Income Tax Appellate Tribunal - Agra
Sh. Santosh Kumar Pandey S/O/, Auraiya vs A.C.I.T.-2, Auraiya on 8 January, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH: AGRA
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBERAND
DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
I.T.A No.496/Agra/2012
(ASSESSMENT YEAR: 2005-06)
Santosh Kumar Pandey, ACIT-2,Agra
S/o.Late Shri Babu Ram Pandey, Vs.
JalaunChauraha,
Dist. Auraiya (UP)
PAN: AKWPP0804H
(Respondent)
(Appellant)
Appellant by Shri R.C.Tomar, AR
Respondent by Shri Sunil Bajpai, CIT-DR
Date of Hearing 06-01-2020
Date of Pronouncement 08-01-2020
ORDER
Per LALIET KUMAR, J.M.:
This appeal of assessee is directed against the order of Commissioner of Income Tax (Appeals)-1, Agra, dated 31-03-2012 for the AY.2005-06.
2. Brief facts of the case are that, in this case, assessment order has been passed u/s.143(3) of the Income Tax Act [Act] dt.22-12-2006, after a search operation was conducted in the premises of the assessee on 03-03-2005. Against the said assessment order, assessee filed an appeal before the I.T.A No. 496/Agra/2012 2 CIT(A), who partly allowed the appeal of assessee. Aggrieved with the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal, by raising various Grounds. The Ground-wise discussion is as under:
3. Ground No.1pertains to estimation of house hold expenses at Rs. 2,50,000.00 against 1,70,000.00 shown by assessee when assessee is residing in village and supplementing his expenses by agriculture and its by product is arbitrary unjust and excessive:
The assessee is in appeal against addition sustained at Rs. 80,000/-. 3.1. The facts are that assessee is a senior citizen, retired from army as a Sipahi. Getting pension duly disclosed at 26,793/- in the return and assessed as suchis basically an agriculturist and belongs to agriculturist family.
Income from agriculture duly shown at 3,40,000/- and accepted by CIT(A). Supplementing his lodging expenses from agriculture e.g., wheat corn pulses vegetable ghee and oil etc. boarding is also free because he is residing with his wife only. Thus, no expenses on boarding and lodging and leading a simple life in village. Thus the withdrawals for personal expenses including amount given to his sons to meet out the lodging and boarding and other day to day expenses is more than enough. He is not a member of any recreation I.T.A No. 496/Agra/2012 3 club etc also. Besides he is teetotaler. Finally, Ld.Counsel for the assessee argued that the addition sustained by CIT (A) at Rs. 80,000/- by estimating his personal expenses at Rs. 2,50,000/- against Rs. 1,70,000/- shown by assessee without bringing any adverse material on record to support, the same may kindly be directed to be deleted.
3.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
3.3. We have heard the rival contentions and perused the material available on record. Though the assessee claims to be an agriculturist but the closure scrutiny of the case reveals that the assessee is co-owner of 300 bighas of land and further, he is into the business of money lending, contract business, therefore, in our view, the order passed by the Ld.CIT(A) was a reasonable order as it merely restricted to Rs.2,50,000 /-. Hence, we do not find any error in the order of the Ld.CIT(A). Hence, this Ground is dismissed.
I.T.A No. 496/Agra/20124
4. Ground No.2 pertains to sustenance of addition of Rs. 4,50,000/- being loans raised from farmer and supported by their affidavits is illegal and arbitrary.
4.1. Ld.Counsel for the assessee submitted that as per written submission PB - 9 and the cash flow statement submitted with the return and before CIT(A) (PB - 110) it was made clear that unsecured loan of Rs. 5,00,000/- pertain to AY.2004-05 and Rs. 4,50,000/- was taken in AY. 2005-06. This made the total at Rs. 14,50,000/-and Rs. 5,00,000.00 has been considered in AY.2004-05.For the loans raised during the AY.2005-06 affidavits of individual farmers giving complete address, name, amount, date of loan duly notarized were produced before CIT(A) as per copy of PB No. 84 to 109. The affidavits are available on CIT(A) and the record of AO as well. There were subjected to remand proceedings.
4.2. Ld.Counsel also submitted that in the course of remand proceedings before the Assessing Officer u/s.250(4) of the Actit was submitted (PB - 83) as under:
"As regards the productions of the depositors is concerned it may kindly be appreciated that complete addresses of the depositors along with confirmationstand files supported by the depositions made through affidavit of I.T.A No. 496/Agra/2012 5 each depositors. Since the depositors are residing in village situated more than 150km away it is requested that they may kindly be examine by issue of commissions or by deputing your inspector or by issuing summons to them on the address with their complete identity furnished as per affidavit"
However, the Ld.CIT(A) has confirmed the addition on the ground that these affidavits cannot be admitted as additional evidence as the condition under Rule 46A has not been satisfied and assessee has failed to establish identity as well as creditworthiness.
4.3. Finally, Ld.Counsel argued that it is settled law as per Hon'ble Allahabad High Court decision that where the CIT(A) has called for the remand report from the AO, the CIT (A) has exercised his powers mentioned in section 250 (4) and there is no violation of Rule 46 A [vide Remand Report Para 3(CIT Lucknow Vs Akash Construction (P) Ltd ITA No. 8 of 2011 dated 23.01.2012) and the ITAT Agra Bench decisions in the case of the DCIT vs. Mukesh kumar Agarwal ITA No.374/Agra/2010 dated 06.03.2012.
The Hon'ble Allahabad High Court in the case of L. Sohanlal Gupta vs. CIT reported in 33 ITR 786 has held as under:
"after the assessee had filed the affidavit, he was neither cross examine on that point nor was he called upon to produce documentary evidence, consequently the assessee was entitled to assume that the income tax authorities were satisfied with affidavits has sufficient proof on this point".I.T.A No. 496/Agra/2012
6
Hon'ble Bombay High Court in the case of Smt Panna Devi Chaudhary (1994) 208 ITR 849 (BOM) as held that "income from undisclosed sources - Burden of Proof - receipt of amount - Burden proving that receipt constitute income of assessee is on revenue"
Since all credible evidence were furnished establishing the case on merit and the AO has not been able to discredit the evidence brought on record in remand proceedings, and the AO did not pursue the matter further, the Addition sustained by CIT(A) without bringing any IOTA of evidence discrediting the evidence furnished by the assessee merely by saying that addition evidence is not acceptable u/s.4 A of the Act is illegal and arbitrary.
Hon'ble Supreme Court in the case Orissa Corporation (1986) 159 ITR 78 has observed that when the assessee furnishes names and address of the alleged creditors, the burden shifts to department to establish revenues case and in order sustain the addition the revenue has to pursue the enquiry and to establish lack of credit worthiness and mere non compliance of summons issued by the AO under section 131 by alleged I.T.A No. 496/Agra/2012 7 creditors will not be sufficient to draw any adverse inference against the assessee.
Hon'ble Jurisdictional Allahabad High Court in the case of CIT vs S. Kamaljeetsingh (2006) 147 taxmann 18 (All) on the issue of discharge of assessee's onus in relation to cash credit has observed and held as under:
"The Assessee discharged the onus by placing confirmation letter of the cash creditors, (ii) their affidavit (Hi) the full address and GIR, it has been found that assessee burden stood discharged and so no addition to his total income on account of cash credit was called for In the case of Kanahaia Lal Jangid vs ACIT (2008) 2017 CTR (Raj) 354 while interpreting section 68 more specifically the issue of burden of proof has held:-
"while it was the assessee's burden to furnish explanation relating to such cash credit, the assessee's burden does not extend beyond proving the existence of creditors and further proving that such creditors own us to have advanced the amount credited in the account of assessee. The burden does not go beyond to put the assessee under any obligation to further prove that where from the creditors has got or procured the money to advance to the assessee. Addition under section 68 cannot be made unless it can be shown by the department that the source of such money comes from the assessee himself or such source could be traced to the assessee itself"
Hon'ble Allahabad High Court judgment in the case of Nathu Ram Prem Vs. CIT 49 ITR 561 has held that it is the duty of the Income Tax Officer to enforce theattendance of the witness if his evidence is material in exercise of I.T.A No. 496/Agra/2012 8 his powers u/s 37(1) of the ITAct read with Order Xvl, rule IO of the civil Procedure Code.
Thus, in view of the submissions made as above and the legal position, Ld.Counsel submitted that the addition sustained by CIT(A) being illegal and arbitrary and the same may kindly be directed to be deleted. 4.4. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
4.5. We have heard the rival contentions and perused the material available on record. The assessee in the appellate proceedings had filed the affidavits of the farmers and have given the name and addresses to the Ld.CIT(A) for the purpose of the verification of the amount. The Ld.CIT(A) had sent the document along with submissions to the AO, who had given the remand report and had not mentioned anything about the affidavits and the loans. In our view, it is the duty of the AO to examine the affidavits and the deponents of the affidavits to find out the truth in the submissions made in the affidavits. Nothing had been done by the AO no adverse material was brought on record by the AO or by the Ld.CIT(A) in the appellate proceedings. It is a settled position of law that the addition cannot be made I.T.A No. 496/Agra/2012 9 on the basis of some cogent and reliable evidence and not on the basis of conjectures and surmises. Accordingly, the Ground No.2 of appeal of assessee is allowed.
5. Ground No.3 pertains to the addition of Rs. 2,00,000/- sustained by Ld.CIT(A) on the basis of third party statements recorded at the back of assessee cannot be used against the assessee, is illegal and the decision relied upon by the Ld.CIT(A) is distinguishable and not applicable. 5.1. Ld.Counsel for the assessee submitted that the AO has made the addition on the ground that Shri Alok Tripathi had stated in his statement on 02.06.2006 that Santosh Kumar Pandey gave security on his behalf in the shape of FDR and in view of statement the amount of 3,50,000/- is treated as income of assessee.
However, the Ld.CIT(A) by saying that Harnarayan Tripathi father of Alok Tripathi has admitted to have contributed Rs.1,50,000/- which was duly shown in his capital account. Shri Harnarayan Tripathi has confirmed that contract was taken in the name of his minor son Alok Tripathi and other family members.
I.T.A No. 496/Agra/201210 The Ld.CIT(A) without appreciating the fact that since the contract was in the name of Alok Tripathi son of Shri Harnarayan Tripathi and part of security at Rs.1,50,000/- was duly credited in his capital account then why not Rs.2,00,000/- can be treated as contribution made by him for the sole reason that contract was in his name and not in the name of assessee nor the assessee at any stage has admitted that part amount of Rs.2,00,000/- was contributed by him. The security raised with the department is in the name of Alok Tripathi and not Assessee.
Ld.Counsel also submitted that further the CIT(A) while referring to the statement made by Harnarayan Tripathi he has not provided opportunity to the assessee to cross examine him. It was his duty to have allowed the assessee to cross examine such a witness.TheHon'ble Apex Court in the case of Union of India vs. TR Verma reported in AIR 1957 (SO 882 has held "when the AO recorded a statement behind the back of the assessee, it was his duty to have allowed the assessee to cross examine such a witness. Statement of person cannot be used against the assessee. It was not for the assessee to demand cross examinations but was for the AO to allow cross examinations if the statement of the witness were to be made the basis of addition.
I.T.A No. 496/Agra/201211 Similar is the ratio laid down by the Hon'ble Supreme Court in the case of Shri KishinchandChellaram vs CIT (125 ITR 137) MAD where it has been held that -
"Before the IT Authorities could rely upon a piece of evidence, they were bound to produce it before the assessee so that assessee could controvert the statement contained in it. Statement given at the back of the assessee is in admissible evidence.
Therefore addition made both being devoid of any merit and against the law laid down by the Hon'ble Supreme Court may kindly be directed to be deleted.
As for the case law relied upon by the CIT(A), it is distinguishable in view of factual and legal position made clear by the Hon'ble Supreme Court (AIR 1957(SC) 882 (Supra).
Even otherwise the assessee held 1/6 share in shergrah bridge therefore the addition to the extent of 1/6 falling to assessee share as discussed against ground No.8 would have been justified against the addition of Rs. 2,00,000/- sustained by the CIT(A).I.T.A No. 496/Agra/2012
12 5.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
5.3. We have heard the rival contentions and perused the material available on record. The additions of Rs.2,00,000/- were made by the AO on the basis of the statement of Mr.AlokTripati. Despite assessee asking for the statement from the AO and also in the appellate proceedings, neither the statement was provided nor the opportunity to cross-examine Shri Alok Tripati was given to the assessee. Further, we are also of the opinion that the addition of Rs.2 Lakhs cannot be made merely on the basis of the statement, unless a corroborative evidence/record is found by the AO. For the purpose of the conclusion that no such additions can be made based on the statement given by Mr.AlokTripati as it would be violative of Principle of Natural Justice and rules of fair and transparent adjudication, we may fruitfully rely upon the decision of the Hon'ble Supreme Court in the case ofShri KishinchandChellaram vs CIT (supra). Respectfully following the decision of the Hon'ble Supreme Court and in the light of the discussion made herein above, we delete the addition of Rs.2 Lakhs. Thus, the Ground No.3 of the assessee's appeal is allowed.I.T.A No. 496/Agra/2012
13
6. Ground No.4 isconcerned, the CIT(A) has erred in sustaining addition of Rs. 4,25,272/- (Rs.3,12,700/- principal + Rs.1,12,572/- interest) on the basis of annexure BK - 15 made during the year ignoring the fact of recycling of loans is the normal practice in money lending business. ii. That no interest has been found recorded in the seized diary BK-15 and the addition sustained is in contravention of CIT(A) own finding given in PARA 15.3 Page 52 of his order.
6.1. Before us Ld.Counsel submitted that the AO has made the addition of Rs.3,12,700/- for principle and Rs.1,12,572/- for interest totaling to Rs.4,25,272/- on the ground that the advance was made during the year when in fact none of the advance was made during AY.2005-06 or any entry is found to be relating to AY.2005-06. The amount of 3,12,700/- has been taken by the AO from page 24 of BK - 15 which represent balances brought forward from different pages and relates to the period as mentioned below against each:I.T.A No. 496/Agra/2012
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Name Amount Period Page Awasthi Munim 2000/- 31-05-2003 52/Item No. 9 RaghvendraAjitmal 19,000/- 31-05-2003 52/ItemNo. 16 Mansha Ram BijalPur 2,000/- 31-05-2003 52/Item No. 18 Kamlesh Chobey 12,500/- 15-06-1999 47,46 Item No. 1 GokarnDadi 6,000/- 31-05-2003 42 Item No. 20 Ashutosh 12,000/- 31-05-2003 52/Item No. 23 Guddu 10,000/- 31-05-2003 527 Item No. 24 Raju Plotwale 2,000/- 02.01.2001 43/Item No .2 Mistri 200/- 01.04.2003 447 Item No. 44 Mukhrjee Engineer 1,66,000/- 01.04.2003 52/Item No.25 Rajpur Block Pramuk 50,000/- 24.06.2003 5 I/Item No. 52 Muniman 500/- 01.04.2003 54/ltem No. 57
At the outset it is submitted that none of the entries recorded in seized diary BK-15relates to AY.2005-06. As explained above also no amount of interest was found credited.
The Seized BK- 15 contains repetition of entries and relates to period prior to 2005-06.
A reply to this effect was also given before the CIT (A) as per written submissions made on 20.03.2012 (Copy placed as per PB -112, PB - 114- 116 PB 120-122and again mentioned on the annexure A - 1 which has been part of CIT (A) orders.
As per CIT(A) order page 40 CIT has confirmed Rs. 4,25,272/- on the basis of BK-15 Page 24 without appreciating the fact that entries recorded on Page I.T.A No. 496/Agra/2012 15 24 also appear on page 52 of seized diary BK - 15 and are balance drawn as on 03.05.2003 hence does not relate to AY.2005-06. Therefore in entirety since none of the entries in seized diary relate to AY.2005-06, the addition sustain by CIT (A) at Rs. 4,25,272/- as per page 14 is being devoid of any merit may kindly be directed to be deleted. On the seized diary writing of any note by the AO for his convenience Is not permissible by any law of the land as done by AO on page 24 by writing 2005-06 Ld.Counsel requested that it may also kindly be appreciated that the amount of principal of Rs. 7,74,890/- and 83,000/- has already been added as unexplained principal, therefore also the availability of principal of Rs. 3,12,700/- in AY.2005-06, though no advance was made during the year, cannot be denied and the addition of (Rs.3,12,700/- + interest at Rs. 1,12,572/-) pertaining to AY.2005-06 which has not been found recorded in the seized diary any where may kindly be directed to be deleted. Finally, Ld.Counsel argued that no addition on mere presumption can be made unless supported by documentary evidence.
6.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.I.T.A No. 496/Agra/2012
16 6.3. We have heard the rival contentions and perused the material available on record. The matter is initially partly-heard on 03-01-2020, on that date, the time was granted to the CIT-DR to verify from the record whether the entries mentioned in BK-1 subject matter of the present ground pertains to the assessment year under consideration or not.
The Ld.CIT-DR clearly had submitted that the entries which are subject matter of the Ground No.4, does not pertain to the assessment year under consideration. We have ourselves also examined the record and the paper book filed by the assessee and we found the force in the submissions of the assessee, which was seconded by the Ld.DR. As the addition sought to be added by the AO pertains to the earlier assessment year, therefore, keeping in mind the principle of accrual as mentioned in Section 4 and 5 of the Income Tax Act, we are of the opinion that these additions cannot be made in the year under consideration. Accordingly, the Ground No.4 of the assessee's appeal is allowed.
7. Ground No. 5 is regarding addition of Rs. 17,56,795/- on the basis of annexure BK-15 in addition of Rs. 4,25,272/- for unexplained investment in money landing is illegal.I.T.A No. 496/Agra/2012
17 7.1. Before us, Ld.Counsel submitted that the AO has made the addition of Rs. 44,04,079/- on the ground that assessee has not specified the period to which these entries relate. The AO while doing so has not looked into the period mentioned on relevant pagesand the repetition of entries being brought forward on different pages. The CIT(A) has also ignored this fact. In this connection, he submitted a copy of seized diary BK - 15 before us. It would be appreciated that none of the items of document seized found narration relating to the AY.2005-06.
Also no amount of interest was found credited. The diary BK - 15 contains repetition of entries relating to prior of period 2005-06. A reply to this effect was made before the CIT(A) as per written submission made on 20-03-2012 (copy placed as per PB Page 112, PB page 114 - 116, PB Page 120-122 and again mentioned on the annexure Al which has been part of CIT (A) order.
Since none of the entry relate to period 2005-06, Ld.Counsel requested that the addition made and sustained by CIT(A) being illegal may kindly be directed to be deleted.I.T.A No. 496/Agra/2012
18 7.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
7.3. We have heard the rival contentions and perused the material available on record. Though the assessee had submitted that the entries do not pertains to the year under consideration, however, when we have examined the record, then we found that no date against these entries were mentioned in the record. As per the Evidence Act, the presumption is required to be drawn against the assessee and it is for the assessee to explain that these entries do not pertain to the year under consideration. The assessee failed to discharging the onus of satisfying the conscious of the AO as well as of the Tribunal that the entries do not pertain to the year under consideration. In view of the above, we do not find any merit and accordingly, the Ground No.5 of the assessee appeal is dismissed.
8. Ground No.6 is that CIT(A) has erred on facts and in law in sustaining the addition of Rs.8,62,125/- for unexplained cash duly recorded in the books of M/s Suresh Kumar Pandey and Brothers Bijalpur Corroborated by the statement receded u/s.132 of the Act on 03-03-2005. I.T.A No. 496/Agra/2012 19 8.1. Ld.Counsel for the assessee submitted that the AO has made the addition ignoring the categorical statement made u/s.132(4) by Santosh Kumar Pandey that Cash Recovered belongs to Suresh Kumar Pandey and Brothers without assigning any reason and by mentioning that at the time of search no such stand was taken whereas as per copy of statement recorded u/s 132 (PB Page - 80) a detailed statement to this effect was made u/s.132 (4) of the Act, which is of evidentiary value and cannot be ignored. Hence the addition made by AO is based on conjectures and surmises even the challan filled in the name of Suresh Kumar Pandey and brother accompanying the cash was found in the search at the spot.
During the course of such statement of Shri Santosh Kumar Pandey was recorded on 03.03.2005, a copy of which is praised as per PB Page 80. In reply to Question No.2 it has been specifically stated by Santosh Kumar Pandey u/s.132(4) of the Act that the cash recovered from his residence relates to the firm M/s Suresh Kumar Pandey and Brothers and was kept at home for making deposit in the account of Government of UP under the head 0853 for the contract of Balu being 3 monthly installment. The amount was available as receipt from Mr.Suresh Kumar Pandey and brothers. I.T.A No. 496/Agra/2012 20 Thus it was explained that it related to Suresh Kumar Pandey and brothers. The total turnover in the case of Suresh Kumar Pandey and brothers has been accepted to be of Rs. 2,41,30,000/- and the return in the case of Suresh Kumar Pandey and Brother was filed disclosing net profit at Rs. 32,55,204/- on business receipts derived and license fee paid for contract at Rs. 31,35,000/- Therefore the availability of sum of Rs.8,62,125/- for depositing quarterly installment cannot be doubted when M/s Suresh Kumar pandey and brothers has under taken the contract, the receipts from which at Rs. 2,41,30,000/- have been duly disclosed to the department and have been accepted. No adverse evidence has been found contrary to statement recorded u/s.132(4) of the Act in the course of such that cash available was out of turnover of Rs.2.48 Crore derived during the normal course of business. Since the availability of cash was duly explained and no contrary evidence has been found by the AO or by the CIT(A) in the course of appeal proceedings or even in remand proceedings as per remand report para 6 (Copy placed as PB-125) the addition sustained by CIT(A) ignoring the specific statement made by the assessee is illegal may be submitted that M/s Suresh Kumar Pandey and Brothers is the firm in which assessee's younger brother are partner and the amount was left by the firm for depositing the I.T.A No. 496/Agra/2012 21 same for payment of quarterly installment. The observation of the CIT(A) is without any basis and without appreciating the facts that the amount found in the course of search was not in round figure but it was a specific amount of Rs.8,62,125/- to be deposited against UP Government A/C No. 0853. No adverse material has been brought on record to reject the explanation made under section 132(4) which is a binding. The statement made on oath under section 132(4) is of evidentiary value and cannot be ignore on mere presumption in a routine manner. Even the challan for Rs.8,62,125/- accompanying the cash was found at the time of such as per categorical statement recorded (Page - 80). Hence the authenticity of statement recorded on oath under section 132 (4) cannot be brushed aside on one ground or the other in a general manner. Therefore, Ld.Counsel requested the Bench that the addition made may kindly be directed to be deleted. 8.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
8.3. We have heard the rival contentions and perused the material available on record. The cash was recovered from the possession of the assessee and the assessee sought to explain the recovery of the cash as a payment required to be paid by the assessee on behalf of another firm of his I.T.A No. 496/Agra/2012 22 brother pertaining to sand contract. It is difficult to comprehend that when the assessee was neither the partner nor the director nor the owner of the said company then how the cash can be said to be belonging to a third party. In our opinion, this is a plea taken by the assessee just to explain the cash the said plea is required to be rejected as the said plea has been made by the assessee to serve his own purpose without any basis. Accordingly, Ground No.6 of the assessee's appeal is dismissed.
9. In Ground No.7 the assessee submitted that the CIT (A) erred on facts and in law I confirming security deposit of Rs.3,90,000/- against addition of Rs.3,50,000/- resulting in enhancement without providing opportunity/show cause (Rs. 2,00,000/- as per Ground No. 7 page 35 + Rs. 1,90,000/- as per Ground no 10 page 48 of CIT(A) order.
(ii) That the CIT (A) has erred on facts and in law in considering the security deposit of Rs. 3,90,000/- a respect of toll bridge contract taken by 6 persons jointly in the hands of appellant alone when on the contrary he had accepted contract receipts @ 1/6 falling to assessee share. 9.1. Ld.Counsel submitted that as discussed in ground No 3 above (AO Page 4 Para 3), The AO made the addition of Rs. 3,50,000.00 reduced by I.T.A No. 496/Agra/2012 23 CIT to Rs. 2,00,000/- on the basis of statement dated 02.06.2006 made by Shri Alok Tripathi at the back of assessee when no such statement can be used against the assessee unless the assessee was confronted. No opportunity to cross examine Shri Alok Tripathi was given. The assessee held 1/6 share. Therefore also the addition made was devoid of any merit. The factual position is that seized diary BK-3 BK-4 BK-5, BK-6, BK-7, and BK-8. It relates to the business of toll collection of shergarh and Pudin Bridge maintained in the name of 6 different persons who had taken the toll collection contract jointly.
The six Notebooks contain similar transactions relating to the business of toll tax collections of the two bridges.
The receipts and saving have been divided equally among the six person jointly that is Mr.Santosh Kumar Pandey, Suresh Kumar Pandey, Shridhar Pandey, Vivek Tripathi, Pradeep Singh, and Shailendra The payments made to PWD for running the contract have been shared equally.
When the receipts and the payments have been shared equally and so also the income derived has been worked out in equal share of 1/6, it was not legally correct to add the security deposit of Rs.3,90,000/- (3,50,000.00 I.T.A No. 496/Agra/2012 24 added by AO) in the hands of assessee alone. The CIT (A) himself on page 44 has noted as under :-
Page 46 of CIT (A) order "I have considered all the above facts with regard to the seized documents BK-3 to BK-8 as discussed above and I have also gone through these seized documents as produced before me on examination of these seized documents I have found that they are in the form of six note books maintained in the name of 6 different persons relating to the business of toll tax collection of shergarh bridge and pudin bridge. From, these six note books, it is very clear that this business was being run by the assessee jointly with other five persons. After examination of all these six note books relating to the business of toll tax collection of two bridges and therefore I found force in the arguments of the Ld AR that since six persons were involved in this business, the accountant has maintained six separate note books, one not books for each persons however as per the transaction recorded in these note books following computation of income has been found from the business of tool tax collection as mentioned by the Ld. AR in his written submission and the same is reproduced as under:-
Saving from Shergarh Bridge 2,48,2027-
Savingfrom Pudin Bridge 47,3107-
Total Saving from Shargarh and Pudin 2,95,5127- as per diary
Add: Income from April to May 2004 99,9757- as per diary
Income from 21.06.2004 to 29.06.2004 26,9087- as per diary
Total 4,22,3957-
Less: Payment made to PWD- 1,47,400/-
If the above amount of saving received from the business of toll tax coming at Rs. 2,74,995/- is divided among 6 persons, the amount received by each person would come to Rs. 45,832/- therefore the share of income oftheassessee (appellant) from the above mentioned business would at the most come to Rs. 45,832/- As far as the decision of the AO that Shri Sridhar Pandey has denied any business connection with all the 6 persons mentioned I.T.A No. 496/Agra/2012 25 in this diary is concerned just on the basis of his denial, it cannot be considered that the entire transaction recorded in these six note books belong to the assessee, (appellant) when apparently, it is very clear on examination of these six note books that they were being maintained relating to a business of toll taxcollection from shergarh bridge and pudin bridge for which even a summary of the surplus income generated from this business in each note book are mere repetition. Therefore on the basis of the seized documents found during search, the transactions recorded in such documents should be considered as correct unless and until it is proved that the transaction recorded in the seized documents are not correct. In fact the AO has also made the addition in the hand of Shri Har Narayan Tripathi on the basis of these seized documents treating that he was also involved in carrying on the toll tax collection business of the above mentioned two bridges. Therefore now after relying on the statement of a third person i.e the brothers of the assessee (appellant) Shri Sridhar Pandey, I do not find that the AO is correct in holding that entire transactions recorded in tall the 6 note books amounting to Rs. 38,68,627/- are related to the assessee (appellant) when most of the entries made in these 6 note books are merely repetition recorded with respect to each person for whom 6 different note books were being maintained.
On the basis of my above finding, I hold that only the addition of Rs. 45,832/- can be confirmed in the hand of the assessee on the basis of entries of surplus earned by the assessee along with 5 other persons involved in running of toll tax collection business of shergarh & Pudin Bridge". In view of facts as conceded by the CIT(A) himself that the afore said six notebooks contains similar transactions relating to the business of toll tax collection of the two bridges, the receipts and savings have been divided equally from the contract run by the six persons jointly as above including that by assessee and the payments have been made to PWD equally as I.T.A No. 496/Agra/2012 26 mentioned above, there was no justification of adding security deposit payment in the hands of assessee alone. Hence, the addition sustained by CIT(A) at Rs. 1,90,000/- +Rs. 2,00,000/- =Rs.3,90,000/- being contrary to the finding given by CIT himself is illegal and arbitrary and may kindly be directed to be treated.
10. The assessee has raised in Ground No.8that the CIT(A) has erred on facts and in law in sustaining addition of Rs.2,35,832/- for toll bridge contract in which assessee had 167 share.
10.1. Ld.Counsel submitted that the CIT (A) has confirmed addition of Rs. 2,00,000/- against Ground No. 4 in respect of security of shergarh bridge ignoring the fact that assessee had 1/6 share in the contract of shergarh bridge and puddin bridge. A finding to this effect had been given by the CIT as mentioned above. Besides this the Ld.CIT(A) has again confirm Rs.1,90,000/- in respect of security contributed for pudding bridge in which as per CIT finding the assessee had 1/6 share. Hence the addition which could be made against ground no 4,7 and 8 in respect of security shergarh bridge and puddin bridge could be 1/6 of assessee's share which works out to Rs. 65,000/- (2,00,000/- + 1,90,000/- = 3,90,000/- @ 1/6 Rs. 65,000/-). This I.T.A No. 496/Agra/2012 27 is besides assessee profit worked out by CIT by taking assessee share @ l/6'h at Rs. 45,832.00 as per page 46 of CIT (A) order. Hence the addition of Rs. 2,35,832/- against Ground No.8 and Rs. 2,00,000/- against Ground No.7 totaling to Rs.4,35,832.00 sustain by CIT (A) against Rs.45,832/- being 1/6 share in profit and Rs. 65,000/- being 1/6 against security is illegal.
The CIT(A) has confirmed the addition of Rs. 2,35,832/- Since the addition sustained on account of security at Rs.1,90,000/- is illegal because the assessee held only 1/6 share. As submitted against Ground No.7 it would be in the interest of equity and justice that the addition which can be made out of Rs.2,00,000/- + 1,90,000/- should be limited to l/6thRs.65,000 /- which is the assessee's share in the toll bridge.
11. Ground No.9 is regarding the addition of Rs.6,88,876/- sustained in the hands of assessee for the contract income earned by other persons Tahir Ali , Mohd Idris whose addresses and complete identity was provided before the authorities below and the addition made in the hands of assessee for AO failure to invoke provisions of section 153C in respect of actual contractor is arbitrary, unjust and against natural justice.
I.T.A No. 496/Agra/201228 11.1. Ld.Counsel submitted that the AO has made the addition of Rs. 6,88,876/- on the ground that investment made by Tahir, Idris and Pappu Chauhan as appearing in BK - 16 disowned by the assessee is not acceptable for the sole reason that these were found at the residence of assessee. It was explained that as per BK - 16 from page 1 to 64. The details of toll tax receipts are mentioned which have been included in the total receipts disclosed by the assessee at Rs. 6,68,094/- in AY.2005-06 On last 4 page of BK - 16 details of contract receipts which pertain to Idris and Tahir are mentioned and the assessee has disown the same vide reply dated 16-01-2006.
As per reply dated 23-08-2006 it was explained that DM Auriya awarded contract of fish to Tahir and Idris in support of which a letter from DM was also seized. The Assessee has no concern with the contract under taken by the aforesaid persons.
It was specifically requested to AO that both the persons may be asked about these papers.
Similar request was made in respect of Shailendra Singh Chauhan, Shri Sridhar Pandey the brother of the assessee was examined on oath by the AO and in the statement recorded on 14.11.2006 he has disowned these papers I.T.A No. 496/Agra/2012 29 which were relating to Shailendra Singh Chauhan and a specific request was made to summon and examine him regarding the contents of paper found in the name of Shri Shailendra Singh Chauhan.
It was also made clear that on page 65 to 68 no where the name of assessee appear.
The matter was subjected to remand report and AO in his report without making any further inquiry to the submissions made by assessee has rested his remand report to what the AO has said in the assessment order (see Para 6 Page 2 of remand report PB 125). The AO has simply said that assessee submission was considered and was not found correct. No reason to controvert the submissions made by assessee has been given nor has any adverse material as a result of remand proceedings been brought on record. The CIT(A) as also without bringing any adverse material on record to correlate that the paper belongs to assessee's business has confirm the addition of Rs.6,88,876/-.
It is settled law that presumption is rebuttable. No addition can be made unless corroborative evidence is place on record. The AO failed to bring any adverse material to support the addition by controverting the submissions made by assessee disowning these papers. The AO did not take I.T.A No. 496/Agra/2012 30 pains to make any further inquiry under section 250 (4) though an opportunity was afforded to him to bring on record the material in support to justify the addition made. No addition can be made on the basis of noting made in the name of third party unless relative evidence is brought on record.
Hence, Ld.Counsel argued that the addition made by AO and sustained by CIT(A) being arbitrary may kindly be deleted. Assessee cannot be saddled with liability for AO failure to conduct inquiry on the submissions made by assessee. Provision of section 153C of the Act is provided in the act for the purpose. If the AO without assigning any reason has not used them though legally attractive, it would be unjust and unfair and again the principal of justice to make addition in the hands of assessee.
In (2010) 322 ITR 191 (Del) in the case of CIT Vs Anil Bhalla, a search and seizure case it was held that where no independent material to show that jottings on paper represented unaccounted transactions of the assessee, the addition could not be sustained in absence of any corroborative evidence. 11.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. The Ld.DR submitted that the Ground Nos.7, 8 I.T.A No. 496/Agra/2012 31 & 9 are required to be decided collectively as they are interlinked with each other.
11.3. We have heard the rival contentions and perused the material available on record. As the Ground Nos. 7, 8 & 9 are connected with other, therefore we are deciding these Grounds collectively. The authorities below have agreed that the assessee was having 1/6th share in the contract. In view of the above said fact, the assessee was liable to be charged for the 1/6th amount found as per the claim of the assessee which in the estimation would come to Rs.45,832/-. In fact, the similar entries were found in all the six note books found during the course of survey pertaining to toll tax collection of two bridges. In our view, though the assessee claimed that he was entitled for 1/6th share in the toll tax collection of the bridges, but we failed to understand why 6 separate note books were maintained by the assessee in respect to the same business. The plausible answer would be in our understanding that the assessee was maintaining six separate note books with a view to suppress the actual toll collection or the six note books were maintained for the individual shareholders. The onus is on the assessee to prove that six note books were maintained for six partners and simultaneously the onus was also on the Revenue to prove that six note I.T.A No. 496/Agra/2012 32 books were maintained for suppressing the toll collection. Therefore, a guess work is required to be done by the Bench and considering the totality of the circumstances and also peculiar facts of the present case, we restrict the addition to Rs.1,90,000/-. Thus, the assessee gets the relief of Rs.2 Lakhs. Hence, the ground raised by assessee is partly allowed.
12. Vide Ground No.10 the assessee raised that the CIT(A) has erred on facts and in law in sustaining the addition of Rs.89,975/- made by AO on the ground that income earned by Mr.Pradeep Chauhan belongs to assessee. 12.1. Ld.Counsel for the assessee submitted that the AO has made addition of Rs.89,975/- on the ground that since assessee was required to explain as to why the income in the name of Pradeep Singh Chaudhan may not be included in the hence of assessee. So the income of Rs. 89,975/- is added in the name of assessee. The addition made on this vague ground is not sustainable. No reason has been given by the AO to not consider the written submission dated 06.12.2006 made by assessee before him The CIT(A) has in para 17.03 stated that no comments has been offered in the remand report by AO. Shri Sridhar Pandey has vide reply dated 06.12.2006 has stated that a statement on the issue was recorded by the AO I.T.A No. 496/Agra/2012 33 on 14.11.2006 and it was made clear that Shri Pradeep Singh Chauhan held 1/6 share in shergarh and Pudding toll Bridge.
The CIT(A) has given as specific finding that "I have gone through the seized documents and I find that share of his income has been recorded. With regard to the business I have already given my finding in para 14.03 based on the seized documents BK-3 to BK-8 that the business of collection of toll tax was being carried on by 6 persons jointly and assess is one of them. The CIT(A) has also held that this note book is in the name of Pradeep Singh Chauhan who is also one of six persons jointly carrying on this business. The CIT has confirm the addition of Rs, 89,975/- in the hands of assessee though seized documents Bk-20 was found and held by him to be belonging to Shri Pradeep Singh Chauhan.
Hence the addition confirmed by CIT(A) on presumption that income of Rs. 89,975/- might have been earned by the assessee also when no such paper has been found and seized in the name of assessee in the course of search. Hence the addition confirmed by CIT(A) being illegal and arbitrary and made on the basis of mere presumption may kindly be directed to be deleted.
I.T.A No. 496/Agra/201234 12.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
12.3. We have heard the rival contentions and perused the material available on record. We have gone through the order passed by the Ld.CIT(A) and the Ld.CIT(A) had passed a reasoned order, dealing with the contention now raised before us. Therefore, the ground of the assessee is dismissed.
13. Vide Ground Nos.11 & 12 the assessee urged that the addition of Rs. 1,15,000/- sustained for house hold goods is arbitrary unjust. 13.1. Ld.Counsel submitted that the CIT(A) has acted against principle of natural justice in presuming that Appellant who is pensioner and co sharer of 300 bighas of agriculture land after leading 40 years of active life had no capacity in acquiring household goods of Rs.1,15,000/- prior to 2005-06.
The AO has made the addition of the ground that the expenses made in AC, TB, VCD, and Computer set and fridge to the tune of about Rs. 1,15,000/- remain unexplained. He has made the addition by saying that it is presumed the other items might have been received or purchase much earlier than 6 years.
I.T.A No. 496/Agra/201235 The AO has found no Material in the course of such that these items were purchased in AY.2005-06 when he himself says that other items might have been purchased prior to six year. No description has been given. The aforesaid items are installed at the residence much prior to 1999-2000. More over since no purchase voucher or any relevant evidence was found that these have been newly purchased in assessment year 2005-06 that is the year of search, the addition made by AO and confirmed by CIT(A) is not justified. The addition have been made on the ground that in balance sheet these household items are not mentioned. In the preceding assessment years substantial addition have been made regarding personal expenses and the loans raised. In AY.2004-05 addition of Rs.5,00,000/- has been confirmed u/s.68 of the Act being the income from unexplained source. The addition of Rs.1,15000/- is covered by the aforesaid additions. Since no bills or voucher or cash memo for the purchase of the aforesaid items in AY.2005-06 have been found in the course of search the addition made on mere presumption ignoring the status of assessee is illegal. The assessee during the year as disclosed his income in the return at Rs.3,40,000/- from agriculture besides business and pension income at Rs.1,09,737/- and the income in the vicinity has been disclosed right from AY.2001-02 on ward. The AO even in the I.T.A No. 496/Agra/2012 36 remand report as has been admitted by CIT(A) that the AO has brought no material on record except a reference made in the assessment. The Addition sustained by CIT (A) being arbitrary and illegal may kindly be directed to be deleted.
13.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
13.3. We have heard the rival contentions and perused the material available on record. We have already mentioned about the status of the assessee while dealing with Ground No.1 of the assessee's appeal and concluded that the assessee is a man of sufficient means therefore, the addition made by the AO and confirmed by the Ld.CIT(A) for a tune of Rs.1,15,000/- is on the lower side, hence, needs no interference by the Tribunal, accordingly, the Ground Nos.11 & 12 raised by the assessee are dismissed.
14. Vide Ground No.13 the assessee raised that CIT(A) has erred on facts and in law in sustaining the addition of Rs.24,98,836/- as per annexure LP-1.
I.T.A No. 496/Agra/201237 14.1. Ld.Counsel submitted that the AO has made the addition of Rs. 44,98,886/- making a vague remarks "after considering the submissions it is concluded that the assessee could not explain satisfactory the transactions entered on page 1,2, 5,10 to 13.
It cannot be made out that how the explanation given by the assessee is found to be unexplained without assigning any reason. Such an addition being devoid of any merit deserves to be struck down instantly.
The explanation given by assessee is that entries on page 1 mentioning Rs. 70,000/- is the total of Rs.40,000/- + Rs.30,000/- which relate to rough calculation without any description. These papers are related to M/s Suresh Kumar Pandey and Brothers where the total turnover has been disclosed at Rs. 2,41,30,000/- and these might have been the rough jottings recorded by some persons relating to expenditure incurred out of the total receipts derived at Rs. 2.41 Crore since these are deaf and dumb entries no adverse inference can be drawn. Also no supporting material has been brought on record to substantiate the addition even in remand proceedings Regarding the Page No 2 Which is reproduced as under: 5,00,000/- Shri chotey Pandey Rs.2,08,750/-, Rs.16,666/- , Rs.1,00,000/- , Rs.8,25,416/- I.T.A No. 496/Agra/2012 38 Shri Chotey Pandey is the partner of M/s Suresh Kumar Pandey and Brothers. There is no date mentioned as to which period or date it relates. It has been explained that the assessee firm M/s Suresh Kumar Pandey and Brothers is carrying on business of sand. The contract of sand extraction is taken. Shri Chotey Pandey Alias Suesh Kumar Pandey is the partner in Suresh Kumar Pandey and Brothers. So the figures mentioned which is rough working of calculation represent the rough calculations of expenses or receipts derived from business of sand. As would appear that Rs. 16,03,470/- has been earned as a result of sale proceeds of sand as is apparent from the description made cash, Mitiwala and different names of the persons to whom the sand has been sold. Further Rs.15,82,470/- as mentioned by the CIT (A) on Page 66 item No. 2 from below does not bear any date or description.
Therefore. this is deaf and dumb entry on which basis no addition can be made legally. Therefore the addition of Rs.24,98,886/- sustained by CIT(A) is illegal without any basis. In support that the business of extraction and sale of sand is be done by M/s.Suresh Kumar Pandey and brothers, the copy of the balance sheet of M/s Suresh Kumar Pandey and Brothers is enclosed. The addition sustained by CIT(A) in absence of any corroborative material found in the course of search or even in remand proceedings as per I.T.A No. 496/Agra/2012 39 page 1 to 25 Para 9 where the AO has except relying on the AOs vague order has brought no adverse material to support. Thereforealso the addition sustained by CIT (A) may kindly be directed to be deleted. 14.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
14.3. We have heard the rival contentions and perused the material available on record. So far as the amount of Rs.5,00,000/-, Rs.2,08,750/-, Rs.16,666/- and Rs.1,00,000/- totaling to Rs.8,25,416/- are the payments relating to the earlier assessment years and therefore, the same cannot be added in the present assessment year. This fact has duly been verified by the Ld.CIT-DR during the course of argument. Accordingly, the amount of Rs.8,25,416/- is deleted.
With respect to the remaining amount of Rs.16,03,470/-, the brake-up of the said amount was given by the AO and CIT(A) in their respective orders, referred pg.66 of the impugned order. In fact, before the CIT(A), the assessee was given an opportunity to explain the said amount to verify his claim that the said expenditure belongs to M/s.Suresh Kumar Pandey and others. Ironically, the assessee failed to prove and produce his case before the lower authorities and also before us. During the course of proceedings I.T.A No. 496/Agra/2012 40 before lower authorities, it was not disputed that these entries were not mentioned in the record sheet, recovered from the possession of the assessee. The onus is always on the assessee to prove and discharge that the payments made were relating to the business of Shri Suresh Kumar Pandey and brothers. In our view, the amount paid on the face of it appears to have been paid for the purposes of earning the income therefore, the assessee is entitled to the corresponding benefit which has been earned on account of such expenditure. In the absence of any help from any of the parties before us, we are required to make the guess of income which can be included for incurring the expenditure of Rs.16,03,470/-. In our view, the overall circumstances of the case and more particularly the assessment year 2005-06 no purpose would be served to remand the matter back to the CIT(A) for granting a fresh opportunity for producing the books of account of M/s.Suresh Kumar Pandey and bothers. It would be sufficient if we restrict the addition to an amount of Rs.6,03,470/- thus, the assessee gets the benefit of Rs.10 Lakhs and the additions of Rs.14,98,886/- are deleted. Hence, the Grounds is partly allowed.
I.T.A No. 496/Agra/201241
15. In Ground of Appeal 14, the assessee submitted that CIT (A) has erred and facts and in law in sustaining following addition in the hands of appellant irrespective of evidence found in the course in the such and addition made in contravention of sec 153.C also are bad in law.
1. Rs. 50,000/- investment made by ShakuntlaDevi
2. Rs. 4,43,747/- investment made by Smt Radha Dubey 15.1. Ld.Counsel submitted that the AO has made the addition of Rs.50,000/- on the ground that the source of investment in purchase of plot with stand in the name of Shakuntla Devi has not been explained. This finding of the AO is vague for the very reason that' assessee vide his reply reproduced by CIT(A) at page 67 it was submitted that appellant had no concern with the purchase of plot land by Shankuntla W/o Shri Vikarm Singh Bijalpur because these were sold by some Shiv Kumar S/o Iswarsahai resident of 26 Tilak Nagar Auriya. The identity and full address of the purchase and seller were available on the sale deed. It was also submitted that it cannot be considered in the hands of appellant. No enquiry has been carried out by the AO even in the remand proceedings to bring the truth and to controvert the submission made by the assessee on the issue. Since the provision of section 153C are distinct which the AO has not applied for the I.T.A No. 496/Agra/2012 42 reasons best known to him and the assessee cannot be saddled with the liability on account on failure on the part of AO, the addition without bringing any supporting material on record the addition sustain by taking shelter of section 132 (4A) is illegal.
Similarly the addition of Rs.4,43,747/- was made on the basis of document LP -8 which showed the details of payment made by Radha Dubey the CIT has observed that the receipt of payment made by Smt Radha Dubey amounting to Rs. 1,16,497/- cash to Ashok Laylend finance limited is Apparent from Page No.66-71 and on Page No.68-69 details of denominations of currency are noted at Rs.1,63,625/-. The learned AO was requested vide letter dated 26.11.2006 to summon both the persons. Vide letter dated 16.11.2006 it was made clear to the AO vide Para 7 that the papers found in the name of Radha Dubey W/o K.K. Dubey relate to purchase of vehicle by her and the vehicle does not pertain to appellant her husband is working in LIC and for the purpose of taking LIC premium from the Appellant and his family. He might have left these papers. Even in the remand report as mentioned in Para 22.03 of CIT (A) The AO has not brought any material to support the addition. Also the CIT(A) except taking shelter of section 132(4A) without bringing any Corroborative I.T.A No. 496/Agra/2012 43 material has confirmed the addition under section 132 (4A) which in absence of any material to support, is illegal. Finally,Ld.Counsel argued that the addition made therefore being devoid of any merit and illegal may kindly be directed to be deleted.
15.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
15.3. We have heard the rival contentions and perused the material available on record. The additions were made by the lower authorities on the basis of the sale document found during the course of search. The documents on the face clearly gives the name and addresses of the instrument showing the ownership in the name of Smt. Shakuntala Devi and Smt.Radha Dubey. No steps were taken by the authorities to make the additions in their names nor any enquiry was conducted by the AO in the remand proceedings. Moreover, the law is fairly settled that the additions can only be made on the basis of some cogent and corroborative evidence and cannot be made on the basis of mere assumptions and surmises by taking recourse to Section 132(4A) of the Act. In the result, the ground raised by the assessee is allowed.
I.T.A No. 496/Agra/201244
16. Vide Ground No.15 the assessee submitted that the CIT(A) has erred on facts in law in sustaining the addition of Rs.74,400/- for purchase of jewellery during the year own on mere presumption in the hands of appellant despite written explanation given before AO is bad in law and the total possession of jewellery did not exceed the normal accepted limit laid down by the CBDT by a Hindu Married lady being her IstriDhan of more than 20 years marriage span and belonging to Zamindar family owning 300 bigha of agriculture land. The Diary page also belongs to the year 2002. Hence also it cannot be presumed to pertaining to year 2005-06. No evidence to the effect of purchase of jewellary in assessment year 2005-06 was found. Hence in cannot be presumed to be pertaining to year 2005-06. The jewellary was receipt at the time of marriage of the assessee from her in laws site and from her parental sides more than twenty years ago. Also there is no finding coming from the AO that the jewellary was purchased during the year 2005- 06 and in absence of any corroborative evidence the addition made on mere presumption may kindly be directed to be deleted.
16.1. In this connection, Ld.Counsel relied on the decision of the the Hon'ble Delhi High Court in the case of CIT Vs Anil Bhalla as held that addition in search case cannot be sustained in absence of any corroborative I.T.A No. 496/Agra/2012 45 evidence and that each and every paper found may not represent undisclosed income or expenditure.
16.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee.
16.3. We have heard the rival contentions and perused the material available on record. The additions were made by the AO on account of the jewellery purchase for an amount of Rs.74,400/-. We had already discussed in detail the status of the assessee while dealing with Ground No.1 and had decided the issue against the assessee by upholding the addition of Rs.2,50,000/- on account of household expenses. In view of the above, the addition made by the AO towards purchase of jewellery is deleted as the same be subsumed in the addition confirmed by us regarding household expenses. This Ground of assessee is allowed.
17. In the result, the appeal of assessee is partly allowed.
Order pronounced in the open court on 08-01-2020
Sd/- Sd/-
(Dr. M.L. MEENA) (LALIET KUMAR)
ACCOUNTANT MEMBER JUDICIAL MEMBER
TNMM
I.T.A No. 496/Agra/2012
46
Copy forwarded to:
1. Assessee
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
Sr. Private Secretary
ITAT AGRA