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2015 (6) TMI 203 - ITAT DELHI

2015 (6) TMI 203 - ITAT DELHI - TMI - Undisclosed investment - CIT(A) deleted the addition - Held that:- Appellant had sufficient amount of cash available as per the cash book so as to enable to him to make the investment of the above amounts. Regarding the objection of the AO, that the cash withdrawn might have been spent by the appellant somewhere else and there was no chance of the appellant having cash in hand with him sufficient enough to make cash deposits with the bank from which the inve .....

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rom the perusal of the cash account, it is find that there was sufficient balance in the cash account on 5/1/05 from which the cash deposit of ₹ 35,000/-could have been made. The AO has no material to justify his suspicion that earlier cash withdrawals from bank have been spent or invested by the appellant somewhere else, and in the absence of such material, no adverse view can be taken against the appellant. Therefore allow this ground of appeal and delete the addition for ₹ 10 lakh .....

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unt of ₹ 1,05,000/- is concerned, the AO has accepted the source of this being out of 3 months' rent @ ₹ 35,0001- per month collected and credited in bank account of appellant wherein his wife Mrs. Rita Dhingra was a joint holder of account and also this rent has been declared by the appellant in his return of income for A.Y. 2005-06. Accordingly, the entire addition for ₹ 11,05,000/- being explained is directed to be deleted. - Decided against revenue.

Disallowance .....

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9,521/- consists of LIC Premium for ₹ 1,07,4711-; mediclaim insurance for ₹ 17,995/- and Travel Insurance for ₹ 4055/-. All these payments have been made through cheques from the Account of G&J Apparels and are, therefore, explained. Therefore AO is directed to delete the addition - Decided against revenue.

Addition to unexplained cash credits - CIT(A) deleted the addition - Held that:- AO has not considered the cash withdrawals of ₹ 1,89,000/- which he himself .....

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e Respondent : Shri S K Gupta, CA ORDER Per T S Kapoor, AM. This is an appeal filed by Revenue against the order of Ld. CIT(A) dated 02.05.2011. The grounds of appeal taken by Revenue are as under: "1. On the fact and in the circumstances of the case, the CIT(A) has erred in law and in facts in deleting the addition of ₹ 6,63,300/- made by the Assessing Officer on account of undisclosed investment. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and o .....

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ng Officer out of the drawing for personal expenses. 5. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 1,44,000/- made by the Assessing Officer on count of unexplained cash credits. 6. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in admitting additional evidences under rule 46A? 7. The order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law." 2. .....

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CIT(A) had obtained remand report from the A.O. and the A.O. in his remand report has communicated merits of addition and Ld. CIT(A) after taking into account the objection of the A.O. in remand report has accepted the contention of assessee and has thereby given relief and therefore, there was no violation of Rule 46A. Ld. A.R. invited our attention to various findings of Ld. CIT(A) and submitted that each and every addition made by A.O. were explained and therefore, Ld. CIT(A) has rightly del .....

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have gone through the material placed on record. We find that Ld. CIT(A) has allowed relief to the assessee on various additions after obtaining remand report and after discussing the objections of A.O. on merits. Therefore, there is no relation of provisions of Rule 46A, therefore, ground No.6 taken by Revenue is dismissed. As regards merits for deletions made by Ld. CIT(A), he has deleted the same by holding as under:: "5.3 Finding on Ground No. 3: I have considered the observation of the .....

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eport which implies that he is agreeable to the explanation regarding the source of investment for ₹ 4,37,000/- and therefore effectively only the addition of ₹ 30,000/- and ₹ 1,96,300/- has to be considered in the present appeal. I have gone through the cash account furnished by the appellant in the paper book and I find that the appellant had sufficient amount of cash available as per the cash book so as to enable to him to make the investment of the above amounts. Regarding .....

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ving spent the cash balance on some other activities, I allow a relief of ₹ 6,63,300/-." 6.3 Finding on Ground No.4. I have considered the entire material available in the form of observation in the assessment order and the submissions of the appellant and the remand report and rejoinder of the appellant thereon. From the brief discussion in the assessment order, I find that the only reason given by the AO is that FDR is not reflected in the statement of affairs of the appellant as on .....

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tifiable reason of the above FDR not appearing in the statement of affairs of the appellant on 31/3/07. Further, coming to the source of the FDR, the AO has only objected to the source to the extent of ₹ 35,000/- only, which is the cash deposit made by the appellant in the bank account on 5/1/05. I have verified the cash account of the appellant and from the perusal of the cash account, I find <that there was sufficient balance in the cash account on 5/1/05 from which the cash deposit o .....

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difference i.e. ₹ 10 lakhs minus ₹ 35,000/-, as the balance amount was received through Bank transfers from A/c of G&J Apparels, the proprietary concern of Mrs. Rita Dhingra, the details of which have been placed on record. 7.2 Finding in Ground No. 5. I have considered the submissions and the contentions raised. It is clear that the AO has in the remand report contested the addition of ₹ 10,00,000/- out of ₹ 11,05,000/- made by him for the loan/advance made to Mrs. R .....

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bmitted from the books of Mrs. Rita Dhingra, the loan transaction consists of credit of FDR of ₹ 10,00,000/- and source of above FDR has already been considered by the AO in para 2 of the impugned order and therefore, there is nothing which remains unexplained as far as purchase of FDR is concerned. The loan transaction, as entered into between the parties, is to be verified with reference to the question whether this transaction of loan involves transfer of funds which needs to be explain .....

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rn of income for A.Y. 2005-06. Accordingly, the entire addition for ₹ 11,05,000/- being explained is directed to be deleted. 8.4 Findings on Ground No.6. I have carefully examined the AO's observation in the order under appeal, the remand report and the submission of the appellant including the submission made in the rejoinder and after considering the same, I find that the premium of A viva Life Insurance policy of ₹ 5,00,000/- was paid on 7/1/7/04 through cheque no. 590801 enca .....

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nce policy is the cheque no. 394888, dated 23/6/04 of ₹ 5 lakhs is not correct as the said credit entry is independent of the above transaction against the opening outstanding debit balance of ₹ 21, 12,719.15 as on 114/04. So far as the payment of the premium is concerned, there is absolutely no doubt about the source of above expenditure. The AO has raised doubt about the source of the cheque of ₹ 5 lakhs on 23/6/04 and I have verified that the appellant on 23/6/04 has deposit .....

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ed the objection of the AO and the explanation of the appellant and I find that the AO is not correct in assuming that all expenses of personal contingencies aggregating ₹ 1,23,000/- are incurred in cash and therefore, on that basis, he has found that the same is not accounted for in the cash flow statement and the cash account of the appellant. From the cash flow statement of the appellant at page 25 of the paper book, it is evident that there is a cash withdrawal of ₹ 45,000/- for .....

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