Sshri Anil Kumar Gupta, Agra v. DCIT, Agra

CO 10/AGR/2009 | misc
Pronouncement Date: 27-08-2010 | Result: Dismissed

Appeal Details

RSA Number 1020323 RSA 2009
Assessee PAN ADKPG6943M
Bench Agra
Appeal Number CO 10/AGR/2009
Duration Of Justice 1 year(s) 5 month(s) 12 day(s)
Appellant Sshri Anil Kumar Gupta, Agra
Respondent DCIT, Agra
Appeal Type Cross Objection
Pronouncement Date 27-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 27-08-2010
Date Of Final Hearing 19-07-2010
Next Hearing Date 19-07-2010
Assessment Year misc
Appeal Filed On 16-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.693/AGR/2008 ASST. YEAR: 2000-01 D.C.I.T. CENTRAL CIRCLE AGRA VS. SHRI ANIL KU MAR GUPTA 7 DEV NAGAR AGRA. (PAN : ADKPG 6943 M). C.O. NO.10/AGR/2009 (IN ITA NO.693/AGR/2008) ASST. YEAR: 2000-01 SHRI ANIL KUMAR GUPTA VS. D.C.I.T. CENTRAL CIR CLE AGRA. 7 DEV NAGAR AGRA. (PAN : ADKPG 6943 M). (APPELLANTS) (RESPONDENTS) REVENUE BY : NONE ASSESSEE BY : SHRI RAKESH JAIN C.A. ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 22.09.2008 AND THE CROSS OBJECTION (C.O.) HAS BEEN FILED BY THE ASSESSEE. 2. IN THE APPEAL THE REVENUE HAS TAKEN THE FOLLOWI NG EFFECTIVE GROUNDS :- 1. THAT THE LEARNED CIT(A)-II AGRA HAS ERRED IN L AW AND ON FACT IN DELETING THE ADDITION OF RS.12 90 575/- MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN BUILDING WITHOUT APPRECIATING THE FACT OF THE CASE AND MATERIAL BROUGHT ON RECORD. 2(I) THAT IN DOING SO LEARNED CIT(A)-II AGRA HAS ERRED IN LAW & ON FACTS IN HOLDING THAT AO WAS NOT JUSTIFIED IN MAKING REFEREN CE TO THE DVO U/S 142A AND 2 SUCH A REFERENCE WAS INVALID IGNORING THE FACT THAT CASE LAWS REFERRED BY ASSESSEE IS IN RESPECT OF CASES WHERE REGULAR BOOKS OF A/C A RE MAINTAINED AND SUCH BOOKS ARE OPEN FOR VERIFICATION AND ITS CORRECTNESS WAS N OT DOUBTED BUT IN THE PRESENT CASE NO SUCH BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE AO OR BEFORE THE LEARNED CIT(A)-II AGRA. 2(II) THAT IN DOING SO LEARNED CIT(A)-II AGRA HAS ERRED IN LAW AND ON FACTS IGNORING THE FACT THAT WHEN THE ASSESSEE HAD NOT PR ODUCED THE BOOKS OF ACCOUNT & SUPPORTING EVIDENCE TO JUSTIFY THE COST OF CONSTRUC TION IN SPITE OF ISSUE OF NOTICES AU/S 143(2) & 142(1) THE AO WAS FULLY JUSTIFIED TO REFER THE MATER TO THE VALUATION OFFICER U/S 142A TO DETERMINE COST OF CON STRUCTION. 3(I) THAT THE LEARNED CIT(A)-II AGRA ERRED IN LAW IN ASSUMING THAT REFERENCE TO DVO U/S 142A HAS TO BE MADE ONLY AFTER REJECTION OF BOOKS WHEN THE SECTION DOES NOT PROVIDE FOR ANY SUCH CONDITION. 3(II) THAT IN DOING SO LEARNED CIT(A)-II AGRA HAS WRONGLY RELIED ON COURT DECISION GIVEN IN THE CONTEXT OF NOW REPEALED SECTI ON 55A FOR COMING TO SUCH AN ERRONEOUS INTERPRETATION OF SECTION 142A. 3. IN THE CROSS OBJECTION THE ASSESSEE HAS TAKEN T HE FOLLOWING EFFECTIVE GROUND :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE LD. CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN ACCEP TING THE ASSUMPTION OF JURISDICTION U/S 153A BY THE LD. A.O. & CONSEQUENTL Y VALIDATING THE IMPUGNED ASSESSMENT ORDER. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS R UNNING A COACHING CENTRE AND MAINTAINS REGULAR BOOKS OF ACCOUNTS DULY AUDITED UNDER SECTIO N 44AB OF THE INCOME-TAX ACT 1961 (THE ACT HEREINAFTER). THERE WAS A SEARCH ON THE ASSES SEE ON 16.09.2004. ACCORDINGLY UNDER SECTION 153A THE A.O. PASSED ASSESSMENT ORDER DATED 29.12.2 006 MAKING AN ADDITION OF RS.12 90 575/-. THE ADDITION WAS MADE ON THE BASIS OF THE REPORT FR OM THE D.V.O. PROCURED BY THE A.O. BY INVOKING THE PROVISIONS OF SECTION 142A. THE ASSES SEE HAS SHOWN THE INVESTMENT IN THE PROPERTY AT NO.86 DEV NAGAR AGRA AT RS.17 05 625/- WHILE T HE DVO VALUED IT AS PER THE REPORT DATED 26.12.2006 AT RS.29 96 200/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE CONTENDED THAT THE A.O. WAS NOT CORRECT IN LAW IN ASSUMING THE JURISDICTION 3 TO FRAME THE IMPUGNED ASSESSMENT UNDER SECTION 153A . HE ALSO TAKEN THE GROUND THAT THE A.O. WAS NOT CORRECT IN MAKING THE ADDITION OF RS.12 90 575/- BY MAKING REFERENCE UNDER SECTION 142A TO THE D.V.O. THE CIT(A) ON THE BASIS OF THE PROVISIONS OF SECTION 153A POINTED OUT THAT SINCE DOCUMENTS AND LOCKER OF THE ASSESSEE WAS SEIZ ED DURING THE COURSE OF SEARCH THE A.O. WAS COMPETENT TO HAVE THE JURISDICTION UNDER SECTION 15 3A BUT ALLOWED THE RELIEF TO THE ASSESSEE BY DELETING THE ADDITION OF RS.12 90 575/-. NONE APPE ARED ON BEHALF OF THE REVENUE AND THEREFORE WE ARE DECIDING THE APPEAL AFTER HEARING THE LD. A. R. 5. WE ARE FIRST TAKING UP THE CROSS OBJECTION OF TH E ASSESSEE. LD. A.R. BEFORE US VEHEMENTLY CONTENDED THAT THE CIT(A) WAS NOT CORREC T IN NOT ACCEPTING THE PLEA OF THE ASSESSEE THAT THE A.O. WAS NOT HAVING JURISDICTION UNDER SEC TION 153A IN THE CASE OF THE ASSESSEE. CONSEQUENTLY THE ASSESSMENT ORDER WAS INVALID. RE LIANCE WAS PLACED ON THE DECISION OF THE AGRA BENCH IN ITA NO.648/AGR/2008 FOR THE A.Y. 1999 -2000 IN THE CASE OF THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE LD. A.R. AND PERUSED THE MATERIAL ON RECORD. FROM THE PERUSAL OF THE AFORES AID SECTION IT IS APPARENT THAT SECTION 153A OF THE ACT PROVIDES :- 153A NOTWITHSTANDING ANYTHING CONTAINED IN S.139 S.147 S.148 S.149 S.151 AND S.153 IN THE CASE OF A PERSON WHERE A SEARCH I S INITIATED UNDER S.132 OR BOOKS OF ACCOUNT OTHER DOCUMENTS OR ANY ASSETS ARE REQUI SITIONED UNDER S.132A AFTER THE 31ST DAY OF MAY 2003 THE AO SHALL - (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE THE RETURN OF INCOM E IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEAS REFERRED TO IN CL. (B) IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER S.139; 4 (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE; PROVIDED THAT THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASS ESSMENT YEARS : PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT I F ANY RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS REFERRED TO IN THIS SECTION PENDING ON THE DATE OF INITIATION OF T HE SEARCH UNDER S.132 OR MAKING OF REQUISITION UNDER S.132A AS THE CASE MAY BE SH ALL ABATE. EXPLANATION : FOR THE REMOVAL OF DOUBTS IT IS HER EBY DECLARED THAT - (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION S.1 53B AND S.153C ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMEN T MADE UNDER THIS SECTION ; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION THE TAX SHALL BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 7. SEC. 153A OF THE I.T. ACT STARTS WITH THE WORD NOTWITHSTANDING ANYTHING CONTAINED IT IS NON OBSTANTE CLAUSE. FOR APPLICABILITY OF ABOVE PR OVISION THE INITIATION OF SEARCH IS NECESSARY. ONCE A WARRANT OF AUTHORIZATION OR REQUISITION IS I SSUED AND SEARCH IS CONDUCTED AND PANCHNAMA IS DRAWN THE COMPLETED ASSESSMENTS FOR ALL THE REL EVANT YEARS WOULD GET REOPENED IRRESPECTIVE OF WHETHER ANY INCRIMINATING MATERIAL IS FOUND OR NOT IN RELATION TO A PARTICULAR ASSESSMENT YEAR. IN OTHER WORDS EVEN IF THE MATERIAL FOUND SHOWS THE C ONCEALMENT IN ONLY ONE YEAR ALL THE COMPLETED ASSESSMENTS FALLING IN THE PERIOD OF SIX ASSESSMENT YEARS PRECEDING THE YEAR OF SEARCH WILL GET REOPENED. THERE WAS AN IDENTICAL PROVISIO N CONTAINED IN CHAPTER XIV-B OF THE ACT WHICH PROVIDES THAT WHERE AFTER 30 TH JUNE 1995 A SEARCH IS INITIATED UNDER S.132 OR B OOKS ACCOUNTS ETC. ARE REQUISITIONED UNDER S.132A THE AO SHALL PROCEED TO ASSESS UNDISCLOSED INCOME IN ACCORDANCE WITH PROVISIONS OF CHAPTER XIV-B FOR MAKING ASSESSMENT FOR BLOCK PERIOD BUT IN THE BLOCK ASSESSMENTS THE QUESTION OF ASSESSING AN UNDISCLOSED INCOME IN RELATION TO ANY 5 ASSESSMENT YEAR WAS RESTRICTED TO THE INCRIMINATING MATERIAL ON UNDISCLOSED ASSETS DISCOVERED DURING THE COURSE OF SEARCH AND SEIZURE OR IN THE P OST-SEARCH INQUIRY THE MATERIAL WAS RELATABLE TO SUCH EVIDENCE DISCOVERED IN SEARCH. THE INCOME ASS ESSED IN THE REGULAR ASSESSMENTS WAS NOT TO BE CONSIDERED IN THE BLOCK ASSESSMENTS. HOWEVER I N THE PRESENT PROVISIONS UNDER S.153A THERE IS NO SUCH PROVISION PROVIDED IN THE ACT. ONCE WAR RANT OF AUTHORIZATION IS ISSUED AND THE SEARCH IS CONDUCTED AND PANCHNAMA IS DRAWN THE ASSESSMENT S FOR ALL THE SEVEN YEARS INCLUDING THE CURRENT YEAR HAVE TO BE COMPLETED UNDER SS.153A 15 3B AND 153C. EVEN THE ASSESSMENTS WHICH ARE COMPLETED BEFORE THE DATE OF SEARCH SHALL GET R EOPENED AND THOSE ASSESSMENTS WHERE THE PROCEEDINGS ARE PENDING AT THE TIME OF SEARCH SHALL ABATE. THE AO THEREFORE SHALL ASSESS OR REASSESS SUCH INCOME FOR ALL THESE YEARS. 8. THE ABOVE PROVISION THEREFORE PROVIDES FOR REO PENING OF THE COMPLETED ASSESSMENT OR ABATEMENT OR THE PENDING ASSESSMENT TAKES PLACE IRR ESPECTIVE OF WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH OR NO T. IT CAN BE ILLUSTRATED BY TAKING AN EXAMPLE THAT IF DURING THE COURSE OF SEARCH AND SEIZURE PRO CEEDINGS CERTAIN UNACCOUNTED VALUABLE OR MONEY IS FOUND AT THE TIME OF SEARCH WITHOUT THERE BEING INCRIMINATING MATERIAL OR DOCUMENT FOR ANY OTHER YEAR OR YEARS EVEN THEN ALL THE SIX ASSE SSMENTS PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH TOOK PLACE SHALL GET REOPENED. SIMILARLY I F REQUISITION IS MADE THEN IRRESPECTIVE OF WHETHER THERE IS ANYTHING INCRIMINATING FOUND AGAIN ST HIM IN RELATION TO OTHER YEAR OR YEARS OR NOT THE ASSESSEE HAS TO UNDERGO THE RIGOR OF THE A SSESSMENT PROCEEDINGS FOR ALL THE SIX YEAS AS WELL AS THE YEAR UNDER SEARCH. 6 9. SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT DELHI D BENCH IN THE CASE OF SHIVNATH RAI HARNARAIN (INDIA) LTD. VS. DY. CIT IN ITA NOS.4101 4103 & 4104/DEL/2006 DATED 15 TH FEBRUARY 2008 BY HOLDING AS UNDER :- THERE IS NO REQUIREMENT FOR AN ASSESSMENT MADE UND ER S.153A BEING BASED ON ANY MATERIAL SEIZED IN THE COURSE OF SEARC H. FURTHER UNDER THE SECOND PROVISO TO S.153A PENDING ASSESSMENT OR REASSESSMEN T PROCEEDINGS IN RELATION TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SI X ASSESSMENT YEARS REFERRED TO IN S.153A(B) SHALL COME TO AN END (ABATE) WHICH M EANS THAT THE AO GETS JURISDICTION FOR SIX ASSESSMENT YEARS REFERRED TO I N S.153A(B) FOR MAKING AN ASSESSMENT OR REASSESSMENT. FURTHER IT IS NOT THE CONTENTION OF THE ASSESSEE THAT ANY INCOME WHICH WAS ALREADY SUBJECTED TO ASSESSME NT UNDER S.143(3) OR UNDER S.143(3)/147 COMPLETED PRIOR TO SEARCH IN RESPECT O F SIX ASSESSMENT YEAS REFERRED TO IN S.153A(B) AND IN THE SECOND PROVISO TO S.153A HAS ALSO BEEN INCLUDED IN THE ASSESSMENT FRAMED UNDER S.153A. AO WAS THEREFORE P ERFECTLY JUSTIFIED IN FRAMING ASSESSMENT UNDER S.153A FOR THE ASSESSMENT YEARS UN DER CONSIDERATION. CIT VS. MAX INDIA LIMITED (2007) 213 CTR (SC) 266 : (2007) 295 ITR 282 (SC) CIT VS. G.M. MITTAL STAINLESS STEEL (P) LTD. (2003) 179 CTR (SC) 553 : (2003) 263 ITR 255 (SC) SGS INDIA (P) LTD. VS. ASSTT. CIT & ORS. (2007) 208 CTR (BOM) 263 : (2007) 292 ITR 93 (BOM) SESA GOA LTD. VS. JT. CIT & ORS. (2007) 213 CTR (BOM) 579 : (2007) 294 ITR 101 (BOM) AND SIEMENS IN FORMATION SYSTEM LTD. VS. ASSTT. CIT & ORS. (2007) 211 CTR (BOM) 10 : (2007) 293 ITR 548 (BOM) DISTINGUISHED 10. W HAVE GONE THROUGH THE DECISION OF THE AGRA BE NCH AS HAS BEEN RELIED BY THE LD. A.R. WE FIND IN THAT DECISION IT HAS NOT BEEN HELD THAT ONCE THE SEARCH HAS TAKEN PLACE IN THE CASE OF THE ASSESSEE THE A.O. WILL NOT ASSUME JURISDICTION UNDER SECTION 153A. WE ACCORDINGLY DISMISS THE GROUND TAKEN BY THE ASSESSES IN THE CROSS OBJEC TION. 11. IN THE RESULT THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. ITA NO.693/AGR/2008 7 12. IN THE APPEAL FILED BY THE REVENUE THERE IS ONL Y ONE ISSUE WHICH RELATES TO THE DELETION OF THE ADDITION OF RS.12 90 575/-. 13. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. O N THE BASIS OF THE REPORT FROM THE D.V.O. OBTAINED BY MAKING REFERENCE UNDER SECTION 142A MAD E THE ADDITION OF RS.12.90 575/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PROPERTY NO.86 DEV NAGAR AGRA. THE ASSESSEE HAS SHOWN THE INVESTMENT IN THE PROPERTY AT RS.17 05 625/- WH ILE THE D.V.O. VALUED IT AT RS.29 96 200/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) DELETED THE ADDITION BY HOLDING THAT SINCE THE ASSESSEE WAS MAINTAINING REGULAR BOOKS OF ACCOUNTS THE A.O. HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF THE ASSESSEE. THEREFORE TH E ADDITION CANNOT BE MADE BY MAKING REFERENCE UNDER SECTION 142A OF THE ACT. 14. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. A .R. AND CAREFULLY CONSIDERED THE SAME. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. UNDER SECTION 69B THE A.O. CAN MAKE ADDITION IN THE CASE OF THE ASSESSEE IF IN ANY FINANCIAL YEAR THE A.O. FINDS THAT THE ASSESSEE HAS MADE THE INVESTMENT DURING THE YEAR WHICH EXCEE DS THE AMOUNT RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND THE ASSESSE E FAILS TO OFFER EXPLANATION FOR SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY THE ASSESSEE I N THIS REGARD IN THE OPINION OF THE A.O. IS NOT SATISFACTORY. THE ASSESSEE IN THIS REGARD WAS MAIN TAINING REGULAR BOOKS OF ACCOUNTS AND THE BOOKS OF THE ASSESSEE WERE DULY AUDITED UNDER SECTI ON 44AB OF THE ACT. THE ASSESSEE HAS RECORDED THE INVESTMENT IN THE BOOKS OF ACCOUNTS TO THE EXTENT OF RAS.17 05 625/-. THIS FACT IS NOT DISPUTED. THE A.O. MADE THE REFERENCE TO THE V ALUATION CELL IN ACCORDANCE WITH THE PROVISIONS OF SECTION 142A AS SECTION 142A AUTHORIZ E THE A.O. TO MAKE SUCH REFERENCE. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 142A. SECTI ON 142A IS A PROCEDURE PROVISION. IT DOES NOT 8 EFFECT ANY VESTED RIGHT OF THE ASSESSEE. IT ONLY D EALS WITH THE POWERS OF THE A.O. TO MAKE ENQUIRY FOR THE PURPOSE OF ASSESSMENT. THERE WAS DOUBT WHE THER AS A PART OF SUCH ENQUIRY. THE A.O. HAD THE POWER TO MAKE A REFERENCE TO THE VALUATION OFFI CER WITH A VIEW TO REMOVE THIS DOUBT THE LEGISLATURE ENACTED SECTION 142A AND GAVE RETROSPEC TIVE EFFECT FROM 15 TH NOVEMBER 1972. SINCE SECTION 142A WAS NOT ONLY ON THE STATUTE TILL IT WA S INSERTED BY THE FINANCE ACT 2004 OBVIOUSLY THE POWER COULD NOT HAVE BEEN EXERCISED BY MAKING A SPECIFIC REFERENCE TO SECTION 142A AFTER THE INSERTION OF SECTION 142A. WITH REFERENCE TO THAT IT CANNOT BE DISPUTED THAT THE A.O. HAD POWER SINCE 15TH NOVEMBER 1972. EVEN THE PROVISO TO SEC TION 142A PROVIDES THAT EVEN IF THE ASSESSMENT HAS BECOME FINAL AND CONCLUSIVE ON OR BE FORE 30 TH DAY OF SEPTEMBER 2004 THIS SECTION SHALL APPLY WHERE REASSESSMENT IS REQUIRED TO BE MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THUS THE REFERENCE MADE UNDER SE CTION 142A MAY BE VALID BUT THE VALUATION SO MADE UNDER SECTION 142A IN OUR OPINION CANNOT BE THE CONCLUSIVE EVIDENCE TO PROVE THAT THE ASSESSEE HAS MADE THE INVESTMENT MUCH MORE WHAT HAS BEEN SHOWN IN THE BOOKS OF ACCOUNTS. SECTION 69B IN OUR OPINION IMPOSES BURDEN OF PROO F IN THE INITIAL STAGE ITSELF ON THE A.O. TO PROVE THAT THE ASSESSEE HAD MADE THE INVESTMENT MUC H MORE WHAT HAS BEEN SHOWN IN THE BOOKS OF ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSEE. IT IS NOT DENIED IN THIS CASE THAT THE ASSESSEE WAS MAINTAINING THE REGULAR BOOKS OF ACCOUNTS AND W HATEVER INVESTMENTS WERE MADE BY THE ASSESSEE WAS DULY SHOWN IN THE BOOKS OF ACCOUNTS MA INTAINED BY THE ASSESSEE. THE A.O. HAS NOT BROUGHT OUT ANY EVIDENCE AT THE INITIAL STAGE WHICH MAY PROVE THAT THE INVESTMENT SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS WERE LESS THAN WH AT HAS BEEN ACTUALLY MADE BY THE ASSESSEE. THERE IS NO FINDING IN THE ASSESSMENT ORDER THAT TH E BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE FOR THE INVESTMENT OF THE ASSESSEE WERE NO T CORRECT OR THERE WERE DEFECTS THEREIN. WE DO AGREE WITH THE FINDING OF THE CIT(A) IN VIEW OF TH E DECISION OF MADRAS HIGH COURT IN THE CASE OF K.K. SESHAIYER VS. CIT 246 ITR 351 (MAD.) THAT THE A.O. CANNOT MAKE THE ADDITION MERELY ON 9 THE BASIS OF THE VALUATION REPORT UNTIL AND UNLESS THE DEFECTS ARE POINTED OUT IN THE BOOKS MAINTAINED BY THE ASSESSEE IN THIS REGARD. WE ACCO RDINGLY CONFIRM THE ORDER OF THE CIT(A). THUS THE GROUND TAKEN BY THE REVENUE STANDS DISMIS SED. 15. IN THE RESULT APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.201 0). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 27 TH AUGUST 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY