TMI Blog2015 (7) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... the investment in construction of house was made in AY 2008-09 & 2009-10 is based on proper verification of facts on record and there is no reason to disturb such findings of facts. It is further contended that ground iv of the revenue has no meaning inasmuch as the merits of all the credit entries stand proved by the assessee which is manifest from the order of ld. CIT(A). consequently there remains no issue about identity, genuineness and creditworthiness of these entries. In the light of above observations and working, the conclusions so arrived at by the learned CIT (A) are very fair, reasonable and logical so we rely upon such findings of the learned CIT (A). No reason to interfere with ld. CIT(A) order who has co-terminus powers with AO and can do what AO failed to do; except the alternate plea of the assessee about the Axis bank a/c being joint account. This becomes more relevant in the peculiar background of assessee’s being a house maker, having no knowledge of construction, debit and credit entries in the bank and prolonged and terminal illness of the husband. None of which is questioned by lower authorities Therefore, if at all it is held that ₹ 8,01,050/- rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i was also assessed to income tax with ITO Ward 1(2), Jaipur with PAN number ABIPR 6405 R. He expired in August, 2012 after prolonged suffering from Malignant Brain Tumor and a spell of being bed ridden for couple of years. The assessee filed return of income declaring interest income. In this year a house property was constructed by her at 2-Ga-24, Jawahar Nagar, Jaipur. AO inquired about the cost of construction and sources thereof, in reply assessee filed a registered valuer report Dtd. 22-5-10 ₹ 37,80,196/-, which was for correcting some measurement mistakes was revised to ₹ 35,28,917/-. 2.1 Assessee filed a reply dated 26-09-11 stating that cost of construction of ₹ 39,07,176/- was incurred and explained the source thereof which is mentioned by AO at page 2 of his order. AO however held that assessee could explain the sources to the extent of ₹ 18,33,300/- and the balance amount of ₹ 20,73,876/- was held to be unexplained and added to her income. Her husband used to avail OD facilities on an Axis Bank joint a/c No.. 031010300004114 operated mainly by him and scantily be the assessee. The withdrawals were mainly used for construction of the hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re B is replete with following flaws and discrepancies:- (i) In this chart no credit for the withdrawals of ₹ 6,36,000/- made in the names of family members had been given despite of the fact that affidavits of the family members were submitted certifying therein the fact that such withdrawals were made by them for the appellant only to be invested in the construction works of the residential house. Such affidavits were ignored without cross examining the deponents on the point P.B. No.59 to 61. (ii) Further the deposits/outwards of ₹ 14,91,000/- were reduced without considering the explanation furnished by the appellant on the point with the help of a chart showing immediate sources of such deposits and outwards. The learned AO had over-looked these facts and explanation without assigning any reason and without brining any material on record contrary to the explanation of the appellant on the point. P.B. 38 41 to 46. (iii) If both the figures of ₹ 6 lacs and odd plus 14 lacs and odd are taken into account as explained by the appellant then the surplus funds would work out around ₹ 38 to 39 lacs which would be more than sufficient to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f in the body of the assessment order, has acknowledged that most of the entries were operated by her husband. 2.10 Ld. Counsel contends that ld. CIT(A) grossly erred in holding disclosed entry of ₹ 8,01,050/- dated 29.11.2008 as undisclosed income without objectively rebutting the contentions. While doing so ld. CIT(A) failed to consider the credit entry of ₹ 25,00,000/- which would nullify the peak deficit. Reliance is placed on following judicial authorities: (i) CIT vs Smt.P.K. Noorjahan (1999) 155 CTR 509 holding therein as under: Income from undisclosed sources- Addition under s. 69- Discretion of AO-Intention of Parliament in enacting s. 69 was to confer a discretion on the ITO in the matter of treating the unexplained source of investment as income of assessee- ITO is not obliged to treat such source of investment as income in every case- Whether it has to be treated as income or not has to be considered in the light of facts of each case- Assessee a young lady, could not explain satisfactorily her source of investment in lands- Tribunal held that it was not possible for her to earn the amount even during a decade and that the source of investment coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madanganj, Kishangarh(287/JP/10) (ii)Shri Vineet Darda, Madanganj, Kishangarh (647/JP/2009) (iii) Shri Gajanand Agarwal, Madangarh, Kishangarh (1440/JP/10) It is contended that the remaining addition of ₹ 8,01,050/- confirmed by the ld. CIT (A) is unjustified and deserves to be deleted. 2.11 The remaining revenue grounds pertain to deletion of addition qua construction of house by ld. AO amounting ₹ 20,73,876/-. There is no dispute about the cost of the investment as valued by approved valuer at ₹ 35,28,917/-. Assessee furnished explanation about investment of ₹ 39,07,176/- whereas the AO held that only ₹ 18,33,300/- were available as per ann. B which resulted in addition of ₹ 20,73,876/-. In first appeal ld. CIT (A) on the basis of reconciliation of funds and written submissions held that the Annexure B working was not correct and deleted the addition by following observations: 3.1 I have duly considered the submission of the appellant. In this case, the A.O. noticed that the assessee had constructed a property at 2-Ga-24, Jawahar Nagar, Jaipur and investment of ₹ 39,07,176/- was claimed to have been made in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 876/- was treated as undisclosed investment in the said house property. On careful consideration of facts, I am inclined to agree with the contentions of the appellant. During the year under reference, the appellant had not declared any source of income except the interest income. No books of accounts were maintained by her. However, she had a joint bank account with her husband namely Sh Suganchand Rangwani (PAN ABIPR6504R) who availed overdraft facility from the Axis Bank. From this joint account, the husband of the appellant utilized the overdraft facility funds for various loan transactions and a part of amount was withdrawn/ utilized for construction of house at 2Ga-24, Jawahar Nagar, Jaipur. It was evident from the bank statement (account No.4114) that there was only rotation of overdraft funds whereby the funds advanced on earlier dates were received bank subsequently and there were no fresh deposits. All the credit entries in the said bank account flowed from that bank only. The bank account was operated by the husband of the appellant. The AO directed the appellant to correlate each and every debit or credit entry in the said bank account. As the husband of the appellant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared more withdrawals than the investment estimated by the registered valuer. Further such investments had been made in the financial year immediately preceding the assessment year in question: this condition is also not satisfied as the assessee had made investment in two financial years namely FY 2008-09 FY 2009- 10. The appellant had not prepared any balance sheet or statement of affairs for the year under consideration. Therefore, even if the claim of purchase of material of ₹ 1,32,176/- is rejected then still the total withdrawals shown by the appellant would exceed the value estimated by the registered valuer. Under these circumstances, I hold that no addition could have been made in the hands of the appellant on account of unexplained investment. I therefore direct the AO to delete the addition of ₹ 20,73,876/- made by him. The ground appeal is allowed . 2.12 Ld. Counsel for the assessee contends that ld. CIT(A) has given clear findings of facts and held that the opening cash of 2.75 lacs and withdrawal of ₹ 1 lac contributed towards construction were not considered, besides there was no justification in ignoring the cost of material of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact about the nature of redeposit based on cash flow statement filed by the assesse along with the reconciliation. vii. The reasons given by ld. CIT(A) are based on proper reasons indicating relevant entries and reasonable of assessee s explanation. viii. Ld. CIT(A) has given a clear finding of fact based on evidence the house was constructed in two years. It seems more likely as the husband of the assessee also was keeping unwell. With these clear findings of facts, reasons and observations on record we see no reason to interfere with ld. CIT(A) order who has co-terminus powers with AO and can do what AO failed to do; except the alternate plea of the assessee about the Axis bank a/c being joint account. This becomes more relevant in the peculiar background of assessee s being a house maker, having no knowledge of construction, debit and credit entries in the bank and prolonged and terminal illness of the husband. None of which is questioned by lower authorities Therefore, if at all it is held that ₹ 8,01,050/- remained unexplained then assessee being a joint a/c holder cannot be saddled with entire addition. The same is to be treated equally half in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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