TaxTMI 
TaxTMI 
2012 (8) TMI 802
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....the assessment order) and the conclusion drawn in the impugned order have been summarised :- "4.9 Ground No. 11 and 12 are directed against addition made by A.O. for unexplained investment in pawned silver articles at Rs. 7,36,282/- and shortage of funds in explaining the advances made at Rs. 5,58,678/-. 4.9.1 The A.O. has discussed twin issues on page 5 of the assessment order, as under :- Addition Rs. 7,36,282/- During the course of search, unexplained pawned articles of 281.390 kgs of silver were found from the searched premises which were valued at Rs.36,81,410/-. The assessee's share in this investment is worked out at Rs. 736282 (i.e. 3681410/5). The assessee was confronted on this point vide point no. 23 of notice 142(1) dated 03.10.2008. During the proceedings it was contended by the assessee that investment in pawned articles were made out of opening capital and surplus generated during the A.Y. under consideration. The contention of the assessee is being considered with reference to facts available in this regard. The above submission of the assessee is not being accepted in view of the fact that there were no funds available with the assessee at the beginning....
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....of the appellant in the matter of this silver articles being pawned silver articles against which loans were advanced, the A.O.s action in treating the same as an unexplained is not found to be sustainable both in facts and in law and accordingly directed to be deleted. 4.9.4 The share of appellant from opening balance coming from years prior to search, being 1/5th would broadly be above Rs. 20 lakhs for which due credit has not been considered by A.O. from 2001-02 onward and once the same is taken into consideration, there would be no shortage of funds as determined by A.O. Accordingly, the addition made by A.O. at Rs. 5,58,678/- as per discussion (Rs. 5,55,,678/- as finally taken in computation) is hereby deleted." 3.1 We are also reproducing hereunder the relevant portion of the order of the Tribunal dated 24.5.2012 wherein identically the cases of both the assessees which are available at Serial No. 1 and 3 of the order of the Tribunal (page 1) for the assessment year 2000-01 have been adjudicated upon :- " The bunch of five appeals filed by the Revenue is against the common impugned order dated 13.10.2011, passed by the learned first Appellate Authority, Indore on the....
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....ecorded at 1/10th of its real terms in value in the girvi Registers as well as Girvi Slips. Therefore, for ascertaining actual income earned from pawning business and also the actual amount of advances made in the entries found and recorded in the entries found and recorded in the Girvi Registers. It has to be multiplied by the figure of 10(Ten), the interest income and the investment by the assessee in this business is determined. Shri Santosh Soni is not maintaining paper books of account and showing meager interest income from pawning business on estimate basis in this individual capacity. It is therefore, the interest income from business of pawning as well as undisclosed investment in this business calculated in lacs and justified escaped investment within the meaning of Section 147 of the I.T. Act, 1961 in the case of Shri Santosh Soni. Therefore, necessary approval for issue of notice u/s 148 for assessment year 2000-2001, obtained. The total income of the assessee is determined as under. Total interest income as per seized Girvi Register calculated an amount of Rs.1,76,789/- multiplied by 10 comes to Rs.17,67,890/- this interest income equally divided into 5 person....
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....d. c. According to the Appraisal Report the assessee has advanced a sum of Rs 12285580/ during Assessment Tear 1999-00 being his family's opening capital of money lending business. Credit for this opening capital needs to bo allowed, If credit for these capital is allowed, there will not be any requirement of addition as the assessee has advanced Rs 7747220/ Only during the year, much less than opening capital available with the assessee. d. Further in all subsequent years, the AD has allowed credit of repayment received during the year from advances made and if there is any shortage, that has been considered for the purpose of calculation of addition. That in this year the assessee has received repayment of Rs 10049910/ which is more than advance made of Rs 7747220j- during the year. On this court also no addition can be made for shortage of funds. The addition of Rs 7747220/ made being illegal and wrong, the same require to be deleted." 3.2 The learned Commissioner of Income Tax (Appeals) sought remand report from the ld. Assessing Officer, who vide letter dated 29.9.2008 submitted the remand report, which is summarized as under: "F.No.ACIT/4(1)/Ind/Remand Report/3/20....
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.... 2. BS-12 Pages 3. BS-13 30 Pages The inner details of advances as noted from the girvi register are enclosed as under: 1. BS-11 06 Pages 2. BS-12 12 Pages 3. BS-13 22 Pages Encl: As above Yours faithfully, Sd/- (Himanshu Kumar Pandey) ACIT-4(1), Indore 3.3 The learned Commissioner of Income Tax (Appeals) considered the submissions of the assessee, remand/appraisal report and deleted the addition as contained in para 4.2.2 of the impugned order against which the Revenue is in appeal before this Tribunal. 3.4 If the observation made in the assessment order, conclusion drawn in the impugned order, remand report/appraisal report and the assertion made by ld. Respective counsel are kept in juxtaposition and analysed, the stand of the Assessing Officer and identical submission of ld. DR before us are that in the girvi register, the advances made by the assessee for the F.Y. comes to Rs.7,74,722/- and after multiplying by ten, the amount comes to Rs.77,47,220/-, consequently, 1/5th share of the assessee comes to Rs.15,49,444/-. Identical is the situation in the remaining four cases. Even as per the appraisal report, prepared by the Department, the o....
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....aim, we are of the view that the learned Assessing Officer misdirected himself ignoring both the opening capital and repayment receipt, while making the additions. The submissions of the assessee were duly considered in the impugned order along with remand report in which nothing contrary was brought to the notice of the learned first appellate authority. The contention of the revenue that the details were not got verified by the learned first appellate authority is also based on presumption as remand report was duly considered, therefore, there is no merit in the appeal of the revenue. The grounds raised by the Revenue have been splitted rather all the grounds are hovering around the availability of capital before the search. 4. So far as ground no. 2 (assessment year 2007-08) regarding giving interest free loan of Rs.1,50,000/- and consequent deletion of Rs.45,000/-, being notional interest, is concerned, it was explained by the ld. Counsel for the assessee that this advance was a personal advance on which no interest was charged by further claiming that notional interest cannot be taxed. The learned CIT DR defended the assessment order by claiming that the learned CIT(A) wron....