TMI Blog2019 (4) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997- 98 to 2003-04. Hence we hereby direct the Ld.AO to delete the addition . Case followed SHRI RAKESH SARIN, [ 2011 (6) TMI 977 - ITAT CHENNAI] Undisclosed investments - HELD THAT:- Since the facts and the issue being same, the decision rendered in the case of the assessee s father Shri Rakesh Sarin [ 2011 (6) TMI 977 - ITAT CHENNAI] and mother Smt. Renu Sarin . [ 2019 (4) TMI 1054 - ITAT CHENNAI] holds good in the case of the assessee also and accordingly we hereby direct the Ld.AO to delete the addition respect to the investment made in Insurance Policies with HDFC, ₹ 88,490/- being the investment made in shares, investment in UTI, investment in shares of Aashna Invt. P. Ltd., City Union Bank Sundaram Finance, fixed deposit with Andhra Bank, investment in RBI Bonds and the investment in UTI, ICICI, IDBI HDFC relief bonds. Addition of cash deposit in SB account Current Account and addition of ₹ 8,10,656/- towards Recurring deposit - AO added the same to the undisclosed income of the assessee because the transactions were not accounted in the assessee s books of accounts - HELD THAT:- AO had failed to examine the return filed by the assessee and the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee were incomplete. In this situation, we do not find any merit in the order of the Ld.Revenue Authorities for adding the amount Addition being the amount advanced to M/s. Status Enterprises as unexplained advances - HELD THAT:- Since neither the Ld.AR nor the assessee submitted any explanation before us on this issue, we do not have any other option but to confirm the addition made by the Ld.Revenue Authorities on this issue. Accordingly we hereby confirm the addition Addition on account of property purchased at Kasthurba Nagar - CIT(A) has rejected the submission of the assessee with respect to the source of investment arising from the VDIS disclosure and borrowings by stating that it has no correlation with the investment made in the property purchased at Kasthurba Nagar - HELD THAT:- CIT(A) has rejected the return of income filed by the assessee by stating it to be bogus without further investigation. When the facts being so, we do not find any merit in the observation of the Ld.CIT(A) when he has only investigated the matter partially. There is also no finding by the Revenue as to what investment was made from the voluntary disclosure. The disclosure in the VDS schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in sustaining the addition made by the Ld.AO amounting to ₹ 2,50,000/- being the loan advanced to M/s. Nadiadwala Grandson as unexplained advances. vii. The Ld.CIT(A) has erred in sustaining the addition made by the Ld.AO amounting to ₹ 1,50,000/- being the amount advanced to M/s. Status Enterprises as unexplained advances. viii. The Ld.CIT(A) has erred in sustaining the addition made by the Ld.AO amounting to ₹ 2,93,517/- on account of property purchased at Kasthurba Nagar. 3. The brief facts of the case are that the assessee is an individual whose father Shri Rakesh Sarin was searched on 27.03.2003 and concluded on 28.08.2003. Thereafter a notice U/s.158BC r.w.s. 158BD was served to the assessee on 02.03.2005 requesting the assessee to file his return of income. Subsequently the assessee filed his return of income on 18.03.2005. Thereafter assessment was completed U/s.143(3) r.w.s. 158BC 158BD of the Act vide order dated 28.02.2007 wherein the Ld.AO made several additions which was further sustained by the Ld.CIT(A). 4. Ground No.2(i) : Non filing of Income Tax returns:- During the course of investigation, it was observed that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 1997- 98 to 2003-04. Hence we hereby direct the Ld.AO to delete the addition made by the Ld.AO for ₹ 6,29,226/- in the block assessment. 5. Ground No.2(ii) : Addition of ₹ 1,90,000/- with respect to the investment made in Insurance Policies with HDFC, ₹ 88,490/- being the investment made in shares, ₹ 1,57,423/- being the investment in UTI, ₹ 37,500/- being the investment in shares of Aashna Invt. P. Ltd., City Union Bank Sundaram Finance, ₹ 54,112/- being the fixed deposit with Andhra Bank, ₹ 19,50,000/- towards investment in RBI Bonds and Rs.,9,00,000/- being the investment in UTI, ICICI, IDBI HDFC relief bonds as undisclosed investments / income:- On the identical issue and on the same facts, this Bench of the Tribunal had deleted the additions in the case of assessee s mother Smt. Renu Sarin in IT(SS)A No.17/Chny/2014 and in the case of the assessee s father Shri Rakesh Sarin in IT(SS)A No.66/Chny/2007. In the case of Smt. Renu Sarin, this Bench of the Tribunal has observed as under:- During the course of search it was observed by the Ld.AO that the assessee had made investments in various bonds, shares, patras, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.Revenue Authorities had failed to examine the evidence produced by the assessee, we are of the considered view that the addition made is not sustainable. Moreover at this stage, it would be impracticable to remit the matter back to the file of Ld.AO for de-nova consideration as the matter relates to the block period 1997-98 to 2002-03 wherein the facts had occurred beyond 20 years ago. Therefore we hereby direct the Ld.AO to delete the addition made for ₹ 84,53,375/-, ₹ 45,75,000/- and ₹ 4,27,500/- towards investment in shares, bonds, patras, etc., RBI bonds and HDFC Standard Life Insurance. Since the facts and the issue being same, the decision rendered in the case of the assessee s father Shri Rakesh Sarin and mother Smt. Renu Sarin holds good in the case of the assessee also and accordingly we hereby direct the Ld.AO to delete the addition of ₹ 1,90,000/- with respect to the investment made in Insurance Policies with HDFC, ₹ 88,490/- being the investment made in shares, ₹ 1,57,423/- being the investment in UTI, ₹ 37,500/- being the investment in shares of Aashna Invt. P. Ltd., City Union Bank Sundaram Finance, ₹ 54,112/- b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the materials on record. From the facts of the case, it is apparent that the pro-notes were incomplete in all aspects and therefore presumption cannot be made that the assessee had lend money though there is some air of doubt. Moreover peak credit concept may also be applicable in the case of the assessee due to rotation of advances and repayments. It appears that the Ld.AO has not examined those aspects. There is every probability that if such exercise would have been carried out the source of the amount utilized in the finance business would have been explainable as the amount utilized in the business would have been much less than the addition made by the Ld.AO. Therefore adhoc addition of the amount mentioned in the entire pro-notes is not justifiable. Further the Ld.AO has also not made any investigation in the market to find out whether any amount borrowed from the assessee was pending to be returned to the assessee. Further the Ld.AO had also not made proper investigation from the borrowers. When the Ld.AO has not made any investigation on this regard addition made only on the basis of presumption is not justifiable. Moreover there is no corroborative evidence to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld.AO. 8.1 At the outset we don t find any merit in the order of the Ld.Revenue Authorities on this issue. The assessee had explained the transaction as advance of ₹ 1,00,000/- extended to M/s. Shibi Travels against collateral security of a ticket to US. These facts could have been confirmed and verified by the Ld.Revenue Authorities from M/s. Shibi Travels which they have failed to do so. Hence we do not find any merit in the findings of the Ld.Revenue Authorities who had simply rejected the explanation offered by the assessee without verifying the facts. Hence we hereby direct the Ld.AO to delete the addition for ₹ 2,00,955/- in the hands of the assessee as unexplained investment. 9. Ground No.2(v) : Addition of ₹ 2,50,000/- being the amount advanced to M/s. Nadiadwala Grandson as unexplained advances:- During the course of search proceedings it was observed by the Ld.AO that the assessee had advanced ₹ 2,50,000/- to M/s. Nadiadwala Grandson Entertainment. On query it was explained that the same was reflected in the name of M/s.Adlab Film Ltd. However the Ld.AO rejected the submission of the assessee and added the amount of ₹ 2,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee submitted any explanation before us on this issue, we do not have any other option but to confirm the addition made by the Ld.Revenue Authorities on this issue. Accordingly we hereby confirm the addition made for ₹ 1,50,000/- as unexplained advance. 11. Ground No.2(viii): Addition of ₹ 2,93,517/- on account of property purchased at Kasthurba Nagar:- It was observed by the Ld.AO that the assessee had purchased property at Kasthurba Nagar for a sum of ₹ 2,93,517/- during the previous year 1996-97. On query it was explained that the amount was debited to the capital account of the assessee. However on verifying the balance sheet of the assessee as on 31.03.2001, such disclosure of investment was not found. Therefore the Ld.AO added the amount of ₹ 2,93,517/- to the income of the assessee. Before the Ld.CIT(A) it was explained by the assessee that the property was purchased by the assessee when he was a minor during the assessment year 1997-98. It was further explained that the assessee had opening capital balance as on 31.03.1997 of ₹ 5,69,000/- and the family had further disclosed a sum of ₹ 34.01 lakhs in the VDIS scheme 1997, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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