Income Tax Appellate Tribunal - Agra
P.C.Wadhwa, Gwalior vs Assessee on 22 November, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH, AGRA
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND
SHRI B.P. JAIN, ACCOUNTANT MEMBER
ITA Nos.44, 45, 46, 47 & 11/Agr/2011
Assessment Years: 2008-09, 2006-07, 2007-08, 2005-06 & 2004-05 respectively
Asstt. Commissioner of Income Tax vs. Shri P.C. Wadhwa,
Circle - 1, Gwalior. Krishna Kunj,
Gandhi Road,
Gwalior.
(PAN: AALPW 7656 F)
C.O. Nos.23, 24, 25, 26 & 34/Agr/2011
(In ITA Nos.44, 45, 46, 47 & 11/Agr/2011 respectively)
Assessment Years: 2008-09, 2006-07, 2007-08, 2005-06 & 2004-05 respectively
Shri P.C. Wadhwa, vs. Asstt. Commissioner of Income Tax
Krishna Kunj, Circle - 1, Gwalior.
Gandhi Road,
Gwalior.
(PAN: AALPW 7656 F)
ITA Nos.428, 443, 444, 445 & 446/Agr/2010
Assessment Years : 2002-03, 2003-04, 2004-05, 2005-06 & 2007-08
respectively
Asstt. Commissioner of Income Tax, vs. Shri P.C. Wadhwa HUF,
Circle - 1, Gwalior. Krishna Kunj,
Gandhi Road,
Gwalior.
(PAN: AAAHW 0432 N)
C.O. Nos. 10, 11, 12, 13 & 14/Agr/2011
(In ITA Nos.428, 443, 444, 445 & 446/Agr/2010 respectively)
Assessment Years : 2002-03, 2003-04, 2004-05, 2005-06 & 2007-08
respectively
2 Shri P.C. Wadhwa & others
Shri P.C. Wadhwa HUF vs. Asstt. Commissioner of Income Tax
Krishna Kunj, Circle - 1, Gwalior.
Gandhi Road,
Gwalior.
(PAN: AAAHW 0432 N)
ITA No.402/Agr/2010
Assessment Year: 2008-09
Shri Rohit Wadhwa, vs. Asstt. Commissioner of Income Tax
Krishna Kunj, Circle - 1, Gwalior.
Gandhi Road,
Gwalior.
(PAN: AAIPW 3229 R)
IT(SS)A No. 05/Agr/2010 & ITA No. 427/Agr/2010
Assessment Year : 2008-09 & 2006-2007 respectively
Asstt. Commissioner of Income Tax, vs. Shri Rohit Wadhwa,
Circle - 1, Gwalior. Krishna Kunj,
Gandhi Road,
Gwalior.
(PAN: AAIPW 3229 R)
C.O. Nos.16 & 15/Agr/2011
(In IT(SS)A No. 05/Agr/2010 & ITA No. 427/Agr/2010 respectively)
Assessment Years : 2008-09 & 2006-2007 respectively
Shri Rohit Wadhwa, vs. Asstt. Commissioner of Income Tax
Krishna Kunj, Circle - 1, Gwalior.
Gandhi Road,
Gwalior.
(PAN: AAIPW 3229 R)
ITA No.370/Agr/2010
Assessment Year : 2002-03
Asstt. Commissioner of Income Tax, vs. Smt. Neeru Wadhwa,
Circle - 1, Gwalior. Krishna Kunj,
Gandhi Road,
Gwalior.
(PAN: AANPW 2245 C)
3 Shri P.C. Wadhwa & others
C.O. No.09/Agr/2011
(In ITA No.370/Agr/2010)
Assessment Year : 2002-03
Smt. Neeru Wadhwa, vs. Asstt. Commissioner of Income Tax,
Krishna Kunj, Circle-1, Gwalior.
Gandhi Road,
Gwalior.
(PAN: AANPW 2245 C)
(Appellants) (Respondents)
Revenue by : Shri A.K. Sharma, Jr. D.R.
Assessee by : Shri Arun Daga, C.A.
Date of Hearing : 22.11.2011
Date of Pronouncement : 25.11.2011
ORDER
PER BENCH :
These 13 appeals of the Revenue and one appeal of the assessee arise from different orders of the ld. CIT(A). The assessee has also filed Cross Appeal in one appeal and the Cross Objections in all the appeals of Revenue. The details, for the sake of convenience, are mentioned herein below :-
S.No. ITA No. Name of assessee Asst. Year
1. ITA No.44/Agr/2011 P.C. Wadhwa 2008-09
2. C.O. No.23/Agr/2011 P.C. Wadhwa 2008-09
3. ITA No.46/Agr/2011 P.C. Wadhwa 2007-08
4. C.O. No.25/Agr/2011 P.C. Wadhwa 2007-08
5. ITA No.45/Agr/2011 P.C. Wadhwa 2006-07
6. C.O. No.24/Agr/2011 P.C. Wadhwa 2006-07
7. IT(SS)A No.47/Agr/2011 P.C. Wadhwa 2005-06
4 Shri P.C. Wadhwa & others
8. C.O. No.26/Agr/2011 P.C. Wadhwah 2005-06
9. ITA No.11/Agr/2011 P.C. Wadhwa 2004-05
10. C.O. No.34/Agr/2011 P.C. Wadhwa 2004-05
11. ITA No.428/Agr/2010 P.C. Wadhwa HUF 2002-03
12. C.O. No.10/Agr/2011 P.C. Wadhwa HUF 2002-03
13. ITA No.443/Agr/2010 P.C. Wadhwa HUF 2003-04
14. C.O. No.11/Agr/2011 P.C. Wadhwa HUF 2003-04
15. ITA No.444/Agr/2010 P.C. Wadhwa HUF 2004-05
16. C.O. No.12/Agr/2011 P.C. Wadhwa HUF 2004-05
17 ITA No.445/Agr/2010 P.C. Wadhwa HUF 2005-06
18 C.O. No.13/Agr/2011 P.C. Wadhwa HUF 2005-06
19. ITA No.446/Agr/2010 P.C. Wadhwa HUF 2007-08
20. C.O. No.14/Agr/2011 P.C. Wadhwa HUF 2007-08
21. IT(SS)A No.05/Agr/2010 Rohit Wadhwa 2008-09
22. C.O. No.16/Agr/2011 Rohit Wadhwa 2008-09
23. ITA No.427/Agr/2010 Rohit Wadhwa 2006-07
24. C.O. No.15/Agr/2010 Rohit Wadhwa 2006-07
25. ITA No.370/Agr/2010 Smt Neeru Wadhwa 2002-03
26. C.O.No.09/Agr/2011 Smt Neeru Wadhwa 2002-03
2. All these appeals mentioned hereinabove are filed by the Revenue and the Cross Objections are filed by the assessee. In addition to the above, the assessee Shri Rohit Wadhwa has also filed Cross appeal in ITA No.402/Agr/2010 for the Assessment Year 2008-09. All these appeals are being taken up by this consolidated order since all are interrelated issues.
3. First of all we take up the Revenue's appeal in ITA No.44/Agr/2011 in the case of Shri P.C. Wadhwa for the Assessment Year 2008-09 as under:-
4. The Revenue has raised the following grounds:-
5 Shri P.C. Wadhwa & others "1. On the facts and in the circumstances of the case the ld.
CIT(Appeals) has erred in deleting the addition of ` 20,00,000/- rightly made by the A.O. as undisclosed income which has been surrendered during the course of search and seizure operations, while stating that there is no denying fact that the appellant has offered ` 20 lakh as income which knowingly or unknowingly may have been left out to be declared earlier.
2. On the facts and in the circumstances of the case the Ld. CIT (Appeals) has erred in deleting the addition of ` 14,00,000/- made by the Assessing Officer on the basis of seized paper marked as LPS-1/1 page 48 as the assessee has failed to furnish counter evidences during the course of assessment proceedings, without giving an opportunity to the A.O. under Rule 46A of I.T. Rules, 1962.
3. Deleting the addition of ` 13,30,000/- made by the A.O. on the basis of LPS-1/2 page 67, as the assessee has failed to discharge its primary onus to prove the same with documentary evidence."
5. As regards ground no.1, the brief facts as emanating from the order of the A.O. at page no.2 are that the assessee has not declared under section 153A Rs.20,00,000/- surrendered during the year as undisclosed income. The same was added back to the income of the assessee by the A.O. The ld. CIT(A) deleted the addition. The assessee made the conditional declaration of Rs.20 lacs subject to the verification from record and the assessee had explained the seized documents from the record and therefore, the Assessing Officer was not justified in treating the conditional declaration as conclusive without making any independent enquiry or bringing any material on record. The ld. CIT(A) while deleting the addition 6 Shri P.C. Wadhwa & others relied upon the decision of Hon'ble Supreme Court in the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerala (1973) 91 ITR 18 (SC).
6. We have heard the rival contentions and perused the facts of the case. The assessee had made conditional declaration of surrender of Rs.20 lacs. The A.O. has made many additions while making the assessment vide his order dated 30.12.2009. Though the A.O. did not consider the explanation so made by the assessee, but it was observed that the ld. CIT(A) who had deleted almost all the additions which were either available before the A.O. in the seized records or the explanation was submitted before the A.O. through various submissions by the assessee and therefore, nothing remains to be explained by the assessee was argued by the ld. Counsel for the assessee Shri Arun Daga, Chartered Accountant.
7. The arguments of the ld. Counsel Shri Daga appears to be convincing when all the additions made by the A.O. have already been explained and are emanating from the seized record available with the Assessing Officer and the ld. CIT(A) has deleted all the additions after accepting the explanation of the assessee. Therefore, no further addition is called which is without any basis or any material found during the search the assessee who had made the conditional surrender subject to verification from the records. The admission though is important piece of evidence 7 Shri P.C. Wadhwa & others but it cannot be said to be convulsive and it is open to the assessee to rebut the admission and to show that the surrender has incorrectly been done, as has been held by the Hon'ble Supreme Court in the case of Pullangode Rubber Paroduce Co. Ltd. (Supra). In the present case, the assessee has submitted the explanation of each and every admission as appears from the order of ld. CIT(A) who has deleted all the additions and the conditional admission made by the assessee. Therefore, relying upon the instruction no.286/2/2003 dated 10.03.2003 it has been advised that the Assessing Officer should rely upon the facts/material gathered during the course of search while framing the assessment. In the present case, no material is available on record before the A.O. with regard to making the addition of Rs.20 lacs. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.1 of the Revenue is dismissed.
8. As regards ground no.2, the facts as emanating from page no.2 of the A.O.'s order are as under:-
"LPS-1/1 (i) Page 48 is a photocopy of Loose paper receipt for receiving `10 lakh on 5/6/06 and `4 lakh on 6.6.06 from Wadhwaji. The same was confronted to the assessee, the assessee has replied that the papers do not pertain to the assessee abut to M/s Global Estate. The A.R. further stated that land owners and farmers come and leave their land papers etc. for sale. However, no sale took place.
8 Shri P.C. Wadhwa & others The plea of the A.R. is not acceptable. The said receipts are duly signed by the persons who had received money along with date. The counter evidences were not furnished by the assessee despite specific show cause. Therefore, the same is added back to the income of the assessee as undisclosed expenditure/investment."
9. The ld. CIT(A) vide paragraph no.5.2 of his order deleted the addition and the observation of the ld. CIT(A) vide paragraph no.5.2 are reproduced as under :-
"5.2 Appellant's submissions alongwith assessment order, records and seized document have been considered carefully and are found to be acceptable. Vide para 5.2 of appeal order in case of the appellant for the A.Y. 07-08 in appeal No.291/IT/09-10/Gwl, the said addition already stands deleted for the reasons mentioned therein. Also the document does not pertain to the assessment year under consideration. Hence, addition of ` 14,00,000/- made on the basis of the same is, hereby, deleted."
10. We have heard the rival contentions and perused the facts of the case. It is not in dispute that the assessee had submitted the explanation before the A.O. that the loose paper in dispute does not pertain to the assessee but to M/s. Global Estate. The said loose paper was also available in the hands of M/s Global Estate before the Assessing Officer who has not drawn any adverse inference in the case of M/sGlobal Estate. Therefore it cannot be presumed that the documents belonged to the assessee and it cannot be said that he assessee has made certain investment in his own right. In the circumstances, and facts of the case, the ld. CIT(A) has 9 Shri P.C. Wadhwa & others rightly deleted the addition so made. Thus, ground no.2 of the Revenue is dismissed.
11. As regards ground no.3, the brief facts as emanating from the order of the A.O. at page no.2 are as under :-
"LPS-1/2 Page 67 is a photocopy of loose papers, with amounts, dates and names, and other such details written over it. The assessee was asked to explain and reconcile with books of accounts. The explanation was desired in the content of the document and reconciliation with books of accounts. The assessee never ever replied the said show cause. Stating the document as dump the assessee does not provided any explanation.
Therefore, the said amount of Rs.13,30,000/- is added back to the income of the assessee as income from undisclosed sources."
12. The ld. CIT(A) vide paragraph no.6.2 at page 6 of the order deleted the addition by observing as under :-
"6.2 On perusal of seized document, it is seen that it does not mention any name, leave aside the name of the appellant or his family members and is also unsigned. I have also obtained the bank statement of A/c. No.1485 from Bank of Maharashtra, City Center, Gwalior. It is found to be in the name of one Mr. Thakur Das, S/o. Shri Vidyaram, Gram Nainagiri, Morar. No transaction of the amounts mentioned in the seized document is found recorded in the said bank account as given by the bank authority in response to this office letter dated 1.11.2010. A.O. has made the addition, as mentioned above, by solely relying on provisions of Section 292C 10 Shri P.C. Wadhwa & others without bringing any material on record to prove that the said amount has indeed been received by the appellant, when the same has been denied by him. Further, the A.O. proposed to make addition of this amount in the hands of the appellant on protective basis, but has proceeded to complete his assessment by making the said addition of Rs.13,30,000/- in the hands of the appellant on substantive basis without any justification. Considering all the facts above and after perusal of bank statement, A.O. is not found justified in making the addition of Rs.13,30,000/- in the hands of the appellant without any basis. The same is, hereby, deleted. The same A.O. has made this addition for A.Y. 07-08 also in case of the appellant which has also been deleted."
13. We have heard the rival contentions and perused the facts of the case. The seized document does not mention any name and is also unsigned. The ld. CIT(A) during the course of appellate proceedings had obtained the Bank statement of Account No.1485 from Bank of Maharashtra which was found in the name of Mr. Thakur Das, S/o. Shri Vidhyaram, Gram Nainagiri, Morar. No transaction of the amount in the said document is found in the said bank account as given by the banking authorities in response to the ld. CIT(A)'s letter dated 01.11.2010. Therefore, the enquiry made by the ld. CIT(A) in her own power has revealed that the document does not pertain to the assessee. The A.O. has made the addition solely relying upon the provisions of section 292C of the Act without bringing any material on record to prove that the said document pertains to the assessee. Therefore, in the circumstances and facts of the case, no presumption under section 292C can be taken against the assessee. We find no infirmity in the order of the ld.
11 Shri P.C. Wadhwa & others CIT(A) who has rightly deleted the addition made by the A.O. Ground no.3 of the Revenue is dismissed. Thus, appeal of the Revenue in ITA No.44/Agr/2011 is dismissed.
14. As regards the Cross Objection of the assessee bearing no.23/Agr/2011 for the Assessment Year 2008-09, the same was not pressed by the ld. Counsel for the assessee Shri Arun Daga, C.A. Therefore, the same is dismissed as not pressed.
15. In the result, appeal of the Revenue in ITA No.44/Agr/2011 and Cross Objection of the assessee bearing no.23/Agr/2011 both are dismissed.
16. Now we take up the appeal of the Revenue in ITA No.46/Agr/2011 for the Assessment Year 2007-08. The Revenue has raised the following grounds of appeal:-
"1. On the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of ` 37,00,000/- made by the A.O. on the basis of LPS 1/12, page 202, as the assessee has failed to discharge its primary onus to prove the transactions with documentary evidence.
2. On the facts and in the circumstances of the case the Ld. CIT (Appeals) has erred in deleting the addition of ` 14,00,000/- made by the Assessing Officer on the basis of seized paper marked as LPS-1/1 page 48 as the assessee has failed to furnish counter evidences during the course of assessment proceedings, without giving an opportunity to the A.O. under Rule 46A of I.T. Rules, 1962.
12 Shri P.C. Wadhwa & others
3. Deleting the addition of ` 13,30,000/- made by the A.O. on the basis of LPS-1/2 page 67, as the assessee has failed to discharge its primary onus to prove the same with documentary evidence."
17. In ground no.1 of the Revenue the brief facts as emanating from the A.O.'s order at page no.3, paragraph nos. 4 & 5 are that as per the seized documents LPS- 1/12, document no.202 which is a Will of Shri P.C. Wadhwa which was made by him before going abroad on 30.05.2006 which had the details of his assets along with their value, and receivables mentioned at page no.3 of A.O.'s order. The assessee could not explain the source of the assets mentioned in the Will and could not reconcile with the books of account. The explanation given by the assessee was not accepted and accordingly the A.O. made the addition of Rs.37 lacs. The ld. CIT(A) vide paragraph no.8.2 of his order deleted the addition of Rs.31 lacs but sustained addition of Rs.6 lacs for the reason that the will/document prepared by the assessee was for his remembrance/record without verification from any of his own record/document pertaining to such assets. Regarding question no.17 in respect of Akariti Builders & Asnani Builders as recorded during the course of search operations which tallies with submissions as filed during the course of assessment proceedings whereby necessary supporting documents of third party had also been furnished. No word as 'receivable' has been mentioned with respect to items at Sl. Nos.15 to 19 which totals to Rs.37 lacs. The assessee himself had 13 Shri P.C. Wadhwa & others admitted Rs.10 lacs mentioned against Akriti Builders and Rs.11 lacs against Asnani Builders for which supporting documents had been given. The A.O. also seized such documents mentioned in the case of P.C. Wadhwa HUF which has been assessed by the same A.O. No adverse inference has been drawn in the case of Sanjeev Wadhwa, son of the assessee who is settled abroad and in whose case also assessments had been completed u/s. 153A by the same A.O. However, the assessee had failed to give any details in support of Rs.6 lacs against Shri Vidyasagar Dodi and Shri Kuldtar Sachdeva during the course of assessment proceedings and therefore, the ld. CIT(A) deleted the addition of Rs.31 lacs and confirmed the addition of Rs.6 lacs.
18. We have heard the rival contentions and perused the facts of the case. The Will had been written by the assessee while he went abroad. The Will is without any name and signature of any witness is not under dispute. All the amounts mentioned in the Will are in round figures which the ld. CIT(A) observed that this has been prepared for his remembrance or record without verification from the actual property or assets owned by the assessee. Regarding Akriti Builders and Asnani Builders, supporting documents are on record with A.O. as well as before the ld. CIT(A) is not under dispute with regard to Rs.21 lacs and no addition has been made with respect to Rs.10 lacs in the hands of Shri Sanjeeve Wadhwa, son 14 Shri P.C. Wadhwa & others of the assessee whose assessment has been completed under section 153C of the Act by the same A.O. Therefore, on the basis of the Will only without having any corroborative evidence or any document seized during the assessment proceedings, no adverse inference can be drawn against the assessee. Therefore, we find no infirmity in the order of the ld. CIT(A). Thus, ground no.1 of the Revenue is dismissed.
19. As regards ground no.2 of the Revenue, the brief facts as emanating from the order of the A.O. vide paragraph no.3 are as under:-
"3. LPS-1/1(i) Page 48 is a photocopy of Loose paper receipt for receiving Rs.10 lakh on 5/6/06 and Rs.4 lakh on 6/6/06 from Wadhwaji.
Assessee could not reconcile the document with its accounts hence the same remained unverifiable and unexplained. Under section 292C these transactions is added to the income of the assessee."
20. The ld. CIT(A) vide paragraph no.5.2 of her order deleted the addition made by the A.O. for the reasons that the assessee had satisfactorily explained the transaction mentioned in the seized documents along with books of account of M/s Global Estate.
15 Shri P.C. Wadhwa & others
21. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) for the reasons that the seized documents has not been recovered from the assessee's possession or control and it has been found from the premises of M/s Global Estate, in which assessee's son is a partner. Name of the assessee is nowhere mentioned in the seized documents which mentions only receipt of amount from Wadhwaji amounting to Rs.10 lacs and Rs.4 lacs, the copy of the said document has been reproduced by the ld. CIT(A) in her order vide paragraph no.5.2. The A.O. has not drawn any adverse inference in the case of M/s. Global Estate to which the documents pertain. Though the presumption under section 292C is applicable, the same is rebutable presumption. The A.O. has not made any enquiry or brought any material on record to show that the said payment of Rs.14 lacs indeed have been received by the assessee himself in the books of M/s. Global Estate to which Shri Rohit Wadhwa, son of the assessee is a partner and the same amount is found reflected as received as advance from Shri V.P. Singh for sale of property no.E-14, Chetakpuri, Gwalior. The assessee has also produced affidavit from Shri V.P. Singh, son of Shri Ratan Singh. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.2 of the Revenue is dismissed.
16 Shri P.C. Wadhwa & others
22. As regards ground no.3 of the Revenue, the brief facts as emanating from page no.2, paragraph no.4 of the A.O.'s order which are reproduced as under :-
"4.(iii) Page 67 is a photocopy f Loose papers, with amounts, dates and names, and other such details written over it. Please explain the reconcile with your books of accounts. Please explain the contents of the document and reconcile with your books of accounts.
These papers are found in possession of the assessee during search. The said papers are only confirmatory, but the same are found in possession of the assessee. Assessee was show cause as to why protective assessment in your hands is not made u/s 292C. The reply of the assessee that it is a rough paper is not acceptable. For the reasons stated above, amount mentioned in the loose paper amounting to Rs.13,30,000/- is added back to the income of the assessee."
23. The ld. CIT(A) vide paragraph no.6.3 of her order deleted the addition made by the A.O. for the reasons that the seized document does not mention the name of the assessee or his family members and also unsigned. Within the powers of the ld. CIT(A) she obtained the bank statement of the account no.1485 from Bank of Maharashtra, City Centre, Gwalior which is a statement in the name of Shri Thakur Das, Son of Shri Vidyaram, Gram Nainagiri, Morar. No transaction of the amount mentioned in the document as per the record in the said bank account. The A.O. has made the addition solely under section 292C of the Act without any material on record. Therefore, the ld. CIT(A) has deleted the addition made by the A.O. 17 Shri P.C. Wadhwa & others
24. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) vide paragraph no.6.3 of her order that the said document does not pertain to the assessee and the lower authorities are not justified in making the addition on the basis of presumption by applying the provisions of section 291C of the Act and therefore, the ld. CIT(A) has rightly deleted the addition made by the A.O. Thus, ground no.3 of the Revenue is dismissed.
25. Now we take up Cross Objection of the assessee bearing no.25/Agr/2011 for the Assessment Year 2007-08. The assessee has raised the following grounds in his Cross Objection:-
"1. On the facts and in the circumstances of the case, the learned commissioner of Income Tax (Appeals) erred in law in holding that non-issue of notice u/s 143(2) was resulting only in irregularity and not nullity and thereby the assessment made is not null and void ignoring the law as laid down in following cases, as cited by the assessee respondent.
(i) ACIT vs. Hotel Blue Moon decided on 2-2-2010 by the Supreme Court.
(ii) Rama Sinha vs. CIT (2002) 256 ITR 481
(iii) CIT(A) vs. Vishnu & Co. Pvt. Ltd. (187 Taxman pt3 - sc) The assessment made without issue of notice u/s 143(2) may kindly be declared as null and void and cancelled.
2. Without prejudice to ground no.1 above, on the facts and in the circumstances of the case the learned Commissioner of Income Tax 18 Shri P.C. Wadhwa & others (Appeals) erred and was not justified in law and on facts in not declaring the assessment a perverse liable to be annulled being made contrary to provisions of law liable to be annulled being made contrary to provisions of law on irrelevant considerations completely ignoring and eliminating the submissions urged.
3. Suitable compensation and damages may kindly be awarded and strictures passed against he concerned assessing office passing the assessment order and the Joint Commissioner giving approval there to in a arbitrary and capricious manner inflicting mental torture, harassment, pecuniary loss and thrusting undue litigation upon the respondent - assessee.
4. The assessee respondent craves leave to add, alter, amend, modify, substitute or delete any of he ground at the time or before hearing of the cross-objections."
26. As regards ground no.1 of the Cross Objection of the assessee which is legal ground and the assessee has agitated the non-issuance and service under section 143(2) which resulted only in irregularity and making the assessment null and void in view of the decision in the case of CIT vs. Hotel Blue Moon (2010) 321 ITR 362 (SC). The assessee has also relied upon two other decisions mentioned in the Cross Objection. The said case was also taken before the ld. CIT(A) which has been dismissed vide paragraph no.3.1 of her order.
27. We have heard the rival contentions and perused the facts of the case. The issue before us is identical on the facts which has been dealt by the Hon'ble Delhi High Court in the case of Ashok Chaddha vs. ITO (2011) 337 ITR 399 (Delhi).
19 Shri P.C. Wadhwa & others For the sake of convenience the head notes of the said judgment of Hon'ble Delhi High Court is reproduced as under :-
"Section 153A of the Income-tax Act, 1961, provides for the procedure for assessment in the case of search or requisition. Sub- section (1) starts with a non obstante clause stating that it is "notwithstanding anything contained in sections 147, 148 and 149".
Clause (a) thereof provides for issuance of notice to the person searched under section 132, or where documents, etc., are requisitioned under section 132A to furnish a return of income. This clause nowhere prescribes issuance of a notice under section 143(2). The words "so far as may be" in clause (a) of sub-section (1) of section 153A cannot be interpreted to mean that the issue of a notice under section 143(2) is mandatory in the case of an assessment under section 153A.
CIT (ASST.) v. HOTEL BLUE MOON [2010] 321 ITR 362 (SC) distinguished.
A search under section 132(1) of the Act was carried out in the residential premises of the assessee as well as his bank locker. In the course of search, cash and jewellery were found at the residence and jewellery was found in the locker. In response to a notice under section 153A the assessee filed a return declaring a total income of Rs.90,080. Two questionnaires were issued to the assessee which were duly complied with by him. After hearing the assessee, the total income was computed at Rs.23,31,760. The assessee preferred an appeal before the Commissioner (Appeals). An additional ground taken before the Commissioner (Appeals) was that since the issuance of a notice under section 143(2) is a mandatory requirement, the assessment was bad in law and void ab initio and required to be cancelled. The Commissioner (Appeals) did not agree with the contention of the assessee and upheld the assessment as framed by the Assessing Officer. Another ground taken before the Commissioner (Appeals) was against the addition of Rs.10 lakhs under section 69A of the Act in the hands of the assessee in respect of cash seized from an employee of the assessee. The assessee contended that the amount belonged to his nephew S, who had sent the money for a property transaction. To support this contention, he filed a copy of a recovery 20 Shri P.C. Wadhwa & others suit filed by S. The Commissioner (Appeals) did not accept the explanation. This order was upheld by the Tribunal. On appeal to the High Court:
Held, dismissing the appeal, that (i) no specific notice was required under section 143(2) of the Act when the notice as required under section 153A(1)(a) of the Act was already given. In addition, the two questionnaires issued to the assessee were sufficient so as to give notice to the assessee, asking him to attend the office of the Assessing Officer in person or through a representative duly authorised in writing or produce or cause to be produced at the given time any documents, accounts, and any other evidence on which he may rely in support of the return filed by him.
(ii) That there was no plausible explanation given by the assessee as to why his employee was found in possession of cash. No details had been filed about the land sought to be purchased by him. Thus, the Tribunal was right in holding that the claim made by S was an afterthought to accommodate the assessee. Had the money really belonged to him, he would have made the claim soon after its seizure.
The addition under section 69A was justified. "
28. Since the issue before us is identical to the facts as in the case of Ashok Chaddha (supra), therefore, following the same, we are of the view that no specific notice was required under section 143(2) of the Act when the notice as required under section 153(a)(ia) of the Act has already been given. Therefore, in the circumstances and facts of the case, we dismiss ground no.1 of the Cross Objection of the assessee.
21 Shri P.C. Wadhwa & others
29. As regards ground nos.2, 3 & 4 of the Cross Objection of the assessee, which are general in nature, therefore do not require any adjudication. Thus, Cross Objection of the assessee is dismissed.
30. In the result, appeal of the Revenue in ITA No.46/Agr/2011 and Cross Objection of the assessee bearing no.25/Agr/2011 both are dismissed.
31. Now we take up the appeal of the Revenue in ITA No.45/Agr/2011 for the Assessment Year 2006-07. The Revenue has raised the following grounds of appeal :-
1. On the facts and in the circumstances of the case the Ld. CIT (Appeals) has erred in deleting the addition of ` 28,00,000/- made by the Assessing Officer on the basis of LPS-2/25, page 1 to 3 and the assessee has signed the agreement in his individual capacity.
2. On the facts and I the circumstances of the case the Ld. CIT(A)(Appeals) has erred in deleting the addition of ` 18,00,000/-
made by the A.O. on the basis of LPS-2/33, page 108, which shows that the assessee has received the cash amount of Rs.18,00,000/- and not on behalf of the HUF."
32. The brief facts in ground no.1 as appearing at page no.3, para no.6 of the A.O.'s order are as under :-
"6. LPS 2/25 Page 1 to 3: These papers contains details of agreement between P.C. Wadhwa Individual and M/s Aakriti Dwelling Pvt. Ltd. which are found in possession of the assessee 22 Shri P.C. Wadhwa & others during search. The said papers are only confirmatory, but the same are found in possession of the assessee. The reply of the A.R. was that the accounting entry was done in the books of HUF. But, when the agreement was made by the assessee in his individual capacity (it is not mentioned that assessee has signed as Karta of HUF), mere recording of the said transaction in the books of HUF, does not in any way entitle the assessee to justify his claim. Therefore, the same is added back to the income of the assessee as income from undisclosed sources."
33. The ld. CIT(A) vide her order in paragraph no.8.2 deleted the addition for the reasons that the investments belong to HUF of the assessee and no adverse inference has been drawn in the case of HUF also.
34. We have heard the rival contentions and perused the facts of the case. We concur with the findings of the ld. CIT(A) that the said investment belongs to Shri P.C. Wadhwa HUF which appears to have been invested out of the bank account of the HUF and no adverse inference has been drawn in the case of P.C. Wadhwa HUF by the Department. These facts were available before the A.O. as well as before ld. CIT(A). In the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.1 of the Revenue is dismissed.
35. As regards ground no.2 of the Revenue, as per page nos.3, 4 & 5 of the order of the A.O. are that certain papers were found in the possession of the assessee 23 Shri P.C. Wadhwa & others during the course of search and the explanation given by the assessee was not found satisfactory and accordingly made the addition of Rs.18 lacs. The ld. CIT(A) deleted the addition vide paragraph no.9.2 of her order for the reasons that the said property belongs to Shri P.C. Wadhwa HUF and this fact was available with the A.O. and was declared in the Balance Sheet of the HUF of the assessee.
36. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) given in paragraph no.9.2 of her order which appears to be reasoned one that the property having been declared by the assessee HUF cannot be added in the hands of the individual i.e. present assessee. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.2 of the Revenue is dismissed.
37. Now we take up Cross Objection of the assessee bearing no.24/Agr/2011 for the Assessment Year 2006-07. The assessee has raised this Cross Objection identical to the Cross Objection of the assessee bearing no.25/Agr/2011 for the Assessment Year 2007-08 which we have already decided vide paragraph nos. 27 & 28 of this order. Since the facts and grounds in the present Cross objection are identical to that of C.O. No.25/Agr/2011. Therefore, following our decision in 24 Shri P.C. Wadhwa & others Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.24/Agr/2011.
38. In the result, Revenue's appeal in ITA no.45/Agr/2011 and Cross Objection of the assessee bearing no.24/Agr/2011 both are dismissed.
39. Now we take up the appeal of the Revenue in ITA No.47/Agr/2011. The Revenue has raised the following grounds of appeal:-
1. On the facts and in the circumstances of the case the Ld. CIT (Appeals) has erred in deleting the addition of ` 10,45,000/- made by the Assessing Officer on the basis of LPS-2/16, page 19-22 and relying on the provision of section 292C of the I.T. Act, as the assessee has failed to discharge its primary onus to prove the transactions with documentary evidence.
2. On the facts and I the circumstances of the case the Ld. CIT(A)(Appeals) has erred in deleting the addition of ` 11,53,000/-
made by the A.O. on the basis of seized paper marked as LPS-2/16, pages 23-26 and relying on the provision of section 292C of the I.T. Act, as the assessee has failed to furnish counter evidence during the course of assessment proceedings, without giving an opportunity to the A.O. under Rule 46A of I.T. Rule, 1962.
3 On the facts and in the circumstances of the case the Ld. CIT (Appeals) has erred in deleting the addition of ` 46,50,000/- made by the Assessing Officer on the basis of LPS-2/32 page 28-74 and relying on the provision of section 292C of the I.T. Act, as the assessee has failed to discharge its primary onus to prove the same with documentary evidence."
25 Shri P.C. Wadhwa & others
40. The brief facts in ground no.1 of the Revenue as emanating at page no.4, paragraph no.9 of the A.O.'s order are as under :-
"9. LPS 2/16 Page 19 to 22 These papers are fond in possession and control of the assessee during search. The said papers are only confirmatory, but the same are found in possession of the assessee. The assessee was show cause as to why protective assessment in your hands is not made u/s 292C and substantive assessment in the hands Kusum (purchaser) be not made. While the assessee filed reply but could not furnish any confirmation, genuineness of parties and as such could not prove that documents regarding asset did not belong to him. By virtue of the section 292C of the Income Tax Act, 1961, Market value of the registry dt. 29-03-2005 not recorded in his accounts, are added in the income of the assessee for the year."
41. The ld. CIT(A) deleted the addition vide paragraph no.11.2 of her order for the reasons that the said transaction belongs to M/s. Global Estate and the son of the assessee is also partner in the said firm and in the case of M/s Global Estate where assessment has been completed under section 153C of the Act by the same A.O. and the seized documents were found from the office premises of M/s Global Estate itself and there is no adverse inference in this regard in the assessment of M/s. Global Estate.
42. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that the seized document was found in the 26 Shri P.C. Wadhwa & others possession of M/s. Global Estate whose assessment has been completed under section 153C of the Act by the same A.O. and the A.O. of the Global Estate has not made any addition. Therefore, in the circumstances and facts of the case, the A.O. cannot draw any presumption under section 292C of the Act against the assessee and therefore, we find no infirmity in the order of ld. CIT(A). Thus, ground no.1 of the Revenue is dismissed.
43. As regards ground no.2 of the Revenue, the brief facts as emanating from the order of the A.O. at page nos.4 & 5 are as under :-
"10. LPS 2/16 Page 23a to 26 These papers are fond in possession and control of the assessee during search. The said papers are only confirmatory, but the same are found in possession of the assessee. The assessee was show cause as to why protective assessment in your hands is not made u/s 292C and substantive assessment in the hands Smt. Saroj Bhadoria, W/o. Shri Krishan Pal Singh Bhadhoria, R/o.E-46A, Balwant Nagar, Gwalior (purchaser) be not made. While the assessee filed reply but could not furnish any confirmation, genuineness of parties and as such could not prove that documents regarding asset did not belong to him. By virtue of the section 292C of the Income Tax Act, 1961, Market value of the registry dt. 29.03.2005 not recorded in his accounts, are added in the income of the assessee for the year.
44. The ld. CIT(A) vide page no.10, paragraph no.11.2 of her order deleted the addition on the same reasons as in ground no.1 hereinabove.
27 Shri P.C. Wadhwa & others
45. We have heard the rival contentions and perused the facts of the case. The facts in the present ground are identical to the facts in ground no.1 hereinabove and following the same, we confirm the order of ld. CIT(A) and dismiss ground no.2 of the Revenue.
46. As regards ground no.3 of the Revenue, the brief facts as emanating from the A.O.'s order at page no.5 are as under :-
"11. LPS 2/32 Page 28 to 74 These papers are found in possession of the assessee during search. The said papers are only confirmatory, but the same are found in possession of the assessee. Please show cause as to why protective assessment in your hands is not made u/s 292C and substantive assessment in the hands of Rohit Wadhwa be not made. Vide reply dated 18-12-2009 though the assessee replied the query but could not prove that documents i.e sale deed in the name of Smt. Prabawati Chohan W/o. Shri K.K. Chouhan r/o. Krishan Kunj, Gandhi Road, Gwalior for Rs.46,50,000/- did not belong to him. By virtue of the section 292C of the Income Tax Act, 1961, Market value of the registry dated 31.03.2009 not recorded in his accounts, are added in the income of the assessee for the year."
47. The ld. CIT(A) vide paragraph no.12.2 at page nos.11 & 12 deleted the addition made by the A.O. for the reasons that the said transactions belongs to Shri Rohit Wadhwa, son of the assessee who is partner in the concern M/s. Global Estate. Both the assessees i.e. Shri Rohit Wadhwa and M/s Global Estate have 28 Shri P.C. Wadhwa & others been assessed under section 153(A)/153(C) by the same A.O. and no adverse inference has been drawn in those cases.
48. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that the said transaction has already been declared in the case of Shri Rohit Wadhwa and M/s Global Estate which has been assessed by the same A.O. under section 153A/153(C) of the Act and no adverse inference has been taken against the assessee or about the said transactions which have been duly recorded in the books of account of Rohit Wadhwa and M/s Global Estate. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.3 of the Revenue is dismissed.
49. Now we take up Cross Objection of the assessee bearing no.26/Agr/2011 for the Assessment Year 2005-06. The assessee has raised this Cross Objection identical to the Cross Objection of the assessee bearing no.25/Agr/2011 for the Assessment Year 2007-08 which we have already decided vide paragraph nos.27 & 28 of this order. Since the facts and grounds in the present Cross objection are identical to that of C.O. No.25/Agr/2011. Therefore, following our decision in 29 Shri P.C. Wadhwa & others Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.26/Agr/2011.
50. In the result, appeal of the Revenue in ITA No.47/Agr/2011 and Cross Objection of the assessee bearing no.26/Agr/2011 both are dismissed.
51. Now we take up Revenue's appeal in ITA No.11/Agr/2011 for the Assessment Year 2004-05. The Revenue has raised the following grounds of appeal:-
"1. Whether on the facts and in the circumstances of the case the ld. CIT(A)(Appeals) has erred in deleting the addition of Rs.3,48,584/- on account of agriculture income.
2. Whether on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the addition of Rs.68,22,580/- on account of LPS 1/14 page 1, 2, 29, 36 and 52.
3. Whether on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the addition of Rs.1,87,950/- on account of LPS 2/1, page 69 & 70.
4. Whether on the facts and in the circumstances of the case the ld. CIT(Appeal) has erred in deleting the addition of Rs.13,82,400/- on account of LPS 2/24, page 2 to19."
52. The brief facts in ground no.1 of the Revenue as appearing at page no.3, paragraph no.5 of A.O.'s order are as under :-
30 Shri P.C. Wadhwa & others "5. Agricultural Land Rania (Haryana): M/s P.C. Wadhwa HUF in its return of income has not furnished Certificate of Yield produced, invoices stating sale of agricultural produce, expenses incurred for cultivation of land etc. for his claim of Agricultural Income shown in the return of income. In view of the same, the said agricultural income as treated is income from undisclosed sources and are added back to the income of the assessee."
53. The ld. CIT(A) vide page no.4, paragraph no.7.1 of her order deleted the addition made by the A.O. The ld. CIT(A) deleted the addition for the reasons that the same addition has been made by the A.O. in the hands of the assessee HUF on substantive basis which has been deleted by the ld. CIT(A).
54. We have heard the rival contentions and perused the facts of the case. It was argued by Shri Arun Daga, C.A. that the agricultural land in dispute has already been declared in the Balance Sheet of Shir P.C. Wadhwa HUF where substantive assessment has been made and the said addition has been deleted by the ld. CIT(A). No two additions can be made, one in the hands of the assessee HUF and other in assessee's hand. We are convinced with the argument of Shri Arun Daga, ld. Counsel for the assessee and the finding of the ld. CIT(A) at paragraph no.7.1 of her order that when the investment has already been declared in the hands of Shri P.C. Wadhwa HUF which is not under dispute, therefore, the addition in the hands of the assessee cannot be made. We find no error in the order of the ld.
31 Shri P.C. Wadhwa & others CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.1 of the Revenue is dismissed.
55. In ground no.2 of the Revenue, the brief facts as appearing at page nos.3 & 4 of the A.O.'s order in paragraph no.6 are as under :-
"6. LPS 1/14 Page 1: This paper contains details of certain transactions amounting to Rs.5.50 Lakhs with Mr. Girish.
Page 2: This paper contains details of certain transactions amounting to Rs.1,52,580/- with Mr. Haish Sharma.
Page 29: This paper contains details of certain transitions amounting to Rs.11,20,000/- for Stamp purchased and other misc. Details like Mr. Kanitkar, Mr. Tomar, Rathi appears on the said page.
Page 36: This paper contains details of certain transactions amounting to Rs.24 Lakhs in the name of Papaji Rs.12 Lakhs and Mr. Dhruv for Rs.12 Lakhs.
Page 52: This paper contains detail of certain transactions amounting to Rs.26 Lakhs in the names of Ravi for basement for Rs.2 Lakhs; Rahul Rana Rs.12 Lakhs and Lokendra/Shukla for Rs.12 Lakhs.
The reply of the assessee was filed on 16/11/2009 is not acceptable as the assessee could not furnish any documentary evidence which shows the details of payment made to said persons. Hence, u/s 292C of the Act, it is presumed that the aid document belongs to the assessee, not recorded in his accounts, as he fails to prove that document found during the course of search proceedings did not belong to him hence added back to the income."
32 Shri P.C. Wadhwa & others
56. The Ld. CIT(A) deleted the addition made by the Assessing Officer as per page nos.7 & 8, paragraph no.8.1 of her order for the reasons mentioned therein.
57. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A). As regards page no.1 of LPS-1/14 which belongs to Shri Rohit Wadhwa, HUF who is a regular Income tax assessee, these facts, as argued by the ld. Counsel for the assessee, are available before the A.O. As regards page no.2 of the seized documents, the same is not in the handwriting of the assessee and nowhere financial transaction is involved with the assessee and the paper was not legible. As regards page no.29, the said paper belongs to M/s. Global Estate where the assessment has been completed by the same A.O. As regards page nos.36 & 62, the word mentioned 2 P.M. or 12 A.M. has been misinterpreted as the amount of unexplained investment. It appears to be a dumb document and no addition is called for by the A.O. with regard to such document. The facts of the seized documents for which the present addition has been made were available before the A.O. where none of the investment was recorded. The said seized document belongs to the assessee and therefore, on verification of such facts and explanation by the assessee, the ld. CIT(A) has rightly deleted the addition made by the A.O. and we find no infirmity in her order. Thus, ground no.2 of the Revenue is dismissed.
33 Shri P.C. Wadhwa & others
58. As regards ground no.3 of the Revenue, the brief facts as appearing at page no.4, paragraph no.7 of the A.O.'s order are as under :-
"7. LPS 2/1 Page 69 to 70 Rs.1,87,950/- in the name of P.C. Wadhwa are share application money the details of which are unexplained and unrecorded in the books of individual. The reply of the assessee was filed on 16/11/2009 is not acceptable as the assessee could not furnish any documentary evidence which shows the details of payment made to said persons. Hence, u/s 292C of the Act, it is presumed that the said document belongs to the assessee, not recorded in his accounts, as he fails to prove that document found during the course of search proceedings did not belong to him hence added back to the income."
59. The ld. CIT(A) deleted the addition vide paragraph no.9.2 of her order for the reasons mentioned therein.
60. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that the books of account of HUF have recorded the said transaction and also from the bank statement of Shri P.C. Wadhwa such details are confirmed. These facts were available before the A.O. in the Balance Sheet filed in the case of Shri PC Wadhwa HUF which has not been taken note by the A.O. Therefore, in the circumstances and facts of the case, the A.O. is not justified in making the said addition and the ld. CIT(A) has rightly deleted the addition made by the A.O. Thus, ground no.3 of the Revenue is dismissed.
34 Shri P.C. Wadhwa & others
61. As regards ground no.4 of the Revenue, the brief facts as emanating from the A.O.'s order at page no.4, paragraph no.8 are reproduced as under :-
"8. LPS 2/24 Page 2 to 19: These documents are Sale Deed in favour of Shri Kaila Devi Grah Nirman Samiti having Market value of Rs.13,82,400/- and Sale Price of Rs.3,50,000/-.
The reply of the assessee was filed on 16/11/2009 is not acceptable as the assessee could not furnish any documentary evidence which shows third party confirmations regarding the sales deed found in his possession. Hence, u/s 292C of the Act, it is presumed that the said document belongs to the assessee, not recorded in his accounts, as he fails to prove that document found during the course of search proceedings did not belong to him hence added back to he income."
62. The ld. CIT(A) vide paragraph no.10.2 of her order deleted the addition made by the A.O. for the reasons mentioned therein.
63. We have heard the rival contentions and perused the facts of the case. We concur with the finding of the ld. CIT(A) that the assessee has submitted certificate from President of Kaila Devi Grah Nirman Samiti stating that certain papers relating to plot nos.239, 240 253 & 254 in Kailash Vihar Colony as purchased from Om Constructions were given o M/s Global Estat for sale. However, no transaction physical or financial has taken place pertaining to the said properties. The seized document does not mention the name of the assessee or family members. In the circumstances and facts of the case, we find no infirmity in the 35 Shri P.C. Wadhwa & others order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.4 of the Revenue is dismissed.
64. Now we take up Cross Objection of the assessee bearing no.34/Agr/2011 for the Assessment Year 2004-05. The assessee has raised this Cross Objection identical to the Cross Objection of the assessee bearing no.25/Agr/2011 for the Assessment Year 2007-08 which we have already decided vide paragraph nos. 27 & 28 of this order. Since the facts and grounds in the present Cross objection are identical to that of C.O. No.25/Agr/2011. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.34/Agr/2011.
65. In the result, appeal of the Revenue in ITA No.11/Ar/2011 and the Cross Objection of the assessee bearing no.34/Agr/2011 both are dismissed.
66. Now we take up the appeals filed by the Revenue in the case of Shri P.C. Wadhwa HUF and the Cross Objection in the said cases by the assessee as under :-
67. In ITA No.428/Agr/2010 for the Assessment Year 2002-03, the Revenue has raised the following grounds of appeal:-
36 Shri P.C. Wadhwa & others "1. Whether on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of Rs.13,77,327/-
out of Rs.24,67,927/- on account of sundry creditors as the assessee has failed to establish genuineness and creditworthiness of the creditors."
68. The brief facts in the sole ground of the assessee as emanating from the A.O.'s order at page no.5, paragraph no.13 are as under :-
"(13) Sundry Creditors not for Goods: The reply filed by the assessee is not acceptable as nature and purpose of these transactions are not explained properly, the details of primary documents and details of services availed etc., are not furnished. Thus, transactions remains doubtful and unverifiable as such the same are treated as unexplained and added back to the income of the assessee for tax purpose."
69. The ld. CIT(A) deleted the addition of Rs.24,67,923/- vide paragraph no.14.2 of her order for the reasons mentioned therein.
70. We have heard the rival contentions and perused the facts of the case. As appears from the grounds of the Revenue, the Revenue has mentioned deletion of addition of Rs.13,77,327/- whereas it is Rs.24,67,923/- which is taken as amended. There is no dispute to the fact as verifiable from the Balance Sheet of the assessee for the Assessment Year 2001-02, the Sundry creditors amounting to Rs.23,05,425/- are the opening balance and the same cannot be added and cannot be subject matter of addition in the income of the assessee in the impugned year.
37 Shri P.C. Wadhwa & others As regards Rs.1,50,000/- which represents the amount received from Shri Bhupendra Gaur, to whom the property has been allotted for Rs2 lacs vide registered deed dated 13.08.2002 and similarly City Center property has been purchased from Shri Sumit Chand Jain for Rs.4,10,450/- vide registration deed dated 16.12.1997. These submissions were given to the A.O. who rejected the assessee's submission without any basis as has been observed by the ld. CIT(A) in her order at paragraph no.14.2. In the circumstances and facts of the case, this disputed amount is receivable as mentioned by the ld. CIT(A) in her order in paragraph no.14.2 and, therefore, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, the sole ground taken by the Revenue is dismissed.
71. As regards Cross Objection bearing no.10/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical on facts which has been decided by us vide paragraph nos.27 & 28 of this order. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.10/Agr/2011.
38 Shri P.C. Wadhwa & others
72. In the result, the Revenue's appeal in ITA No.428/Agr/2010 and Cross Objection of the assessee bearing no.10/Agr/2011 both are dismissed.
73. Now we take up Revenue's appeal in ITA No.443/Agr/2011 for the Assessment Year 2003-04. The Revenue has raised the following grounds :-
"1. Whether on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of Rs.14,27,922/- on account of sundry creditors not for goods."
74. The brief facts in the grounds of the assessee as appearing at page nos.3 & 4 of the A.O's order are that the assessee has declared Sundry Creditors in its Balance Sheet. The explanation with regard to the Sundry Creditors was not found satisfactory by the A.O. who treated them as unexplained and added to the income of the assessee.
75. The ld. CIT(A) vide paragraph no.9.2 of her order deleted the same for the reasons mentioned therein.
76. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that out of Rs.14,27,922/-, the amount of Rs.3,05,450/- represents the opening balance of the Sundry Creditors which is verifiable from the books of the assessee for Assessment Year 2002-03. As 39 Shri P.C. Wadhwa & others regards Rs.1,50,000/- which represents the amount received from Shri Bhupendra Gaur to whom the property has been allotted for Rs.2,00,000/- vide registration deed dated 13.08.2002 is on record and similarly City Centre property has been purchased from Shri Sumit Chand Jain for Rs.4,10,450/- vide registration deed dated 16.12.1997. The assessee has submitted the explanation before the A.O. who has rejected the said submission. All other creditors belong to family members as appearing from Assessing Officer's order and cannot be subject matter of addition because the same were assessed with same Assessing Officer und section 153(A) of the Act and no adverse inference has been taken in those assessments. In the circumstances and facts of the case, we find no infirmity in the order of the ld CIT(A) who has rightly deleted the addition made by the A.O. Thus, the sole ground of the Revenue is dismissed.
77. As regards Cross Objection bearing no.11/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical on facts which has been decided by us vide paragraph nos.27 & 28 of this order. Therefore, following our decision in Cross 40 Shri P.C. Wadhwa & others Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection bearing no.11/Agr/2011 of the assessee.
78. Now we take up the Revenue's appeal in ITA No.444/Agr/2010 for the Assessment Year 2004-05.
79. The Revenue has raised the following grounds of appeal :-
"1. Whether on the facts ad in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of Rs.28,09,974/- on account of sundry creditors not for goods."
80. The brief facts in the case of the Revenue as appearing in the A.O.'s order at page no.4, paragraph no.6 are as under :-
"(6) Sundry Creditors not for Goods:
The reply filed by the assessee is not acceptable as nature and purpose of these transactions are not explained properly, the details of primary documents and details of services availed etc., are not furnished. Thus, transitions remains doubtful and unverifiable as such the same are treated as unexplained and added back to the income of the assessee for tax purposes."
81. The ld. CIT(A) vide page nos.7 & 8 at paragraph no.9.2 of her order deleted the addition for the reasons mentioned therein.
41 Shri P.C. Wadhwa & others
82. We have heard the rival contention and perused the facts of the case. We concur with the views of the ld. CIT(A) that on perusal of records, it is seen that out of total sundry creditors of Rs.28,09,974/- declared as per the balance sheet of the assessee HUF, amount of Rs.4,62,118/- only represents sundry creditors added during the year. The balance are opening balance as on 01.04.2003, confirmations along with PAN in respect of which have been filed by the assessee. Amount of Rs.4,62,118/- has been taken from P.C. Wadhwa, Individual, who has also been paid back Rs.71,527/- during the year. Shri P.C. Wadhwa is assessed with the same A.O. and transactions are found duly recorded in the books of account of the assessee HUF along with Shri P.C. Wadhwa. The sundry creditors of Rs.13,41,791/- pertain to the family members of the appellant HUF viz. Shri Rajesh Wadhwa, Smt. Rakhee Wadhwa, Shri Rohit Wadhwa, Shri Sanjeev Wadhwa and Smt. Sudha Wadhwa, who incidentally, are also assessed with the same A.O. Transactions in respect of family members have also been found to be duly recorded in the books of account of the appellant HUF along with family members, where the assessment order has also been passed by the same A.O. u/s 153A. Since the assessee has discharged the onus regarding identity and creditworthiness of the creditors along with genuineness of the transactions, the A.O. was not justified in making the addition of total amount of sundry creditors shown in the balance sheet at Rs.28,09,974/- for want of evidence. The same was 42 Shri P.C. Wadhwa & others rightly deleted by the ld. CIT(A). In the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the Assessing Officer. Thus, the sole ground of appeal of the Revenue is dismissed.
83. As regards Cross Objection bearing no.12/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical which has been decided by us vide paragraph nos. 27 & 28 of this order. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.12/Agr/2011.
84. In the result, Revenue's appeal in ITA No.444/Agr/2010 and Cross Objection of the assessee bearing no.12/Agr/2011 both are dismissed.
85. Now we take up the appeal of the Revenue in ITA No.445/Agr/2010 for the Assessment Year 2005-06. The Revenue has raised the following grounds:
43 Shri P.C. Wadhwa & others "1. Whether on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of ` 38,78,244/-
on account of sundry creditors not for goods.
2. Whether on the facts and in the circumstances of the case the Ld. CIT (Appeals) has erred in deleting the addition of ` 20,86,000/- on account of advance received.
3. Whether on the facts and in the circumstances of the case the CIT (Appeals) has erred in deleting the above addition ignoring the co-terminus power of CIT(A) as has been held by their Supreme Court of India in the case of Kanpur Coals Syndicate vs. Commissioner of Income Tax, 53 ITR 225."
86. The brief facts in ground no.1 of the Revenue as appearing at page nos. 3 & 4, paragraph no. 5 of order of the A.O. are as under :-
"(5) Sundry Coeditors not for Goods:
The reply filed by the assessee is not acceptable as nature and purpose of these transactions are not explained properly, the details of primary documents and details of services availed etc., are not furnished. Thus, transactions remains doubtful and unverifiable as such the same are treated as unexplained and added back to the income of the assessee for tax purpose."
87. The ld. CIT(A) vide paragraph no.8.2 of her order deleted the addition made by the Assessing Officer for the reasons mentioned therein.
88. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) given in paragraph no.8.2 of her order wherein she has held that as per the list of sundry creditors declared in the balance 44 Shri P.C. Wadhwa & others sheet for Rs.38,78,243/- amount of Rs.18,82,895/- represent family members of the assessee HUF as sundry creditors who are assessed with the same A.O. and in whose case assessment has also been completed u/s 153A. Books of account of the assessee HUF along with family members have also been produced. The assessee has also produced confirmed copy of accounts in respect of all the sundry creditors along with their PAN etc. The transactions as mentioned in the confirmed coy of accounts are found duly reflected in the books of account. Copy of registration deeds also given in respect of properties purchased from those shown as creditors. The A.O. has rejected the confirmations without giving any basis for the same. Books of account of the assessee have also been accepted by the A.O. Therefore, the A.O. was not justified in treating sundry creditors as unexplained without bringing any adverse material on record by making third party enquiries or any other evidence. Accordingly, addition of Rs.38,78,244/- is deleted. Therefore, we find no infirmity in the order of the ld. CIT(A) which appears to be reasoned one. Thus, ground no.1 of the Revenue is dismissed.
89. As regards to ground no.2 of the Revenue, the brief facts as emanating from the order of the A.O. at page no.4, paragraph no.7 are as under :-
"(7) Advance Received:
In the Audit report along with submitted Balance Sheet it is mentioned Advance received as per List, but after specific show cause, the assessee had not given the said list of advance received but 45 Shri P.C. Wadhwa & others credited the same in the books of accounts. Therefore, the credits remains unexplained and unverifiable and added back to the income of the assessee as undisclosed income from undisclosed sources."
90. The ld. CIT(A) vide para no.9.2 of her order deleted the addition made by the A.O. for the reasons mentioned therein.
91. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that some registries are already in the possession of the A.O. in the seized documents and the transactions are also duly recorded in the books of account of the assessee which has been accepted by the A.O. In such circumstances, when the transaction itself is confirmed through registries which are the seized documents therefore, there is no purpose of making addition in the hands of the assessee which are recorded in the books of account. Therefore, we find no infirmity in the order of the ld CIT(A). Thus, ground no.2 of the Revenue is dismissed.
92. As regards Ground no.3 of the Revenue, the said ground has probably been taken on misconception of the A.O. which mentions that the CIT(A) (Appeals) has deleted the addition ignoring the co-terminus power of the CIT(A). There is no dispute to the fact that the Hon'ble Supreme Court of India in the case of Kanpur Coals Syndicate vs. CIT, 53 ITR 225 held that the CIT has co-terminus power as 46 Shri P.C. Wadhwa & others that of the A.O. is the law of land and not a grievance of the Revenue. The ground raised is on misconception of the facts of the present case and therefore, the same is dismissed.
93. As regards Cross Objection bearing no.13/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical on facts which has been decided by us vide paragraph nos.27 & 28 of this order. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.13/Agr/2011..
94. In the result, Revenue's appeal in ITA No.445/Agr/2010 and Cross Objection of the assessee bearing no.13/Agr/2011 both are dismissed.
95. Now we take up appeal of the Revenue in ITA No.446/Agr/2010 for the Assessment Year 207-08. The Revenue has raised the following grounds of appeal:-
47 Shri P.C. Wadhwa & others "1. Whether on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of Rs.12,42,100/-
on account of difference in sales consideration of properties sold."
96. The brief facts in the sole ground of the Revenue as emanating from the order of the A.O. at page nos.2 & 3 vide paragraph no.3 are as under :-
"(3) Income from Capital Gains:
The assessee has shown Long Term Capital Gains wherein full value of consideration is mentioned as Rs.20,31,200/-.
During the course of proceedings it was placed on record that assessee has sold the following properties :-
Sale of Office No.S-6 and S-7 at Srishti Complex, Bhopal Total Area = 464 sq. ft. to Mr. Suneel Agarwal and Mrs. Sandhya Agarwal resident of 3/1 Kanishka Apartments, Shalimar Enclave, E-3,Area Colony, Bhopal. Total consideration shown Rs.3,00,000/- whereas market value as per the guidelines of Sub-Registrar office is Rs.8,79,800/-. Total Stamp duty of Rs.79,200/- had be paid by the buyers.
Sale of Office No.G-11 at Srishti Complex, Bhopal Total Area = 233 sq. ft. to Mr. Praveen Singh, s/o. K.K Singh Chauhan. Total consideration shown Rs.3,72,800/- whereas market value as per the guidelines of the Sub-Registrar office is Rs.6,44,350/- on which stamp duty of Rs.51,550/- is paid.
Sale of Office No.G-14 and G-15 at Srishti Complex, Bhopal Total Area = 441 sq. ft. to Mr. Tarkeshwar Singh Chauhan. Total consideration shown = Rs.7,05,600/- whereas market value as per Sub-Registrar office is Rs.12,19,375/- on which total stamp duty of Rs.97,550/- is paid.
Sale of Office No.G-12 and G-13 at Srishti Complex, Bhopal Total Area = 408 sq. ft. to Mrs. Prabhavati Singh Chauhan. Total consideration shown = Rs.6,52,800/- whereas market value as per 48 Shri P.C. Wadhwa & others Sub-Registrar office is Rs.9,02,500/- on which total stamp duty of Rs.72,200/- is paid.
Particulars of Sales Sale Consideration Actual Guideline Sale of Office S6 and S7 300,000.00 879,800.00 Sale of Office G11 372,800.00 5,15,500.00 Sale of Office G 14, 15 705,600.00 9,75,500.00 Sale of Office G 12, 13 652,800.00 902,500.00 Total 2,031,200.00 32,73,300.00 Difference in Sales Consideration 12,42,100.00 The said difference of consideration shown for the sale of Offices in Shrishti Complex is added back to income as income from undisclosed sources."
97. The ld. CIT(A) vide paragraph no.6.2 of her order deleted the addition made by the A.O. for the reasons mentioned herein.
98. We have heard the rival contentions and perused the facts of the case. The order of the ld. CIT(A) appears to be reasoned one who has given the finding that the same A.O. has been assessing the rental income and investment in the properties at Shrishti Complex protectively in the hands of the assessee HUF for earlier years i.e. 2002-03 & 03-04. For the assessment year und consideration, the sale of shops on the same property has been assessed substantively in the hands of the assessee HUF on the basis of same facts. The A.O. has not brought any material on record to prove receipt of money by the assessee in excess of declared value of sale consideration received. This is despite the fact that extensive search 49 Shri P.C. Wadhwa & others and seizure operations have been carried out at the business and residential premises of the assessee HUF along with its members. The A.O. has also failed to refer the matter to the DVO to arrive at value of the said property, as requested by the assessee during the course of assessment proceedings, but has proceeded to complete the assessment on the basis of guidelines of Sub-registrar office, though he has chosen to refer the matter to the DVO for valuation of other properties namely City Centre plot and agricultural land at Rania and has drawn no adverse inference in respect of the same properties on the basis of DVO's report. Neither any enquiry from purchasers of the properties has been made before arriving at the conclusion that the assessee has received more than declared. It has been held by the Hon'ble Supreme Court in the case of K.P. Verghese vs. ITO (1981) 131 ITR 597 that the A.O. has to establish that the assessee must be shown to have received more than what is declared by him. Difference in market value and consideration shown in the sale deed is not sufficient ground for assumption of higher sale consideration received. The same view has been held by Hon'ble Apex Court in the case of Shiva Kamy Co. Pvt. Ltd., 159 ITR 1. On the basis of facts above, the A.O. is not found justified in estimating the sale proceeds and adding the difference in the value as income from undisclosed sources. The addition of Rs.12,42,100/- is, hereby, deleted. In the circumstances and facts of the case, the order of the ld. CIT(A) being a reasoned one and especially when the Assessing 50 Shri P.C. Wadhwa & others Officer has failed to refer the matter to the DVO as requested by the assessee during the assessment proceedings, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, the sole ground of the Revenue is dismissed.
99. As regards Cross Objection bearing no.14/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical on facts which has been decided by us vide paragraph nos.27 & 28 of this order. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.14/Agr/2011.
100. Thus, Revenue's appeal in ITA No.446/Agr/2010 and Cross Objection of the assessee bearing no.14/Agr/2011 both are dismissed.
101. Now we take up Revenue's appeal in ITA No.427/Agr/2010 in the case of Shri Rohit Wadhwa and Cross Objection of the assessee bearing no.15/Agr/2010 as under :-
51 Shri P.C. Wadhwa & others
102. In ITA No.427/Agr/2010 for the Assessment Year 2006-07, the Revenue has raised the following grounds of appeal:-
"1. Whether on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in deleting the addition of ` 1,85,158/- made by the Assessing Officer on account of agricultural income.
2. Whether on the facts and in the circumstances of the case the CIT (Appeals) has erred in deleting the addition of Rs.3,00,000/- made by the Assessing Officer on account of gift from Shri Sanjeev Wadhwa.
3. Whether on the facts and in the circumstances of the case the CIT (Appeals) has erred in deleting the addition of Rs.3,13,787/- made by the Assessing Officer on account of undisclosed expenditure/payment for purchase of property (LPS) 1/11, pg. 1-168 on the basis of misguided facts."
103. The brief facts in ground no.1 of Revenue as appearing at page no.2, paragraph no.1 of the order of the A.O. are as under:-
"1. Agricultural income as mentioned in Capital Account for Rs.1,85,157.55. The assessee was not able to furnish and explain the source of agricultural income along with expenses made by him for generation of the said income. Therefore, the same is added back to the income of the assessee as income from undisclosed sources, in the absence of details and documentary evidences."
104. The ld. CIT(A) vide paragraph no.4.2 of her order deleted the additions made by the A.O. for the reasons that net agricultural income has already been declared by the assessee after charging expenses as per chart given at page no.4 of 52 Shri P.C. Wadhwa & others her order.. The receipts of Mandi Committee for sale of agricultural produce were also submitted. The original sale deed and the agreement were also the seized documents and were available with the A.O.
105. We have heard the rival contentions and perused the facts of the case. We concur with the finding of the ld. CIT(A) that agricultural income has already been declared by the assessee and there is no dispute to the fact that the original sale deed/agreement were the seized document with the A.O. himself and the Mandi committee receipts for sale of agricultural produce were also on record. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.1 of the Revenue is dismissed.
106. As regards ground no.2 as appearing at page no.2 of the order of the A.O. at page no.2 paragraph no.2 are as under :-
"2. Gift from Sanjeev Wadhwa: The assessee has shown gift received for Rs.2,16,316.50 from his NRI Brother for which no document was received for justification of the said claim. Therefore, an amount of Rs.3,00,000/- is added back to income as income unexplained."
53 Shri P.C. Wadhwa & others
107. The ld. CIT(A) vide paragraph no.5.2 of her order deleted the same for the reasons that the donor is assessed with the same A.O. and no adverse inference has been taken by the same A.O. in the hands of the donor and the transaction has been got confirmed from the bank also, which is not under dispute.
108. We have heard the rival contentions and perused the facts of the case. The assessee has declared gift received for `2,16,316.50 from his NRI Brother who is assessed with the same A.O. whose assessment has been completed under section 153A of the Act on 30.12.2009 and no adverse inference has been drawn with respect of the said gift in the hands of the donor. The said transaction has been confirmed from the bank also. The A.O., it appears under certain misconception of facts, made addition of `3,00,000/- lacs for the gift received of `2,16,316.50. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.2 of the Revenue is dismissed.
109. As regards ground no.3 of the Revenue, the brief facts as appearing at page nos.2 & 3, paragraph no.4 of the order of the A.O. are as under :-
"4. LPS-1/11 Pages from 1 to 168 are original sale deed agreement in respect of land at Nainagir and land at Dongarpur, Gwalior. Assessee was requested to explain the contents and specify the source 54 Shri P.C. Wadhwa & others of fund utilized and genuineness of he parties involved, as well as the payment made.
The reply submitted by the assessee is not tenable. The assessee has purchased multiple properties from different persons. The said registries are made at below the market rates. Also, the sales consideration is paid in cash for which no ..(not legible) taken/considered by the assessee in his books of accounts. The total amount for registry at Dongarpur is shown in Balance Sheet at Rs.7,11,213/- whereas as per original registries found the total amount of consideration paid was Rs.10,25,000/-. Therefore, an amount of Rs.3,13,787/- being difference in values not shown is added back to the income of the assessee as undisclosed expenditure/payment made for purchase of said properties."
110. The ld. CIT(A) vide paragraph no.7.2 of her order deleted the addition made by the A.O. for the reasons that the registration deed proving the ownership of the land in assessee's name is already in the possession of the A.O. as seized documents. The provisions of section 50C are not applicable in the hands of the purchaser in view of the decision of Hon'ble Supreme Court in the case of CIT vs. Shiva Kami Co. Pvt. Ltd.,159 ITR 71.
111. We have heard the rival contentions and perused the facts of the case. We concur with the finding of the ld. CIT(A) that the Assessing Officer is in possession of seized documents which includes registration deed which proves the cash paid by the assessee and there is no evidence with the A.O. that more amount has been passed by the assessee to the seller. Therefore, in view of the decision of 55 Shri P.C. Wadhwa & others Hon'ble Supreme Court in the case of CIT(A) vs. Shiva Kami Co. Pvt. Ld. (supra), we find no infirmity in the order of the ld. CIT(A). Thus, ground no.3 of the Revenue is dismissed.
112. As regards Cross Objection bearing no.15/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical on facts which has been decided by us vide paragraph nos.27 & 28 of this order. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.15/Agr/2011.
113. In the result, Revenue's appeal in ITA No.427/Agr/2010 and Cross Objection of the assessee bearing no.15/Agr/2011 both are dismissed.
114. Now we take up the Revenue's appeal in IT(SS)A No.05/Agr/2010 and assessee's Cross Objection bearing no.16/Agr/2011 as under :
115. The Revenue has raised the following grounds in its appeal in IT(SS)A No.05/Agra/2010 as under :
56 Shri P.C. Wadhwa & others "1. On the facts and in the circumstances of the case the CIT(Appeals) has erred in deleting the addition of Rs.7,24,803/- on the account of agricultural income and not applying the rule 46A of Income tax rules.
2. On the facts and in the circumstances of the case the CIT (Appeals) has erred in deleting the addition of Rs.20,00,000/- made on account of undisclosed income advance from customers.
3. On the facts and in the circumstances of the case the CIT (Appeals) has erred in deleting the addition of Rs.6,75,000/- on account of unexplained deposit and not applying the rule 46A of Income Tax Rules."
116. As regards ground no.1 of the Revenue, the brief facts as appearing in page nos.2 & 3, paragraph no.3 of the order of the A.O. are as under :-
"3. Agricultural Income: Rs.7,24,803/-. The assessee has shown the said amount in Capital Account Credit side s income earned from agriculture. The assessee has not furnished details of gross earning along with expenses on generation of the said income. The said amounts being unexplained and not supported by any evidence are added back to the income of the assessee as unexplained."
117. The ld. CIT(A) vide paragraph no.5.2 at page no.5 of her order deleted the additions made by the A.O. for the reasons that the A.O. himself is in possession of the documents in respect of these agricultural land as seized documents. Mandi Bills in respect of sale of agricultural produce has also been submitted. In the absence of any adverse material on record, the ld. CIT(A) deleted the addition made by the A.O. 57 Shri P.C. Wadhwa & others
118. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that the documents are in the possession of A.O. as seized documents and Mandi bills were also submitted and therefore, there is no reason for the A.O. to treat the said income as unexplained which cannot be treated as unexplained. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.1 of the Revenue is dismissed.
119. As regards ground no.2, the brief facts as appearing at page no.3, paragraph no.5 of the order of the A.O. are reproduced as under :
"5. Advance from Customers: Aditya Education Society Rs.5,00,000/-, Mevaram Gurjar Rs.10,00,000/-, Santosh Parashar Rs.5,00,000/- is shown in Balance Sheet. Despite opportunity given the assessee has not filed any confirmation/PAN and address along with Bank Statement, Income Tax Returns etc. of the said individuals for verification and genuineness of parties with their credit worthiness. Moreover, the said amounts were received by the assessee during the year. Since the amount is shown as advance from customers, the revenue effect of the said transaction is not taken into consideration for showing gross receipts in Profit and Loss Account. Since the assessee failed to prove their identity, genuineness and creditworthiness the transactions remains unverifiable and are liable to be treated as income of the assessee earned during the year as undisclosed income of the assessee and is added back to the income."
58 Shri P.C. Wadhwa & others
120. The ld. CIT(A) vide paragraph no.7.2 of her order deleted the addition made by the A.O. for the reasons that the advance received from various persons were confirmed by the said persons.
121. We have heard the rival contentions and perused the facts of the case. As mentioned in paragraph no.7.1 in CIT(A)'s order that the explanation was furnished by the assessee to the A.O. vide letter dated 14.10.2009 that advance received from Aditya Education Society amounting to Rs.5,00,000/- was an old advance and Balance Sheet of Aditya Education Society was also filed before the A.O. In respect of advance amounting to Rs.10,00,000/- of Mewaram Gurjar whose land was purchased on credit basis and therefore, the same was shown as creditor. Copy of the registry of purchase of land and copy of the accounts were furnished before the A.O. As regards to the advance of Sanmtosh Parashjar amounting to Rs.5,00,000/-, which in fact is Rs.50,000/-, was received for which agreement was also filed before the A.O. alongwith copy of ledger account. Therefore, in the circumstances and facts of the case, identity, creditworthiness and genuineness of the transaction can not be doubted. The ld. CIT(A) has rightly deleted the addition made by the A.O. Thus, ground no.2 of the Revenue is dismissed.
59 Shri P.C. Wadhwa & others
122. As regards ground no.3 of the Revenue , the brief facts as appearing in page no.3, paragraph no. 6 of the A.O.'s order are as under:-
"6. LPS-1/2 (Page 52) is a photocopy of Loose paper, with the name of Rohit Wadhwa and certain record of transactions. Total expenditure given is Rs.7,01,300/- and amount deposited is Rs.6,75,000/-. Assessee was requested to explain the document and reconcile with your books of accounts.
The reply of the assessee is not tenable. Therefore, the said deposits of Rs.6,75,000/- is added back to the income of the assessee as undisclosed."
123. The ld. CIT(A) vide paragraph no. 8.2 of her order deleted the addition made by the A.O. for the reasons mentioned therein. The said expenses have already been declared by M/s. Global Estate of which the assessment has been made by the same Assessing Officer under section 153(C) and no adverse inference has been drawn in that case.
124. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that the said expenditure has already been declared by M/s. Global Estate who is also assessed by the same A.O. under section 153C of the Act and no adverse inference has been drawn in respect of the said expenditure which has been declared by the said M/s. Global Estate. In the circumstances and facts of the case, we find no infirmity in the order of the ld.
60 Shri P.C. Wadhwa & others CIT(A) who has rightly deleted the addition made by the A.O. Thus, ground no.3 of the Revenue is dismissed.
125. As regards Cross Objection of the assessee bearing no.16/Agr/2011, the assessee has made a surrender of Rs.20,00,000/- and the A.O. made addition as the same has not been entered in the income of the assessee. The ld. CIT(A) confirmed the action of the A.O. This issue has already been dealt by us in the case of Shri P.C. Wadhwa for the Assessment Year 2008-09 in ground no.1 hereinabove where the ld. CIT(A) on appreciation of facts has deleted the addition and we have confirmed the order of the ld. CIT(A) and dismissed the Revenue's appeal on identical facts. In ground no.2 of the Cross Objection bearing No.16/Agr/2011 before us, the ld. CIT(A) is not justified to confirm the addition of the A.O. on identical facts. In the circumstances and facts of the case, following our decision in the case of Shri P.C. Wadhwa hereinabove in ITA No.44/Agr/2011, we direct the A.O. to delete the addition. Thus, ground no.2 of the C.O. is allowed.
126. Since the ground nos.1, 3 & 4 are general in nature, therefore, do not require any adjudication.
61 Shri P.C. Wadhwa & others
127. In the result, appeal of the Revenue in IT(SS)A No.05/Agr/2010 is dismissed and Cross Objection of the assessee bearing no.16/Agr/2011 is allowed.
128. Now we take up the appeal of the assessee in ITA No.402/Agr/2010 where the grounds of the assessee has been amended and taken on record which is reproduced as under :-
"On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals) grossly erred in law and on facts in confirming an addition Rs.20,00,000/-"
129. The ground is identical to the ground no.2 of the Cross Objectin of the assessee bearing no.16/Agr/2011 discussed hereinabove. Since the facts in the assessee's appeal are identical to ground no.2 of the C.O. of the assessee, following the decision taken in the aforesaid Cross Objection bearing no.16/Agr/20-11, we allow the appeal of the assessee. Thus, appeal of the assessee in ITA No.402/Agr/2010 is allowed.
130. Now we take up appeal of the Revenue in ITA no.370/Agr/2010 in the case of Smt. Neeru Wadhwa and Cross Objection of the assessee bearing No.09/Agr/2011 for Assessment Year 2002-03. The Revenue has raised the following ground of appeal :-
62 Shri P.C. Wadhwa & others "Whether on the facts and in the circumstances of the case the CIT(Appeals) has erred in deleting the addition of Rs.10,62,919/- on account of unexplained investment."
131. The brief facts as appearing in the order of the A.O. at page no.2 are as under :-
"(1) The assessee was specifically asked about income from Business and Profession. The A.R. had filed copies of Share Trading Account and Day Book of the Broker. It was noticed that the said Broker M/s Vinod Parasrampuria is a Broker of M.P. Stock Exchange and had issued Bill in the name of Mrs. Neeru Wadhwa for Bombay Stock Exchange having Settlement No.R-2001169/5 (where R stands for Rolling settlement and No. is denoted as year date and month in this case, it was 16/09/2001, whereas settlement period is mentioned as 27/11/2001 instead of 16/09/2001) and Journal Voucher No.J-
169005 for Rs.58,707.00. On detailed analysis of the said documents given by A.R., it was found that 1100 shares of Dr. Reddy Lab. Limited were bought and sold on the same day. Thus, it was pure speculative transaction not disclosed by the assessee in her return of income.
The Barker had not opened the A/c of the Client Mrs. Neeru Wadhwa by not taking into considerations the A/c opening formalities of SEBI as no amount is deposited by the assessee (verified from Cash Book and Bank Statement) as Margin for such Speculative Trading. The assessee in his reply also confirmed that no demat a/c was opened. Therefore, the amount invested in buying such securities i.e. Rs.10,62,919.00 is treated as income of the assessee earned from undisclosed sources and as such the same is added in the income of the assessee."
63 Shri P.C. Wadhwa & others
132. The ld CIT(A) vide paragraph no.4.2 of her order deleted the addition made by the Assessing Officer for the reasons mentioned therein.
133. We have heard the rival contentions and perused the facts of the case. The Assessing Officer has made the addition since the assessee has not completed the formalities of the SEBI as appearing from his order mentioned hereinabove. There is no dispute to the facts that the transaction has been carried out by the assessee and no defect has been pointed out by the Assessing Officer with respect to sales of the said transaction and therefore, there is no reason that certain formalities are not fulfilled by the assessee. No addition on this account can be made by the A.O. Therefore, in the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus, the sole ground of the Revenue is dismissed. Thus, appeal of the Revenue is dismissed.
134. As regards Cross Objection bearing no.09/Agr/2011 raised by the assessee which is identical to the grounds taken by the assessee in C.O. bearing no.25/Agr/2011 for the Assessment Year 2007-08 and since the facts in the present Cross Objection and the Cross Objection mentioned hereinabove bearing No.25/Agr/2011 are identical on facts which has been decided by us vide 64 Shri P.C. Wadhwa & others paragraph nos.27 & 28 of this order. Therefore, following our decision in Cross Objection no.25/Agr/2011 for the Assessment Year 2007-08, we dismiss the present Cross Objection of the assessee bearing no.09/Agr/2011.
135. In the result, Revenue's appeal in ITA No.370/Agr/2010 and Cross Objection of the assessee bearing no.09/Agr/2011 both are dismissed.
136. In the result, all the appeals of the Revenue in the case of Shri P.C. Wadhwa, Shri P.C. Wadhwa (HUF), Shri Rohit Wadhwa and Smt. Neeru Wadhwa are dismissed, all the Cross Objections of the assessee against the said appeals are also dismissed except in the case of Rohit Wadhwa in C.O. No.16/Agr/2011 which is allowed and appeal of the assessee in ITA No.402/Agr/2010 is allowed.
(Order pronounced in the open Court on 25.11.2011).
Sd/- Sd/-
(H.S. SIDHU) (B.P. JAIN)
Judicial Member Accountant Member
Date: 25th November, 2011
PBN/*
Copy of the order forwarded to:
Appellant/Respondent/CIT concerned/CIT(Appeals) concerned/D.R., ITAT, Agra Bench, Agra/Guard File.
By Order Assistant Registrar Income-tax Appellate Tribunal, Agra True Copy