Income Tax Appellate Tribunal - Delhi
Sh. Raj Singh Sangwan, New Delhi vs Dcit, New Delhi on 27 December, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "F", NEW DELHI
BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
AND
MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
ITA Nos.4100 to 4106/Del/2009
Assessment Years : 1999-2000 to 2005-06
Raj Singh Sangwan, DCIT, Central Circle,
C/o Rakesh Raj & Associates, New Delhi.
D-28, South Extension-I, Vs.
New Delhi.
PAN : AZYPS0464R
(Appellant) (Respondent)
ITA No.4231/Del/2009
Assessment Year : 2005-06
ACIT, Central Circle-II, Raj Singh Sangwan,
Faridabad. Upkar Hospital Street,
Vs. Near Bus Stand, Charkhi Dadri,
Bhiwani.
PAN : AZYPS0464R
(Appellant) (Respondent)
Assessee by : Shri (Dr.) Rakesh Gupta, Adv.
Department by : Smt. Paramita Tripathy, CIT(DR)
Date of hearing : 12-10-2017
Date of pronouncement : 27-12-2017
ORDER
PER R. K. PANDA, AM :
ITA Nos.4100 to 4105/Del/2009 filed by the assessee are directed against the separate orders dated 17.08.2009 of the CIT(A)-I, Ludhiana relating to assessment years 1999-2000 to 2004-05 respectively. ITA No.4106/Del/2009 2 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 filed by the assessee and ITA No.4231/Del/2009 filed by the Revenue are cross appeals and are directed against the order dated 17.08.2009 of the CIT(A)-I, Ludhiana relating to assessment year 2005-06. Since common issues have been raised by the assessee in all these appeals, therefore, the appeals filed by the assessee as well as appeal filed by the Revenue are disposed of by this common order for the sake of convenience.
ITA No.4100/Del/2009 (A.Y. 1999-2000)
2. Facts of the case, in brief, are that the assessee is an individual and is engaged in the business of property dealer. A search action u/s 132 was carried out at the residential premises of the assessee on 04.03.2005. In response to notice u/s 153A on 07.11.2005 issued by the Assessing Officer asking the assessee to file his return of income within 30 days, the assessee filed his return of income on 12.12.2005 declaring an income of Rs.31,690/- and agricultural income of Rs.1,78,000/-. Since the return of income was not accompanied with the copies of trading account, profit and loss account, capital account, statement of affairs, details of sundry creditors and debtors etc. the Assessing Officer issued a deficiency letter on 16.06.2006. The assessee removed the above defects by fling the requisite details vide reply dated 02.08.2006. The Assessing Officer, therefore, treated the date of filing of the return as 02.08.2006. 3
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
3. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has never filed his return of income before the date of search. The assessee is a famous property dealer of Charkhi Dadri which is established from the various documents such as maps, sale deeds, evidence of developing the land before selling into plots, names and address of the persons to whom plots were sold etc found during the course of search. Moreover, the assessee himself has shown, commission income from the sale and purchase of property. Further, in the statement recorded u/s 132(4), the assessee has admitted to have received income from commission from the sale and purchase of the properties and also developing the land before selling the same into plots. The Assessing Officer, therefore, held that the assessee is doing business in dealing of property. He, therefore, rejected the contention of the assessee that he is only doing such property business on part time basis.
4. In response to statutory notices issued from time to time, the assessee appeared before the Assessing Officer and filed certain details. From the various details furnished by the assessee, the Assessing Officer observed that the assessee has shown opening cash in hand of Rs.3,60,000/- on 01.04.1998. He, therefore, asked the assessee to justify this cash in hand with documentary evidence. The assessee in his reply dated 21.08.2006 submitted that he has sold agriculture land for Rs.2,40,000/- and received the proceeds in cash. The balance amount of Rs.1,20,000/- was explained to be out of savings from 4 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 agricultural income. It was submitted that the assessee earned an amount of Rs.1,50,000/- to Rs.2,00,000/- per annum, from agricultural land of 164 Kanal. The Assessing Officer, therefore, asked the assessee to substantiate with evidence regarding the savings of Rs.1,20,000/- out of agricultural income. The assessee submitted that during the financial year 1997-98, he was having around 197 Kanal of agriculture land and his agriculture income was more than Rs.1,50,000/-. The assessee also submitted copies of 'J' forms to substantiate the sale of agricultural produce to the extent of Rs.1,16,000/-. However, the Assessing Officer did not accept the contention of the assessee on the ground that when the assessee was having 4 bank accounts and he was frequently depositing and withdrawing money from these accounts and was investing in the properties regularly, therefore, the explanation of the assessee cannot be accepted in full. He, however, held that the assessee might be having the cash of Rs.2,90,000/- (2,40,000+50,000) out of past savings. He, therefore, rejected availability of the cash to the extent of Rs.70,000/- and made addition u/s 69A of the I.T. Act.
4.1 The Assessing Officer observed that there is cash credit of Rs.70,699/- on 27.05.1998 in the books of account of the assessee in name of Shri Sube Singh. He, therefore, asked the assessee to substantiate with documentary evidence to prove the genuineness of the above credit. He also asked the assessee to file complete address of Shri Sube Singh. Although the assessee filed a written 5 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 submission the address or confirmation in respect of credit in the name of Shri Sube Singh was not filed. Since the assessee could not file any details to substantiate with evidence to the satisfaction of the Assessing Officer in terms of the provisions of section 68, the Assessing Officer added Rs.70,699/- to the total income of the assessee.
5. The Assessing Officer observed that the assessee in his Balance Sheet has shown unsecured loan of Rs.2,00,000/- as on 31.03.1999. On being questioned by the Assessing Officer, it was submitted that the assessee obtained loan of Rs.1,00,000/- each from Shri Bhagwan Singh & Shri Daya Chand. Since the assessee did not produce Shri Bhagwan Singh before the Assessing Officer to justify his identity and creditworthiness, the Assessing Officer invoking the provisions of section 68 made addition of Rs.1,00,000/- to the total income of the assessee. Since the loan was disallowed u/s 68, the interest paid to the above person amounting to Rs.18,000/- which was debited in the Profit & Loss Account was also disallowed by the Assessing Officer.
6. The Assessing Officer further observed from the Balance Sheet of the assessee that the value of car has been shown at Rs.1,50,000/-. The Assessing Officer asked the assessee to produce the evidence of purchase of car and source of purchase of the same. He also asked the assessee to give the full particulars of the car and details of the vehicle running and maintenance expenses including insurance expenses. Since the assessee did not furnish the requisite 6 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 details as asked for by the Assessing Officer, the Assessing Officer estimated the value of the car at Rs.2,10,000/- and added the same to the total income of the assessee u/s 69 of the I.T. Act as investment from undisclosed sources.
7. The Assessing Officer observed from the return of income that the assessee has shown an amount of Rs.8,250/- as commission income. Since the assessee did not produce any documentary evidence for verification of the commission income, the Assessing Officer, keeping in view of the status and expenses of the assessee estimated such commission income at Rs.60,000/-. After deducting the commission income declared by the assessee at Rs.8,250/- he made addition of Rs.51,750/- to the total income of the assessee.
8. The Assessing Officer further made addition of Rs.4,024/- on account of capital gain sale of plot of land for a consideration of Rs.30,000/- estimating the value of such plot of Rs.1,000/- in absence of any documentary evidence filed before him. The Assessing Officer further noted that the assessee has purchased a shop at Bus Stand Road, Charkhi Dadri for a consideration of Rs.80,000/-. From the copy of the sale/purchase deed, he observed that the assessee has made payment of Rs.92,400/- (i.e. Rs.80,000/- + Rs.12,400/- towards stamp duty). Since the assessee has disclosed only Rs.80,000/- the Assessing Officer made addition of Rs.12,400/- to the total income of the assessee. The Assessing Officer estimated the house hold expenses of the assessee at Rs.70,000/-. After deducting the withdrawal for house hold expenses shown by the assessee at 7 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Rs.24,000/-, the Assessing Officer made addition of Rs.46,000/- to the total income of the assessee. However, he ultimately did not make addition of that account on the ground that the commission income has already been enhanced which will take care of this house hold expenses.
9. The Assessing Officer observed that the assessee has shown agricultural income of Rs.1,78,000/- during the year. It was explained by the assessee that the 'J' forms regarding sale of agriculture land were seized during the course of search which shows sale of agriculture produce to the extent of Rs.1,16,000/-. Since the assessee did not produce the evidence for the remaining Rs.62,000/-, the Assessing Officer estimated the total agricultural income at Rs.1,60,000/- as against Rs.1,78,000/- declared by the assessee and made addition of Rs.18,000/- as non-agricultural income and accordingly made addition of Rs.18,000/- to the total income of the assessee.
10. The assessee filed an appeal before the ld. CIT(A) challenging the action of the Assessing Officer in treating the return as defective. The various additions made by the Assessing Officer were also challenged. Considering the arguments advanced by the assessee, the ld. CIT(A) upheld the action of the Assessing Officer in treating the return as defective. So far as the various additions made by the Assessing Officer are concerned, the ld. CIT(A) upheld the action of the Assessing Officer in making addition of Rs70,000/- on account of opening cash, Rs.70,699/- being credit appearing in the name of Shri Sube 8 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Singh, Rs.1,00,000/- obtained as unsecured loan from Shri Bhagwan Singh and the interest thereon amounting to Rs.18,000/-. Ld. CIT(A) deleted the addition made by the Assessing Officer amounting to Rs.2,10,000/- on account of purchase of motor car. He also deleted the addition made by the Assessing Officer amounting to Rs.51,750/- on account of commission income received. He, however, sustained the addition of Rs.4,024/- made by the Assessing Officer on account of sale of land and Rs.12,400/-on account of purchase of shop. Ld. CIT(A) further upheld the addition of Rs.46,000/- on account of house hold expenses. He also deleted the agricultural income of Rs.18,000/- declared by the assessee as agricultural income which was treated by the Assessing Officer as "income from other sources". The CIT(A) thus gave part relief to the assessee for this assessment year.
11. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 02.08.2006, instead on 12.12.05 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating Rs.70,000/- out of opening cash in hand as income from undisclosed sources u/s. 69A of the Income Tax Act.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating a sum of Rs.70,699/- as unexplained credit under the provisions of section 68 of the Act.9
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,00,000/- u/s 68 of the Income Tax Act on account of loan from Sh. Bhagwan Singh.
6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.18000/-.
7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.4024/- to long term capital gain.
8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating a sum of Rs.12400/- as investment in shop out of undisclosed sources.
9. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.46000/- as income from undisclosed source on account of household expense.
10. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.
11. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
12. Ld. counsel for the assessee at the time of hearing did not press the ground no.2 and 4 for which ld. DR has no objection. Accordingly, the above two grounds are dismissed as not pressed.
13. Ground no.11 being general in nature is dismissed.
14. So far as ground no.1 is concerned, ld. counsel for the assessee referring to para 2, page 1 of the assessment order drew the attention of the Bench to the deficiency letter issued by the Assessing Officer on 16.01.2006. Referring to page 37 - 38 of the Paper Book, ld. counsel for the assessee drew the attention of the Bench to the letter issued by the assessee dated 25.01.2006 which was received by the Assessing Officer on 01.02.2006, copy of which is placed at 10 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 page 5 of the Paper Book. Referring to page 2 of the Paper Book, which contains the computation of income, he submitted that the assessee has declared only Rs.9,000/- as brokerage and commission income and after claiming miscellaneous expenses of Rs.750/- declared income of Rs.8,250/-. Since such meager income is on actual basis, therefore, assessee is not required to maintain any books of account, Profit & Loss Account and Balance Sheet etc. which was clarified before the Assessing Officer as well as before the ld. CIT(A). However, the Assessing Officer treated the return filed as beyond the due date and the ld. CIT(A) upheld the same by relying on Clause (f) of Explanation 1 to sub-section (9) of section 139. Referring to the said provision, he submitted that the said clause is not applicable to the case of the assessee since he has received only Rs.9,000/- towards commission and has incurred expenses of Rs.750/- only towards miscellaneous expenses which is on actual basis.
15. The Ld. DR on the other hand heavily relied on the order of the Assessing Officer.
16. We have carefully considered the rival arguments made by both the sides, perused the orders of the authorities below and the Paper Book filed on behalf of the assessee. We find the ld. CIT(A) relying on Clause (f) of Explanation 1 to sub-section (9) of section 139 upheld the action of the Assessing Officer in treating the return as defective. However, we find the assessee in the computation of total income, copy of which is placed at page 2 of the Paper 11 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Book, has shown brokerage and commission income of Rs.9,000/-. After claiming miscellaneous expenses of Rs.750/-, the assessee has declared income from business at Rs.8250/-. Further, in response to defective notice issued by the Assessing Officer on 16.01.2006, the assessee vide letter dated 25.01.2006, which was received by the Assessing Officer on 01.02.2006, has explained the reasons for which there is no trading Profit & Loss Account, capital account or Balance Sheet etc.. Under these circumstances, we are of the considered opinion that the assessee has removed the defects within the time prescribed by the Assessing Officer and, therefore, the return cannot be treated as defective. The ground raised by the assessee is accordingly allowed.
17. So far as ground no.3 is concerned, the same relates to treating Rs.70,000/- out of opening cash in hand as income from undisclosed sources u/s 69A of the I.T. Act.
18. After hearing both the sides, we find out of the opening cash in hand of Rs.3,60,000/- the Assessing Officer treated an amount of Rs.2,90,000/- as explained by accepting the amount of Rs.2,40,000/- towards sale proceeds of agricultural land and cash of Rs.50,000/- being out of accumulated savings. It is the submissions of the ld. counsel for the assessee that the assessee derives agricultural income of Rs.1,50,000/- to Rs.2,00,000/- per annum. At the time of search, cash of Rs.3,60,000/- was found out of which Rs.2,40,000/- was accepted as explained as out of sale proceeds of agricultural land. It is also the 12 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 submission of the ld. counsel of the assessee that the balance Rs.1,40,000/- was the savings out of agricultural income. It is the submission of the ld. DR that when the assessee is maintaining 4 bank accounts and was regularly depositing and withdrawing money from the said bank accounts, therefore, it is unbelievable that such huge cash balance was kept at hand. According to him, since the ld. CIT(A) has passed a reasonable order on this issue, therefore, the same should be upheld.
19. It is an admitted fact that 'J' forms to the tune of Rs.1,16,000/- were seized during the course of search which shows sale proceeds of agricultural produce. Therefore, holding of Rs.1,20,000/- out of such agricultural income, in our opinion, should not have been disbelieved. Since the Assessing Officer has accepted an amount of Rs.50,000/- only out of cash balance of Rs.1,20,000/- and thereby made addition of Rs.70,000/- which has been upheld by the ld. CIT(A), therefore the same, in our opinion, is uncalled for. Under these circumstances, we set-aside the order of the ld. CIT(A) and direct the Assessing Officer to delete the addition of Rs.70,000/-. The ground no.3 by the assessee is accordingly allowed.
20. Grounds no.5 and 6 relate to the order of the ld. CIT(A) in confirming the addition of Rs.1,00,000/- made by the Assessing Officer u/s 68 on account of loan from Shri Bhagwan Singh and interest of Rs.18,000/- paid on such loan. 13
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
21. After hearing both the sides, we find the addition was made by the Assessing Officer on account of non-production of Shri Bhagwan Singh before the Assessing Officer. Ld. counsel for the assessee, at the time of hearing, submitted that given an opportunity he will produce the said person before the Assessing Officer to substantiate with evidence to his satisfaction regarding the identity and creditworthiness of Shri Bhagwan Singh and the genuineness of the transactions. In view of the above and considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the above two grounds to the file of the Assessing Officer for adjudication of the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
22. Ground no.7 relates to addition of Rs.4,024/- by the Assessing Officer as long term capital gain.
23. After hearing both the sides, we find due to non-production of evidence regarding the purchase of plot in the year 1987-88 for a consideration of Rs.2,147/-, the Assessing Officer considered the purchase value at Rs.1,000/- on estimate basis and determined the profit on sale of plot at Rs.28,700/- as against Rs.24,676/- declared by the assessee. Since nothing was produced before the ld. CIT(A) he confirmed the said addition. No other evidence was produced before us so as to take a contrary view than the view taken by the ld. CIT(A). 14
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Accordingly the same is upheld and the ground raised by the assessee is dismissed.
24. Ground no.8 relates to addition of Rs.12,400/- towards investment in shop out of undisclosed sources. As mentioned earlier, the assessee had purchased the shop for Rs.80,000/- which was duly disclosed in the cash flow statement. However, the stamp duty and registration expenses of Rs.12,400/- was not separately disclosed for which the Assessing Officer made the addition which has been confirmed by the ld. CIT(A). No further evidence was produced before us to substantiate the source of Rs12,400/-. Therefore, the ground raised by the assessee on this issue is dismissed.
25. Ground no.9 by the assessee relates to addition of Rs.46,000/- on account of undisclosed source on account of household expenses.
26. After hearing both the sides, we find the assessee had shown only Rs.24,000/- as withdrawal for household expenses which was estimated by the Assessing Officer at Rs.70,000/- resulting addition of Rs.46,000/- which has been upheld by the ld. CIT(A). It is the submission of the ld. counsel for the assessee that in absence of any evidence found during the course of search, the addition should not have been sustained. Merely because the assessee is maintaining a car and telephone, it cannot be said that the standard of living is quite high. Considering the totality of the facts of the case, we are of the considered opinion that the addition of Rs.46,000/- on estimate basis on account 15 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 of probable household expenses under the facts and circumstances of the case is uncalled for. We, therefore, set-aside the order of the ld. CIT(A) on this issue and the ground raised by the assessee is allowed.
27. Ground no.10 relates to charging of interest u/s 234A and 234B.
28. After hearing both the sides, we are of the considered opinion that the charging of interest under the above provisions are mandatory and consequential in nature. Therefore, the ground raised by the assessee is dismissed.
ITA No.4101/Del/2009 (A.Y. 2000-01)
29. The grounds raised by the assessee are as under :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 02.08.2006, instead on 12.12.05 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making addition and disallowances dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in holding that the appellant has not received any land through gift deed.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.4,90,000/- on account of purchase of land out of income from undisclosed sources of the appellant.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing a sum of Rs.95,000/- incurred on development of plot and thereby making an addition of Rs.95,000/- to short term capital gain.
6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.18000/- paid to Sh. Bhagwan Singh.
7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.50000/- as income from undisclosed source on account of household expense.16
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
8. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.
9. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
30. Ld. counsel for the assessee did not press the ground no.2 and 5 for which the ld. DR has no objection. Accordingly, the above two grounds are dismissed.
31. Ground no.9 being general in nature is dismissed.
32. So far as ground no.10 is concerned, the same is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following the reasons given therein, this ground raised by the assessee is allowed.
33. Ground no.3 and 4 relates to the order of the ld. CIT(A) in confirming the action of the Assessing Officer in making addition of Rs.4,90,000/- on account of purchase of land.
34. After hearing both the sides, we find the Assessing Officer during the course of assessment proceedings after examination of the seized documents observed that the assessee has acquired land measuring 56K 13M on 30.06.1999 through HIBA-NAMA (gift deed), from Shri Ganga Dhar Aggarwal, S/o Shri Rameshwar (R.L. Aggarwal) resident of B-487, New Friends Colony, New Delhi himself and having General Power of Attorney of Ramesh, Sarla and Ashrafi Wd/of Laxmi Narain, resident of Mumbai, GPA of Balkishan, S/o Tika 17 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Ram, resident of Calcutta, GPA of Praveen, Naveen, Anoop Sheela and Usha sons, daughter and wd/o Tara Chand, resident of Mumbai GPA of Lalita D/o Rameshwar and GPA of Arjun, Shiv Kumar, Kamal sons of pitamber, residents of Calcutta gifted the above said land measuring 56K 13M to Shri Raj Singh. The registration authority has valued the land at Rs.4,90,000/- and stamp duty is of Rs.30,630/-. He, therefore, asked the assessee to give complete address of Shri Ganga Dhar, his relationship with the assessee and also to produce the said Shri Ganga Dhar for recording his statement to substantiate such gift. However, the assessee failed to produce the said Shri Ganga Dhar. The Assessing Officer recorded the statement of Shri Raj Singh and came to the conclusion that he is not related to Shri Ganga Dhar and other members on behalf of whom Shri Ganga Dhar has made the gift. He, therefore, made addition of Rs.4,90,000/- to the total income of the assessee.
35. Before the ld. CIT(A), the assessee argued that no adequate opportunity has been granted by the Assessing Officer on this issue. It was reiterated that the land in question was received by the assessee as gift through Shri Ganga Dhar and the evidence of the said gift deed has been duly registered with the Joint Registrar.
36. However, the ld. CIT(A) was not convinced with the argument advanced by the assessee and upheld the action of the Assessing Officer by observing as under :-
18
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 "6.2 I have analyzed the matter and find that donor was holding GPA for this land as mentioned by the A.O. in the assessment order. It doesn't emerge from the details available as to how the donor was having GPA on behalf of various persons residing at different places. The appellant couldn't even furnish the address of these persons when asked by the A.O. That goes to show that how ephemeral the relationship is between the donor and donee. The appellant's claim that his family was looking after the land for more than three decades also remains unsubstantiated. The lack of intimacy of relationship and no occasion for making the gift are strong factors in favour of the department to treat the gift as not genuine. Therefore, I hold that the appellant has failed to prove that it was a genuine gift flowing from natural love and affection and without consideration. The ground of appeal is dismissed."
37. It is the submission of the ld. counsel for the assessee that given an opportunity he will be in a position to produce the said Shri Ganga Dhar before the Assessing Officer to substantiate that he has given the land as gift to the assessee. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the Assessing Officer with the direction to give an opportunity to the assessee to produce Shri Ganga Dhar before the Assessing Officer to substantiate the gift. The Assessing Officer shall decide the issue afresh in accordance with law and after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The above grounds are accordingly allowed for statistical purposes.
38. Ground no.6 relates to disallowance of interest of Rs.18,000/- paid to Shri Bhagwan Singh.
39. After hearing both the sides, we find in the immediately preceding year, the Assessing Officer disallowed the interest on the ground that loan obtained from him was disallowed. We have already restored this issue to the file of the 19 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Assessing Officer with a direction to give an opportunity to the assessee to produce the said Shri Bhagwan Singh. We, therefore, restore this issue to the file of the Assessing Officer with the direction to adjudicate the issue afresh in the light of our direction in the preceding assessment year. He will also ascertain whether the assessee has claimed such interest. He shall decide the issue in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the assessee is allowed for statistical purposes.
40. Ground no.7 relates to addition of Rs.50,000/- on account of undisclosed source on account of household expenses.
41. After hearing both the sides, we find as against Rs.30,000/- declared by the assessee as household expenses, the Assessing Officer estimated the same at Rs.1,10,000/- and made addition of Rs.80,000/- as undisclosed income on account of household expenses which has been upheld by the ld. CIT(A). We find the above ground is identical to ground no.9 raised by the assessee in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following similar reasoning, this ground raised by the assessee is allowed.
42. Ground no.8 by the assessee relates to levy of interest u/s 234A and 234B which in our opinion is mandatory and consequential in nature. Accordingly the said ground raised by the assessee is dismissed.
20
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 ITA No.4102/Del/2009 (A.Y. 2001-02)
43. The grounds raised by the assessee are as under :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 07.11.2006, instead on 12.12.05 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.5,00,000/- on account of forfeited advance receipt against his capital asset.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,80,000/- as unexplained credit u/s 68 of the Income Tax Act.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.18000/-.
6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.54000/- as income from undisclosed source on account of household expense.
7. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.
8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
44. Ground no.2 by the assessee was not pressed for which ld. DR has no objection. Accordingly, the same is dismissed as not pressed.
45. Ground no.8 being general in nature is dismissed.
21
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
46. Ground no.1 is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following similar reasoning this ground by the assessee is also allowed.
47. In ground no.3, the assessee has challenged the order of the ld. CIT(A) in confirming the addition of Rs.5,00,000/- made by the Assessing Officer on account forfeited advance receipt against his capital asset.
48. After hearing both the sides, we find the assessee had shown receipt of Rs.5,00,000/- in cash in the name of Shri Ram Bhagat on account of agreement with him for sale of land for a consideration of Rs.16,50,000/- on 22.05.1999. Since the land was not registered on 10.04.2000 as per the agreement, the assessee forfeited the advance and claimed the same as forfeited advance. However, the Assessing Officer disbelieved the claim of the assessee and made addition of Rs.5,00,000/- to the total income of the assessee which was upheld by the ld. CIT(A) by observing as under :-
"5.2 I have gone through the facts of the case and find that assessee's plea that the advance was received towards the sale of capital asset in the form of agricultural land cannot be accepted. It is an admitted fact that the appellant is a commission agent deriving income from working as a broker in the sale and purchase of land deeds. However, it is also a matter of fact that the appellant had been buying and purchasing land and also entering into agreements for sale and purchase of land as is evident from the following transactions entered into by the appellant :
Assessment year 1999-2000 (i) On 12.2.98 the appellant sold agricultural land for Rs.2,40,000/-.
(ii) Sole a plot of land on 12.8.98 for Rs.30,000/-.
(iii)Purchased a shop for Rs.80,000/- at Bus Stand, Charkhi Dadri.
2000-01 Sold a plot of land on 24.6.99 for a sum of Rs.1,52,000/-. 22
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 2001-02 i) Received a sum of Rs5 lacs from Sh. Ram Bhagat for sale of land.
ii) Appellant entered into an agreement dated 21.11.2000 with Sh. Partap Singh for purchase of land and paid Rs.1,80,000/-. 5.3 From the above, it is very clear that buying and selling of land is being done in a very systematic and organized manner and with regularity by the appellant. Therefore, the land purchased becomes stock in trade in the hands of the assessee and he cannot take the shelter of the plea that it is a capital asset in his hand, as selling and purchasing of land constitutes the business of the assessee. Therefore, I upheld the action of the AO and the ground of appeal is dismissed."
49. Ld. counsel for the assessee referred to the submissions made before the Assessing Officer as well as the ld. CIT(A). He also referred to page 19 to 21 of the Paper Book regarding the advance receipt of Rs.5,00,000/-. He also referred to page 31 to 33 of the Paper Book. In our opinion, the matter has not been adjudicated properly in the light of the various documents furnished especially when such documents are in Punjabi and no translated copy of same are available before us. We, therefore, restore this issue to the file of the Assessing Officer with a direction to give an opportunity to assessee to file the translated copy of the said agreement/documents. The Assessing Officer shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. The ground raised by the assessee is allowed for statistical purposes.
50. Ground no.4 relates to addition of Rs.1,80,000/- as unexplained credit u/s 68 of the I.T. Act.
23
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
51. After hearing both the sides, we find since the assessee did not produce Shri Partap Singh from whom he claimed to have received an amount of Rs.1,80,000/-, the Assessing Officer, invoking the provisions of section 68 made the addition which has been upheld by the ld. CIT(A). It is the submission of the ld. counsel for the assessee that given an opportunity he will produce the said person before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to produce the said person and prove ingredients of section 68 before him. The ground raised by the assessee is allowed.
52. Ground no.5 relates to disallowance of interest of Rs.18,000/-.
53. After hearing both the sides, we find the above ground is identical to ground no.6 in ITA No.4101/Del/2009. We have already decided the issue and restored the matter to the file of the Assessing Officer for fresh adjudication. Therefore, following similar reasoning this ground is allowed for statistical purposes.
54. Ground no.6 relates to addition of Rs.54,000/- as income from undisclosed source on account of household expense.
55. After hearing both the sides, we find this ground is identical to ground no.9 in ITA No.4100/Del/2009. We have already decided the issue and the 24 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 ground has been allowed. Following similar reasoning, this ground is also allowed.
56. Ground no.7 relates to levy of interest u/s 234A and 234B which in our opinion is mandatory and consequential in nature. Accordingly, the ground raised by the assessee is dismissed.
ITA No.4103/Del/2009 (A.Y. 2002-03)
57. The grounds raised by the assessee are as under :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 07.11.2006, instead on 12.12.05 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,24,996/- on account of short term capital gains.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in holding the amount of Rs.65,500/- as income from undisclosed sources u/s 68 of the Income Tax Act.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh. Dayachand (Rs.18000/-) as per provisions of section-36 read with section 40A of the Income Tax Act."
58. Grounds no.2, 3 and 4 were not pressed by the ld. counsel for the assessee for which ld. DR has not objection. Accordingly, the same are dismissed as not pressed.
25
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
59. Ground no.1 by the assessee is identical to Ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following similar reasoning, this ground raised by the assessee is allowed.
60. Ground no.5 relates to disallowance of interest of Rs.36,000/- paid to Shri Bhagwan Singh (Rs.18000/-) and Shri Dayachand (Rs.18000/-).
61. After hearing both the sides, we find this ground is identical to ground no.5 in ITA No.4100/Del/2009. We have already restored this issue to the file of the Assessing Officer with a direction to decide the issue afresh. Therefore, following similar reasoning, this ground is allowed for statistical purposes. ITA No.4104/Del/2009 (A.Y. 2003-04)
62. The grounds raised by the assessee are as under :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 30.11.2006, instead on 12.12.06 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh. Dayachand (Rs.18000/-) as per provisions of section-36 read with section 40A of the Income Tax Act.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.77,000/- as income from undisclosed source on account of household expense.
5. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.26
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
63. Ground no.2 was not pressed by the assessee for which ld. DR has no objection. Accordingly, the ground no.2 is dismissed.
64. Ground no.6 being general in nature is dismissed.
65. Ground no.1 is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground has already been allowed. Following similar reasoning, this ground is also allowed.
66. Ground no.3 is identical to ground no.5 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been restored to the file of the Assessing Officer with a direction for fresh adjudication. Following similar reasoning, the ground raised by the assessee is allowed for statistical purposes.
67. Ground no.4 relates to addition of Rs.77,000/- as undisclosed source on account of household expenses.
68. After hearing both the sides, we find that Rs.48,000/- has declared by the assessee towards household expenses. The Assessing Officer estimated the same at Rs.1,25,000/- resulting addition of Rs.77,000/- which has been upheld by the ld. CIT(A). We find this ground is identical to ground no.9 in ITA 27 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 No.4100/Del/2009. Following similar reasoning, the ground raised by the assessee is allowed.
69. Ground no.5 relates to levy of interest u/s 234A and 234B which in our opinion is mandatory and consequential in nature. Accordingly, the ground no.5 raised by the assessee is dismissed.
ITA No.4105/Del/2009 (A.Y. 2004-05)
70. The grounds raised by the assessee are as under :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 14.11.2006, instead on 12.12.05 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.15,00,000/- on account of income from undisclosed sources and that too u/s 68.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh. Dayachand (Rs.18000/-) as per provisions of section-36 read with section 40A of the Income Tax Act.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.86000/- as income from undisclosed source on account of household expense.
6. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.
7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."28
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
71. Ground no.2 was not pressed by the ld. counsel for the assessee for which ld. DR has no objection. Accordingly, the same is dismissed as not pressed.
72. Ground no.7 being general in nature is dismissed.
73. Ground no.1 is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground has been allowed. Following similar reasoning, this ground is also allowed.
74. Ground no.3 relates to addition of Rs.15,00,000/- on account of income from undisclosed sources u/s 68.
75. After hearing both the sides, we find the Assessing Officer during the course of assessment proceedings observed that the assessee has shown cash of Rs.15,00,000/- in the name of Shri Risal Singh. Since the assessee did not produce the said person before the Assessing Officer, he made addition of Rs.15,00,000/- by invoking the provisions of section 68 which has been upheld by the ld. CIT(A) by observing as under :-
"6.2 I have analyzed the matter and find that the assessee has failed to prove the creditworthiness of the person who gave the sum of Rs.15 lacs and the very genuineness of the transaction. The initial burden is on the appellant to prove the identity and creditworthiness of the creditor and genuineness of the transaction. This burden which is initially cast on the assessee cannot be shifted to the department. I am of the opinion that the agreement to sell and the cancellation thereof has only been used as a subterfuge to explain the bank deposits as observed by the A.O. I don't find any merit in the ground of appeal and the same is dismissed."
76. It is the submission of the ld. counsel for the assessee that given an opportunity to the assessee he will produce the said person before the Assessing 29 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 Officer and substantiate with evidence to his satisfaction regarding the cash receipt of Rs.15,00,000/-. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with direction to give an opportunity to the assessee to substantiate with evidence to his satisfaction regarding the receipt of Rs.15,00,000/- from Shri Bhagwan Singh and produce him before the Assessing Officer. The ground raised by the assessee is accordingly allowed for statistical purposes.
77. Ground no.4 is identical to ground no.6 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been restored to the file of the Assessing Officer for fresh adjudication. Following similar reasoning, this ground raised by the assessee is accordingly allowed for statistical purposes.
78. Ground no.5 relates to addition of Rs.86000/- an income from undisclosed source on account of low household expenses.
79. After hearing both the sides, we find as against Rs.54,000/- declared by the assessee as household expenses, the Assessing Officer estimated the household expenses at Rs.1,40,000/- resulting in addition of Rs.86,000/- which has been upheld by the ld. CIT(A). We find the above ground is identical to ground no.9 in ITA No.4100/Del/2009. We have already decided the issue and 30 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 the ground raised by the assessee has been allowed. Following similar reasoning, this ground raised by the assessee is also allowed.
80. Ground no.6 relates to levy of interest u/s 234A and 234B which in our opinion mandatory and consequential in nature. Accordingly, the ground no.6 raised by the assessee is dismissed.
ITA No.4106/Del/2009 (A.Y. 2005-06 - By Assessee)
81. The grounds raised by the assessee are as under :-
"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 30.11.2006, instead on 12.12.05 by treating the return as defective.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowance dehors the seized material.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.6,68,164/- as income from business.
4. That having regarding to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.10,00,000/- under the provisions of section 68 of the Income Tax Act.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,51,000/- under the provisions of section 68 of the Income Tax Act.
6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh Dayachand (Rs.18000/-) as per provisions of section36 read with section 40A of the Income Tax Act.
7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.85000/- as income from undisclosed source on account of household expense.
8. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.31
ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009
9. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
82. Ground no.2 by the assessee was not pressed at the time of hearing for which ld. DR has no objection. Accordingly, this ground is dismissed as not pressed. Ground of appeal no.9 being general in nature is dismissed.
83. Ground no.1 is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground of the assessee was allowed. So far as remaining grounds no.3 to 6 are concerned, the same are also identical to the grounds raised in the preceding years. We have already decided the issue and the above grounds have been restored to the file of the Assessing Officer with certain directions. Following similar reasoning, grounds no.3, 4, 5 and 6 are restored to the file of the Assessing Officer for fresh adjudication in the light of our direction in the preceding years. The above grounds by the assessee are accordingly allowed for statistical purposes.
84. Ground no.7 relates to addition of Rs.85000/- as income from undisclosed source on account of household expenses.
85. After hearing both the sides, we find as against Rs.60,000/- declared by the assessee towards household expenses, the Assessing Officer estimated the same at Rs.1,45,000/- resulting addition of Rs.85,000/- which has been confirmed by the ld. CIT(A). We find the this ground is identical to ground 32 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 no.9 in ITA No.4106/Del/2009. We have already decided the said issue and the ground raised by the assessee has been allowed. Following the same reasoning, this ground raised by the assessee is allowed.
86. Ground no.8 relates to levy of interest u/s 234A and 234B which, in our opinion is mandatory and consequential in nature. Accordingly, this ground raised by the assessee is dismissed.
ITA No.4231/Del/2009 (A.Y. 2005-06 - By Revenue)
87. Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that the assessee entered into an agreement in respect of 23 kanal of land for a sum of Rs. 85 lacs out of which 10 kanal 19 marlah of land was purchased by the son and daughter of the appellant for an apparent consideration of Rs. 4,01,000/-. Ld. A.O concluded that this land has been purchased by the son and the daughter not for the ostensible consideration of Rs. 4,01,000/- but it must have been purchased at Rs.40,46,739/- which he calculated proportionately with reference to Rs. 85 lacs for 23 kanal. Therefore, Ld. A.O. made addition of Rs. 31,45,739/- in the hands of the assessee as unexplained payment by making the working as under:
Cost of 23 kanal of land 85,00,000
Cost of 10 kanal 19 marla of land 40,46,739
Less Paid as per Sale Deed 4,01,000
33
ITA Nos.4100 to 4106/Del/2009
ITA No.4231/Del/2009
Balance 36,45,739
Less: Paid as bayana 5,00,000
For Addition 32,45,739
88. Before ld. CIT(A), it was explained that the assessee vide letter dated 26.12.2006 placed at PB 26-27 had paid a sum of Rs. 5 lacs to Sh. Sajjan Singh as advance towards the agreement entered into for the purchase of 23 kanal land for an aggregate amount of Rs. 85 lacs but since deal could not materialize, nothing more was paid by the assessee and the matter was explained in great detail in the statement of the assessee recorded by A.O. during the course of assessment proceeding. It was also explained that a part of the land was purchased by the adult children of the assessee directly and no payment was made by the assessee. Statement of the assessee was recorded by A.O. in which the assessee explained on oath that the deal with Sh. Sajjan Singh was cancelled as there was kabja by the anti social elements and Sh. Sajjan Kumar died before the appointed day. It was explained by the assessee that the amount of advance could not be received back by the assessee due to the death of Sh. Sajjan Singh. It was further explained by the assessee in his statement that a part of this land has been purchased directly by the children for avoiding the fight and that he became a perforced witness. It was further explained by the assessee in his statement that no amount was paid. It was argued that in view of such statement recorded on oath, the action of the A.O. without any basic 34 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 material or evidence presuming that the payment has been made by the assessee is illegal and the addition was made contrary to the material on record.
89. Based on the arguments advanced by the assessee, the ld. CIT(A) deleted the addition for which the assessee is in appeal.
90. We have carefully considered the rival arguments made by both the sides, perused the material available on record and the Paper Book filed on behalf of the assessee. We find ld. CIT(A) analyzed the matter and adjudicated the issue in favour of the assessee by observing as under :-
"9.2 I have analyzed the matter and find that the examination of seized documents revealed that the appellant had entered into an agreement with Sh. Jai Singh and others for purchase of land measuring 23 kanals for a consideration of Rs. 85 lacs. For this purpose the appellant had also given a sum of Rs. 5 lacs as advance money. However, the seized documents further revealed that out of this land of 23 kanals, 12 kanal and 01 marla were sold to Sh. Ram Kishan, Sh. Dhajja Ram and Sh. Meer Singh and others for a consideration of Rs. 4,52,000/-. The remaining land measuring 10 kanal and 19 marla was sold by Sh. Jai Singh & Others to Sh. Sudeep Kumar and Smt. Sarita Devi son and daughter of the assessee respectively and Sh. Sukhbir Singh for a consideration of Rs. 4,01,000/- on 19.1.05. In the sale deed executed for purchase of this land by the son and daughter of the appellant the assessee is one of the witnesses. According to the AO, the appellant was a party to this deal and he is one of the beneficiary of this transaction as he had given an advance of Rs. 5 lacs for purchase of this land and has also admitted that he did not receive back the same. Accordingly, the AO held that the son and daughter of the appellant bought 10 kanal 19 marlas of land for a consideration of Rs. 40,46,739/- by adopting proportionate cost as given in the agreement to sell. The calculation of which has been given in para 8(vii) of the order and, thus, the A.O. made addition of Rs. 31,45,739/- by holding that this money has been paid by the appellant out of his concealed business income. The residence of the appellant was searched and nothing came to the light of the department that over and above the sum of Rs. 5 lacs which was paid as advance for purchase of this land, something more was also paid to acquire this land. Also, there is nothing on record to suggest that the agreement entered into by the appellant to purchase the land in question finally fructified and the land was acquired by him at the agreed consideration. There is also nothing on record that the sum of Rs. 31,45,739/- has been paid over and above the apparent consideration of Rs. 4,01,000/- by the appellant on behalf of his son and daughter for acquiring this land. If any addition was to be made after enquiring the prevalent market rate 35 ITA Nos.4100 to 4106/Del/2009 ITA No.4231/Del/2009 and any other related factor, the same had to be made in the hands of the purchasers of the land i.e. son and daughter of the appellant and Sh. Sukhbir Singh. The addition has been made by the AO without any basis and the same is deleted."
91. Ld. DR could not controvert the above factual findings given by the ld. CIT(A). Since the order of the ld. CIT(A) in the instant case is based on facts, therefore, in absence of any contrary material brought to our notice by the ld. DR against the factual findings given by the ld. CIT(A), we find no infirmity in the same. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed.
92. In the result, all the appeals filed by the assessee are partly allowed for statistical purposes and appeal filed by the Revenue is dismissed.
Order pronounced in the open Court on this 27th day of December, 2017.
Sd/- Sd/-
(SUCHITRA KAMBLE) (R. K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 27-12-2017.
Sujeet
Copy of order to: -
1) The Appellant
2) The Respondent
3) The CIT
4) The CIT(A)
5) The DR, I.T.A.T., New Delhi
By Order
//True Copy//
Assistant Registrar
ITAT, New Delhi