TMI Blog2013 (11) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... ank, and therefore, the addition made by the AO on account of such cash deposits is deleted – Decided against the Revenue. Addition of R. Rs.1,17,04,500/- made u/s.68 of the IT Act as the assessee failed to furnish satisfactory proofs regarding the source of investment in RBI bonds – Held that:- Investment was made in the financial year 2003- 2004 relevant to the asstt.year 2004-2005, and such investment was duly disclosed by the assessee in the balance sheet filed along with return of income of all earlier years, and therefore, even if the assessee is not able to explain the source of investment in the year of investment, then also no addition is justified in the present year. However, the AO is well within its power to reopen the assessment of the year of investment, if he has material in his possession that such investment is out of income which had escaped assessment. The AO may take suitable action in that year as per the provision of law, but in any case, no addition is justified in the present year, and therefore, the ground of the Revenue is rejected – Decided against the Revenue. For computation of capital gains, the value stated in the Balance sheet or the value det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed of by way of this common order for the sake of convenience. 2. First, we take up the appeal in the case of Kanchanlal Lallubhai Panwala (HUF) in ITA No.145/Ahd/2013. The ground no.1 is as under: "1. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of Rs.72,50,000/- made u/s.68 of the IT Act on account of unexplained cash credits without appreciating the fact that the assessee was not able prove the source of cash deposits and that the survey disclosure was made in the case of sister concerns in respect of unaccounted stock, not in the case of assessee." 3. The learned DR supported the assessment order whereas the learned AR of the assessee supported the order of the CIT(A). 4. We have considered rival submissions. We find that it is noted by the AO in the assessment order that the assessee has shown cash deposit in its bank account with Dena Bank in SB account no.425320 during in the period from 11.12.2008 to 9.3.2009 of Rs.72,50,000/-. The AO asked the assessee to explain the source of this cash deposit in bank. In reply, it was submitted by the assessee before the AO that the entire cash deposit in Dena Bank is fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there was no disclosure in survey in present case on account of excess stock, then also it has to be accepted that the assessee has declared an amount of Rs.69.96 lakhs in the present year, as income on account of sale without claiming any deduction on account of purchase or opening stock. The cash generated on account of this sale explains the source of cash deposited in bank, and therefore, the addition made by the AO on account of such cash deposits in bank amounts to double addition for the same amount, and hence, we do not find any reason to interfere in the order of the learned CIT(A) on this issue. This ground of the Revenue is rejected. 5. The Ground no.2 of the Revenue's appeal is as under: "On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of R. rs.1,17,04,500/- made u/s.68 of the IT Act even as the assessee failed to furnish satisfactory proofs regarding the source of investment in RBI bonds." 6. The learned DR supported the order of the AO, whereas, the learned counsel for the assessee supported the order of the CIT(A). 6. We have considered rival submissions and perused the material on record and gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The AO may take suitable action in that year as per the provision of law, but in any case, no addition is justified in the present year, and therefore, we find no infirmity in the order of the CIT(A) on this issue. This ground is also rejected. 7. In the result, this appeal of the Revenue is dismissed. 8. Now we take up the appeal in the case of Shri Pareshkumar K. Panwala, in ITA No.146/Ahd/2013. The ground no.1 is as under: "1. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of Rs.1,65,00,000/- inspite of the fact that the assessee was not able to submit any supporting evidence to prove the source of investment made in RBI Bonds." 9. The learned DR supported the order of the AO, whereas, the learned counsel for the assessee supported the order of the CIT(A). 10. Both the parties agreed that this ground is identical to the ground no.2 in the case of Kanchanlal Lallubhai Panwala, (HUF) and same may be decided on similar line. 11. We have considered rival submissions. In this case also it is noted by the AO in para-4 of the assessment order that the assessee has received on 11.4.2008 Rs.165.00 lakhs from the matu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, has no basis and the same was done by the AO arbitrarily on presumptive basis, and therefore, the addition is not justified. It is also worth noting that out of total sale proceeds of Rs.55 lakhs, this assessee has declared sale proceeds of Rs.47.50 lakhs and the balance amount of sale proceeds of Rs.7.50 lakhs was declared in the hands of his wife Mitaben. The AO preceded on the basis that both are equal co-owners, and he adopted sale value of Rs.27.50 lakhs in each case, being 50% of total sale value of Rs.55 lakhs. This action is also without any basis. Moreover, as per the valuation done by Sub-Registrar of Sanand, total market value in the present year was worked out at Rs.34.92 lakhs, as against the sale proceeds declared by the assessee at Rs.55 lakhs. When the sale proceedings in the present year is higher by substantial amount, as compared to the valuation done by Sub-Registrar, Sanand, the cost of acquisition can also be higher, and moreover, there is no basis of adopting backward indexation to work out the cost of acquisition when the cost of acquisition is duly declared by the assessee in the year of acquisition, and in subsequent years. No specific defect is poi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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