AI Drafter 
TaxTMI 
TaxTMI 
2013 (10) TMI 974
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.... 2.1. Brief facts regarding this issue and the decision of ld.CIT(A) is as per para-4 of the order of the ld.CIT(A) which is reproduced below: "04. The first ground of appeal is regarding an addition of Rs.48,31,000/- on account of investment in Bunglow No.154, Sunrise Park, Drive-in-Road, Ahmedabad. The Assessing Officer has observed that Annexure A-6, A-18, A-23, A-24 and A-50 contain the details of investment as well as expenses incurred in the purchase and renovation of the said bungalow. Smt. Bimlajeet Kaur, wife of the appellant stated on oath on 20th May, 1999 that the bungalow at Sunrise Park was purchased in 1994 from Shri C.V. Somaiya for Rs.30 lakhs and thereafter expenses were incurred on renovation of the bungalow up to 1996. The documented price of the above property is at Rs.8 lakhs which is registered in the joint names of Smt.Bimlajeet Kaur and Shri Pradhan Singh. The Assessing Officer has observed that the appellant invested Rs.30 lakhs on purchase of the property and further Rs.26.31 lakhs on its renovation. The property was also referred to the District Valuation Officer under section 131(1)(d) of the I.T. Act 1961 who valued the same at Rs.23,52,000/- vid....
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....unt is considered which is Rs.22,84,788/- as against the value as per DVO of Rs.23.52 lacs, it should be accepted that no further addition over and above Rs. 22,84,788/- is called for because the minor difference with value as per DVO on estimate basis does not call for any addition. He submitted that this is also worth noting that the property in question is jointly owned by the assessee and his wife and this is admitted by the AO also because he has also noted that out of the payment of Rs.8 lacs disclosed by the assessee having been made by cheque/draft, an amount of Rs.3.50 lacs was paid by wife of the assessee and, therefore, even if there is any cash expenditure for acquiring this property, only 50% of the same can be considered in the hands of the assessee. He submitted that under these facts, the entire addition made by the AO in the hands of the assessee on this account should be deleted. 5. We have considered the rival submissions and we find force in the submissions of the ld.AR of the assessee. This is an admitted position that out of the declared value of the property in question, i.e. Rs.8 lacs, an amount of Rs.4.50 lacs only was paid by the assessee by way of draf....
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....f the case, the Ld.CIT(A), has erred in not deleting the addition of Rs.3,00,000/- in respect of investment in Radhe Acre eventhough it was fully explained. 6.1. Brief facts regarding this issue and the decision of the ld.CIT(A) is as per para-5 of his order which is reproduced below: "5. The second ground is regarding an addition of Rs.8 lakhs on account of investment in plot. The Assessing Officer has made addition of Rs.8 lakhs by observing that the appellant purchased a plot No.40-A by paying Rs.10 lakhs, out of which Rs.2,00,700/- was paid by cheque and the rest Rs.8,00,000/- was paid in cash. The Assessing Officer observed that the appellant has shown the valuation report of the above plot at Rs.39,68,800/-. The Assessing Officer also referred the property to the District Valuation Officer under section 131(1)(d) of the I.T.Act to value the same at Rs.2,31,000/-. The appellant pleaded at the time of assessment proceedings that he valuation report showing higher value was prepared to obtain bank loans. However, Assessing Officer proceeded to make the above addition. I have perused the contention raised by the appellant as well as noted facts of this case. The element of ....
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....s of the present case. We, therefore, delete the entire addition. Ground No.2 of the Revenue is rejected, whereas ground No.2 of the assessee is allowed. 9. Ground No.3 of the Revenue reads as under:- 3. The learned CIT(A) has erred in law and on facts in deleting the addition of Rs.29,25,540/- in respect of post-dated cheques found. 9.1. Brief facts regarding this issue and the decision of the ld.CIT(A) is as per para-6 of his order which is reproduced below: "6. The third ground of appeal is regarding an addition of Rs.29,25,540/- in respect of items of Annexure-II mentioned in Para 11 of the assessment order. The Assessing Officer has made the above addition on the basis of post dated cheques belonging to other parties which are stated to be unexplained. The details of cheques are reproduced from the relevant Para as under: Rs. 5,000/- Delta Star Corpn. Rs. 10,540/- of S.P. Thakkar Rs. 10,000/- of Prakash Patel Rs. 5,00,000/- of Chamunda Plywood Traders Rs.18,00,000/- of Sagar Consultancy Rs. 1,00,000/- of Vaalinath Corporation Rs. 5,00,000/- of H.H. Gami Rs.2925,540/- (Total) The appellant submitted before me that i....
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....) on this issue because ld.DR of the Revenue could not controvert this clear finding of ld.CIT(A). Accordingly, ground No.3 of Revenue's appeal is rejected. 12. Ground No.4 of Revenue's appeal reads as under:- 4. The learned CIT(A) has erred in law and on facts in deleting, (i) addition of Rs.70,000/- in respect of loan given to Smt.Kusumben and (ii) addition of Rs.55,000/- in respect of unexplained payment made to one Shri Jatinbhai, Advocate. 12.1. Brief facts regarding this issue and the decision of the ld.CIT(A) is as per para-7 of his order which is reproduced below: "07. The fourth ground of appeal is regarding an addition of Rs.1,25,000/ in respect of items mentioned in Para 11 of the assessment order. The assessing Officer has made addition of Rs.70,000/- on account of loan given to Kusumben and another addition of Rs.55,000/- on account of receipt by Jatin Advocate. The appellant has explained that loan of Rs.70,000/- was arranged from a party of Baroda whose name and telephone number is mentioned on the seized paper itself. Similarly Shri Jatin Advocate had issued receipt of Rs.55,000/- to Shri I.K. Baxi which has noting to do with the affairs of the app....
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....such addition. In view of these facts the addition of Rs.3,17,500/- is deleted. " 16. The ld.DR of the Revenue supported the assessment order, whereas the ld.AR of the Assessee supported the order of the ld.CIT(A). 17. We have considered the rival submissions and we find that this issued had been decided by ld.CIT(A) on this basis that the papers prepared along with cheque were lying with the assessee and these were four years old. He has given a clear finding that the AO could not establish that the transaction took place in actual. Ld.DR could not controvert this finding of the ld.CIT(A) by producing any evidence to establish that the transaction actually took place. We, therefore, decline to interfere with the order of the ld.CIT(A) on this issue also. Ground No.5 of Revenue's appeal is rejected. 18. Ground No.6 of Revenue's appeal reads as under:- 6. The learned CIT(A) has erred in law and on facts in directing to allow set-off of the amount of Rs.10,56,530/- representing the addition made on account of loan amounts to be recovered from various parties as also certain unexplained expenses against the addition of Rs.40 lakhs sustained by him [CIT(A)] on account of in....
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....ri Bholabhai and other members of his family for the past 15 years which is duly reflected in the Books of account. The appellant has referred to the question answers raised during the course of assessment proceedings, which are reproduced as under: "Q2- I saw you page 1 of Annexure A-41 and Annexure A-43 which has seized by us and according to that you have given a loan of Rs.2,65,00,000/- to Bholabhai Patel. Please explain. A-2- I know Bholabhai since last 10-15 years and we are having good relation. His son Raj Bholabhai and his daughter Rekha Bholabhai are interested in having new car. Therefore they used to ask us the rates of imported and premium car because of our old dealing with them. As regards assets of Bholabhai, these are all copies of the documents with us obtained for security against car loans. Whatever amount we have to received from them is shown in our books of accounts. Question No.5- How much finance you gave to Bholabhai? A-5- I have given finance to Bholabhai and his family members are reflected in our books of accounts. It may be please be confirmed with Mr.Bholabhai after calling him personally. Q-6- Whether Bholabhai confirmed or not, how mu....
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....hantakarn Market launched by Bholabhai Patel). Q-12 I show you page 2 of annexures A-31, in which from 10th June, 1998 on January 99 full and final page is written - 4% Please explain. A-12- I have to get 4% commission for the deal of shop and full and final payment to be completed at he time of possession in January 1999. Q-13- On Page no.31 annexure A-36, 3 pending, 10-11-98, 3 pending, 10-12-98, 3 pending, 10-12-98, 3 p3nding 10-02-99, 3 pending, 10-03-99. A-13- It is a note of our R.T.O. agent, to we have given R.C.Book for registration of the vehicles which are pending in the various months. Q-14- Please refer page 1 of annexure A-31, we understand that your finance is Rs.2,90,00,000/- to Bholabhai on interest, in which Rs.27,00,000/- received back, Thus total Rs.2,63,00,000/- you have to receive from Bholabhai. Please explain. A-14- Respected Sir, Please refer this page very carefully. Nothing is written in Rupees Hundreds, Thousands, lacs, Crores. So how can you understand it is in crores? I request you to please clarify. Q-15- You have taken cheques of 35+1+4+6+1+1+12+0.50 = Rs.60.50 from Bholabhai. Please explain this. A-15- I have already explained....
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.... not established any conclusive evidence so as to make the appellant solely responsible for the transaction. A corroborative evidence to indicate that the funds have gone to the pocket of the appellant must have been established by the Assessing Officer. In view of these facts addition of the principal amount along with interest etc. at Rs.2,63,00,000/- is deleted." 21. The ld.DR of the Revenue supported the assessment order, whereas the ld.AR of the Assessee supported the order of the ld.CIT(A). 22. We have considered the rival submissions. We find that this addition was deleted by the ld.CIT(A) on this basis that the loose-papers on the basis of which the addition are made by the AO are without any particulars or date or name etc. and, therefore, these are dump-papers and cannot be made the basis for addition. This finding of the ld.CIT(A) could not be controverted by the ld.DR of the Revenue by bringing any evidence on record to show that this essential information such as date, name or particulars are available on the seized paper on the basis of which the addition was made by the AO and, hence, on this issue also, we do not find any reason to interfere with the order of ....
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....d noted each and every amount. Before ld.CIT(A), it was explained by the assessee that most of the accounts were settled in the past and these are dumb and rough papers. Since no date was mentioned on these loose-papers, in our considered opinion, no such addition is justified on the basis of such dumb documents. Hence, we delete the entire addition. Accordingly, ground No.8 of Revenue's appeal is rejected, whereas ground No.3 of Assessee's appeal is allowed. 26. Ground No.9 or Revenue's appeal reads as under:- 9. The learned CIT(A) has erred in law and on facts in deleting the addition of Rs.50,00,000/- in respect of unaccounted loan given to Shri K.I.Bakshi. 26.1. Brief facts regarding this issue and the decision of the ld.CIT(A) is as per para-12 of his order which is reproduced below: "12. The fourteenth ground is regarding an addition of Rs.50,00,000/- in respect of K.I.Bakshi mentioned in Para 37 of the assessment order. The assessing Officer has made the above addition on the basis of statement made before the DDIT wherein the appellant stated that he had advanced Rs.50,00,000/-. However, the appellant stated that the Assessing Officer did not appreciate the comp....
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....ant was either a recipient or payee of such a huge amount. The worst part of the additions made in the appellant's case is that the same do not match with the seized valuables or assets owned by the appellant. The addition is totally unwarranted and without any corroborative evidence. Perusal of the relevant Para of the assessment order reveals that the Assessing Officer has made such a heavy addition in a very casual manner. In view of these facts addition of Rs.50,00,000/- is deleted." 27. The ld.DR of the Revenue supported the assessment order, whereas the ld.AR of the Assessee supported the order of the ld.CIT(A). 28. We have considered the rival submissions. From the facts noted by the ld.CIT(A) in para-12 as reproduced above, we find that a cheque of Rs.50 lacs was given by Shri K.I.Bakshi of Bombay to the assessee for a loan @ 15%. The said cheque should never be encashed. It was also submitted by the assessee before ld.CIT(A) that Shri Bakshi took a fiat-car of the assessee but never returned and he is not traceable. It is also submitted before the ld.CIT(A) that as per newspaper report, Shri K.I.Bakshi has already died during earthquake in Bhuj. Under these facts, in....
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....off of the amount of Rs.53,258/- representing the addition made on account of unaccounted house-hold expenses against the addition of Rs.40 lakhs sustained on account of investment in bungalow. 32.1. As per these grounds, we find that the Revenue is disputing regarding set off allowed by ld.CIT(A) for these two amounts against the addition of Rs.40 lakhs sustained by him on account of investment in bungalow. Since both these additions are upheld by the ld.CIT(A) and only set off was allowed by him, we do not find any reason to interfere with the order of ld.CIT(A) on this issue. Accordingly, both these grounds are rejected. 33. Ground No.13 & 14 are general in nature and do not call for any separate adjudication. 34. The only remaining ground is ground No.4 as per assessee's appeal which reads as under:- I4. On the facts and in the circumstance of the case, the Ld.CIT(A), has erred in not deleting the addition of Rs.5,00,000/- in respect of advance to Shri Suresh Joitaram even though it was fully explained. 34.1. Brief facts regarding this issue and the decision of the ld.CIT(A) is as per para-11 of his order which is reproduced below: "11.The thirteenth ground of....