TMI Blog2012 (12) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence to lead that the assessee had invested Rs.20 lakhs in Nanad Co-op Housing society by using his four employees as conduits for booking of flats - authorities below have not brought any conclusive documentary evidence on record that the assessee had, in fact, made unaccounted investment of Rs.20 lakhs and, accordingly, the addition of Rs.20 lakhs stands deleted. Addition on account of unaccounted investment - alleged that the assessee accepted the fact that Rs.4.5 lakhs in cash and Rs.50,000/- in cheque have been paid and receipts obtained for purchase of this property which has not, however, been reflected in the books of the account and the same is offering now for taxation – Held that:- This agreement was, in fact, entered into in the month of March 1995 whereas the block period was from 1.4.1996 to 6.9.2001 - this transaction alleged to have been entered into by the assessee doesn’t fall within the block period under consideration - in favour of the assessee Addition on account of unaccounted sum given to Shri Sanjeev Shukla - alleged that the assessee’s mother filed a civil suit against Neelkant Corporation involving Rs.1.5 lakhs against which documents showed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition on account of unaccounted investment in Dhwirup Bungalow - AO had found that a Civil suit was pending in a Court where the assessee had claimed possession of a property from Shree Jaisheel A Patel against the payment of Rs.5 lakhs and another Rs.50,000/- given as registration charges – Held that:- Assessee was having sufficient cash balance with him and family members as per the books of accounts - assessee had produced documentary proof to belie the assumption of the AO who took a stand that the investment of these amounts were not open to verification etc. - investment made by the assessee stands explained – addition deleted Addition on account of investment in Santro Car – alleged that Car was not registered in the name of the assessee – Held that:- Assessee had produced the receipt for alleged to have paid cash of Rs.1 lakh and subsequent return of the vehicle which appeared to have been a used car and also found at the time of search operation, the addition of Rs.1,80,000/- cannot be sustained – addition deleted Addition of Rs.3 lakhs being fictitious entries in the name of Bharat Textile – Held that:- There was no justification in making the addition since there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Rs.20 lakhs being an investment in Ninad Co-op. Housing Society; (5) Rs.5 lakhs as unaccounted investment with Shri Yogesh J Rawal; (6) Rs.1.5 lakhs as unaccounted sum given to Shri Sanjeev Shukla; (7) Rs.5 lakhs as unaccounted investment by way of cash loan to Shri Dinish Dhabalia; (8) Rs.7.43 lakhs as unaccounted investment in Flat Nos. 901 902 in Jay Shiva Apartment; (9) Rs. 2 lakhs allegedly made a deposit with A.D. Patel Co., for Jay Shiva Apartment; (10) Rs.10 lakhs as alleged unaccounted investment in a land purchased from Bhavya Ghantakaran Cottage Association; (11) Rs.5.51 lakhs being unaccounted investment made at 3, Dhwirup Bungalow; (12) Rs.3.07 lakhs being rent from Dhwirup Bungalow property; (13) Rs.1.8 lakhs being unaccounted investment in Santro Car; (14) Rs.3 lakhs treating as fictitious entries in the name of Bhart Textiles; (15) Rs.1.17,900/- being unaccounted investment in shares; (16) Rs.1.01 lakhs being various household items purchased as unaccounted/un-explained; (17) , (18) (19) being general and no specific issues involved, they have become non-consequential. 3. The revenue had raised six grounds in an illustrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook up the issues with the learned CIT (A) who had sustained most of the additions under various heads and granted partial relief. 8. Agitated with the partial relief, the assessee has come up with the present appeal. 9. The issues raised by the assessee under various heads are dealt with chronologically after taking into account the reasoning of the authorities below and also elaborate submissions made by the learned AR which were effectively countered by the learned DR. We have also perused the documentary evidences advanced by the learned AR at the time of hearing in the shape of voluminous paper books. 10. Ground Nos. 1 2: Additions of Rs.3.46 lakhs and Rs.72,956/- of Nank Cutlery Mart - difference between opening closing capital of AY 2000-01: 10.1 The AO had pointed out that the O.B of capital as on 1.4.99 was Rs.4,76,824/- whereas the closing capital balance as on 31.3.99 was only Rs.1,30,635/- and the difference of Rs.3,46,389/- represented an increase without apparent reason. 10.2 After considering the assessee s submission, the CIT (A) accepted the arguments of the assessee that there was no incorrectness in the computerized books of account and that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 234 ITR 733 (Guj) and (II) CIT v. Shambhulala C. Bachkaniwala [245 ITR 488 (Guj)]. 10.4 We have duly considered the submission of the learned A R and also the reasoning of the CIT (A) cited supra. 10.5 We are in agreement with the findings of the CIT (A) that the assessee had filed his return of income for the AY 99-00 earlier and the Revenue had not initiated any proceedings u/s 147 of the act for that year. Therefore, the capital of the assessee as an individual together with the capital of Nanak Cutlery Mart as reflected in that return of income should be taken into consideration by the AO while determining the difference between closing balance for the AY 1999-00 and the opening balance for AY 2000-01 and the difference between the same would be upheld as addition. Though the assessee has agreed in principle that the personal books, the account of Nanak Cutlery Mart shows balance of Rs.2,03,591/- whereas in the books of NCM, the capital shown was Rs.1,30,635/-, such difference being not reconcilable, the addition may be sustained. However, this had not arisen from the seizure of the assets/records during search; such addition cannot be made in view of the rulings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The donor s books of account has not been rejected by the AO and, thus, it was argued, the donor as well as donee having confirmed and duly reflected in their respective books the gift as well as the receipt, the genuineness of the gift cannot be put under the scanner. 11.3 The learned D R present was heard. 11.4 We have duly considered the rival submissions and gone through the documentary evidence produced by the learned AR. 11.5 At the outset, we would like to point out that the learned CIT (A) had fairly conceded that the books of account of the donor were not written in the regular course of business from day-to-day basis and, therefore, the entries made therein during the course of block period proceedings do not evidence the day-to-day transaction. Chiefly, the computerized books of account of the donor and the donee have not been rejected by the AO. This stand of the AO had vindicated the genuineness of the gift. Moreover, the AO, in our considered view, had not brought any clinching documentary evidence on record to repudiate the assessee s claim. The learned CIT (A) had also doubted the assessee s proprietary firm Nanak Cutlery Mart advance of Rs.1 lakh as loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to safe guard the interest of Gajjar in the property. It was, further, contended that even then the cash receipts were signed by some person other than Shri Gajjar and no entry pertaining to the alleged advances of Rs.20 lakhs was reflected in the assessee s books of account nor were such entries in the books of Gajjar. It was submitted that Shri Gajjar had filed an affidavit in the City Civil Court that no amounts had been paid for these four flats by the four persons concerned and that the case was filed only to prove unauthorized possession of flats by Sheth Finance. 12.3 The CIT (A) had in her findings recorded that there was no doubt that documentary evidences found during the search showed that four employees of the assessee had sought for housing loans and that four flats in Ninad Co-op Housing Society stood allotted in their names. Those documents related to the employees of the assessee on whose behalf Civil suits were filed and pursued by the assessee s own Advocate. Whatever be the reason for filing of the civil suits, documentary evidences were available that four flats stood allotted in the names of the assessee s employees. Therefore, the contradictory stands ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion, it was submitted that in view of the above facts, the addition requires to be deleted. 12.6 The learned D R present had supported the stand of the authorities below and pleaded that the addition of Rs.20 lakhs requires to be sustained. 12.7 We have duly considered the rival submissions and attentively perused the relevant case records and documentary evidences produced by the assessee. 12.8 The AO had held that the assessee made an investment of Rs.20 lakhs in Flat Nos.202, 203, 302 402 in Ninand Co-op Hsg. Society in the name of his four employees as conduits. The backdrop of the issue was that during the search operations, house loan applications for acquiring of flats were impounded and those loan applications were for the purpose of purchase of flats in the above mentioned Society. It was also gathered from City Civil Court that those four employees have filed civil suits against the Society seeking possession of flats. On the basis of the statement of Shri Gajjar, the organizer of the Society who claimed that the assessee had financed him Rs.20 lakhs at 4 5% per month for which he had taken booking of four flats as security. Rejecting the assessee s cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a goby; (vii) the addition has been made at the back of the assessee without extending an elementary courtesy and legitimate claim of the assessee to subject to Shri Gajjar for cross examination; 12.11 When the learned CIT (A) was magnanimous in pointing out that, 5.5 (On page 13) There is no evidence, however, of the interpretation by the AO that the sum of Rs.20 lakhs represented a finance loan because the statement given by Jitubhai Gajjar is not good evidence as he was not made available for cross examination to the appellant. In the absence of any evidence relating to the amount being a finance loan, the question of calculation of interest on the said loan at the stated rate does not arise. Besides, it does not appeal to reasoning that a loan, if at all given, would be at such rates as would lead to more than 100% due on account of interest. In the absence of any positive evidence beyond the statement of Shri Gajjar which is not evidenced by any documents, the addition on account of interest at Rs.20,70,000/- is therefore, directed to be deleted ., the same yardstick should have been applied in respect of addition of Rs.20 lakhs being alleged investment in Ninad Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that an amount of Rs.5 lakhs was given by the appellant in the name of his wife to Yogesh Raval which is witnessed by documents for purchase of property. The receipts for payments which are in cash are clearly back dated and no proof of receipt back of money is given now even the alleged copy of understanding is not filed though claimed to be so filed. It would in any case have been in-admissible as additional evidence. It is also found that the return of income filed by the appellant did not show any such investment. 6.3. All this therefore, rightly led the AO to conclude that the amount of Rs.5 lakh was unaccounted and that it did not pertain to the period beyond block assessment. The appellant being in control of his wife s business affairs, there can be no doubt that the amount reflects undisclosed income of the appellant. To the extent that the AO has himself given credit for Rs.4 lakhs as reflected in the books and made an addition of Rs.1 lakh only towards the capital invested, the observation of the AO is found to be incorrect in the light of earlier comments given in para 9.5.3. of assessment order that the investment was not reflected in the returns of income filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rejected the assessee s theory that no amount was given and the documents were got prepared to assist his friend Rajeev Shukla s brother Sanjeev Shukla just to prevent illegal possession of the property by the owner of the plot without affecting any financial transaction. The document to this effect produced by the assessee was also virtually rejected by the AO. 14.2 Considering the assessee s submission as well as the facts of the issue, the CIT (A) took a view that the claim of the assessee as well as the counter claim of Rajeev Shukla being contradictory based on the documentary evidence which shows the investment of Rs.1.5 lakhs vis- -vis allotment of plot and shops in the name of the assessee s mother and the possession of which was yet to be decided by the court etc., it was reasonable to believe that the investment was actually made at Rs.1.5 lakhs towards allotment of plot and shops. 14.3 Before us it was contended by the assessee s A.R. that the entire addition was based on the information received from City Civil Court and not on any materials found. It was, further, submitted that the copy of agreement of understanding between Mahendrakaur Suri, the assessee s mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d run up huge loss in the assessee s shop, the AO took a view that the assessee was unable to prove that the reality was otherwise than stated by Dhabalia. 15.3 The learned CIT (A) had recorded her findings as under: 8.2. (On page 19) .In the light of the fact that statement of Dinesh Dhabalia is not good evidence since he had not been cross examined, the documentary evidences themselves present a picture which show that Nanak Cutlery Mart continued to be a proprietorship concern of the appellant and there is no evidence that it was given to Shri Dinesh Dhabalia in lieu of the property. The property itself was admittedly in the possession of the appellant along with power of attorney and as such there is enough ground to hold that the appellant made investment in obtaining to power of attorney of the property. Such investment could reasonably be expected to be of the sum of Rs.5 lakhs ass referred to by the AO and addition to this extent is therefore held to be justified as the source of the amount of money is not proved .. 15.4 It was the contention of the assessee before us that no incriminating material was found and that the addition was purely based on the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld to be justified The presumption of the AO as well as CIT (A) does not stand the testimony of law. 15.9 In view of the above, we are of the considered view that the Revenue has failed in its endeavour to bring on record any unambiguous documentary proof to nail the assessee on this score. Accordingly, we delete the addition of Rs.5 lakhs. 16. Ground Nos.8 9: Additions of Rs.7,43,000 + Rs.2 lakhs as unaccounted investments in Jay Shiva Apartments: 16.1 Based on the statement of one of the partners of the Scheme Jay Shiva Apartments Scheme that the flats in the scheme were sold at a cost of Rs.7,04,000/- each and, accordingly, the AO had come to a conclusion that the difference of Rs.7,43,000/- between cost of Rs.14,80,000/- minus payment of Rs.6,65,000/- represented payment in cash out of unaccounted income. Further, payment of Rs.2 lakhs said to be paid in the current year out of total of Rs.6.65 lakhs was also found to be unproved, and, accordingly, the same was also added as undisclosed income of the assessee. 16.2 After analyzing the assessee s contentions, the CIT (A) had observed thus: 9.2. (On page 21) .There is ample evidences that as per practice in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish that the assessee had paid amount outside the books of accounts for effecting real estate transactions substantial evidence has to be placed on record which is absent in this case. It would be unjust if an addition is made on the appellant based on a statement made by one of the partners of the firm without further making enquiries and collecting evidence. Therefore, we hereby delete the addition of Rs.7,43,000/- and Rs.2,00,000/- made by the learned AO and confirmed by the learned CIT(A). 17. Ground No.10: Addition of Rs.10 lakhs as unaccounted investment from Bhavya Ghantakaran Cottage Association: 17.1 The AO had stated that post-dated cheques of Rs.10 lakhs in favour of the assessee and his family members from Bhavya Ghantakaran Cottage Association, besides documents showing investment in booking of 40 plots in the Scheme were unearthed during the search operation. However, the contention of the assessee was that he had made an investment of Rs.5 lakhs in 1999 while the AO relied on the post-dated cheques to say that investment was of Rs.10 lakhs. However, the argument of the assessee was that the amount given was only Rs.5 lakhs which was to be returned at Rs.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceive Rs.3 lakhs from BGCOA after the expiry of five years. This fact was further corroborated from the Panchnama wherein ten cheques of BGCOA were seized. It was submitted that the assessee had made an investment of Rs.1.5 lakhs in BGCOA by cheque on 7.5.1999 and the same was reflected in the balance sheet of FY 1999-2000. It was, further, submitted that the assessee and his family members have made investment of Rs.5 lakhs in BGCOA for booking of plots and that the assessee had never advanced any amount in interest either to Shri Kishorebhai Shah or BGCOA. Advanced cheques were received and undated receipts were found because investment was of the Scheme wherein investors were assured double the return of amount so invested. Such schemes were prevailing when Scheme of investment in agricultural trees etc., were prevalent during late nineties. Availability of such cheques do not prove or suggest any unaccounted advance given or investment made by the assessee, particularly when no such receipts or confirmations have been found in the assessee s residence during the course of search operation. The AO had wrongly presumed that the assessee had financed Rs.10 lakhs to Shri Kishore Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only for earning interest. The AO s presumption that the assessee financed Shri Shash by giving him Rs.10 lakhs and in lieu of which he obtained post-dated cheques as security was without any basis or with no corroborate evidence. Admitting the AO s logic for argument sake, no prudent lender would have parted with such a huge sum without any substantial proof in the shape of a promissory note as proof. If so, where are they? Without any documentary proof which subjects to testimony of law, we are of the considered view; that no addition can be resorted to purely based on presumption, assumption and guess work. The addition of Rs.10 lakhs made by the AO and subsequently sustained by the CIT (A) cannot be upheld any further. Accordingly, the assessee gets relief of Rs.10 lakhs. 18. Ground No.11: Addition of Rs.5,51,000/- being unaccounted investment in Dhwirup Bungalow: 18.1 The AO had found that a Civil suit was pending in a Court where the assessee had claimed possession of a property from Shree Jaisheel A Patel against the payment of Rs.5 lakhs and another Rs.50,000/- given as registration charges. The AO referred to the statement of the father of Shri J Patel viz., Shri A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit, but, no addition of unexplained cash credit was made. In conclusion, it was pleaded that the assessee had debited the amount in the books of accounts, the cash balance available was fully proved and, thus, there was no justification in making the addition of Rs.5.51 lakhs which requires to be deleted. 18.4 On a perusal of the evidences produced by the assessee, it has been observed that the payment of Rs.3 lakhs made through cheques have been duly reflected in the books of account of Mahendrakaur N Suri and the assessee and Rs.2 lakhs of cash was paid from the account of Nanak Cutlery Mart [Refer: Pages 173, 174 and 175 of PB]. They had sufficient cash balances to make such payments. Document on a stamp paper [worth Rs.50,000] was executed for the purchase of the said house from Jaisheel Patel [source: P 176 180 PB] duly acknowledging the sale consideration through cheques for Rs.3 lakhs and cash of Rs.2 lakhs. The said document has been registered and the Stamp Authorities have accepted the price and, accordingly colleted the stamp charges of Rs.51,000 [Refer: P 193-208]. The assessee had produced documentary proof to belie the assumption of the AO who took a stand tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had purchased the said flat clandestinely through his unknown source and, accordingly made an addition of Rs.2.35 lakhs. Besides, Rs.72,000/- being alleged rent for the said flat was also added in his hands. It was pleaded that the flat has since been purchased by his sister who was married and also an assessee; there was no justification on the part of the Revenue to penalize the assessee for his of no fault. The entire addition of Rs.3.07 lakhs, requires to be deleted. 19.4 We have carefully examined the submission of the assessee as well as critically perused the reasoning of the AO. 19.5 Briefly, according to the assessee, he had originally booked for a Flat and, accordingly, made an initial payment of Rs.1.5 lakhs through account payee cheques [the detail of which is finding a place in the assessee s submission supra] and due to financial constraint, the Association was requested to cancel the booking and also got back the deposits initially made. The above exercise has been duly reflected in the respective books of account. In the meanwhile to place on record, Smt.Mahendrakaur Suri and Smt.Manjeetkaur suri in their separate but identical letters dated 22.6.2000 tendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its letter heads) had unambiguously acknowledged that Mahendrakaur Suri and Manjitkaur I Suri have withdrew their bookings way back in June 2000, how could have the Secretary of the same Association given a contradictory statement that the assessee owns the flat in Shailabhadra Flat. Why this glaring contradictory statement has not been further probed into by the Revenue? Instead, the Revenue had conveniently come to a conclusion, perhaps, on assumption that the assessee had invested in Shalibhadra Flat a sum of Rs.2.35 lakhs from his alleged unaccounted source and also penalized for Rs.72,000 by way of rental income when the legitimate owner of the said flat has not been conclusively established. 19.11 In view of the above facts and circumstances of the issue as deliberated upon in the foregoing paragraphs, we are of the considered view that the Revenue had failed to establish the real owner of the subject flat. Accordingly, we delete the entire addition of Rs.3,07,000/- on this count. 20. Ground No.13: Addition of Rs.1,80,000/- being investment in Santro Car: 20.1 The addition was made by the AO on the basis of assessee s statement during the search proceedings. 20.2 It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.1.5 lakhs each and according to the AO, the monies were allegedly received from Bharat Textiles which were then used to purchase bank drafts in its favour. The source of money was held by the AO to be the unexplained after rejecting the assessee s explanation that entries in the name of this party were reflected in the accounts of the family members etc. 21.2 It was contended before the CIT (A) that there were adequate and sufficient balances in the books of account from where money was deposited and copies of cash book as well as bank statements were shown to the AO who had virtually rejected the assessee s claim. 21.3 Considering the assessee s contentions, the CIT (A) had recorded her findings that 14.2 ..Since it is already held by me in paras above that the books of accounts written at a later dates are not reliable, the explanation given is found to be not acceptable. Without a direct link between source of money and the deposits in cash in the banks on particular dates, the invested sums cannot be held to be explained and addition made for Rs.3 lakhs is sustained. 21.4 Before us, it was claimed that there were adequate and sufficient cash balances and having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not change the character of genuineness of purchase of shares. It was, therefore, pleaded that the addition was made in a flimsy manner which requires to be deleted. 22.4 We have considered the assessee s submissions and also perused the details of investments made in shares as exhibited at pages 229 231 of Paper Book. Most of the investments have been through cheques, the details of which were available at page 230 of PB. 22.5 The AO recorded his reasoning for rejecting the assessee s contentions as under: 18.3.4 ..the source of investment in these shares is not free from doubt not explained properly and for the reasons discussed in detail at the beginning of this order. It is clear that the transactions shown in the balance sheet and profit and loss account etc., of the income-tax return filed after search are not to be taken up the face value and deserve outright rejection. 22.6 We do not agree with the reasoning of the AO in rejecting the assessee s explanation without analyzing the same as to why the explanation cannot be relied upon etc. In the absence of such examination on the part of the Revenue in rejecting the assessee s claim in a wholesale manner, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical figures in his balance sheets [Refer: P 232 PB], apparently to strike a balance. 23.5 It is a common phenomenon for a person of appellant s stature to accumulate household appliances, entertainment equipments and other electronic items during a period of time either by way of purchase, gifts etc. Further, there is no evidence to establish that these goods are purchased out of unexplained source. The amount of Rs.1,01,000/- is also quite negligible for an addition to be made on this count. Therefore, we hereby delete the addition of Rs.1,01,000/- made on account of unexplained investment. 24. Let us now proceed to adjudicate the Revenue s appeal as under: II. IT (SS)A No.331/A/2004 By the Revenue: (1) Deletion of addition of interest of Rs.20.7 lakhs made on account of interest earned on a loan of Rs.20 lakhs advanced to Jitendra Gajjar; 24.1 At the outset, we would like to point out that the alleged loan amount of Rs.20 lakhs advanced by the assessee to Shri Jitendra Gajjar has since been deleted by this Bench in the assessee s appeal (supra) (ground No.4) for the reasons recorded therein. Thus, the Revenue s grievance for having deleted Rs.20,70,000/- being interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of Rs.8,98,847/- at beginning of block period was not proved and the details filed and returns filed were only to explain investment made in properties and in fact they did not reveal the actual position. 28.3 Rejecting the assessee s contention that the capital account has been worked out each year by showing the receipts and payments made during the year which are wholly and exclusively tallying with the bank book. With regard to cash transactions, they have been recorded from the nothings kept as well as the recollection of facts and realities .the capital account of the balance sheet represent true and correct state of affairs and do not merit any look with suspicion or doubt etc., the AO had made the addition, holding that the amount represented undisclosed income, particularly in view of the fact that the assessee was also making withdrawals for household expenses from very nominal receipts which were not more than Rs.2 lakhs for the long period from AY 1996-97 to AY 2001-02. 28.4 After considering the assessee s submission as recorded in her impugned order, the CIT (A) had observed that: 2.3. (On Page 4) .I am of the confirmed opinion that the fact of no regular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .8.98 lakhs was fully explained. 28.6 We have attentively considered the submission of the learned AR and also heard the version of the learned D R present at the time of hearing. 28.7 On a decisive perusal of the reasoning of the AO in rejecting the assessee s claim, it has been observed that the computerized books of account of the assessee were not rejected by the AO, such an event, the reasons for rejecting the assessee s claim ought to have spelt out. On her part, the learned CIT (A) had mechanically sustained the addition with a sweeping remark that even if these computerized books are not rejected; they cannot automatically be accepted as having been verified and as such beyond doubt. This observation of the CIT (A), to view it mildly, is intriguing. It is an undisputed fact that no regular books of account have been maintained, considering the volume of transactions which took place during the intervening period. However, this cannot be a valid reason to out-rightly rejecting the legitimate claim of the assessee in one go. 28.8 The assessee being an educated lady coupled with Punjabi family tradition and custom tends to get herself involved such activities like co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly acceptable merely because it has certain recording of transactions reflected in bank accounts, since the other entries made regarding receipts in cash and withdrawals of cash are not supported by evidences. Only because the AO has not specifically rejected the books of accounts does not mean that the same have been accepted or that there are no errors in them. The very fact that the computerized books are not a regular record of the transactions sought to be depicted therein leads me to the conclusion that they are not acceptable. Therefore, an attempt by the appellant now in appeal proceedings claiming that certain liabilities filed in I T Returns were to be ignored while adding liabilities of such unreliable books of accounts and similarly treating some of the various assets in different ways to calculate the capital account reconciliation is not at all an acceptable preposition. The claims are not open to verification from regularly written books of account which are missing and not written, and such presentation as made now as per page 145A inserted during the course of appeal proceedings on 4.10.2004 is a mere jugglery of figures in order to explain the balance sheet. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cash credits: Rs.1,00,000: 30.1 Before the CIT (A), it was contended that 4.1(On Page 7) .the additions made were totally unjustified because there was no deposit from Sagar Consultants where the assessee had paid earlier Rs.2,25,000/- to Sagar Consultants. Copy of the Ledger Account is on page 158. As against this amount given the said party, Sagar Consultants allotted a flat on 12th March for Rs.3,15,000/-, copy of the papers of allotment of flat for Rs.3,15,000/- are on page 159 to 162. The balance amount of Rs.1,00,000/- to be paid against the allotment of said flat was paid by the appellant on 6.1.1998 and copy of receipts are on page 156 and 157. Thus, the entire basis of addition of deposit or unaccounted cash credit is totally wrong. Rs.40,000: Princy Suri being minor and her income has to be added in the income of father or mother whose income is greater and in view of the provisions of Sec.64, the assessing officer had occasion to add such income if he was not satisfied about the financial transactions in the books. As the books of accounts of Princy Suri are fully examined and are not rejected or disbelieved and her status and genuineness being accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown in the earlier accounts and obviously in the earlier filed returns and, therefore, representation made and based on the subsequently written computerized books of account will not override the details given in the earlier returns filed. The unverifiable computerized books of accounts cannot be made the basis for explanation as given. The addition made is therefore sustained. 30.3 During the course of hearing, it was reiterated more or less what was presented before the first appellate authority. It was, further, pleaded that since the additions were made without taking into account the explanation offered by the assessee, the same may be deleted. 30.4 Rs.1,00,000 Sagar Consultants: 30.5 We have considered the assessee s submission as well as the reasoning of the authorities below. On perusal of the evidences produced by the assessee, it has been observed that Sagar Consultants had duly acknowledged the receipts of Rs.25,000/- and Rs.75,000/- vide its receipts placed at Pages 168 169 of PB. The amounts have been duly reflected in the cash book of the assessee on page 97 of the Paper Book. It is pertinent to mention here that the Revenue had neither rejected the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that no such deposit exists on the revised computerized books of account and, therefore, pleaded that this addition deserves deletion. 30.16 However, we are declined to agree with the assessee s contentions. The assessee had, in fact, conceded before the CIT (A) that her Accountant by mistake had shown such deposit in the old book, however, pleaded magnanimously that no explanation could be possible as to how such deposit was shown by her Accountant at that relevant time of writing the old handwritten book under the name of Anku Traders. This argument of the assessee s A.R doesn t hold water. When there was an entry either in the old book or in the computerized book, the assessee was duty bound to explain the circumstances under which the entry came into being. Instead, the assessee cannot take refuge under the flimsy excuse. The AO was justified in making such an addition which was subsequently ratified by the CIT (A). Accordingly, this issue goes against the assessee. 31. Ground No.4: Addition of Rs.1,06,33000/- as unexplained stock in the business of Punjab Equipments: 31.1 A survey u/s 133A of the Act was carried out at the business premises of Punjab Equipments on 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
