Shri Shyam Kumar Chandak (HUF), v. The ACIT, 1(1),

CO 127/IND/2007 | misc
Pronouncement Date: 26-07-2011 | Result: Dismissed

Appeal Details

RSA Number 12722723 RSA 2007
Assessee PAN AADHR2971Q
Bench Indore
Appeal Number CO 127/IND/2007
Duration Of Justice 3 year(s) 8 month(s) 18 day(s)
Appellant Shri Shyam Kumar Chandak (HUF),
Respondent The ACIT, 1(1),
Appeal Type Cross Objection
Pronouncement Date 26-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 26-07-2011
Date Of Final Hearing 02-06-2011
Next Hearing Date 02-06-2011
Assessment Year misc
Appeal Filed On 07-11-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARMA A.M. PAN NO. : AADHR2971Q I.T (SS) .A.NO. 188 / IND /200 7 A.Y. : 1.4.1996 TO 13.12.2002 ACIT SHRI RAM KUMAR 1(1) VS CHANDAK HUF BH OPAL UDAIPURA DISTRICT RAISEN APPELLANT RESPONDENT C.O.NO.125/IND/2007 (ARISING OUT OF I.T (SS) .A.NO. 125 / IND /200 7) A.Y. : 1.4.1996 TO 13.12.2002 SHRI RAM KUMAR ACIT CHANDAK HUF VS 1(1) UDAIPURA DISTRICT RAISEN BHOPAL CROSS OBJECTOR RESPONDENT PAN NO. : AAGHS 4613F I.T (SS) .A.NO. 189 / IND /200 7 A.Y. : 1.4.1996 TO 13.12.2002 ACIT SHRI SHYAM KUMAR 1(1) VS CHANDAK HUF BHOPAL UDAIPURA DISTRICT RAISEN - : 2 : - 2 APPELLANT RESPONDENT C.O.NO.12 7 /IND/2007 (ARISING OUT OF I.T (SS) .A .NO. 1 89 / IND /200 7) A.Y. : 1.4.1996 TO 13.12.2002 SHRI SHYAM KUMAR ACIT CHANDAK HUF VS 1(1) UDAIPURA DISTRICT RAISEN BHOPAL CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI KEHSAVE SAXENA CIT DR ASSESSEE BY : S/SHRI H.P.VERMA AND ASHISH GOYAL ADV. O R D E R PER JOGINDER SINGH J.M. TH ESE ARE THE APPEALS FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 158BD READ WITH SECTIO N 158BC OF THE INCOME - TAX ACT 1961. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE I N RESPECTIVE APPEALS FILED BY IT BEFORE US . - : 3 : - 3 I.T.(SS).A.NO. 188/IND/2007 : 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN : - 1. H OL DING THAT NOTICE BY THE ASSESSING OFFICER U/S 158BC FOR FILING OF RETURN OF INCOME IS NOT VALID AND THEREFORE CONSEQUENTIAL PROCEEDINGS ARE UNSUSTAINABLE IN LAW. 2. ALLOWING THE SET OFF OF RS. 3 00 000/ - BEING THE AMOUNT DECLARED AS UNDISCLOSED INCOME IN THE BLOCK RETURN FILED. 3. DELETING THE ADDITION OF RS. 4 35 021/ - BEING UNDISCLOSED INCOME BY VIRTUE OF THE PROVISIONS OF SECTION 158BB OF THE INCOME - TAX ACT. 4. DELETING THE ADDITION OF RS. 10 00 000/ - MADE BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAINST THE HEAD OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN THE RETURNS OF INCOME DURING THE BLOCK PERIOD. - : 4 : - 4 5. DELETING THE ADDITION OF RS. 36 74 896/ - ON ACCOUNT OF UNDISCLOSED INCOME FROM MONEY LENDING BUSINESS. 6. DELETING T HE ADDITION OF RS. 9 39 524/ - MADE ON ACCOUNT OF UNDISCLOSED INCOME FROM TRADING OF FOOD GRAINS. 7. DELETING THE ADDITION OF RS. 2 16 312/ - ON ACCOUNT OF UNDISCLOSED INCOME FROM TRADING IN PESTICIDES AND UREA AND SEEDS BEING UNDISCLOSED PROFIT OF RS. 70 767/ - AND UNDISCLOSED INVESTMENT OF RS. 1 45 545/ - IN PURCHASE OF PESTICIDES ETC. 8. DELETING THE ADDITION OF RS. 42 500/ - MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF LAND. 9. DELETING THE ADDITION OF RS. 56 98 000/ - BEING UNDISCLOSED INVESTMENT IN PURCH ASE OF TRACTORS WHICH WAS MADE ON PROTECTIVE BASIS. 10. DELETING THE UNDISCLOSED INVESTMENT IN FINANCING TRACTORS AND UNACCOUNTED INTEREST - : 5 : - 5 INCOME OF RS. 70 96 042/ - WHICH WAS MADE ON PROTECTIVE BASIS. 11. DELETING THE ADDITION OF RS. 36 93 662/ - MADE ON ACCOUNT O F UNEXPLAINED CREDITS IN BANK ACCOUNTS ON PROTECTIVE BASIS. 12. DELETING THE INTEREST CHARGED UNDER SECTION 158BFA(1) OF INCOME - TAX ACT CLAIMING THAT THE RETURN WAS FILED WITHIN THE PRESCRIBED PERIOD. I.T . (SS).A.NO.189/IND/2007 : 4. ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN : - 1. H OL DING THAT NOTICE BY THE ASSESSING OFFICER U/S 158BC FOR FILING OF RETURN OF INCOME IS NOT VALID AND THEREFORE CONSEQUENTIAL PROCEEDINGS ARE UNSUSTAINABLE IN LAW. 2. ALLOWING THE SET OFF OF RS. 3 00 000/ - BEING THE AMOUNT DECLARED AS UNDISCLOSED INCOME IN THE BLOCK RETURN FILED. - : 6 : - 6 3. DELETING THE ADDITION OF RS. 4 82 987 / - BEING UNDISCLOSED INCOME BY VIRTUE OF THE PROVISIONS OF SECTION 158BB OF THE INCOME - TAX ACT. 4. DELETING THE ADDITION OF RS. 1 1 04 087 / - MADE BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAINST THE HEAD OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN THE RETURNS OF INCOME DURING THE BLOCK PERIOD. 5. DELETING THE ADDITION OF RS. 3 7 27 337/ - ON ACCOUNT OF UNDISCLOSED INCOME FROM MONEY LENDING BUSINESS. 6. DELETING THE ADDITION OF RS. 9 39 524/ - MADE ON ACCOUNT OF UNDISCLOSED INCOME FROM TRADING OF FOOD GRAINS. 7. DELETING THE ADDITION OF RS. 2 16 312/ - ON ACCOUNT OF UNDISCLOSED INCOME FROM TRADING IN PESTICIDE S AND UREA AND SEEDS BEING UNDISCLOSED PROFIT OF RS. 70 767/ - AND UNDISCLOSED - : 7 : - 7 INVESTMENT OF RS. 1 45 545/ - IN PURCHASE OF PESTICIDES ETC. 8. DELETING THE ADDITION OF RS. 21 13 035/ - MADE ON PROTECTIVE BASIS ON ACCOUNT OF UN EXPLAINED CREDITS IN BANK ACCOUNTS MAINTAINED IN DIFFERENT BANKS. 9. DELETING THE ADDITION OF RS. 9 08 087/ - ON PROTECTIVE BASIS MADE ON ACCOUNT OF VARIOUS UNEXPLAINED EXPENSES AND INVESTMENT. 10. DELETING THE INTEREST CHARGED U /S 158BFA(1) OF THE INCOME - TAX ACT CLAIMING THAT THE RETURN WAS FIL ED WITHIN THE PRESCRIBED PERIOD. 5. COMMON GROUNDS TAKEN IN CROSS OBJECTIONS NO.125 & 127/IND/2007 READ AS UNDER : THE LD. CIT(A) ERRED IN NOT HOLDING : - 1. THAT THE DECISION OF THE AO IS CONTRARY TO LAW MATERIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS - : 8 : - 8 WEL L AS ON FACTS IN RESPECT OF THE LEGALITY OF ASSESSMENT. 2. THAT THERE WAS NO MATERIAL FOR SEARCH U/S 132. 3. THAT PROVISION OF CHAPTER XIVB WERE NOT ATTRACTED. 6. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 7. THE FACTS IN BRIEF ARE THAT SEARCH AND SEI ZURE OPERATION U/S 132(1) OF THE INCOME - TAX ACT WAS CARRIED OUT ON 13.12.2002 AND 14.12.2002 AT THE RESIDENTIAL AND BUSINESS PREMISES OF CHANDAK GROUP AT UDAIPURA AND AT SHOP REMISES OF MAHESWARI TRACTORS AND A SURVEY OPERATION U/S 133(A) WAS ALSO CARRIED ON 13.12.2002 AT CHANDAK BANDHU KRISHI FARM AT UDAIPURA. DURING THE COURSE OF SEARCH AND SEIZURE ACTION AT THE PREMISES UNEXPLAINED ASSETS BOOKS OF ACCOUNT AND INCRIMINATING DOCUMENTS WERE SEIZED AS PER THE ANNEXURES TO THE VARIOUS PANCHNAMAS. THE ASSESS EE HUF IS HAVING FOLLOWING MEMBERS : A. SHRI RAM KUMAR CHANDAK (KARTA) - : 9 : - 9 B. SMT. RAMA CHANDAK C. KU. POONAM CHANDAK D. KU. TRUPTI CHANDAK E. MR.AKHILESH CHANDAK 8. IN VIEW OF THE STATEMENT RECORDED DURING COURSE OF SEARCH AND THE DOCUMENTS IMPOUNDED THE AO ISSUED NOTICE T O THE ASSESSEE HUF U/S 158BD ON 10.11.2004 WHICH WAS SERVED ON THE ASSESSEE ON 11.11.2004. THE ASSESSEE FILED RETURN ON 22.11.2004 WHEREIN UNDISCLOSED INCOME OF RS. 3 LAKHS WAS OFFERED FOR TAXATION. IN THE YEAR - WISE CHART OF DISCLOSED AND UNDISCLOSED INC OME THE ASSESSEE HAS CLAIMED TO HAVE FILED RETURN OF INCOME IN ALL ASSESSMENT YEARS COVERED IN THE BLOCK PERIOD. 9. VARIOUS ADDITIONS WERE MADE DURING COURSE OF BLOCK ASSESSMENT. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AND ALSO HELD THA T NOTICE ISSUED BY THE ASSESSING OFFICER U/S 158BC IS NOT VALID. THEREFORE CONSEQUENTIAL PROCEEDINGS IS ALSO NOT SUSTAINABLE IN LAW. AGAINST THIS ORDER OF CIT(A) THE REVENUE IS IN FURTHER APPEAL BEFORE US. - : 10 : - 10 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT THE ASSESSEE HUF WAS ENGAGED IN MONEYLENDING BUSINESS AND WAS ALSO CARRYING ON AGRICULTURAL ACTIVITIES FOR ALL THE YEARS FALLING IN THE BLOCK PERIOD . R ETURNS OF INCOME FOR AL L THE YEARS FALLING IN THE LOCK PERIOD WERE ALREADY IN THE RECORD OF DEPARTMENT MUCH PRIOR TO SEARCH . THERE WAS SEARCH U/S 132 ON 13 TH & 14 TH DECEMBER 2002 AT RESIDENTIAL PREMISES OF INDIVIDUAL AND HIS FAMILY MEMBERS AND ALSO OF M/S. MAHESWARI TRACTORS WHERE ASSESSEE HUF IS A PARTNER. ON 13.12.2002 THERE WAS ALSO SURVEY AT SHOP OF M/S. CHANDAK BANDHU KRISHI FARM. NOTICE U/S 158BC WAS ISSUED AFTER ONE YEAR AND NINE MONTHS WHEREIN STATUS OF THE ASSESSEE WAS NOT MENTIONED. THE ASSESSEE FILED RETURN IN THE STATUS OF HUF AGAINST THE SAME. THEREAFTER NOTICE U/S 158BD WAS ALSO ISSUED ON ASSESSEE HUF. 11. BEFORE THE CIT(A) IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THAT NOTICE ISSUED U/S 158BC WAS NOT A VALID NOTICE IN SO FAR AS THERE WAS NO MENTION OF THE STATUS OF THE ASSESSEE. BY THE IMPUGNED ORDER THE LD. CIT(A) - : 11 : - 11 HELD THAT NOTICE U/S 158BC DATED 28.9.2004 ISSUED BY THE ASSESSING OFFICER AND SERVED ON THE ASSESSEE ON 11.10.2004 FOR FILING THE RETURN IS NOT VALID. THEREFORE THE NOTICE AND CONSEQUE NTIAL PROCEEDINGS BASED UPON SUCH ILLEGAL NO TICE ARE UNSUSTAINABLE IN LAW. FOLLOWING WAS THE PRECISE OBSERVATION OF THE CIT(A) ON THIS ISSUE : - I HAVE CAREFULLY GONE THROUGH THE ORDER OF THE AO AND ALSO CONSIDERED THE SUBMISSIONS OF THE APPELLANT. THERE I S IMMENSE FORCE IN THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE. I HAVE SEEN THE NOTICES ISSUED BY THE ASSESSING OFFICER AND FOUND THAT HE HAS NOT MENTIONED THE STATUS OF THE APPELLANT. BECAUSE THE APPELLANT HAD ALREADY STATED IN ITS STATEMENT RECOR DED BY THE IT AUTHORITIES THAT THE RETURN OF INCOME IS BEING FILED FROM YEAR TO YEAR IN THE CAPACITY OF HUF AND NOT IN THE STATUS OF THE INDIVIDUAL IT IS CONTENDED THAT THE WHOLE PROCEEDINGS WERE WITH OUT ANY BASIS. I HAVE ALSO PERUSED THE STATEMENT OF TH E APPELLANT AND THE NOTICES ISSUED BY THE ASSESSING OFFICER AND FOUND - : 12 : - 12 THAT THIS WAS A VERY IMPORTANT AND LEGAL REQUIREMENT ON THE PART OF THE AO TO ISSUE CORRECT AND VALID NOTICES TO THE APPELLANT. I HAVE ALSO CONSIDERED THE DECISION IN CASE OF DR. A.K. BA NSAL VS. ACIT AND IN CASE OF CHAITRADEVI VS. ACIT . AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS I AM OF CONSIDERED OPINION THAT THE AO HAS NOT ESTABLISHED AND DECIDED THE OBJECTION OF THE APPELLANT THAT AS TO HOW THE NOTICE ISSUED WITHOUT C ONTAINING AND MENTIONING THE APPELLANT S STATUS WAS VALID AND AS PER THE AR EVEN THIS FACT WAS WELL WITHIN THE KNOWLEDGE OF THE AO. THIS GROUND AND THE SUBMISSIONS OF THE APPELLANT WERE MORE SPECIFIC WHERE THE LD. AUTHORIZED REPRESENTATIVE HAS MENTIONED TH E DETAILS ABOUT THE STATUS OF THE APPELLANT AS HUF. IN VIEW OF THE FACTS CIRCUMSTANCES AND LEGAL POSITION I HAVE NO HESITATION TO HOLD THAT THE NOTICE U/S 158BC DATED 20.09.2004 ISSUED BY THE ASSESSING OFFICER AND SERVED ON THE APPELLANT ON 11.10.2004 FO R FILING THE - : 13 : - 13 RETURN IS NOT VALID. THEREFORE THE NOTICE AND THE CONSEQUENTIAL PROCEEDINGS BASED UPON SUCH ILLEGAL NOTICE ARE DECIDED UNSUSTAINABLE IN LAW. THIS GROUND IS THEREFORE DECIDED IN FAVOUR OF THE APPELLANT. THUS THIS GROUND OF THE APPELLANT IS ALLOWED. 12. AGGRIEVED BY THE ABOVE CONCLUSION OF THE CIT(A) REVENUE IS IN FURTHER APPEAL BEFORE US. IT WAS CONTENDED BY THE LD. CIT DR THAT THE ASSESSMENT CANNOT BE HELD TO BE BAD IN LAW FOR NON - MENTIONING OF STATUS IN THE NOTICE ISSUED U/S 158BC AND 158 BD OF THE INCOME - TAX ACT 1961. SHRI KESHAVE SAXENA THE LD. CIT DR FURTHER SUBMITTED THAT POSITION OF LAW IN THIS REGARD IS WELL SETTLED AFTER ENACTMENT OF SECTION 292B OF THE ACT WHICH IS INTRODUCED FROM 1.10.1975. HE HAS SUBMITTED THAT THIS SECTION IS NEITHER CONSIDERED NOR EXAMINED BY THE LD. CIT(A). AS PER THE LD. CIT DR THE CASE LAWS CITED BY THE LD. AUTHORIZED REPRESENTATIVE PERTAINS TO THE CASES DECIDED PRIOR TO 1.10.1975 I.E. PRIOR TO THE ENACTMENT OF SECTION 292B. FU RTHER RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS : - - : 14 : - 14 (1) MULCHAND RAMPURIA 252 ITR 758 (CAL) (2) CHANDRA BHAN (2006) 98 ITD 6 (AGRA) (3) RAJBIR SINGH (1998) 233 ITR 126 (P & H) 13. ON THE OTHER HAND THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE AO HAS ASKED TO FILE RETURN BY ISSUI NG NOTICE U/S 158BC SINCE THERE WAS NO MENTION OF STATUS OF THE ASSESSEE ON THE NOTICE ITSELF THE SAME BECAME INVALID THEREFORE ANY PROCEEDINGS THEREAFTER OR ASSUMPTION OF JURISDICTION TO FRAME ASSESSMENT WAS ALSO ILLEGAL. THUS HE SUPPORTED THE CONCLU SION OF CIT(A) FOR ASSESSMENT SO FRAMED AS A RESULT OF SUCH NOTICE WHICH WAS UNSUSTAINABLE IN LAW. 14. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS PER OUR CONSIDERED VIEW AFTER INTRODUCTION OF PROVI SIONS OF SECTION 292B NON - MENTION OF STATUS IN NOTICE U/S 158BC WOULD NOT RENDER BLOCK ASSESSMENT INVALID. THERE BEING NO PREJUDICE CAUSED TO THE ASSESSEE AND THE ASSESSEE AFTER ISSUE OF THE - : 15 : - 15 NOTICE HAVE FURNISHED THE RETURN AND ON WHICH THE AO HAS TAKEN T HE ACTION SUCH NOTICE IS ISSUED AS PER PROVISIONS OF LAW IT IS INSUBSTANCE AND EFFECT IN CONFORMITY WITH AND ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. THEREFORE MERE IRREGULARITY OF MENTIONING STATUS IN THE NOTICE WILL NOT INVALIDATE THE ASSESSMEN T FRAMED CONSEQUENT TO SUCH ISSUE OF NOTICE. WE THEREFORE REVERSE THE ORDER OF CIT(A) ON THIS ISSUE AND ALLOW THE GROUND RAISED BY THE REVENUE IN THIS REGARD. 15. AS PER PROVISIONS OF SECTION 292B NO RETURN OF INCOME ASSESSMENT NOTICE SUMMONS OR OTHER PROCEEDINGS FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID MERELY BY REASON OF ANY MISTAKE DEFECT OR OMISSION IN SUCH RETURN OF INCOME ASSESSMENT NOTICE SUMMONS OR OTHER PROCEEDINGS IF SUCH RE TURN OF INCOME ASSESSMENT NOTICE SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT OR PURPOSE OF THIS ACT. RECENTLY PUNJAB & HARYANA HIGH COURT IN THE CASE OF PANCHWATI MOTORS (P) LIMITED IN I.T.A.NO. 292 OF 2008 VIDE ORDER DATED 3.5.2011 HELD THAT TECHNICAL DEFECT IN THE NOTICE WOULD NOT MAKE THE - : 16 : - 16 ASSESSMENT ORDER INVALID. WHILE HOLDING SO RELIANCE WAS PLACED ON THE JUDGMENT OF HIND SAMACHAR LIMITED 330 ITR 266 (P&H) . IN VIEW OF THE ABOVE DISCUSSION I SSUE IS DECIDED IN FAVOUR OF THE REVENUE. 16. IN GROUND NO.2 THE REVENUE IS AGGRIEVED FOR ALLOWING SET OFF OF RS. 3 LAKHS BEING THE AMOUNT DECLARED AS UNDISCLOSED INCOME IN THE BLOCK RETURN. 17. FROM THE RECORD WE FOUND THAT THE ASSESSEE HAS FILED ITS BLOCK RET URN WITH AN INCOME OF RS. 3 LAKHS WHICH IS ELIGIBLE TO BE TAKEN INTO CONSIDERATION IN RESPECT OF ANY INCOME FOUND TO BE UNACCOUNTED AS A RESULT OF BLOCK ASSESSMENT. THUS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DIRECTING THE AO TO ALLOW SE T OFF OF SUCH INCOME AS DECLARED IN THE BLOCK RETURN AGAINST THE UNDISCLOSED INCOME FOUND IN SUCH PROCEEDINGS. 18. IN THE RESULT GROUND NO.2 OF REVENUE S APPEAL IS DISMISSED. 19. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 4 35 021/ - MAD E BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 158BB OF THE INCOME - TAX ACT 1961. - : 17 : - 17 20. IN THIS REGARD WE FOUND THAT DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1997 - 98 TO 2002 - 03 WERE EITHER BELATED OR WERE NON EST. THEREFORE NO CREDIT FOR THE INCOME DECLARED IN THESE RETURNS CAN BE GIVEN TO THE ASSESSEE WHICH IN TOTAL AMOUNTS TO RS. 4 35 021/ - . BY STATING PROVISIONS OF SECTION 158BB THE AO HELD THAT SINCE DUE DATE FOR THESE RETURNS WERE EXPIRED NO CREDIT FOR THE INCOME IN SUCH RETURNS CAN BE ALLOWED DURING COMPUTATION OF UNDISCLOSED INCOME AS PER PROVISIONS OF THE ACT. 21. BY THE IMPUGNED ORDER THE LD. CIT(A) ALLOWED THE CREDIT IN RESPECT OF INCOME ALREADY RETU RNED THROUGH THE RETURNS FILED PRIOR TO THE DATE OF SEARCH AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE ORDER OF THE AO SUBMISSION OF THE LD. AR AND THE CASE REFERRED BY THEM. AFTER CONSIDERING ALL THE MATERIALS AND THE DECISION AS CITED ABOVE I CONCLUDED THAT THE AMOUNT OF RS. 4 35 021/ - IS THE DULY DISCLOSED INCOME OF THE APPELLANT AND THEREFORE THE ADDITION - : 18 : - 18 OF RS. 4 35 021/ - MADE BY THE AO CANNOT BE SUSTAINED AND IT HAS TO BE DELETED. THUS THIS GROUND OF THE APPEAL IS ALLOWED. 22. WE HAVE CONSIDERED THE LD. AUTHORIZED REPRESENTATIVE S CONTENTION AND ARE OF THE VIEW THAT AS PER PROVISIONS OF SECTION 158BB THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHALL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEAR FALLING IN THE BLO CK PERIOD COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE AO AS REDUCED BY T HE AGGREGATE OF THE TOTAL INCOME WHICH HAS ALREADY BEEN FILED BY THE ASSESSEE U/S 139 OR IN RESPONSE TO NOTICE U/S 142(1) OR 148 MEAN ING THEREBY ALL THE INCOMES FOR WHICH RETURNS HAVE BEEN FILED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH WHETHER U/S 139 (1 ) OR 139(4) HAVE TO BE TAKEN INTO ACCOUNT WHILE COMPUTING UNDISCLOSED INCOME OF THE BLOCK PERIOD U/S 158BB. ACCORDINGLY WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. SENIOR D.R. THAT IN VIEW OF THE RETURNS FILED BELATEDLY EVEN - : 19 : - 19 THOUGH PRIOR TO SUCH NO CREDIT FOR SUCH INCOME CAN BE GIVEN WHILE COMPUTING UNDISCLOSED INCOME U/S 158B B . 23. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF RS. 10 LAKHS WHICH WAS ADDED BY THE ASSESSING OFFICER UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAINST THE HEAD AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME DURING THE BLOCK PERIOD. 24. THE FACTS IN BRIEF ARE THAT IN THE RETURNS FILED FOR THE BLOCK PERIOD THE ASSESSEE HAS SHOWN INCOME FROM AGRICULTURE. DURING THE COURSE OF BLOCK ASSESSMEN T THE AO ASKED THE ASSESSEE TO FURNISH DETAIL OF SUCH AGRICULTURAL LAND ITS LOCATION KIND OF CROPS GROWN AND DOCUMENTARY EVIDENCE OF OWNERSHIP OF AGRICULTURAL LAND. VIDE LETTER DATED 9.12.2004 THE ASSESSEE STATED THAT THE ASSESSEE HOLDS ANCESTRAL AGRIC ULTURAL LAND MEASURING AROUND 30.87 ACRES OF GRAM KHADON PATWARI HALKA NO.9 TEHSIL UDAIPURA RAISEN. IN ADDITION TO ABOVE HOLDING OF LAND OTHER PERSON S AGRICULTURE LAND WAS ALSO TAKEN ON WHICH AGRICULTURAL ACTIVITIES WERE PERFORMED. THIS FACT WAS ALREADY SUBMITTED ALONGWITH THE RETURNS FILED BY THE ASSESSEE. THE ASSESSEE S AGRICULTURE LAND - : 20 : - 20 IS IRRIGATED WITH THE HELP OF SMALL RIVER NEAR TO AGRICULTURE LAND AND BOREWELL. THE APPELLANT GROWS TWO CROPS IN HIS AGRICULTURE LAND . 25. IT WAS FURTHER STATED THAT THE ASSESSEE HAS AGRICULTURE INCOME THE COPIES OF SALE OF AGRICULTURE PRODUCE BAHI AND LEASE AGREEMENT OF AGRICULTURE LAND ALL WERE SUBMITTED WITH THE REGULAR RETURNS FILED BY THE ASSESSEE . 26. FURTHER THE ASSESSEE HAS ENCLOSED AVERAGE CROP GROWN VIDE CERTIFICA TE FORM THE SR. AGRICULTURE DEVELOPMENT OFFICER UDAIPURA. F.Y.96 - 97 F.Y.97 - 98 F.Y.98 - 99 F.Y.99 - 00 F.Y.00 - 01 F.Y.01 - 02 AGRICULTURE LAND HOLDING(ACRES) 29.40 29.40 32.40 32.40 32.40 32.40 KOHL PATTA 17.50 17.50 20.78 27.53 19.74 15.17 CROP GROWN IN IT SOYABEAN CHANA TUAR MASOOR WHEAT BATARI SOYABEAN CHANA TUAR MASOOR WHEAT BATARI SOYABEAN CHANA TUAR MASOOR WHEAT BATARI SOYABEAN CHANA TUAR MASOOR WHEAT BATARI SOYABEAN CHANA TUAR MASOOR WHEAT BATARI SOYABEAN CHANA TUAR MASOOR WHEAT BATARI ANNUAL RECEIPTS 737300 709400 515200 550 650 452100 440550 ANNUAL EXPENSES 554760 434100 258300 251000 201485 238450 NET AG.INCOME 182540 275300 256900 299650 250615 238450 STATUS OF THE RETURN NON EST NON EST - : 21 : - 21 27. THE AO DECLINED ASSE SSEE S CLAIM ON THE PLEA THAT THE RETURNS CLAIMED TO HAVE BEEN FILED BY THE ASSESSEE U/S 139 COULD NOT BE TRACED OUT DESPITE ALL THE EFFORTS AND THEREFORE THE COPIES OF RETURNS SUBMITTED BY HIM COULD NOT BE VERIFIED. 28. BY THE IMPUGNED ORDER THE LD. CIT(A) HELD THAT NO ADDITION ON ACCOUNT OF AGRICULTURAL INCOME AS DECLARED BY THE ASSESSEE CAN BE MADE. FOLLOWING WAS THE PRECISE OBSERVATION OF THE CIT(A) : - I HAVE BESTOWED MY ANXIOUS CONSIDERATION ON THE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE. I HA VE ALSO PERUSED THE REASONS ADVANCED BY THE ASSESSING OFFICER REGARDING THIS ISSUE. I FOUND THAT THE AO HAS NOT DISPUTED THE HOLDING OF AGRICULTURAL LAND OF THE CHANDAK FAMILY. FOR LAND TAKEN ON LEASE I.E. KOLI PATTA THE AGREEMENTS RIN PUSTIKA AND COPY O F KHASARA NAKAL WERE PRODUCED. ALL THESE DOCUMENTS HAVE ALSO NOT BEEN DOUBTED OR DISPUTED. MERELY BECAUSE THE CONCERNED PERSONS WERE NOT PRODUCED BEFORE THE AO FOR VERIFICATION/EXAMINATION THE ADVERSE INFERENCE - : 22 : - 22 CANNOT BE DRAWN IN THE ABSENCE OF ANY POSITI VE MATERIAL AGAINST THE APPELLANT. BUT THE AO HAS ALSO NOT BROUGHT ANY ADVERSE AND COGENT REASON OR MATERIAL IN SUPPORT OF HIS FINDINGS. I ALSO FOUND THAT THE APPELLANT HAS DULY DISCHARGED THE ONUS LIES UPON HIM BY FILING THE NECESSARY EVIDENCES. THE APPE LLANT CULTIVATES ABOUT 50 ACRES OF LAND. DURING THE COURSE OF SEARCH ACTION NO EVIDENCE WAS SEEN OR FOUND TO SUPPORT THE AO S CONCLUSION. AFTER CONSIDERING THE FACTS AND SUBMISSION MADE IN THIS REGARD IF THE AGRICULTURE INCOME IS ESTIMATED IN VIEW OF THE DECISION OF THE LD. I.T.A.T. JABALPUR BENCH AND ALSO THE DECISION GIVEN BY MY LD. PREDECESSOR I.E. RS. 10 000/ - PER ACRE OF THE TOTAL LAND HOLDING IS TAKEN THEN THE INCOME WILL BE MORE THAN THAT OF THE ONE DECLARED IN THE RETURN. THUS THE INCOME SHOWN BY THE APPELLANT APPEARS TO BE REASONABLE AND THEREFORE THE FINDING OF AO IS NOT JUSTIFIED. IN VIEW OF THE ABOVE FINDINGS THE ADDITION MADE AT RS. 10 00 000/ - CANNOT BE SUSTAINED AND - : 23 : - 23 HAS TO BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED. 29. AGAINST THE ABOVE CONCLUSION OF THE CIT(A) THE REVENUE IS IN FURTHER APPEAL BEFORE US. WE FOUND THAT THE ASSESSEE HAS FURNISHED DETAIL OF AVERAGE CROP GROWN BY HIM ALONGWITH AGRICULTURAL LAND HOLDINGS. DETAIL OF VARIOUS CROP IN VARIOUS YEAR GIVING BREAK UP OF NA TURE OF CROP GROWN ANNUAL RECEIPTS ANNUAL EXPENSES AND NET AGRICULTURAL INCOME. ALONGWITH THE RETURN OF INCOME FOR ASSESSMENT YEAR 1997 - 98 1998 - 99 THE ASSESSEE HAS FILED AGRICULTURAL ACCOUNT WHEREIN GROSS AGRICULTURAL RECEIPTS ALONGWITH DETAILS OF EXP ENSES OF SEEDS FERTILIZERS ELECTRICITY REPAIR AND MAINTENANCE ETC. WERE MENTIONED . THE COPIES OF BILLS FOR SALE OF AGRICULTURAL PRODUCE WERE ALSO FILED ALONGWITH RETURN OF INCOME. XEROX COPY OF ACKNOWLEDGEMENT OF THE RETURN ALSO MENTIONED THESE FACTS . ME RELY ON PLEA THAT RETURNS WERE FILED BELATEDLY A GRICULTURAL INCOME CLAIMED BY THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. NOWHERE THE AO HA S DISPUTED THE LAND HOLDINGS BY THE ASSESSEE HUF AND ITS FAMILY MEMBERS LAND OWNERSHIP AND INVOLVEMENT OF THE ASSESSEE IN THE AGRICULTURE - : 24 : - 24 OPERATION THE LAND TAKEN ON KOLY WAS ALSO SUPPORTED BY THE EVIDENCE IN THE SHA PE OF AFFIDAVIT OF THE OWNER OF THE SAID LAND. BY FURNISHING OF THESE DOCUMENTARY EVIDENCE THE ASSESSEE HAS DULY DISCHARGED ITS BURDEN TO PRO VE THE AGRICULTURAL INCOME DERIVED BY IT DURING THE YEARS COVERED BY THE BLOCK ASSESSMENT. MERELY BECAUSE THE ASSESSEE HAS NOT MAINTAINED THE ACCOUNTS WITH REGARD TO THE AGRICULTURAL PRODUCE THE AGRICULTURAL OPERATIONS AND INCOME DERIVED THERE FROM CANNOT BE DISBELIEVED. 30. FROM THE RECORD WE FOUND THAT FOLLOWING AGRICULTURAL INCOME WAS OFFERED BY THE ASSESSEE IN THE REGULAR RETURNS : - A.Y. AGRICULTURAL INCOME DISCLOSED DATE OF FILING OF RETURN REMARKS 96 - 97 182540 12.06.1997 (1) ASSESSMENT YEARS 96 - 97 TO 2001 - 02. RETURNS WERE FILED PRIOR TO SEARCH. 97 - 98 275300 24.10.1997 98 - 09 256900 31.05.1999 (2) AO PG. 8. ASSESSMENT MADE U/S 143(3) ON 28.03 2000( FOR A.Y. 98 - 99) ACCEPTING THE AGRICULTURAL - : 25 : - 25 INCOME. 99 - 00 299650 09.08.2002 00 - 01 250615 09.08.200 2 01 - 02 238450 09.08.2002 02 - 03 238450 06.03.2003 FILED AFTER SEARCH. (A) AGRICULTURAL INCOME IN PROFIT AND LOSS ACCOUNT WAS ALSO FILED ALONGWITH THE RETURN. (B) ASSESSEE S LANDHOLDING AND THE FACT THAT ASSESSEE HAD TAKEN LAND ON KOLI - PATTA WAS ALRE ADY DISCLOSED IN THE RETURN. (C) A.Y. 98 - 99 WAS UNDER SCRUTINY ASSESSMENT ORDER U/S 143(3) DATED 29.3.2000 WHEREIN THE AGRICULTURAL INCOME DISCLOSED BY ASSESSEE WAS ACCEPTED AFTER SCRUTINY OF EVIDENCE. 31. THERE WAS NOTHING ON THE RECORD TO INDICATE THAT THE ASSESSEE WAS NOT HAVING AGRICULTURAL INCOME OR THE AGRICULTURAL LAND HELD BY IT. LAND TAKEN ON KOLY PATTA WAS ALSO DISCLOSED IN THE REGULAR RETURN PRIOR TO SEARCH. NO COGNIZANCE OF THE SAME WAS TAKEN BY THE AO IN THE BLOCK ASSESSMENT PROCEEDINGS. THE ASS ESSEE HAS ALSO REQUESTED THE AO TO HAVE A PHYSICAL VERIFICATION OF THE LAND HOLDINGS AND AGRICULTURAL - : 26 : - 26 ACTIVITIES OF ITS FAMILY MEMBERS BUT THE AO CHOSE NOT TO MAKE SUCH VERIFICATION. AS THE AGRICULTURAL INCOME WAS ALREADY DISCLOSED IN THE REGULAR RETURNS AND WAS ASSESSED AS SUCH IF THE DEPARTMENT WANTS TO TREAT SUCH INCOME IN THE BLOCK ASSESSMENT AS UNDISCLOSED INCOME OF THE ASSESSEE ONUS IS ON THE REVENUE. ADDITION CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH AND POST SEAR CH INQUIRY CONNECTED WITH THE MATERIAL FOUND IN SEARCH. HOWEVER IN THE INSTANT CASE NO INCRIMINATING MATERIAL HAS BEEN MENTIONED BY THE ASSESSING OFFICER IN HIS ORDER. BASICALLY THE AO HAS ACCEPTED THE AGRICULTURAL INCOME TO MAKE PART DISALLOWANCE OF IT . OUT OF AGRICULTURAL INCOME OF RS. 16.76 LAKHS AS DISCLOSED DURING THE BLOCK PERIOD THE AO HAS DISALLOWED RS. 10 LAKHS AND AGRICULTURAL INCOME HAS BEEN ESTIMATED AT RS. 6 76 084/ - . THE PART DISALLOWANCE OF AGRICULTURAL INCOME IS WITHOUT ANY BASIS. EVEN I F WE TAKE THE AGRICULTURAL INCOME AT RS. 10 000/ - PER ACRE THE ASSESSEE HAVING 32.34 ACRES OF LAND FOR SIX YEARS AND 10 MONTHS ESTIMATED INCOME WORKS OUT TOM RS. 22 00 03 67/ - AS AGAINST INCOME OF RS. 16 76 084/ - DISCLOSED BY THE ASSESSEE. - : 27 : - 27 32. AFTER CONSIDE RING ALL THE DOCUMENTS AND THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS TAKEN AGRICULTURAL INCOME AT RS. 10 000/ - PER ACRE. KEEPING IN VIEW THE LAND HOLDINGS AND COMPUTING THE AGRICULTURAL INCOME AT RS. 10 000/ - PER ACRE. T HE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE WORKS OUT TO BE VERY REASONABLE. ON THE BASIS OF ALL THESE FACTS AND CIRCUMSTANCES THE LD. CIT(A) REACHED TO THE CONCLUSION THAT NO ADDITION WAS WARRANTED ON ACCOUNT OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE WHICH IS VERY REASON ABLE IN VIEW OF LAND HOLDINGS AND TAKING AGRICULTURAL INCOME AT RS.10 000/ - PER ACRE WHICH IS IN CONSONANCE WITH THE JUDICIAL PRONOUNCEMENT IN THE CASE OF SURESH CHAND KAUSHAL IN I.T.A.NO. 99/JAB/2003. NO INTERFERENCE IS REQUIRED IN THE FINDINGS OF CIT(A) FOR SUCH DELETION. 33. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 36 74 896/ - ON ACCOUNT OF INCOME FROM MONEYLENDING BUSINESS. 34. IN THIS REGARD WE FOUND THAT LIST OF VARIOUS ADVANCES GIVEN BY THE ASSESSEE AND ITS FAMILY MEMBERS WAS MENTIONED - : 28 : - 28 IN ANNEXURE I . OUT OF THE TOTAL ADVANCES 50% WAS TAKEN BY THE ASSESSING OFFICER AS ASSESSEE S SHARE AND ASSESSEE S SHARE OF INVESTMENT AND BALANCE TO SHYAM KUMAR HUF . O UT OF THIS TOTAL ADVANCES DISCLOSED BY THE ASSESSEE IN THE RETURN WERE REDUCED AND BALANCE AMOUNT WAS TREATED AS UNEXPLAINED INVESTMENT IN MONEYLENDING BUSINESS. 35. WHILE COMPUTING THE AMOUNT INVESTED IN MONEYLENDING BUSINESS THE CALCULATION OF AO WAS AS UNDER : - A.Y. TOTAL ADVANCES GIVEN AS PER ANNEXURE - 1 50% OF (A) ADVANCES ALREADY HELD TO BE UNDISCLOSED INCOME AS ABOVE FURTHER UNDISCLOSED ADVANCE (A) (B) (C) (B - C) WHERE B>C 1997 - 98 3 87 310/ - 1 93 655/ - 2 52 001/ - 0 1998 - 99 2 83 500/ - 1 41 750/ - 15 000/ - 1 26 750/ - 1999 - 00 3 73 965/ - 1 86 983/ - 0 1 86 983/ - 2000 - 01 38 67 990/ - 19 33 995/ - 1 20 000/ - 18 13 995/ - 2001 - 02 11 13 285/ - 5 56 643/ - 2 99 780/ - 2 56 863/ - 2002 - 03 2 78 345/ - 0 61 000/ - 0 2003 - 04(TILL THE DATE OF 30 22 810/ - 15 11 405/ - 2 21 100/ - 12 90 305/ - - : 29 : - 29 SEARCH) TOTAL 36 74 896/ - 36. BY THE IMPUGNED T HE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY GONE THROUGH THE ORDER OF THE AO AND ALSO PERUSED THE SUBMISSIONS AND OTHER DETAILS/DOCUMENTS PRODUCED BEFORE ME BY THE LD. AUTHORIZED REPRESENTATIVE AND FOUND THAT THERE WERE AMPLE OPPORTUNITIES WITH THE AO FOR VERIFICATION OF SUCH TRANSACTIONS DURING THE COURSE OF ASSESSMENT BUT HE FAILED TO DO SO. THERE IS A CONSIDERABLE FORCE IN THE CONTENTION AND SUBMISSION OF THE APPELLANT THAT THE ANNEXURE I CONTAINING T HE NAME OF PERSON AND THE AMOUNT OF FINANCE MADE TO HIM PERTAINS TO THE MEMBER OF THE CHANDAK FAMILY. THE AO IS SILENT ON THE INFORMATION GIVEN BY THE APPELLANT THAT ALL THE MEMBERS ARE DOING THIS BUSINESS AND ALSO SHOWING INTEREST INCOME ON THE FINANCE. THEREFORE THE APPELLANT AND ITS FAMILY - : 30 : - 30 MEMBERS DULY DISCLOSED THE REFERRED ADVANCES. AFTER CONSIDERING ALL THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT I AM OF THE CONSIDERATION OPINION THAT THE ADDITION MADE AT RS. 36 74 8986/ - IS GROSSLY WRON G. HENCE THE ADDITION OF THE SAME IN THE HANDS OF THE APPELLANT CANNOT BE SUSTAINED AND HAS TO BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED. 37. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. FROM THE RECORD WE FOUND THAT THE ASSESSE E AND HIS 5 FAMILY MEMBERS WERE REGULARLY ENGAGED IN MONEYLENDING BUSINESS. YEAR - WISE INVESTMENT IN MONEY LENDING BY THEM ARE MENTIONED AS FOLLOWS : - A.Y. ASSESSEE SHYAM CHANDAK (HUF) P.B.243 RADHA DEVI RAMA DEVI YAMUNA DEVI GUTIA BAI 1996 - 97 INVEST MENT BALANCE 207123 PB 5 1997 - 98 INVESTMENT NIL 6 64 420 PB 243 - 245 44000 PB 269 & 276 NIL 39500 PB 363 - 365 445090 PB 429 - 431 BALANCE 154937 PB 11 4 94 820 PB 216 - 218 100000 PB 268 49200 PB 293 1130655 PB 338 - 341 392890 PB 396 - 397 - : 31 : - 31 1998 - 99 INVESTMENT NIL 84000 PB 24 6 - 24 7 550 5 0 PB 2 70 & 276 60800 PB 296 & 302 177540 PB 36 1 - 36 2 256775 PB 42 6 - 4 28 BALANCE NIL 3 54 200 PB 220 - 221 155050 PB 267 108000 PB 292 896970 PB 33 4 - 337 586165 PB 393 - 395 1999 - 00 INVESTMENT NIL 9100 PB 24 8 - 24 9 82450 PB 271 & 276 100500 PB 297 & 302 78280 PB 357 - 36 0 268716 PB 42 3 - BALANCE NIL 3 51 800 PB 2 24 - 225 237500 PB 26 6 208500 PB 29 1 377850 PB 331 - 333 779281 PB 3 89 - 39 2 2000 - 01 INVESTMENT 120000 PB 46 - 47 3 55 800 PB 2 50 - 251 91350 PB 2 72 & 277 6750 0 PB 298 & 303 884690 PB 3 50 - 3 53 1674920 PB 415 - 422 BALANCE 120000 PB 25 4 99 630 PB 2 28 313500 PB 26 5 275500 PB 29 0 583845 PB 3 2 8 - 3 30 1805195 PB 3 8 6 - 3 88 2001 - 02 INVESTMENT 299780 PB 48 - 49 122600 PB 2 52 - 253 234950 PB 2 73 & 277 - 278 226000 PB 299 & 304 - 305 31420 PB 354 - 3 56 905365 PB 411 - 414 BALANCE 673782 PB 29 6 49 000 PB 2 31 - 233 527150 PB 264 49 7100 PB 2 89 415750 PB 326 - 327 1208460 PB 383 - 385 2002 - 03 INVESTMENT 61000 PB 50 - 51 2 75 000 PB 2 54 - 255 129220 PB 2 74 & 279 146050 PB 300 & 307 144 350 PB 348 - 3 49 1164120 PB 4 06 - 4 10 BALANCE 778500 PB 34 9 74 000 PB 2 36 - 2 38 640200 PB 26 1 640050 PB 2 86 543500 PB 3 21 - 3 23 2315740 PB 374 - 380 2003 - 04 INVESTMENT 294800 PB 52 54 319391 PB 256 - 358 509725 PB 275 & 280 866200 PB 301 & 308 - 311 1362610 342 347 1236800 PB 398 - 405 BALANCE 455820 PB 39 7 60 891 PB 2 41 - 2 42 1406410 PB 313 - 317 2090795 PB 368 - 370 - : 32 : - 32 PB 338 - 341 38. IN VIEW OF THE ABOVE EACH AND EVERY ADVANCE MENTIONED IN ANNEXURE A WAS EXPLAINED IN DETAIL WITH REFERENCE TO THE DETAILS OF ADVANCE FILED WITH THE REGULAR RETURNS IN CASE WHERE THE AMOUNT WAS RECEIVED BACK THE SAME HAS BEEN MENTIONED IN SEPARATE COLUMN BY THE ASSESSING OFFICER. THEREFORE NO ADDITION CAN BE MADE FOR THE SAME. WHILE PERUSING THE STATEMENT RECORDED WE FOUND THAT IN THE STATEMENT DATED 14.12.2002 R.K. CHANDAK REPLIED TO QUE. NO. 13 PB 101 THAT THE INVESTMENT IN MONEYLENDING WAS UNDISCLOSED INVESTMENT OF R.K.CHANDAK (HUF) AND S.K. CHANDAK WAS RS. 30 19 049/ - EACH. THIS STATEMENT WAS GIVEN BY HIM AS HE WAS NOT H AVING FIGURES OF ADVANCES OF OTHER FAMILY MEMBERS AND HE WANTED TO PLAY SAFE BY DISCLOSING MORE THAN WHAT SHOULD HAVE BEEN DISCLOSED IF AT ALL. HE NOW RETRACTED FROM THE STATEMENT AFTER VERIFICATION OF FACTS FROM RECORDS THAT WERE FILED FROM TIME TO TIME WITH THE I. T. DEPARTMENT BY FAMILY MEMBERS MUCH BEFORE THE SEARCH. BUSINESS OF ADVANCE MONEY LENDING WAS DONE BY 6 MEMBERS OF - : 33 : - 33 FAMILY AS ABOVE. DIVIDING THE INCOME IN HANDS OF ASSESSEE AND SHYAM KUMAR CHANDAK (HUF) IN RATIO OF 50:50 IS NOT JUSTIFIED. 39. IN V IEW OF THE ABOVE WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION. 40. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 9 39 524/ - MADE ON ACCOUNT OF INCOME FROM TRADING OF FOODGRAINS. 41. RIVAL CONTENTIO NS HAVE BEEN HEARD AND RECORDS PERUSED. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE FAMILY IS BASICALLY AN AGRICULTURIST FAMILY HAVING 124 ACRES OF LAND AND FURTHER LAND O N KOLY PATTA. FOODGRAINS ARE GROWN ON THE LAND. FOR GROWING FOODGRAINS SEEDS ARE P URCHASED FROM TIME TO TIME AND THIS AGRICULTURAL PRODUCE IS SOLD IN THE MARKET. HOWEVER THE AO HAS DISBELIEVED IN GROWING OF FOODGRAINS AND ITS SALE IN THE MARKET HE TREATED THE ASSESSEE HAS ENGAGED IN TRADING OF FOODGRAINS. THE LD. CIT(A) HAS DELETED TH E ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE ORDER OF THE AO. THE AO HAS DISBELIEVED THE DOCUMENTS SUBMITTED BY THE APPELLANT DURING THE COURSE OF BLOCK - : 34 : - 34 ASSESSMENT. THE AO IN HIS ORDER HAS WORKED OUT THE AMOUNT OF THE SO CALLED TRADING AND HAS TREATED THE SAME AS UNDISCLOSED SALE OF THE APPELLANT HUF AND R.K. CHANDAK HUF AND DIVIDED THE SAME IN EQUAL AMOUNT. SUBSEQUENTLY THE AO HAS CALCULATED NET PROFIT @ 5% ON THE TOTAL TURNOVER AND TREATED THE SAME AS THE UNDISCLOSED PRO FITS FROM THE TRADING OF FOODGRAINS. IN THE CONCLUSIVE PART OF PARA 5.4 THE AO HAS FURTHER WORKED OUT THE AMOUNT OF INITIAL INVESTMENT AT 1/20 TH OF THE TURNOVER AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE APPELLANT. I HAVE PERUSED THE ORDER OF THE AO AND ALSO THE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE AND ALSO CONSIDERED THE FACTS OF THE CASE. THE AO WAS HAVING SUFFICIENT AND PROPER OPPORTUNITY TO VERIFY THE LAND HOLDING OF THE APPELLANT AND ALSO THE CULTIVATION ACTIVITY OF THE APPELLANT BUT INSPITE OF THE REQUEST OF THE APPELLANT HE - : 35 : - 35 FAILED TO DO SO. I HAVE ALSO PERUSED THE SUPPORTING DOCUMENTS FURNISHED BY THE APPELLANT BEFORE ME. AFTER CONSIDERING THE SUBJECT MATTER INVOLVED IN THIS ISSUE. IF FOUND THAT THE APPELLANT HAS PROPERLY DISCHARGE D ITS ONUS IN RESPECT OF THIS ISSUE. PURCHASES OF PETTY QUANTITY FROM ANY PERSON DO NOT MAKE ANY TRANSACTION AS THE TRADING TRANSACTIONS. FOR MAKING ANY ACTIVITY IN THE NATURE OF TRADING THE EXISTENCE OF TWO ELEMENTS IS MUST VIZ. PURCHASE AND THEN SALE. BUT IN THE APPELLANT S CASE THE DOCUMENTS SO SEIZED ARE OF THE SINGLE NATURE I.E. PURCHASE AND THE SUBSEQUENT RECORD OF SALE HAS NOT BEEN FOUND AT ANY TIME DURING THE SEARCH OPERATION OR DURING THE ASSESSMENT PROCEEDINGS AND THE AO HAS ALSO FAILED TO ESTAB LISH DIRECT NEXUS BETWEEN PURCHASE AND SALE OF ANY FOODGRAIN. THEREFORE IN VIEW OF THIS THE ADDITIONS OF RS.9 39 524/ - ON ACCOUNT OF UNDISCLOSED - : 36 : - 36 INCOME FROM ALLEGED TRADING ACTIVITY AND RS. 9 39 524/ - ON ACCOUNT OF INVESTMENT IN THE ALLEGED TRADING ACTIV ITIES CANNOT BE CONFIRMED AND THE SAME HAS TO BE DELETED. THUS THE APPEAL ON THESE POINTS IS ALLOWED. 42. WE HAVE GONE THROUGH THE DOCUMENTS REFERRED BY THE ASSESSING OFFICER AND FOUND THAT NONE OF THE PAPERS JUSTIFIED THAT THE ASSESSEE WAS ENGAGED IN TRAD ING OF FOODGRAINS. THE LOOSE PAPE R S REFERRED BY THE ASSESSING OFFICER RELATING TO SALE OF CROPS BY THE ASSESSEE. THE ASSESSEE WAS ALSO PURCHASING FOODGRAINS AS SEEDS FOR UTILIZING IN THE PROCESS OF GROWING. THE AO HAS DISCUSSED THE LOOSE PAPERS AS UNDER : - LOOSE PAPER PB PARTICUALRS AS PER AO AMOUNT REMARKS BS 3 PG 179 432 ENTRIES RELATED TO GRAIN A/C FOR THE MONTH OF SEPT.02 8 50 000 (A) REFLECTS CASH RECEIVED AGAINST SALES. W. S. TO AO PB 117. (B) PAPERS FOUND AT YAMUNA JEWELLERS AND NOT IN POSSESSI ON OF ASSESSEE PB 58. LPS 4 PG. 42 433 PURCHASE OF MASOOR 2 69 550 (A) SAME IS A TELEPHONE BILL. (B) PAPERS FOUND AT YAMUNA JEWELLERS AND NOT IN POSSESSION OF ASSESSEE. PB 58. LPS A/7 PG. 34 435 PURCHASE OF CHANA & TIWDA 339435 (A) UNDATED. UNSIGNED. NOT CLEAR IF PURCHASE OR SALE. SAME IS A DUMB DOCUMENT. ACIT VS. SATYAPAL WASAN 295 ITR 352 (JAB) GIRISH CHAUDHARY 165 ITR 608 (DEL) LPS A/12 PG. 30 434 MASOOR PURCHASED BY R.K. CHANDAK 2 16 000 UNSIGNED. NOT CLEAR IF PURCHASE OR SALE. SAME IS A DUMP - : 37 : - 37 DOC UMENT. LPS A/12 PG.96 TO 98 436 - 438 PURCHASE OF GRAINS 4 44 975 5 61 565 5 16 325 (A) FIRST TWO FIGURES INCORRECT : - PB 436 RS. 2 23 115 PB 437 RS. 1 16 570 (B) UNSIGNED. UNDATED. NOT CLEAR IF PURCHASE OR SALE . SAME IS A DUMP DOCUMENT. LPS A/15 PG. 4 6 439 PURCHASE OF CHANA MASOOR & TUWAR 16 42 488 15 16 1000 (A)TRANSACTION WHETHER PURCHASE OR SALE CANNOT BE MADE OUT. PARTIES WITH WHOM TRADED NOT MENTIONED. IT IS A DUMB DOCUMENT. (B) BASIS OF ADOPTING FIGURES FOR ADDITION IS NOT THERE. BS 1 3 6 FO UND AT KRISHI FARM SALE OF VARIOUS FOODGRAIN ITEMS 8 25 523 38 450 18 500 98 935 (A) SAME WERE FOUND DURING SURVEY. NO COGNIZANCE OF SAME CAN BE TAKEN IN BLOCK ASSESSMENT PROCEEDINGS. C.I. AUTOMOTORS 8 ITJ 146 (TRIB.)INDORE. CIT VS. SEMIAPPAN 284 ITR 220 (MAD.) (B) ALL PAPERS REFLECT SALES AS PER LD. AO SALES ARE OF AGRICULTURAL CROPS OF ASSESSEE. (C) BS 6 PG. 12 PB 440 DOES NOT BELONG TO ASSESSEE AND IS UNDATED. UNSIGNED. APPEARS TO BE A MEMORANDUM ACCOUNT OF SOME RAJPUT . 2. AO PG. 31 PARA (2) S TATES THAT IT IS CLEARLY ESTABLISHED THAT THESE DOCUMENTS DO NOT DEPICT THE SALES OF GRAINS GROWN BY ASSESSEE GROUP ON ITS LAND BUT THEY CLEARLY REPRESENT TRADING ACTIVITY. THE ENTRIES OF PURCHASE THAT TOO IN SUBSTANTIAL QUANTITY CLEARLY PROVE THAT THE ASS ESSEE WAS ENGAGED IN TRADING OF GRAINS. - : 38 : - 38 43. IN THIS REGARD CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT THE TRANSACTIONS OF ALLEGED PURCHASES HAVE ALREADY BEEN EXPLAINED TO THE AO NOT EVEN A SINGLE DOCUMENT DEPICTS TRADING OF FOODGRAINS OR EVEN PURCHASE OF FOODGRAINS. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE HIS CONTENTION THAT THE ASSESSEE WAS ENGAGED IN TRADING OF FOODGRAINS. THE FACT THAT DURING SEARCH OPERATION NO STOCK OF FOODGRAINS WAS FOUND CLEARLY INDICATE THAT THE ASSESS EE WAS NOT ENGAGED IN TRADING OF FOODGRAINS AND IT IS EVIDENT FROM PANCHNAMA PAGE 55 - 96. AS THE ASSESSEE IS AN AGRICULTURIST FOODGRAIN CROPS ARE SOLD IMMEDIATELY AFTER HARVESTING WITHOUT HAVING STOCK OF FOODGRAINS ONE CANNOT SHOW THAT THE ASSESSEE WAS EN GAGED IN TRADING BUSINESS. 44. IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING ADDITION OF RS. 9 39 524/ - . 45. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 2 16 312/ - WITH RESPECT T O PESTICIDES BUSINESS. 46. THE AO HAS MADE ADDITION BY REFERRING TO LOOSE PAPERS ON PAGES 32 & 33 AND CONCLUDED THAT THE ASSESSEE WAS DEALING - : 39 : - 39 IN UNACCOUNTED PESTICIDES BUSINESS. BY THE IMPUGNED ORDER AFTER RECORDING FOLLOWING OBSERVATIONS THE LD. CIT(A) HAS DELETING THE ADDITION : - I HAVE GONE THROUGH THE REASONING ADVANCED BY THE ASSESSING OFFICER IN HIS ORDER AND ALSO CONSIDERED THE SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE AND ALSO PERUSED THE DOCUMENTS. I FOUND THAT THE AO WAS NOT JUSTIFIED IN MA KING THE ADDITION ON THE BASIS OF THAT THE BILL WAS IN THE NAME OF R.K. CHADAK. THE AO HAS NOT ISSUED ANY NOTICE U/S 131 TO SHRI KAMLESH KUMAR AND SHRI DEVENDRA KUMAR TO CONFIRM THE CONTENTS OF THEIR RESPECTIVE AFFIDAVITS. THE AO HAS ALSO NOT CONDUCTED AN Y ENQUIRY FROM THE LOCAL PERSONS. THE FACT OF AVAILABILITY OF LOOSE PAPERS IS IN SUPPORT OF THE CONTENTION OF THE APPELLANT THAT HE BEING A UPSARPANCH WAS IN A POSITION TO PROCURE THE INSECTICIDE AND UREA FOR AND ON BEHALF OF THE PERSONS WHO WERE DOING AG RICULTURAL OPERATION APPEAR TO BE JUST AND APPROPRIATE. THUS I DO NOT - : 40 : - 40 FIND ANY POSITIVE MATERIAL FOR MAKING THIS ADDITION OF RS. 70 767/ - . THE ADDITION IS THEREFORE TO BE DELETED. SINCE THE TRADING OF PESTICIDE AND INSECTICIDE WAS NOT BEING CARRIED OUT AS DECIDED ABOUT THE QUESTION FOR INVESTMENT DOES NOT ARISE THEREFORE THE ADDITION OF RS. 1 45 545/ - IS NOT JUSTIFIED. HENCE THE ADDITION OF RS. 2 16 312/ - ( RS. 1 45 545/ - + RS. 70 767/ - ) IS TO BE DELETED. THUS THE APPEAL ON THIS POINT IS ALLOWED. 47. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM RECORD THAT THE ASSESSEE USED TO PURCHASE PESTICIDES FOR HIS OWN AGRICULTURAL OPERATIONS OVER MORE THAN 150 ACRES OF LAND. THE LD. CIT(A) HAS DELETED THE AD DITION BY OBSERVING THAT THE ASSESSEE BEING UPSARPANCH WAS PROCURING UREA ON BEHALF OF PERSONS WHO WERE DOING AGRICULTURAL OPERATIONS. IT WAS ALSO OBSERVED THAT SINCE THE ASSESSEE WAS NOT DOING ANY BUSINESS IN PESTICIDES THERE WAS NO QUESTION OF ANY INIT IAL INVESTMENT. IT APPEARS THAT THE CIT(A) HAS PRECISELY NOT DEALT WITH THE DOCUMENTS REFERRED BY THE ASSESSING OFFICER ON THE BASIS OF WHICH ADDITION WAS MADE. IN THE INTEREST OF - : 41 : - 41 JUSTICE WE RESTORE THIS GROUND BACK TO THE FILE OF AO FOR DECIDING AFRESH KEEPING IN VIEW OBSERVATIONS MADE BY THE LD. CIT(A) AT PAGES 17 & 18 OF HIS APPELLATE ORDER. 48. NEXT GRIEVANCE RELATES TO DELETION OF ADDITION OF RS. 42 500/ - ON ACCOUNT OF INVESTMENT OF PURCHASE IN LAND. 49. THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN PURCHAS E OF LAND WAS DELETED BY THE LD. CIT(A) A FTER EXAMINING THE PURCHASE DEED WITH THE RECORDS PRODUCED BEFORE HIM. IT WAS FURTHER OBSERVED THAT FUND WAS AVAILABLE WITH THE ASSESSEE AND RECORDED IN THE REGULAR BOOKS OF ACCOUNT. 50. WE HAVE CAREFULLY CONSIDERED T HE RIVAL CONTENTIONS AND FOUND THAT LPS A/3 PAGES 50 TO 56 IS PURCHASE DEED OF LAND DATED 10 TH JUNE 2002 FROM SMT. HALKIBAI LODI BY SHRI R.K. CHANDAK. THE LAND WAS PURCHASED BY SHRI RAM KUMAR CHANDAK IN HIS INDIVIDUAL CAPACITY AND HOUSE HOLD DRAWINGS WER E SUFFICIENT TO COVER INVESTMENT OF RS. 42 500/ - . WE ALSO FOUND THAT INVESTMENT WAS DISCLOSED IN THE HUF RETURN FOR THE ASSESSMENT YEAR 2003 - 04. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING THE ADDITION. - : 42 : - 42 51. NEXT GR OUNDS I.E. GROUND NOS. 9 10 & 11 WHICH RELATE TO DELETION OF ADDITION OF RS. 56 98 000/ - BEING UNDISCLOSED INVESTMENT IN PURCHASE OF TRACTORS ON PROTECTIVE BASIS DELETION OF UNDISCLOSED INVESTMENT IN FINANCING TRACTORS AND UNACCOUNTED INTEREST INCOME O F RS. 70 96 042/ - AND DELETION OF ADDITION OF RS. 36 93 662/ - MADE ON ACCOUNT OF UNEXPLAINED CREDITS IN BANK ACCOUNTS ON PROTECTIVE BASIS. 52. ALL THE ABOVE ISSUES ARE COVERED BY I.T.(SS).A.NO. 192/IND/2007 FILED BY THE REVENUE IN THE CASE OF RAM KUMAR CHANDAK (INDIVIDUAL). WE HAVE ALREADY DISCUSSED THE ISSUES IN GREAT DETAIL F OLLOWING THE SAME ANALOGY AND REASONING ACTION OF THE LD. CIT(A) DELETING THE ABOVE ADDITIONS ARE BEING CONFIRMED. 53. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. I.T.(SS).A.NO. 189/IND/2007 : 54. GROUND NO.1 OF THE REVENUE RELATES TO INVALIDITY OF THE ASSESSMENT FRAMED U/S 158BC. - : 43 : - 43 55. AS DISCUSSED IN CASE OF RAM KUMAR CHANDAK BY FOLLOWING THE SAME REASONING WE ALLOW THIS GROUND IN FAVOUR OF THE RE VENUE. 56. NEXT GRIEVANCE OF THE REVENUE RELATES TO ALLOWING OF SET OFF OF RS. 3 LAKHS BEING THE AMOUNT DECLARED AS UNDISCLOSED INCOME IN THE BLOCK RETURN . 57. THE SAME ISSUE HAS BEEN DISCUSSED AT GROUND NO. 2 IN CASE OF RAM KUMAR CHANDAK (HUF) HEREINABOVE F OLLOWING THE SAME ANALOGY WE DISMISS THIS GROUND OF THE REVENUE S APPEAL. 58. GROUND NOS. 3 TO 7 ARE THE SAME AS DISCUSSED IN CASE OF SHRI RAM KUMAR CHANDAK (HUF) FOLLOWING THE SAME ANALOGY WE DISMISS THESE GROUNDS OF THE REVENUE S APPEAL 59. GROUND NO. 8 RELA TES TO DELETION OF ADDITION OF RS. 21 13 035/ - MADE ON PROTECTIVE BASIS IN RESPECT OF UNEXPLAINED CREDIT IN THE BANK ACCOUNT. 60. IN THIS CONNECTION THE AO HAS OBSERVED THAT KARTA OF HUF DOES NOT FILE ANY RETURN OF INCOME IN HIS INDIVIDUAL CAPACITY AND DURING COURSE OF SEARCH IT WAS FOUND THAT KARTA OF ASSESSEE HUF WAS HOLDING SEVERAL BANK ACCOUNTS WHEREIN HE HAS MADE CASH DEPOSIT. IT WAS EXPLAINED BY THE ASSESSEE - : 44 : - 44 THAT ALL THE BANK ACCOUNTS WERE SHOWN IN THE INCOME TAX RETURNS FILED REGULARLY AND ALSO COVERE D IN CASH ROTATION STATEMENT FILED BEFORE THE AO. 61. AFTER HAVING THE FOLLOWING OBSERVATIONS THE LD. CIT(A) HAS DELETED THE ADDITION : - I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND ALSO PERUSED THE ORDER OF THE AO. I HAVE ALSO GONE THROU GH THE DETAILS FILED BY THE LD. AUTHORIZED REPRESENTATIVE. I HAVE ALSO CONSIDERED THE DETAILS FILED IN RESPECT OF AGRICULTURAL INCOME WHICH BELONGS TO HUF HEADED BY THE APPELLANT. THE AO WHILE MAKING THE ADDITION FOR THE DEPOSITS FOUND IN THE VARIOUS BANK S ACCOUNT HAS BEEN BROUGHT ON RECORD ANY SUPPORTING MATERIAL. MOREOVER HE HAS ALSO NOT MADE ANY ATTEMPT TO VERIFY THE CONTENTION OF THE APPELLANT IN RESPECT OF AGRICULTURAL LAND AND ACTIVITIES CARRIED ON THE LANDS AND ALSO THE EARNING THERE FROM. THE RETU RNS FILED EARLIER BY THE APPELLANT HAVE ALSO SUPPORT THE CONTENTION OF THE APPELLANT REGARDING THE - : 45 : - 45 AGRICULTURAL INCOME. I HAVE ALSO CONSIDERED THE CASH ROTATION STATEMENTS FOR THE BLOCK PERIODS. AFTER CONSIDERING THE FACTS AND THE MATERIAL OF THE CASE ON T HIS ISSUE I DECIDE THIS GROUND IN FAVOUR OF THE APPELLANT AND THE ADDITION OF RS. 21 13 035/ - CANNOT BE SUSTAINED AND IT HAS TO BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED. 62. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM RECO RD THAT DETAILS OF BANK ACCOUNT AND DEPOSITS AND WITHDRAWALS WERE FURNISHED BY THE ASSESSEE BEFORE THE AO WHICH HAS ALSO BEEN PLACED AT PAPER BOOK PAGE NO.138 TO 162 AND ANNEXURE 1. THE LD. CIT(A) HAS DELETED THE ADDITION AFTER OBSERVING THAT DETAILS FILE D BY THE ASSESSEE IN RESPECT OF AGRICULTURAL INCOME BELONGS TO HUF ADDED BY THE ASSESSEE. AS THERE WAS SUFFICIENT AGRICULTURAL INCOME AS PER THE CASH FLOW STATEMENT FURNISHED BEFORE THE AO WHEREIN THERE WAS SUFFICIENT AVAILABILITY OF CASH WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION. - : 46 : - 46 63. NEXT GRIEVANCE RELATES TO DELETION OF ADDITION OF RS. 9 08 087/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE AND INVESTMENT. 64. THIS ADDITION WAS MADE IN ASSESSEE S HANDS ON PROTECTIVE BASIS . SUBSTANTIVE ADDITION HAD BEEN MADE IN THE HANDS OF ASSESSEE INDIVIDUAL. THE LD. CIT(A) OBSERVED THAT ASSESSEE HAS EXPLAINED EACH DOCUMENT MARKED AS LPS - 3 4 A/2 AND A/7 AND LPS 2. 65. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT THE IS SUE HAS BEEN DISCUSSED IN THE CASE OF ASSESSEE IN HIS INDIVIDUAL CAPACITY AND THIS AMOUNT OF RS. 9 08 087/ - WAS ADDED IN THE TOTAL AMOUNT OF RS. 17 94 600/ - . AS THE ADDITION WAS MADE ON SUBSTANTIVE BASIS IN THE INDIVIDUAL HANDS OF THE ASSESSEE WE DO NOT F IND ANY INFIRMITY IN DELETING THE PROTECTIVE ADDITION MADE IN THE HANDS OF THE ASSESSEE HUF. 66. LAST GRIEVANCE OF THE REVENUE RELATES TO DELETING OF INTEREST CHARGED U/S 158BFA(1). 67. THE LD. CIT(A) HAS DELETED THE INTEREST BY OBSERVING THAT NOTICE U/S 158BD WAS ISSUED ON 10.11.2004 AND SERVED - : 47 : - 47 ON 11.11.2004 ASKING THE ASSESSEE TO FILE RETURN WITHIN SEVEN DAYS FROM THE DATE OF RECEIPT OF THIS NOTICE. IT WAS ALSO OBSERVED THAT RETURN WAS FILED BY THE ASSESSEE WITHIN THE EXTENDED TIME ALLOWED BY THE ASSESSING OFFICE R THEREFORE NO INTEREST IS CHARGEABLE U/S 158BFA(1). WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). 68. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. 69. GROUNDS TAKEN IN THE CROSS OBJECTION IN CASE OF BOTH THE ASSESSEES ARE DISMISSED IN VIEW OF OUR DISCUSSION WITH RESPECT TO GROUND NO. 1 RAISED BY THE REVENUE. ACCORDINGLY THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. 70. FINALLY BOTH THE APPEAL OF THE REVENUE ARE ALLOWED IN PART WHEREAS THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 28 TH JU LY 2011. SD/ - SD/ - ( R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH JU LY 2011 . CPU* 146 127