ITO Ward-18 (2), v. Usha Computed (P) Ltd,

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER & SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO. 1824 /DEL/2008 ASSESSMENT YEAR: 2004-05 INCOME TAX OFFICER VS. M/S USHA COMPUTEL (P) LTD . WARD 18(2) C/O H.S. AHUJA H-61 NEW DELHI. CONNAUGHT CIRCUS NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. CHAND SR. DR RESPONDENT BY : SH. H.S. AHUJA CA ORDER PER I.P. BANSAL J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST THE ORDER OF CIT(A) DATED 15.02.08 FOR A.Y. 2004-05. G ROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 262875/- ON ACCOUNT OF EXPENSES OF BUILDING REPAIR AND MAINTENANCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 12 00 000 /- ON ACCOUNT OF NON SUBMISSION OF CHALLAN. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1 62 00 000/- MADE BY THE AO U/S 68 OF THE I.T. ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5 00 000/- ON ACCOUNT OF CREDIT ENTRY. ITA NO. 1824/DEL/08 2 2. THE FIRST GROUND RELATES TO DISALLOWANCE OF RS. 2 62 875/- MADE ON ACCOUNT OF EXPENSES ON BUILDING REPAIR AND MAINTENA NCE. THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER. HOWEVER LD. C IT(A) HAS DELETED THE ADDITION AFTER CALLING THE REMAND REPORT FROM AO ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS WHICH ARE FULLY VOUCHED. HENCE ADDITION MADE BY A O WAS FOUND UNCALLED FOR. 3. AT THE TIME OF HEARING LD. DR HAS FURNISHED BEF ORE US A COPY OF COMPUTATION OF INCOME FILED BY THE ASSESSEE WHICH DESCRIBE THE INCOME EARNED BY ASSESSEE FROM THREE SOURCES ONE OF WHICH IS INCOME FROM HOUSE PROPERTY. THE ASSESSEE HAS SHOWN ANNUAL RENTAL VAL UE U/S 23 OF THE PROPERTY AT A SUM OF RS. 20 13 113/- OUT OF WHICH I T HAS CLAIMED HOUSE TAX PAID OF A SUM OF RS. 12 LAKH LEAVING THE RESULTANT SUM AT A SUM OF RS. 813 113/- AND AFTER CLAIMING DEDUCTION U/S 24(A) OF A SUM OF RS. 2 43 934/- HOUSE PROPERTY INCOME HAS BEEN SHOWN AT RS. 5 69 17 9/-. WHILE COMPUTING BUSINESS INCOME THE ASSESSEE HAS INTER-ALIA ADDED A SUM OF RS. 2 62 875/- ON ACCOUNT OF BUILDING REPAIR AND MAINTENANCE. AT THE SAME TIME ASSESSEE HAS ALSO REDUCED THE RENT RECEIVED FROM THE SAID PR OPERTY AND THUS BUSINESS INCOME AFTER MAKING VARIOUS ADDITIONS AND REDUCTIONS IS COMPUTED AT A SUM OF RS. 8 59 513/- AS AGAINST NET INCOME SH OWN IN PROFIT AND LOSS ACCOUNT OF RS. 15 31 808/-. REFERRING TO THE SAID COMPUTATION IT WAS SUBMITTED BY LD. DR THAT ASSESSEE ITSELF HAS ADDED THE SAID SUM OF RS. 2 62 875/- TO ITS BUSINESS INCOME AS THE SAME RELAT ED TO HOUSE PROPERTY INCOME AND LATER ON IT CONTENDED BEFORE LD. CIT(A) THAT THE SAME IS ITA NO. 1824/DEL/08 3 BUSINESS EXPENDITURE. HE SUBMITTED THAT EXPENSES R ELATED TO HOUSE PROPERTY INCOME WHICH WAS NOT ALLOWABLE AS RELEVAN T DEDUCTION HAS BEEN CLAIMED BY THE ASSESSEE U/S 24(A). HE SUBMITTED TH AT LD. CIT(A) HAS WRONGLY ALLOWED THE RELIEF TO THE ASSESSEE AND HIS ORDER ON THIS ISSUE SHOULD BE SET ASIDE AND THAT OF AO SHOULD BE RESTORED. 4. ON THE OTHER HAND AFTER GOING THROUGH THE COMPU TATION OF INCOME LD. AR ADMITTED THAT THE ADDITION WAS MADE BY THE AO AC CORDING TO COMPUTATION OF INCOME SUBMITTED BY THE ASSESSEE. 5. IN THE CIRCUMSTANCES AFTER HEARING BOTH THE PAR TIES WE ARE OF THE OPINION THAT WHERE THE ASSESSEE HAS CLAIMED DEDUCTI ON OUT OF HOUSE PROPERTY INCOME U/S 24(A) THE AMOUNT INCURRED ON B UILDING REPAIR AND MAINTENANCE COULD NOT BE SEPARATELY ALLOWED. THE A SSESSEE ITSELF HAS ADDED THE SAID AMOUNT IN THE COMPUTATION OF INCOME SUBMITTED BY IT IN THE RETURN. AT THE TIME OF HEARING ALSO LD. AR COULD N OT JUSTIFY THE DELETION OF THIS AMOUNT. IN THIS VIEW OF THE SITUATION AFTER HEARI NG BOTH THE PARTIES WE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THAT OF AO. GROUND NO. 1 FILED BY THE REVENUE IS ALLOWED. 6. APROPOS GROUND NO. 2 AS POINTED OUT EARLIER A SU M OF RS. 12 LAKH WAS CLAIMED BY THE ASSESSEE ON ACCOUNT OF HOUSE TAX PAI D OUT OF ANNUAL RENTAL VALUE OF THE PROPERTY. THE AO DISALLOWED THE SAID AMOUNT ON THE GROUND THAT ASSESSEE COULD NOT FILE COPY OF HOUSE TAX PAID RECEIPT. LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO IN THIS RE SPECT AND THE OBSERVATION OF AO WITH REGARD TO THIS ISSUE ARE AS UNDER: - ITA NO. 1824/DEL/08 4 MY PREDECESSOR HAD ADDED A SUM OF RS. 12 00 000/- HOUSE TAX PAID FOR WANT OF FILING EVIDENCE I.E. COPY OF C HALLAN. ASSESSEE HAD FILED BANK STATEMENT INDICATING DEBIT ENTRY OF RS. 12 00 000/-. ASSESSEE HAD INFORMED SUM OF RS. 12 00 000/- WAS PAID TO MCD THROUGH CHEQUE NO. 5194 57 TOWARDS HOUSE TAX DRAWN AT JAMMU & KASHMIR BANK. B UT NO COPY OF CHALLAN WAS ATTACHED TO IT THE ADDITIONS M ADE DESERVES TO BE CONFIRMED. 7. AFTER CONSIDERING THE REMAND REPORT LD. CIT(A) HAS DELETED THIS ADDITION VIDE PARAS 5 & 5.1. IT IS OBSERVED BY LD. CIT(A) THAT ADDITION WAS MADE BY AO ONLY ON ACCOUNT OF NON SUBMISSION OF CHA LLAN AND HE HAS NOT DISPUTED THE GENUINENESS OF THE PAYMENT MADE TO THE MCD. 8. REFERRING TO THE ASSESSMENT ORDER AND THE ORDER OF CIT(A) AND REMAND REPORT IT WAS SUBMITTED BY LD. DR THAT ASSE SSEE HAS CLAIMED EXPENDITURE OF RS. 12 LAKH OUT OF INCOME FROM HOUSE PROPERTY. THE ONUS WAS ON ASSESSEE TO PROVE THAT THE SAID AMOUNT WAS E XPANDED WHOLLY AND EXCLUSIVELY IN RESPECT OF HOUSE PROPERTY INCOME. I T WAS SUBMITTED THAT MERE EXISTENCE OF ENTRIES IN THE BANK ACCOUNT ARE NOT SU FFICIENT TO HOLD THAT THESE EXPENDITURES WERE ALLOWABLE OR THE PAYMENT OF HOUSE TAX WAS ADMISSIBLE DEDUCTION. HE SUBMITTED THAT UNLESS THE ASSESSEE P RODUCED THE EVIDENCE MERE BANK ENTRIES CANNOT BE TREATED AS SUFFICIENT T O ALLOW THE SAID DEDUCTION. THE AO DISALLOWED THE AMOUNT ON THE GRO UND THAT ASSESSEE DID NOT PRODUCE RECEIPT FROM WHERE IT COULD BE ASCERTAI NED THAT THE SUM PAID BY THE ASSESSEE RELATED TO THE VERY PROPERTY OF WHICH THE INCOME WAS DECLARED BY THE ASSESSEE. IT WAS SUBMITTED THAT BEST EVIDEN CE IS IN THE POSSESSION OF THE ASSESSEE AND UNLESS ASSESSEE PRODUCE THE REL EVANT DOCUMENT AND ITA NO. 1824/DEL/08 5 SATISFY THE DEPARTMENT REGARDING ITS CLAIM THE LD. CIT(A) WAS WRONG IN ACCEPTING THE CLAIM OF THE ASSESSEE. IT WAS SUBMIT TED THAT EVEN IN THE REMAND REPORT THE AO HAS STATED THAT ADDITION DESER VES TO BE CONFIRMED AND THUS IT WAS SUBMITTED THAT AOS ORDER IN THIS RESPECT SHOULD BE RESTORED AND ORDER OF LD. CIT(A) SHOULD BE SET ASIDE. 9. ON THE OTHER HAND IT WAS SUBMITTED BY LD. AR TH AT THE ASSESSEE COULD NOT PRODUCE RECEIPT. THE PAYMENT WAS MADE BY THE ASSESSEE AS HOUSE TAX IN RESPECT OF THE PROPERTY INCOME WHICH W AS DECLARED IN THE RETURN. AFTER VERIFYING THE ENTRIES FROM THE BANK ACCOUNT A FINDING HAS BEEN RECORDED BY LD. CIT(A) THAT THE PAYMENT WAS MADE BY THE ASSESSEE AND GENUINENESS OF THE SAME WAS NOT DOUBTED BY THE AO A ND THEREFORE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION. 10. AT THIS JUNCTURE LD. AR WAS REQUIRED TO STATE THAT WHETHER ASSESSEE NOW HAS THE EVIDENCE TO SHOW THAT THE SAID PAYMENT OF RS. 12 LAKH WHICH IS CLAIMED TO BE AS HOUSE TAX PAID IN RESPECT OF P ROPERTY FOR WHICH THE HOUSE PROPERTY INCOME HAS BEEN DECLARED. LD. AR ST ATED THAT ASSESSEE DOES NOT HAVE SUCH EVIDENCE READILY AVAILABLE AND I T WAS SUBMITTED THAT AO COULD HAVE VERIFIED THE PAYMENT FROM THE RECORDS OF MCD. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. A DEDUCTION OF RS. 12 L AKH HAS BEEN CLAIMED BY THE ASSESSEE OUT OF HOUSE PROPERTY INCOME ON THE GR OUND THAT THE SAID SUM IS PAID AS HOUSE TAX. FOR CLAIMING THAT DEDUCTION THE ASSESSEE WAS REQUIRED TO PRODUCE THE RECEIPT WHICH WAS NEITHER PRODUCED BEFORE AO NOR ITA NO. 1824/DEL/08 6 PRODUCED BEFORE CIT(A). THE CIT(A) HAS ACCEPTED TH E CLAIM OF THE ASSESSEE ONLY ON THE GROUND THAT THE SAID SUM WAS F OUND TO HAVE BEEN DEBITED TO THE BANK ACCOUNT OF THE ASSESSEE. LAW I S WELL SETTLED THAT WHENEVER ASSESSEE IS CLAIMING CERTAIN AMOUNT AS DED UCTION OUT OF SOME INCOME THEN THE BURDEN OF PROOF IS ON ASSESSEE TO E STABLISH THAT THE SAID AMOUNT IS ALLOWABLE. TO CLAIM ANY AMOUNT AS HOUSE TAX PAID OUT OF HOUSE PROPERTY INCOME THE LEAST REQUIREMENT IS THE SUBMI SSION OF RECEIPT FROM WHERE IT CAN BE ASCERTAINED THAT WHAT WAS THE NATUR E OF PAYMENT AND IN RESPECT OF WHICH PROPERTY THE SAID PAYMENT WAS MADE . THOUGH IT HAS BEEN THE CONTENTION OF LD. AR THAT MCD DOES NOT ACCEPT A NY PAYMENT OTHER THAN HOUSE TAX BUT THAT WILL BE A SIMPLE PRESUMPTION AS IT HAS TO BE ESTABLISHED THAT THE PAYMENT IS HOUSE TAX AND IT IS MADE IN RES PECT OF THE VERY PROPERTY FROM WHICH THE INCOME HAS BEEN SHOWN. THE BANK ACC OUNT ENTRIES CAN ONLY ESTABLISH THAT PAYMENT IS MADE TO THE MCD AND NOTHI NG BEYOND. THEREFORE WHAT WAS REQUIRED WAS TO SUBMIT EVIDENCE WHICH COU LD PROVE THAT THE AMOUNT WAS HOUSE TAX AND IT WAS PAID IN RESPECT OF THE PROPERTY OUT OF WHICH THE INCOME WAS SHOWN BY THE ASSESSEE. THERE IS COMPLETE ABSENCE OF SUCH PARTICULARS ON RECORD. HOWEVER KEEPING IN VIEW THE INTEREST OF JUSTICE AND THE CLAIM OF THE ASSESSEE THAT IT IS WI TH RESPECT TO HOUSE TAX PAID IN RESPECT OF WHICH THE INCOME HAS BEEN DECLARED W E CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIRECTION TO GIVE THE ASSESSEE A REASONABLE OPPORTUNITY OF PLACING EVIDEN CE ON RECORD TO JUSTIFY ITS CLAIM AND THEREAFTER IF ASSESSEE IS ABLE TO EST ABLISH THAT THE SAID SUM OF RS. 12 LAKH PERTAINS TO THE HOUSE PROPERTY OF WHICH THE INCOME IS DECLARED IN THE RETURN THEN THE AO WILL ASCERTAIN THAT UNDER WHICH SECTION THE SAME IS ALLOWABLE AND THEREAFTER TO GRANT THE DEDUCTION TO THE ASSESSEE AS PER ITA NO. 1824/DEL/08 7 PROVISIONS OF LAW. AGAIN AT THE COST OF REPETITION WE MAY OBSERVE THAT THE BURDEN WILL BE ON ASSESSEE TO SUBMIT THE EVIDENCE A ND TO PROVE THAT THESE EXPENDITURES ARE ALLOWABLE DEDUCTION OUT OF HOUSE P ROPERTY INCOME. WE DIRECT ACCORDINGLY. GROUND NO. 2 IS ALLOWED FOR ST ATISTICAL PURPOSES. 12. APROPOS GROUND NO. 3 TO VERIFY THE GENUINENESS OF A SUM OF RS. 1 62 00 000/- OUTSTANDING IN THE NAME OF SH. PARVEE N KUMAR JOLLY THE AO ISSUED NOTICE U/S 133(6) OF I.T. ACT 1961 IN RESPO NSE TO WHICH SAID SH. PARVEEN KUMAR JOLLY SEND A CONFIRMATION LETTER WITH OUT THE COPY OF ACCOUNT OF M/S USHA COMPUTEL P. LTD. AND HIS BANK STATEMENT / BALANCE SHEET. FURTHER SUMMONS WERE ISSUED WHICH WERE RECEIVED BA CK WITH THE REMARK LEFT. AGAIN SUMMONS WERE ISSUED AND INSPECTOR WA S DEPUTED TO SERVE SUMMONS UPON SH. PARVEEN KUMAR JOLLY. AS PER REPOR T OF INSPECTOR SAID SH. PARVEEN KUMAR JOLLYS OFFICE WAS IN 8-B PUSA R OAD AND HIS RESIDENCE WAS 39/1 EAST PATEL NAGAR NEW DELHI. ON NEW ADDR ESSES SUMMONS WERE SERVED BY THE INSPECTOR. DURING THE COURSE OF ASSE SSMENT PROCEEDING ASSESSEE COMPANY FILED A COPY OF RESOLUTION DEED IN WHICH IT WAS MENTIONED THAT SH. GULSHAN KUMAR JOLLY WHO WAS THE OTHER DIRECTOR OF THE COMPANY NAMED AS BANKEY BIHARI REALTORS P. LTD. T O PURCHASE THE PROPERTY FROM ASSESSEE NAMELY PROPERTY NO. 210 OKH LA INDUSTRIAL AREA PHASE III NEW DELHI. ACCORDING TO AO IT COULD NO T BE ASCERTAINED FROM RESOLUTION DEED THAT SH. PARVEEN KUMAR JOLLY WAS SH OWN AS CREDITOR FOR THE PAYMENT OF RS. 1 62 00 000/- (WRONGLY TYPED IN ASSE SSMENT ORDER AS RS. 1 62 000/-) WHILE THE AUTHORIZE PERSON WAS SH. GULS HAN KUMAR DIRECTOR. ON THESE FACTS THE AO MADE ADDITION OF RS. 1 62 00 000/-. ITA NO. 1824/DEL/08 8 13. BEFORE CIT(A) IT WAS SUBMITTED THAT THE SAID A MOUNT OF RS. 1 62 00 000/- REPRESENTED ADVANCE PAYMENT RECEIVED FROM SH. PARVEEN KUMAR JOLLY AGAINST SALE OF ABOVE MENTIONED PROPERT Y. THE AO HAS WRONGLY INVOKED SEC. 68 FOR THE SAID ADVANCE. IT W AS SUBMITTED THAT THE SAID PROPERTY WAS SOLD ON 12 TH MAY 2004 AND CAPITAL GAIN ACCRUED ON THE SAID PROPERTY WAS DECLARED IN THE NEXT YEAR I.E. A. Y. 2005-06. IT WAS SUBMITTED THAT BALANCE OF THE CONSIDERATION WAS REC EIVED FROM THE PARTY DURING THE NEXT YEAR WHICH WAS ALSO DECLARED IN TH E INCOME TAX RETURN. IT WAS SUBMITTED THAT SH. PARVEEN KUMAR JOLLY HAD SEND THE CONFIRMATION IN RESPONSE TO SUMMONS ISSUED BY THE AO. THE AO DID N OT APPRECIATE THE EVIDENCE SUBMITTED BY THE ASSESSEE. LD. CIT(A) HAS CALLED FOR THE REMAND REPORT FOR THE AO AND THE SUBMISSION OF THE AO IN T HIS REGARD ARE AS UNDER: - FURTHER MY PREDECESSOR MADE ADDITIONS AMOUNTING TO RS. 1 62 00 000/- + RS. 5 00 000/- AS CASH CREDIT U/S 6 8. AO HAD MADE AN ADDITION OF RS. 1 62 00 000/- AS ASSESSEE H AD NOT FILED BANK STATEMENT OF SH. PARVEEN JOLLY AND M/S U SHA COMPUTEL P. LTD. AS CASH CREDIT U/S 68. NOW AS PER SUBMISSIONS ASSESSEE HAS POINTED OUT. THIS PROPERTY WAS SOLD ON 12 TH MAY 204 DURING THE ASSESSMENT YEAR THE ASSESSEE HAS RECEIVED ONLY ADV ANCE MONEY. IN THIS REGARD THE VERIFICATION OF REPLY FI LED ON 8.12.06. THE ASSESSEE COMPANY HAS REPORTED AS UNDE R. THE PAYMENT WAS RECEIVED FROM SH. PARVEEN JOLLY WHI CH IS ADVANCE AGAINST SALE OF PROPERTY HAVING REGARD TO FACT STATED ABOVE IT IS HUMBLE PRAYED THAT ALL THE TRANS ACTIONS ARE THROUGH THE BANK AND DUTY ACCOUNTED IN BOOKS OF ACC OUNT. IN SUPPORT TO ABOVE THE ASSESSEE COMPANY HAS FILED ITS BANK STATEMENT HIGHLIGHTING AS UNDER: 1. RS. 2 00 000/- DATED 6.9.03 2. RS. 10 00 000/- DATED 11.9.03 ITA NO. 1824/DEL/08 9 3. RS. 50 00 000/- DATED 19.9.03 4. RS. 100 00 000/- DATED 19.9.03 FURTHER VERIFICATION OF THE RECORD IT REVEALS THAT ASSESSEE HAS FILED BANK INSTRUMENTS. THE SAME IS BEING SUBM ITTED FOR YOUR KIND PERUSAL. 14. ACCORDINGLY LD. CIT(A) HAS DELETED THE ADDITIO N THE DEPARTMENT IS AGGRIEVED HENCE IN APPEAL. 15. AFTER NARRATING THE FACTS LD. DR REFERRED TO T HE RESOLUTION PASSED BY M/S BANKEY BIHARI REALTORS P. LTD. ON 8.12.03 AND S UBMITTED THAT THE AMOUNT OF RS. 1 62 00 000/- WAS ADVANCED BY PARVEEN KUMAR JOLLY AND IT HAS BEEN STATED IN THE RESOLUTION THAT THE SAID AMO UNT WILL BE REFUNDED BY THE COMPANY TO SAID SH. PARVEEN JOLLY. THUS IT WA S SUBMITTED BY LD. DR THAT THE IDENTITY CREDITWORTHINESS AND GENUINENESS HAS NOT BEEN ESTABLISHED IN THE HANDS OF SH. PARVEEN KUMAR JOLLY . THUS IT WAS PLEADED THAT ADDITION HAS WRONGLY BEEN DELETED BY LD. CIT(A ). 16. ON THE OTHER HAND IT WAS SUBMITTED BY LD. AR T HAT PROPER EVIDENCE WAS SUBMITTED NOT ONLY BEFORE AO BUT ALSO BEFORE CI T(A) WHO HAS CALLED FOR REMAND REPORT OF THE AO AND THE AO AFTER VERIFYING THE CORRECTNESS OF BANK STATEMENT ETC. HAS DELETED THE ADDITION AND HIS ORD ER SHOULD BE UPHELD. 17. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE RELEVANT PORTION OF REMAND REPORT HAS ALREADY BEEN REPRODUCED ABOVE. IT IS SEEN THAT PAR VEEN KUMAR JOLLY AND GULSHAN KUMAR JOLLY BOTH ARE DIRECTORS OF BANKEY BI HARI REALTORS P. LTD. ITA NO. 1824/DEL/08 10 WHO HAD PURCHASED THE PROPERTY FROM THE ASSESSEE T HE POSSESSION OF WHICH WAS GIVEN VIDE LETTER DATED 15.03.04 A COPY OF WHICH WAS PLACED IN THE PAPER BOOK. IN THE REMAND REPORT AO HAS SPECI FICALLY MENTIONED THAT COPY OF BANK ACCOUNT WAS PRODUCED AND THE TRANSACTI ONS ARE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE AO IN T HE REMAND REPORT HAS NOWHERE DOUBTED THE GENUINENESS OF ALL THESE TRANSA CTIONS. NO ADVERSE MATERIAL HAS BEEN BROUGHT ON RECORD TO SUGGEST THAT THE ADVANCE RECEIVED BY ASSESSEE AS ADVANCE OF PROPERTY WAS DOUBTFUL. T HEREFORE WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) WHEN HE DELETED TH E ADDITION OF RS. 1 62 00 000/- AS THE VERIFICATION WAS MADE BY THE A O IN THE REMAND REPORT. WE DISMISS THIS GROUND OF THE REVENUE. 18. APROPOS GROUND NO. 4; DURING THE COURSE OF ASSE SSMENT THE AO FOUND THAT AS AGAINST A SUM OF RS. 20 LAKH OUTSTAND ING IN THE NAME OF ONE SH. ANIL GUPTA UNDER THE HEAD SUNDRY CREDITORS THE CONFIRMATION FILED BY THE ASSESSEE WAS A SUM OF RS. 15 LAKH AND IN ABSENCE OF CONFIRMATION OF RS. 5 LAKH THE AO REQUIRED THE ASSESSEE TO EXPLAIN AND AG AIN A CONFIRMATION OF RS. 5 LAKH WAS FILED ALONG WITH LETTER DATED 3.12.0 6. THE AO TREATED THE NEXT CONFIRMATION AS NON-GENUINE AND MADE THE ADDIT ION OF RS. 5 LAKH. BEFORE CIT(A) IT WAS SUBMITTED THAT THERE WERE TWO DIFFERENT PERSONS IN THE NAME OF ANIL GUPTA; ONE WAS APPEARING ON DEBTORS LI ST AND OTHER WAS ON CREDITOR LIST BOTH PARTIES HAD SEND THEIR CONFIRMAT IONS IN RESPONSE TO SUMMONS ISSUED BY THE AO. IT WAS SUBMITTED THAT BO TH WERE HAVING OPENING BALANCES AND THERE WAS NO INFLOW OF FUNDS/A CCOUNT DURING THE YEAR THEREFORE THE ADDITION AHS BEEN MADE ON CONJUNCTUR ES AND SURMISES. THE ITA NO. 1824/DEL/08 11 CIT(A) CALLED FOR THE REMAND REPORT FROM AO AND THE OBSERVATIONS OF AO ARE AS UNDER: - MY PREDECESSOR HAS MADE ADDITION AMOUNTING TO RS. 5 LAKHS AS HE FOUND DIFFERENCE IN CONFIRMATION. SUND RY CREDITS WERE AMOUNTING TO RS. 20 00 000/- WHERE AS ANIL GUP TA HAS CONFIRMED SUM OF RS. 15 00 000/-. THUS DIFFERENCE OF RS. 5 00 000/-. NOW ASSESSEE HAS SUBMITTED CLARIFICATI ON THAT THERE WERE TWO ANIL GUPTAS ONE THE RESIDENT OF 5/1 1 SHAKTI NAGAR NIKETAN ANOTHER 91 NEW FRIENDS COLONY. BUT DURING THE ASSESSMENT PROCEEDINGS ASSESSEE HAS SUBMITTED V IDE LETTER DATED 1.12.06 ANIL GUPTAS ACCOUNT HAVING O F OPENING BALANCE AND THERE WAS NO TRANSACTION DURING YEAR. IN MY VIEW THE AO HAS MADE ADDITION IN THIS REGARD WHICH DESERVES TO BE CONFIRMED. 19. LD. DR RELIED ON THE ASSESSMENT ORDER AND AS AG AINST THAT LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF CIT(A) AND THE REMAND REPORT. 20. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. A FINDING HAS BEEN RECORDED THAT THERE WAS NO TRANSACTION DURING THE YEAR AND THE AMOUNT OUTSTANDING WAS ONLY OPENING BALANCE. IN TH IS VIEW OF THE SITUATION NO ADDITION COULD BE MADE DURING THE YEAR UNDER CON SIDERATION AND THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF CIT (A) WHEN HE DELETED THE ADDITION OF RS. 5 LAKH. GROUND NO. 4 OF REVENUE AP PEAL IS DISMISSED. ITA NO. 1824/DEL/08 12 21. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED IN THE MANNER AFORESAID. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22.01.201 0 (K.G. BANSAL) (I.P. BANSAL) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: *KAVITA CHOPRA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR