Km. Parapati Mankani, Nainital v. ACIT, Nainital

ITA 146/DEL/2009 | 1999-2000
Pronouncement Date: 22-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 14620114 RSA 2009
Bench Delhi
Appeal Number ITA 146/DEL/2009
Duration Of Justice 1 year(s) 7 day(s)
Appellant Km. Parapati Mankani, Nainital
Respondent ACIT, Nainital
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 22-01-2010
Date Of Final Hearing 12-01-2010
Next Hearing Date 12-01-2010
Assessment Year 1999-2000
Appeal Filed On 14-01-2009
Judgment Text
ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NOS. 146&147/DEL/2009 A.YRS.. : 1999-2000 & 2000-2001 KUM. PARAPATI MANKANI VS. ASSTT. COMMISSIONER OF C/O BANGA & CO. INCOME TAX CHARTERED ACCOUNTANTS NAINITAL BANGA HOUSE MALITAL NAINITAL-263001 (UTTARAKHAND) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.L. BANGA CA DEPARTMENT BY : SHRI ISTIYAQUE AHEMED SR. DR O R D E R PER SHAMIM YAHYA : AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 1999-2000 AND 20 00-2001 RESPECTIVELY. 2. SINCE THE ISSUES INVOLVED ARE COMMON AND CONNECT ED AND HENCE THESE APPEALS ARE BEING CONSOLIDATED AND DISPOSED O FF FOR THE SAKE OF CONVENIENCE BY THIS COMMON ORDER. 3. THE FIRST ISSUE RAISED IS THAT THE LD. CIT(A) ER RED IN NOT QUASHING REASSESSMENT ORDER PASSED UNDER 143(3)/147. 3.1 IN THIS CASE THE AO IN THE ASSESSMENT ORDER NOT ED THAT ASSESSE IS OWNER OF HOTEL GRACE OF SHIVA HOLIDAY INN GHORAKH AL BHOWALI DISTT. NAINITAL SITUATED WITHIN THE JURISDICTION OF ACIT NAINITAL. NOTICE UNDER ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 2 SECTION 148 FOR INITIATING PROCEEDINGS U/S 147 WAS ISSUED ON 20.3.2006. THE REASONS RECORDED FOR THE REOPENING WAS THAT TH E ASSESSEE HAS PURCHASED THE LAND CONSTRUCTED A FOUR-STORIED BUI LDING NAMED AS GRACE OF SHIVA HOLIDAY INN THEREBY INVESTING OF RS. 50 LA CS IN CONSTRUCTION OF BUILDING. THE ASSESSEE HAD NOT FURNISHED ANY RETU RN OF INCOME IN THIS REGARD. ASSESSEE SUBMITTED A COPY OF RETURN FILED AT DELHI FOR THE ASSESSMENT YEAR 1999-2000 AND CHALLENGED THE JURISD ICTION OF THE AO IN THIS REGARD. AO OBTAINED INFORMATION FROM NCC DELHI THAT ASSESSEE HAD NO PAN ALLOTTED IN HER NAME. THE AO PROCEEDED TO DISMISS THE ISSUE OF JURISDICTION RAISED BY THE ASSESSEE. . 4. UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED THE AOS ACTION HOLDING AS UNDER:- THE AO IN THE ASSESSMENT ORDER HAS MENTIONED THA T THE APPELLANT WAS SENT A QUERY LETTER DATED 8.9.2004 AN D TO FURNISH ADDRESS OF THE WARD AND CIRCLE IN WHICH SHE HAS BEE N ASSESSED. SHE WAS AGAIN GIVEN FURTHER OPPORTUNITY ON 14.10.20 04 AND 07.12.2004 TO FURNISH INFORMATION ON HER PAST ASSES SMENT HISTORY. EXCEPT FOR SEEKING ADJOURNMENT THE APPELLANT DID N OT RESPOND TO SUCH LETTERS OF THE AO. FINALLY IT WAS GATHERED F ROM NATIONAL COMPUTER CENTRE (NCC) DELHI WAS MAINTAINING THE RE CORD FO THE ASSESSES PAN IN HER NAME. THEREFORE THE APPELLA NT AS PER RECORD WAS TREATED AS A NEW ASSESSEE ON 20.3.2006. AS PER ORDER U/S 120 OF IT ACT 1961 DATED 30.9.2004 OF JCIT RANGE NAI NITAL THE JURISDICTION OVER THE NEW ASSESSES LIES WITH THE AC IT NAINITAL. THE PRINCIPLE PLACE OF BUSINESS OF THE APPELLANT HAPPEN S TO BE AT GHORKHAL (BHOWALI) IN NAINITAL DISTRICT THEREBY MAK ING THE JURISDICTION OF THE APPELLANT WITH ACIT NAINITAL. FURTHER THE ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 3 APPELLANT COULD HAVE INVOKED THE PROVISIONS OF SEC TION 124(3) OF IT ACT TO CHALLENGE THE JURISDICTION OF THE AO WHICH HAS NOT BEEN ADHERED TO. THE NOTICE U/S 148 WAS SERVED ON THE A PPELLANT AT HER PLACE OF BUSINESS ADDRESS AS WELL AS AT HER RESIDEN TIAL ADDRESS THROUGH REGISTERED POST. SECTION 124(3) ENABLED THE APPELLANT TO CHALLENGE THE JURISDICTION DURING 30 DAYS FROM THE DATE OF SERVICE OF NOTICE U/S 148 AND THE APPELLANT FAILED TO INVOK E SUCH PROVISIONS OF SECTION 124(3) WITHIN THE STIPULATED TIME AND TH EREFORE NO OTHER LEGAL REMEDY WAS AVAILABLE TO THE APPELLANT AND IT HAS BEEN RIGHTLY INFERRED BY THE AO THAT THE MATTER OF JURISDICTION STANDS SETTLED AND THE AO HAS RIGHTLY EXERCISED HER JURISDICTION OVER THE INSTANT CASE. FURTHER THE COUNSEL OF THE APPELLANT SOUGHT DIRECTI ON U/S 144A FROM JCIT NAINITAL ON THE MATTER OF JURISDICTION O N 22.12.2006 AND THE APPLICATION WAS DISPOSED OF BY LD. JCIT IN FAVO UR OF THE AO AND THE LAST INTIMATION HAS BEEN FORWARDED TO THE OFFIC E OF THE AO VIDE LETTER DATED 27.12.2006. KEEPING IN VIEW THESE FACT S I DO NOT FIND ANY TECHNICAL INFIRMITY IN ASSUMPTION OF JURISDICTI ON BY THE AO IN THE INSTANT CASE OF THE APPELLANT AND THEREFORE NO INTEREFERENCE IS CALLED FOR AND THE GROUND RAISED BY THE APPELLANT O N THIS ISSUE DOES NOT SUCCEED. HENCE GROUND NO. (II) IS HEREBY REJECTED. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 5.1 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. 6. LD. COUNSEL OF ASSESSEE DREW OUR ATTENTION TO T HE PAPER BOOK IN WHICH RETURN OF THE ASSESSEE FOR THE ASSESSMENT YEA R 1999-2000 DISCLOSING THE TOTAL INCOME OF RS. 18 870/- WAS FIL ED ON 4.9.2000 AT ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 4 DELHI. IN THIS REGARD WE FIND THAT THE SAID RET URN IS NOT AT ALL A VALID RETURN. FIRSTLY BECAUSE THE TOTAL INCOME RETURNED THEREIN IS BELOW TAXABLE LIMIT AND SECONDLY THE RETURN HAS BEEN FILE D AFTER THE DUE DATE FOR FILING THE RETURN UNDER SECTION 139(1) OF THE I T ACT. IN THIS REGARD WE REFER THE DECISION OF THE TRIBUNAL IN THE CASE OF R OYALA CORPORATION P. LTD. VS. ACIT 319 ITR (AT) 158 (CHENNAI) WHEREIN I T HAS BEEN OBSERVED THAT NONE OF THE PRESCRIBED MODE OF INTIMATION/ AS SESSMENT CONTEMPLATES ANY TYPE OF INFERENCE TO BE ATTACHED TO AN INVALID RETURN. THE TERM INVALID HAS BEEN DEFINED IN THE OXFORD ENGLISH DICTIONARY AS MEANING NOT LEGALLY RECOGNIZED BECAUSE CONTRAVENIN G A REGULATION OR LAW. SECTION 139(9) ITSELF SAYS THAT IN CASE OF SU CH AN INVALID RETURN THE MEANING OF SUCH AN INVALID RETURN WILL BE THAT THE ASSESSEE HAD FAILED TO FURNISH THE RETURN. 6.1 LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED B EFORE US THAT THE ASESSEE HAS FILED APPLICATION FOR PAN BUT THE ASSES SEE WAS NOT PROVIDED PAN. ON GOING THROUGH THE SAID APPLICATION OF PAN WE FIND THAT ASSESEE HAS NOT PROVIDED ANY DETAIL OF BUSINESS BEING CARR IED OUT BY THE ASESSEE AND HAD ONLY SHOWN SALARY AS SOURCES OF INCOME. UN DER THESE CIRCUMSTANCES ASSESSEES PLEA IS THAT SHE WAS BEIN G ASSESSED AT NEW DELHI. ASSESSEE HAVING A PLACE OF BUSINESS AND CO NSTRUCTED THE HOTEL AT NAINITAL WAS RIGHTLY ASSESSED BY THE AO AT NAINITAL . ACCORDINGLY WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDERS OF THE LD. CIT(A). LD. COUNSEL OF THE ASESSEE ALSO ARGUED THAT THE REASONS RECORDED FOR THE REOPENING WAS NOT PROPER. IN THIS REGARD WE FIND THAT REASONS RECORDED FOR THE REOPENING IS THAT THE ASSESSEE HAS CONSTRU CTED HOTEL BUILDING INVOLVING LARGE INVESTMENT AND THE SAME HAD NOT BEE N DISCLOSED BEFORE THE DEPARTMENT. IN OUR CONSIDERED OPINION THERE IS AMPLE COGENCY IN THE REASONS RECORDED FOR THE REOPENING AND AS SUCH LD. COUNSELS ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 5 ARGUMENTS IN THIS REGARD ARE ALSO BEING REJECTED. IN THIS REGARD WE ALSO PLACE RELIANCE UPON HONBLE APEX COURT DECISION IN 236 ITR 34 FOR THE PROPOSITION THAT FOR REASSESSMENT NOTICE AO SHOULD HAVE PRIMA-FACIE SOME MATERIAL SUFFICIENCY OR CORRECTNESS OF THE AB OVE IS NOT RELEVANT THIS STAGE. 7. THE NEXT ISSUE RAISED IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE REPORT OF THE APPROVED VALUER SUBMIT TED BY THE ASSESSEE. IT HAS BEEN FURTHER URGED THAT CONSTRUCTION WAS SP READ OVER IN 2 YEARS INSTEAD OF 3 YEARS WITHOUT ANY BASIS. 7.1 AS REGARDS THE COST OF CONSTRUCTION THE AO NOT ED THE FOLLOWING IN THE ASSESSMENT ORDER:- THE COUNSEL HAS SUBMITTED A VALUATION REPORT FROM SHRI Y.M. SAXENA REGISTERED VALUER BASED AT HALDWANI ON 27.12.2006. THE VALUATION WAS MADE ON 10 TH JULY 2006. THE PERIOD OF CONSTRUCTION AS MENTIONED IN POINT N O. 41 OF THE REPORT IS JULY 1998 TO MARCH 1999 AT RS. 10 10 361.75. THE TOTAL COST OF CONSTRUCTION OF THE BUILDING HAS BEEN VALUED AT RS. 31 23 216/-. 7.2 THE AO DEPUTED ITI TO CONDUCT INQUIRY AND THE I TIS REPORTED THAT THE COST OF CONSTRUCTION OF THE BUILDING WOULD BE RS. 50-60 LACS. AO ALSO REFERRED TO THE INSURANCE POLICY TAKEN BY THE ASESSEE FROM NATIONAL INSURANCE COMPANY WHERE THE BUILDING WAS VALUED AT RS. 40 LACS AND VALUE OF FURNITURE AND FIXTURES ETC. WAS ADDITIONAL RS. 3 80 000/-. AO FURTHER REFERRED TO STATEMENT OF SHRI NAGENDRA KUM AR WHO HELPED THE ASSESSEE IN CONSTRUCTING THE HOTEL. AO REJECTED TH E VALUATION REPORT SUBMITTED BY THE ASSESSEE AND PROCEEDED TO MAKE EST IMATION OF THE COST ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 6 OF CONSTRUCTION ON HIS OWN. AO ARRIVED AT TOTAL C OST OF CONSTRUCTION OF RS. 48 20 000/- AND SPREAD THE SAME BETWEEN THE ASS ESSMENT YEAR 1999-2000 AND 2000-2001. 7.3 UPON ASSESSEES APPEAL LD. CIT(A) OBSERVED THAT AO HAS APPLIED CPWD RATES AND IN HIS OPINION ALSO SUPPORTED BY THE HONBLE ALLAHABAD HIGH COURT UPPWD RATES SHOULD HAVE BEEN APPLIED. ACCORDINGLY LD. CIT(A) WENT ON TO ESTIMATE THE COS T OF CONSTRUCTION AT RS. 40 98 643/- DIVIDING THE SAME BETWEEN THE ASSESSMEN T YEAR 1999-2000 AND 2000-01 @ RS. 20 49 321/-. 7.4 AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE US. 7.5. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED TH E RECORDS. AS PER THE ADMITTED FACTS OF THE CASE ASSESSEE HAS NOT PRO DUCED ANY RECORD FOR THE COST OF CONSTRUCTION. BUT SHE HAD DULY GIVEN V ALUATION REPORT FROM AN APPROVED VALUER IN THIS REGARD. AS PER THE SAI D VALUATION REPORT THE TOTAL VALUE WAS RS. 31 23 216/- AND WAS SPREAD OVE R BETWEEN THE FINANCIAL YEAR 1998-99 1999-00 AND 2000-01. NOW T HE AO DID NOT ACCEPT THE VALUATION REPORT SUBMITTED BY THE ASSESS EE ON THE GROUND THAT VALUATION WAS DONE AFTER THE YEAR ASSESSEE HAS NOT MAINTAINED VOUCHERS & VALUER HAS MENTIONED QUALITY OF CONSTRU CTION ETC. NOW WHEN THE AO REJECTS THE APPROVED VALUER REPORT. THE COU RSE AVAILABLE TO HIM WAS REFERRING THE MATTER TO THE DEPARTMENTAL VALUAT ION OFFICER (DVO) FOR VALUATION THEREOF. ADMITTEDLY THE AO CANNOT BE SA ID TO BE EXPERT IN THE FIELD OF VALUATION AND CONSTRUCTION MATTER AND HE C ANNOT REJECT THE VALUATION REPORT SUBMITTED BY THE ASSESSEE WHICH WA S OBTAINED FROM AN EXPERT IN THE FIELD BY HIS OWN WITHOUT REFERRING TO ANY COGENT MATERIAL. THE ABOVE VIEW IS ALSO FORTIFIED BY THE PROVISIONS OF SECTION 142A(1) PROVIDE THAT FOR THE PURPOSE OF MAKING AN ASSESSME NT OR REASSESSMENT ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 7 UNDER THIS SECTION 69 WHEREIN ESTIMATE OF VALUE OF ANY INVESTMENT REFERRED TO IN SECTION 69 OR SECTION 69B OR THE VA LUE OF ANY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE REFERRED TO IN SECTION 69A OR SECTION 69B IS REQUIRED TO BE MADE THE ASSESSING OFFICER M AY REQUIRE VALUATION OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPOR T THE SAME TO HIM. UNDER THE CIRCUMSTANCES IN OUR CONSIDERED OPINION THE AO HAS TOTALLY ERRED IN MAKING THE ESTIMATED ADDITION WITHOUT MAK ING ANY REFERENCE TO DVO AND AMOUNTS BY REJECTING THE VALUATION REPORT S UBMITTED BY THE ASSESSEE. ACCORDINGY WE HOLD THAT VALUATION IN T HIS REGARD IS TO BE IN ACCORDANCE WITH THE VALUATION REPORT SUBMITTED BY T HE ASESSEE AND WHICH SHOULD BE DULY SPREAD OVER IN THREE YEARS AS MENTIONED THEREIN. 8. THE NEXT ISSUE RAISED IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE SOURCE OF INVESTMENT AND WAS ALSO NOT JUSTIFIED IN NOT ACCEPTING THE ADDITIONAL EVIDENCE FILED IN THIS RE GARD. 8.1 IN THE ASSESSMENT ORDER IN THIS REGARD THE AO HAD NOTED THAT AS PER THE RETURN FILED BY THE ASSESSEE SHE HAD SALAR Y INCOME OF RS. 15 000/- AND INCOME FROM OTHER SOURCE RS. 5739/-. ASSESSEE FILED RETURN OF INCOME ONLY FOR ASSESSMENT YEAR 1999-2000 AND 2000-01. SHE FURTHER SUBMITTED THAT SHE DID NOT FILE RETURN OF I NCOME FOR THE ASSESSMENT YEAR 2001-02 TO 2006-07 AS PER INCOME WA S BELOW TAXABLE LIMIT. THE AO ENQUIRED ABOUT THE ASSESSEES SOURCE OF FUNDS. THE SOURCE OF FUNDS WAS SAID TO BE : (A) INCOME FROM I NTEREST DIVIDEND CHITFUND ETC. FOR THE LAST 50 YEARS (B) ASSESSEE LAUNCHED A SCHEME FOR COLLECTING FUNDS FROM MEMBERS AND COLLECTED RS. 7 17 500/- FOR THE FINANCIAL YEAR 1998-99 AND AMOUNT OF RS. 8 22 500/- FOR THE ASSESSMENT YEAR 1999-2000. ASSESSEE FURTHER SUBMITTED THAT SH E COLLECTED FUNDS BY WAY OF FOLLOWING FRIENDS OF HER BROTHER SHRI RS MA NKANI. ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 8 I) SQ. LEADER RK JAIN RS. 3 00 000/- II) SHRI ANURADHA SINGH RS. 47 000/- III) SHRI DAYAL VAPUDANI NRI RS. 4 00 000/- IV) SHRI SATYA PRAKASH NRI RS. 5 00 000/- V) SHRI MOHAN NAGRANI RS. 3 00 000/- VI) FROM FAMILY MEMBERS RS. 2 60 000/- TOTAL = RS. 18 07 000/- ================ 8.2 THE COUNSEL WAS REQUIRED TO PRODUCE CERTAIN ME MBERS FROM WHOM MEMBERSHIP FEE WAS RECEIVED. ASSESSEE STATED THAT PERSONAL APPEARANCE OF MEMBERS DURING THIS EXTREME WINTER IS NOT POSSIB LE. HOWEVER CONFIRMATION HAD BEEN COLLECTED FROM FEW WHO ARE AVAILABLE AND IS BEING FILED. AO OBSERVED THAT ALL THE FEE HAD BEE N RECEIVED IN CASH AND IT WAS NEVER DEPOSITED IN THE BANK ACCOUNT. AO PR OCEEDED TO DISALLOW THE ENTIRE SOURCE OF ASSESSEES INVESTMENT EXCEPT R S. 3 LAC RECEIVED FROM R.K. JAIN. 8.3 UPON ASSESSEES APPEAL LD. CIT(A) NOTED AS UNDE R:- THE AO HAS MADE THE NECESSARY ENQUIRIES REGARDING THE MEMBERS SUBSCRIBING TO THE SCHEME OF THE APPELLANT FOR AWARDING HOLIDAY VISITS FOR CERTAIN NUMBER OF DAYS DURING THE YEAR AND HAS GIVEN A CONCRETE FINDING THAT NONE OF THESE MEMBERS HAS EVER AVAILED OF SUCH FACILITY DURING T HE YEAR UNDER CONSIDERATION OR IN THE SUCCEEDING YEAR. THE MEMBERSHIP FEES HAVE BEEN RECEIVED IN CASH WHICH HA VE NOT BEEN DEPOSITED IN ANY BANK ACCOUNT AND THEREFORE VE RACITY OF SUCH CONTRIBUTIONS HAVE BEEN RIGHTFULLY QUESTIONED BY THE AO. IN ADDITION IN SPITE OF OPPORTUNITIES PROVIDE D TO THE ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 9 APPELLANT NONE OF THESE MEMBERS COULD BE PRODUCED BEFORE THE AO FOR NECESSARY EXAMINATION REGARDING THE CLAI M MADE BY THE APPELLANT. SIMILARLY AS FAR AS THE LOAN C REDITORS ADVANCING THE LOANS ARE CONCERNED THE AO HAS NOTE D THAT THE LOAN CONFIRMATIONS WERE RECEIED ONLY FROM SQ. L EADER SHRI RK JAIN AND SHRI MOHAN L. NAGRANI AND IN THE CASE OF OTHER CREDITORS NEITHER ANY CONFIRMATIONS NOR THE EVIDENC ES JUSTIFYING SUCH LOANS WERE FURNISHED BEFORE THE AO. THE AO HAS GIVEN THE BENEFIT OF THE LOAN RECEIVED FROM SH RI RK JAIN TO THE TUNE OF RS. 3 LAKH IN A.Y. 2000-01 BECAUSE TH E NECESSARY EVIDENCE JUSTIFYING SUCH LOAN COULD BE FU RNISHED BEFORE THE AO. HOWEVER AS REGARDS THE OTHER LOAN CREDITORS SINCE THE REQUISITE EVIDENCE SUBSTANTIATING SUCH LO ANS COULD NOT BE FURNISHED THE AO HAS REJECTED THE CLAIM OF THE APPELLANT REGARDING RECEIPT OF SUCH LOANS WHICH AP PEARS TO BE IN ORDER. DURING THE COURSE OF APPELLATE PROCEEDIN GS THE LD. COUNSEL OF THE APPELLANT HAS FILED SOME AFFIDAVITS FROM THE MEMBER WHO HAVE SUBMITTED THAT THEY PAID THE MEMBER SHIP FEES WHICH VARIED FROM RS. 12500/- TO RS. 17500/-. THESE AFFIDAVITS WERE ASKED TO BE ADMITTED AS ADDITIONAL EVIDENCE UNDER THE PROVISIONS OF RULE 46A OF I.T. RULES 196 2 BY THE COUNSEL OF THE APPELLANT AND ACCORDINGLY THESE EVI DENCES WERE FORWARDED TO THE AO TO EXAMINE THE ADMISSIBILI TY OF SUCH EVIDENCE AND THE MERITS OF SUCH EVIDENCE TOWARDS T HE ADJUDICATION OF THE CASE. THE AO SUBMITTED A RE PORT DATED 3.9.2008 WHEREIN THE ADMISSION OF SUCH EVIDENCE HAS BEEN CHALLENGED ON THE GROUND THAT THE APPELLANT HAS BEE N PROVIDED WITH DUE OPPORTUNITY TO PRODUCE SUCH EVIDE NCE ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 10 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ON M ERITS ALSO THE AO HAS INFERRED THAT NONE OF THESE PERSONS COUL D BE PRODUCED TO JUSTIFY THE GENUINENESS OF SUCH CONTRI BUTIONS BY WAY OF MEMBERSHIP FEES WHICH HAVE BEEN GIVEN BY ALL OF THEM IN CASH. FURTHER THE WHOLE STORY BECOMES UNACCEPTA BLE ON THE GROUND THAT NONE OF THESE MEMBERS COULD ULTIMA TELY AVAIL OF THE BENEFIT OF THE HOLIDAY SCHEME IN SPITE OF THEIR PAYING CONTRIBUTIONS BECAUSE THE HOLIDAY INN NEVER CAME INTO OPERATION. THE RECEIPTS BY WAY OF CONTRIBUTIONS FR OM THE MEMBERS WERE NEVER DEPOSITED IN ANY BANK ACCOUNT WH ICH COULD ESTABLISH ABOUT THE GENUINENESS OF SUCH RECEI PTS. UNDER THESE CIRCUMSTANCES THE AO HAS OBSERVED THAT ON MERITS ALSO SUCH MEMBERSHIP FEES RECEIPTS AS PROPO UNDED BY THE APPELLANT ARE NOT ACCEPTABLE. CONSIDERING THE CIRCUMSTANTIAL EVIDENCES I AGREE WITH THE AO THAT SUCH RECEIPTS ISSUED BY THE APPELLANT AGAINST THE MEMBER SHIP FEES ARE NOTHING BUT THE SOURCES OF FUND OF THE APPELLAN T HERSELF WHICH HAVE BEEN LAUNDERED THROUGH SUCH MEMBERS TO G IVE A GENUINE COLOUR TO THE WHOLE TRANSACTION. KEEPING IN VIEW THESE FACTS APART FROM THE LOAN AMOUNT OF SHRI RK JAIN AMOUNTING TO RS. 3 LAKHS OTHER RECEIPTS ARE NOT TE NABLE FOR ADMISSION IN ORDER TO EXPLAIN THE SOURCE OF INVESTM ENT TOWARDS THE CONSTRUCTION OF THE BUILDING BY THE APP ELLANT. 8.4 AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 8.5 LD. COUNSEL OF THE ASSESSEE PRAYED BEFORE US TH AT THOUGH THE ASSESSEE WAS NOT IN A POSITION TO PRODUCE THE REQUI SITE PERSONS BY THE AO DURING THE COURSE OF ASSESSMENT HE CLAIMED THAT ASSESSEE WAS NOW ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 11 IN A POSITION TO PROVIDE THE SAME AND LD. CIT(A) ER RED IN IGNORING THE ADDITIONAL EVIDENCE FILED WITH THE APPLICATION UNDE R SECTION 46A. WE FIND THAT AO HAS NOTED THAT HIS ORDER FOR ASSESSMENT YEA R 2000-01 THAT ASSESSEE HAS DELIBERATELY FILED THE INFORMATION ON 22.12.2006 WHICH IS 9 DAYS BEFORE 31.12.2006 TO EVADE CROSS VERIFICATION. THEREFORE THE AMOUNT OF RS. 21 10 100/- WAS BEING TREATED AS UNEX PLAINED INVESTMENT THE SOURCE OF WHICH COULD NOT BE EXPLAINED BY THE A SSESSEE UNDER SECTION 69. SIMILAR OBSERVATION WAS MADE BY THE AO FOR AS SESSMENT YEAR 1999- 2000 WHEN HE OBSERVED THAT ASSESSEE HAS DELIBERATEL Y FILED THE INFORMATION ON 22.12.2006 WHICH IS 9 DAYS BEFORE 31 .12.2006 TO EVADE CROSS VERIFICATION. THEREFORE THE AMOUNT OF 24 10 000/- IS BEING TREATED AS UNEXPLAINED INVESTMENT. 8.6 FROM THE ABOVE IT IS VERY CLEAR THAT AO HAS NOT MADE THE REQUIRED VERIFICATION ON THE GROUND OF PAUCITY OF TIME. THE ASSESSEE HAS SUBMITTED FURTHER DETAILS AS ADDITIONAL EVIDENCE B UT THE SAME WAS NOT ACCEPTED BY THE LD. CIT(A). LD. CIT(A) HAS PROC EEDED TO CONFIRM THE ORDER OF THE AO. IN OUR CONSIDERED OPINION INTE REST OF JUSTICE WILL BE SERVED IF THE ISSUE OF SOURCE OF INVESTMENT IS REM ITTED TO THE FILES OF THE AO TO EXAMINE THE SAME AFRESH AFTER GIVING ASSESSE ADEQUATE OPPORTUNITY OF BEING HEARD. ACCORDINGLY WE REMI T THIS ISSUE TO THE FILES OF THE AO TO EXAMINE THE ISSUE OF SOURCE OF INVESTM ENT AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 9. THE NEXT ISSUE RAISED IS THAT LD. CIT(A) ERRED I N CONFIRMING THE CHARGING OF INTEREST U/S. 234A AND 234B IGNORING PR OVISION OF LAW AND DECISION OF ITAT MUMBAI BENCH. ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 12 9.1 WE FIND THAT THERE IS NO SUCH DISCUSSION REGARD ING CONFIRMING THE CHARGING OF INTEREST UNDER SECTION 234A AND 234B IN THE ORDER OF THE CIT(A). NEVERTHELESS WE HAVE ALREADY REMITTED THE MATTER REGARDING THE SOURCE OF INVESTMENT TO THE FILES OF THE AO AND CHA RGING OF INTEREST ACCORDINGLY IS A CONSEQUENTIAL MATTER AND STANDS REMITTED. 10. THE LAST ISSUE PERTAINS TO DISALLOWANCE /ADDITI ON MADE BY THE AO TO THE RETURNED INCOME AS PER ORIGINAL INCOME FILED AT DELHI AND EVEN IGNORING THE DEDUCTION UNDER SECTION 88 FOR PF /TDS ETC. FOR THE ASSESSMENT YEAR 2000-01. 10.1 WE FIND THAT ON THIS ISSUE THAT NEITHER GROUN D AHS BEEN RAISED BEFORE THE LD. CIT(A) NOR ANY DISCUSSION IS THERE. UNDER THE CIRCUMSTANCES THE ISSUE RAISED IS INFRUCTUOUS AND AS SUCH IS DISMISSED. 11. IN THE RESULT THE ASSESSES APPEALS ARE PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22/01/2010. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 22/01/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES ITA NOS. 146 & 147/DEL/09 A.YRS. 1999-2000 & 2000-2001 13