DCIT 22(3), NAVI MUMBAI v. DINESH K. KARGIL,, NAVI MUMBAI

ITA 345/MUM/2010 | 2006-2007
Pronouncement Date: 22-12-2010 | Result: Allowed

Appeal Details

RSA Number 34519914 RSA 2010
Assessee PAN AGZPK8963H
Bench Mumbai
Appeal Number ITA 345/MUM/2010
Duration Of Justice 11 month(s) 7 day(s)
Appellant DCIT 22(3), NAVI MUMBAI
Respondent DINESH K. KARGIL,, NAVI MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-12-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 22-12-2010
Assessment Year 2006-2007
Appeal Filed On 14-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI R.S.SYAL ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 277/MUM/2010 (ASSESSMENT YEARS: 2006-07) DINESH K KARGAL PROP. M S DINESH ASSOCIATES -02 2 ND FL. NEIGHBORHOOD SHOPPING COMPLEX SECTOR-4 NERUL NAVI MUMVAI. PAN: AGZPK8963H . APPELLANT VS ADDL. CID RANGE 22(3) VASHI RAILWAY STATION 3 RD FL. TOWER NO.6 VASHI NAVI MUMBAI. RESPONDENT ITA NO. 345/MUM/2010 (ASSESSMENT YEARS: 2006-07) ADDL. CID RANGE 22(3) APPELLANT V/S DINESH K KARGAL RESPONDENT ASSESSEE BY : DR.P DANIEL RESPONDENT BY : SHRI SUNIL KUMAR SINGH. O R D E R PER VIJAY PAL RAO JM THESE CROSS-APPEALS ARE DIRECTED AGAINST THE ORDER DATED 09-10.2009 OF CIT(A)-XXX MUMBAI FOR THE ASSE SSMENT YEAR 2006-07. ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 2 2. AT THE OUTSET WE FIND THAT THERE IS A DELAY OF 53 DAYS IN FILING THE APPEAL BY THE ASSESSEE AND TO CONDONE TH E DELAY HE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY. 3. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FILED A RECTIFICATION APPLICATION BEFO RE THE FIRST APPELLATE AUTHORITY AND WAS WAITING FOR OUTCOME OF THE RECTIFICATION APPLICATION. IN THE MEAN TIME CHARTER ED ACCOUNTANT ALSO FALL ILL AND THEY COULD NOT CONTAC T ON THE ISSUE. THEREFORE THIS DELAY WAS OCCURRED. HE SUB MITTED THAT THE ASSESSEE AND HIS REPRESENTATIVES WERE VIGILANT ABOUT THE MATTER AND THE DELAY IF SO OCCURRED WAS NOT INTENTI ONAL AND MOTIVATED. HENCE HE PRAYED FOR CONDONATION OF DELA Y. 4. ON THE OTHER HAND THE LEARNED DR HAS OPPOSED THE ADMISSION OF THE APPEAL ON THIS TECHNICAL POINT. 5. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE APPLICATION FOR CONDONATION OF DELAY WE ARE SATISF IED WITH THE EXPLANATIONS GIVEN BY THE LEARNED AR OF THE ASSESSE E. THEREFORE IN THE INTEREST OF JUSTICE AND FAIR PLAY WE CONDONE THE DELAY IN FILING THE APPEAL AND DECIDE THE APPEA L ON MERITS.. ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 3 ITA NO. 277/MUM/2010 (BY ASSESSEE) 6. THE ASSESSEE HAS RAISED THE FOLLOWING CONCISE GR OUNDS IN THIS APPEAL: 1. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF FOLLOWING EXPENSES : A) OUT OF EXPENSES AT LUCKNOW SITE RS.4 56 000/- B) OUT OF LABOUR CHARGES (OMS) RS.3 04 150/- C) OUT OF LABOUR EXPENSES RS.2 49 251/- D) OUT OF LABOUR CHARGES WITHIN MAHARASHTRA RS.6 42 608/- 2. THE LD. CIT(A) HAS ERRED IN ESTIMATING 10% DISALLOWANCE OF OTHER EXPENSE AT RS.62344/- AND OU T OF OTHER MINOR HEADS EXPENSES DISALLOWED AT RS.493197/- 3. (A) THE LD. CIT(A) ERRED IN NOT DECIDING THE ISSUE REGARDING EXEMPTION OF CAPITAL GAIN U/S 54 A ND WRONG WORKING OF THE CAPITAL GAIN BY DIRECTING THE AO TO RECTIFY THE ORDER; (B) WITHOUT PREJUDICE TO THE ABOVE THE LD CIT(A ) ERRED IN NOT DIRECTING THE AO TO TAX ONLY THE CAPI TAL GAIN AND NOT THE TOTAL INVESTMENTS. BESIDES THE CAPITAL GAIN SHOULD HAVE BEEN TAXED AT THE APPROPRIATE RATE AS PER LAW: 7. GROUNDS OF APPEAL NO.1 AND 2 REGARDING DISALLOW ANCE OF EXPENSES. THE ASSESSEE IS A CIVIL AND TELECOM CONT RACTOR. THE ASSESSEE HAS INCURRED EXPENSES AS LABOUR AND SU B- CONTRACT CHARGES AMOUNTING TO RS.9 20 75 035/-. T HE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF LABOUR CHARGES FOR ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 4 VARIOUS SITES FOR VERIFICATION. THE ASSESSEE DID N OT FURNISH THE COMPLETE DETAILS AS CALLED FOR BY THE AO. SINCE T HE EXPENSE WERE PAID IN CASH THE AO ASKED THE ASSESSEE TO PR ODUCED THE EMPLOYEES S/SHRI SHASHIKANT SINGH OMPRAKASH VERMA AKSHAY FOR VERIFICATION. THE ASSESSEE PRODUCED SHRI SHASHIKANT SINGH WHOSE STATEMENT WAS RECORDED. THE AO EXAMINED THE RECORD AND HELD THAT THE EXPENSES CLAI MED BY THE ASSESSEE FROM 1.11.2005 TO 31.3.2006 AMOUNTING TO RS.17 60 915/- FOR THE WORKS CARRIED OUT FOR THE V SNL AT LUCKNOW SITE IS BOGUS AND NEEDS TO BE DISALLOWED. ACCORDINGLY THE AO DISALLOWED THE AMOUNT OF RS.1 7 60 915/- FOR THE WORKS CARRIED OUT FOR THE VSNL AT LUCKNOW SITE. SIMILARLY THE AO HAS ALSO DISALLOWED 25% OF REMAI NING RS.28 LAKHS FOR WANT OF BILLS/VOUCHERS IN RESPECT OF LUCK NOW SITE. THE AO ALSO DISALLOWED AN AMOUNT OF RS.17 LAKHS I N THE ABSENCE OF NECESSARY BILLS AND VOUCHERS AND EVIDENC E IN SUPPORT OF CLAIM OF EXPENDITURES. THE ASSESSEE CLA IMED THE LABOUR CHARGES (OMS) OF RS.53 32 375/- OUT OF TOTAL EXPENDITURE OF RS.9 20 75 035/-. THE AO NOTICED THAT THE ENTIRE AMOUNT HAS BEEN PAID IN CASH. THE BREAK UP O F THE EXPENSES WAS REPRODUCED BY THE AO IN PARAGRAPH 4 O F THE ASSESSMENT ORDER AS UNDER : . ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 5 1) RS25 75 720 SHRI SHASHIKANT SINGH 2) RS.15 80 000 SHRI OMPRAKASH VERMA RAJKOT SITE 3) RS2 75 000 SHRI OMPRAKASH VERMA KANPUR SITE 4) RS.81 000 AKSHAY 5 RS.1 03 000 MARUTI RAJKOT SITE 6 RS.1 13 750 CEMENT PURCHASE 7 RS.1 14 400 KHADI PURCHASE 8 RS.76 000 SAND PURCHASE 8. SINCE THE ASSESSEE DID NOT FURNISH ANY DESCR IPTION AS WELL AS BILL FOR THE EXPENSES INCURRED THE AO DIS ALLOWED A SUM OF RS.1 13 750/- REGARDING THE PURCHASE OF CE MENT RS.1 14 400/- REGARDING THE PURCHASE OF KHADI AND RS.76 000/- FOR PURCHASE OF SAND TOTALING TO RS.3 0 4 150/-. SIMILARLY THE LARBOUR CHARGES PAID IN CASH (OMS) AND WITHOUT SUPPORTING BY ANY EVIDENCE PERTAINING TO ONE SHRI S HRI OMPRAKASH VERMA RAJKOT SITE AND KANPUR SITE THE AO DISALLOWED 10% OF LABOUR CHARGES TOTALING TO RS.24 925/-. THE LABOUR CHARGES INCURRED WITHIN MAHARASHTRA AS CLAIM ED BY THE ASSESSEE IS RS.64 28 064/-. THE AO NOTED THAT TH E ENTIRE PAYMENT MADE IN CASH. THE SAID EXPENDITURE WAS ST ATED TO HAVE BEEN INCURRED THROUGH SHRI ARUN K TIWARI OM PRAKASH VERMA AND SHRI SHASHIKANT SINGH. SINCE NO DETAIL S WERE FILED AS TO WHEN THE EXPENDITURE WAS INCURRED THE AO DISALLOWED THE 20% OF THE SAID EXPENDITURE AMOUNTIN G TO RS.12 85 613/-. ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 6 8.1 THE ASSESSEE HAS CLAIMED THE SUM OF RS.10 67 1 57/- UNDER THE HEAD TRANSPORTATION AND HIRING CHARGES. THE AO NOTED THAT THE TRANSPORTATION EXPENDITURE TO THE T UNE OF RS.6 23 445/- SHOWN BY THE ASSESSEE IS IN CASH. O UT OF THIS RS.6 23 445/- A SUM OF RS.5 58 018/- PERTAINS TO S HRI SHASHIKANT SINGH FOR LUCKNOW SITE. THE AO HAS DIS ALLOWED 50% OF THE SAID EXPENDITURE OF RS.5 58 018/- FOR WANT OF NECESSARY BILLS/VOUCHERS. ACCORDINGLY A SUM OF RS.2 79 009/- WAS DISALLOWED ON THIS ACCOUNT. THE ASSESSEE CLAIMED OTHER MINOR SUB-EXPENSES TO THE TUNE OF RS.49 31 972/-. SINCE PAYMENT OF ALL THE EXPENSES WERE MADE IN CASH AND NO DETAILS/BILLS/VOUCHERS WERE PRODUCED THEREFORE THE AO HAS DISALLOWED 10% OF THESE EXPENSES ON THE GROUND THAT THE EXPENDITURES ARE NOT VERIFIABLE. ACCORDIN GLY THE ADDITION OF RS.49 31 970/-- WAS MADE. THUS THE A O HAS DISALLOWED A TOTAL SUM OF RS.42 99 929/- ON ACCOU NT OF EXPENSES. 9. ON APPEAL THE CIT(A) HAS RESTRICTED THE DISA LLOWANCE TO 10% OF THE EXPENDITURE. 10. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEA RNED DR AND CONSIDERED THE RELEVANT RECORD. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SOLE PROP RIETARY CONCERN AND THE BUSINESS OF THE ASSESSEE IS SUPPLY OF LABOUR ON VARIOUS SITES AT FAR DISTANCE LOCATIONS. THEREF ORE THE TIME ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 7 AND NATURE INVOLVED IN THE CONTRACT IS VERY LIMITE D. SINCE MAJOR HEAD OF THE EXPENDITURE IS A LABOUR CHARGES A ND THE LABORERS ARE USUALLY ILLITERATE AND HAVING NO PERM ANENT PLACE OF RESIDENCE THEREFORE IT IS NOT PRACTICALLY POSSI BLE TO MAKE THE PAYMENT THROUGH CHEQUES TO THESE LABOURERS. SI NCE PRINCIPAL EMPLOYER /ASSESSEE IS NOT AVAILABLE AT SI TE TO KEEP AND PROVIDE RECORD SIGNATURES OF THE LABOURERS ETC . THEREFORE SUPERVISOR OF THE ASSESSEE WHO ARRANGES THE LABOUR RECEIVES THE CASH FROM THE ASSESSEE AND DISTRIBUTES THE SAM E TO THE NUMBER OF LABOURERS AT SITE. THE LEARNED AR FURTHER CONTENDED THAT THE WORK IS BEING CARRIED OUT AT THE SITES WH ICH ARE AWAY FROM THE LOCAL MARKET. THERE ARE REQUIREMENT OF MA TERIAL CEMENT SAND KHADI ETC. UNDER THESE CIRCUMSTANCES THE SUPERVISOR EMPLOYED BY THE ASSESSEE OR CONTRACTOR ARRANGES THE REQUIRED MATERIAL BY MAKING PAYMENT INSTANTLY A ND THEREFORE IT IS NOT POSSIBLE TO TAKE PROPER BILL AN D VOUCHERS AGAINST SUCH TYPE OF INSTANT PAYMENT. SIMILARLY T HE LEARNED AR HAS SUBMITTED THAT FOR HIRING PUBLIC TRANSPORT O R LORRY FOR CARRYING RAW MATERIAL REQUIRES PETROL FUEL FOR W HICH THE ASSESSEE HAS TO MAKE PAYMENT IN CASH AND NO BILL IS GIVEN IN SUCH TYPE OF EXPENDITURE. 11. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT I N VIEW OF THE NATURE OF WORK AND THE REQUIREMENT OF MATERIALS AT SITE THE ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 8 ASSESSEE HAS NO OTHER ALTERNATIVE BUT TO MAKE THE P AYMENT IN CASH FOR PROCUREMENT OF RAW MATERIALS. 12. ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE INCURRED ENTIRE EXPENDITURE IN CASH A ND IN ABSENCE OF ANY SUPPORTING BILLS/ VOUCHERS THE DISA LLOWANCE RESTRICTED BY THE CIT(A) TO 10% OF THE EXPENDITURE IS PROPER AND REASONABLE. HE HAS RELIED UPON THE LOWER AUTHO RITIES. 13. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND R ELEVANT RECORD. IT IS EVIDENT FROM THE RECORD THAT THE ASSE SSEE HAS NOT PRODUCED ANY EVIDENCE IN THE FORM OF BILLS/VOUCHER S AND EVEN THE COMPLETE DETAILS OF THE EXPENDITURES IN SUPPORT OF THE CLAIM MADE BY THE ASSESSEE. THEREFORE IN OUR VIEW THE ASSESSEE HAS FAILED TO PROVE THE CLAIM TO THE SAT ISFACTION OF THE LOWER AUTHORITIES. WE FURTHER NOTE THAT THE C IT(A) HAS ALSO ISSUED REMAND ORDER AND AFTER CONSIDERING THE REMAND REPORT OF THE AO DATED 23.07.2009 FOUND THAT TH E ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN OF PROVIN G THE NECESSARY FACTS IN CONNECTION WITH THE CLAIM OF DED UCTION. THE ASSESSEE APART FROM THE BOOKS OF ACCOUNT PROD UCED BEFORE THE LOWER AUTHORITIES HAS NOT PRODUCED ANY MATERIAL/EVIDENCE IN THE SHAPE OF VOUCHERS/BILLS AND OTHER SUPPORTING EVIDENCE FOR THE CLAIM OF THE EXPENDITURE. THEREFORE UNDER THESE CIRCUMSTANCES WE DO ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 9 NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS ISSUE WHO HAS ALREADY RESTRICTED THE DISALLOW ANCE TO 10% WHICH IS IN OUR VIEW IS JUST AND PROPER. HENCE GROUNDS OF APPEAL NO.1 AND 2 ARE DECIDED AGAINST THE ASSESSEE. 14. GROUNDS OF APPEAL NO.3 REGARDING EXEMPTION OF CAPITAL GAIN U/S 54. FACTS RELATING TO THIS ISSUE ARE THA T DURING THE PREVIOUS YEAR RELEVANT TO THE YEAR UNDER CONSIDERAT ION THE ASSESSEE SOLD A PROPERTY AT RS.11 50 000/-. THE ASSESSEE HELD 50% SHARE IN THE PROPERTY AND AFTER AVAILING T HE BENEFIT OF INDEXATION THE ASSESSEE HAS DECLARED LONG TERM CAP ITAL GAIN OF RS.6 95 210/- FOR WHICH ASSESSEE CLAIMED EXEMPTI ON U/S 54 ON THE GROUND THAT THE ASSESSEE HAS INVESTED RS.11 91 998/- IN THE NEW PROPERTY. THE AO HAS DISALLOWED THE CLA IM OF EXEMPTION U/S 54 ON THE GROUND THAT THE ASSESSEE HA S NOT ACQUIRED ANY RESIDENTIAL HOUSE BUT SIMPLY RESERVED A FLAT WITH THE BUILDER. HOWEVER IN THE COMPUTATION THE AO HA S MADE AN ADDITION OF RS.11 91 998/- ON ACCOUNT OF THIS DISA LLOWANCE U/S 54. THE ASSESSEE RAISED GROUND BEFORE THE CIT(A) T HAT INSTEAD OF ENTIRE INVESTMENT AMOUNT OF RS11 91 99 8/- ONLY THE CAPITAL GAIN DECLARED BY THE ASSESSEE MAY BE D ISALLOWED WHILE DECLINING THE EXEMPTION U/S 54. THE CIT(A) C ONFIRMED THE ACTION OF THE AO WHILE PASSING THE IMPUGNED O RDER. THEREAFTER THE ASSESSEE HAS FILED RECTIFICA TION APPLICATION U/S 154 BEFORE THE CIT(A) POINTI NG OUT ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 10 THE ERROR/MISTAKE IN THE ASSESSMENT ORDER WHILE TAK ING THE ENTIRE INVESTMENT AMOUNT AS DISALLOWANCE U/S 54. T HE CIT(A) WHILE PASSING THE ORDER U/S 154 DATED 10.11.2009 DI RECTED THE AO TO TAKE NECESSARY MEASURES KEEPING IN MIND THE RECTIFICATION APPLICATION PENDING BEFORE HIM ON THI S ISSUE AND THE PROVISIONS OF THE LAW. 15. BEFORE US THE LEARNED AR OF THE ASSESSEE HAS S UBMITTED THAT THE ASSESSEE INITIALLY FILED PETITION U/S 154 BEFORE THE AO POINTING OUR THE MISTAKE REGARDING THE WRONG AMOUNT OF RS.11 91 998/- DISALLOWED IN STEAD OF CAPITAL GAIN OF RS.6 95 210/-. THE AO HAS NOT PASSED ANY ORDER TIL L DATE ON THE PETITION FILED UNDER SECTION 154 DESPITE THE O RDER OF THE CIT(A) U/S 154. THUS THE LEARNED AR HAS PLEADED THAT THE DIRECTION MAY BE ISSUE TO THE AO FOR PASSING NECES SARY ORDER.. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND RELEVAN T RECORD. IT IS EVIDENT FROM THE RECORD THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 54 WITH RESPECT TO THE CAPITAL GAIN O F RS.6 95 210/-. THE AO WHILE DECIDING THE ISSUE HEL D IN PARAGRAPH 9.2 AS UNDER : 9.2 IN REPLY VIDE LETTER DATED 26.12.2008 THE ASSESSEE HAS SIMPLY STATED THAT HE HAS COMPLIED WI TH THE PROVISIONS OF BY INVESTING CAPITAL GAIN WITH NEELSIDDHI ENTERPRISES. HOWEVER AS MENTIONED ABOVE AND AS PER THE RECEIPTS THERE IS NO INVESTMENT. AN INVESTMENT AS REQUIRE U/S 54 MAY BE OF DIRECT PURCHASE OR BOOKING OF A PROPERTY UNDER CONSTRUCTIO N. ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 11 HOWEVER THE ASSESSEE HAS NOT EVEN BOOKED A FLAT. HE HAS GIVEN AN AMOUNT TO THE BUILDER AND NOW THE BUILDER HAS STATED THAT THE AMOUNT IS NOT FOR BOOK ING BUT RESERVATION OF A FLAT WHICH MAY BE CONVERTED IN TO BOOKING LATER ON BUT AT THE SAME TIME THE RESERVATI ON MAY BE CANCELLED ALSO AND NOT NECESSARY TO BE CONVERTED INTO BOOKING. THE ASSESSEE HAS CITED CAS E LAW OF CIT V/S BHARATI C KOTHARI 160 CIT 165(CAL). HOWEVER THE FACTS OF THAT CASE ARE ENTIRELY DIFFE RENT FROM THE FACTS OF THE ASSESSEES CASE. HENCE ASSESSEES RELIANCE ON THE SAME IS MISPLACED. THEREFORE ASSESSEES CLAIM OF EXEMPTION U/S 54 IS DISALLOWED. PENALTY PROCEEDINGS U/S 271(1)( C ) ARE INITIATED SEPARATELY (ADDITION : RS.11 91 998/-_ 17. WE FURTHER NOTE THAT IN THE COMPUTATION PART T HE AO HAS ADDED A SUM OF RS.11 91 998/- UNDER THE HEAD EXEMPT ION U/S 54. THUS IT IS CLEAR THAT THE CLAIM OF THE ASESEE E U/S 54 WAS ONLY OF RS.6 95 210/- AND THE DISALLOWANCE MADE BY THE AO IS OF TOTAL INVESTMENT OF RS.11 91 998/-. THEREFO RE IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE SET ASIDE T HIS ISSUE TO THE RECORD OF THE AO TO PASS NECESSARY ORDER AS PE R LAW AND AFTER CONSIDERING THE CONTENTION OF THE ASESEEE.. 18. GROUNDS NO.4 REGARDING THE ADDITION FOR CAPIT AL INTRODUCED. THIS ISSUE IS COMMON IN BOTH THE APPEA LS FILED BY THE RESPECTIVE PARTIES. THE REVENUE HAS RAISED THI S ISSUE IN GROUND NO.2. THUS GROUND NO.4 OF THE ASSESSEES A PPEAL AND THE ONLY GROUND RAISED BY THE REVENUE IS BEING DECI DED BY THIS COMPOSITE FINDINGS. ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 12 19. THE AO HAS NOTED THAT THE ASSESSEE INTRODUCED A CAPITAL OF RS.10 65 000/- DURING THE YEAR. THE AO ASKED T HE ASSESSEE AS TO WHY THE CAPITAL INTRODUCED DURING TH E YEAR SHOULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. IN REPLY THE ASSESSEE SUBMITTED THAT THE SAME IS F ROM THE PERSONAL ACCOUNT OF THE ASESEEE AND THE SAME CAN BE VERIFIED FROM THE BANK STAMENS AND BALANCE SHEET. THE AO WA S OF THE OPINION THAT THE SO CALLED PERSONAL BALANCE SHEET DOES NOT GIVE TOTAL CLEAR PICTURE OF THE ASSESSEES AFFAIRS AND ACCORDINGLY HE DISALLOWED THE CLAIM OF THE ASSESSE E AND MADE ADDITION OF RS.10 65 000/-. 20. ON APPEAL THE CIT(A) HAS ACCEPTED THE CLAIM OF THE ASESEEE TO THE EXTENT OF THE AMOUNT RECEIVED FROM T HE SALE OF FLAT WHICH WAS TRANSFERRED AS CAPITAL THROUGH CHEQU ES TRANSACTION. ACCORDINGLY THE CIT(A) HAS CONFIRMED THE ADDITION TO THE EXTENT OF RS.3 20 000/- BEING CAP ITAL INTRODUCED IN CASH DURING THE YEAR. HENCE THE ADD ITION WAS RESTRICTED TO RS.3 20 000/-. 21. BEFORE US THE LEARNED AR OF THE ASSESSEE HAS S UBMITTED THAT THE ASSESSEE FILED A LEDGER ACCOUNT BEFORE THE LOWER AUTHORITIES ALONG WITH THE STATEMENT OF THE BANK AC COUNT TO SHOW THE MOVEMENT OF FUNDS IN THE CAPITAL ACCOUNT O F THE ASESEEE. HE HAS REFERRED THE LEDGER ACCOUNT AND SU BMITTED ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 13 THAT EXCEPT TWO ENTRIES OF RS.40 000/- ALL OTHER M ONIES HAVE GONE THROUGH THE BANKING CHANNEL FROM THE BANK ACC OUNT OF SHRI DINESH ASSOCIATES. THUS THE AMOUNT INTRODUC ED AS CAPITAL HAS BEEN DULY REFLECTED AS WITHDRAWAL FROM THE BANK ACCOUNT AND THEREFORE THE ADDITION IS NOT JUSTIF IED ON THIS ACCOUNT. 22. ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED THAT IN THE CAPITAL ACCOUNT THE ASESEEE HAS INTRODUCED RS .3 20 000/- THROUGH CASH AND THE ENTRIES OF RS.1 LAKH THROUGH C HEQUE DATED 20.08.2005 DOES NOT FIND IN THE BANK ACCOUNT. THEREFORE THE ASESEEE HAS FAILED TO PROVE THE SOUR CE OF THE CAPITAL INTRODUCED DURING THE YEAR. HE HAS RELIED UPON THE ORDER OF THE AO. 23. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. THOUGH THE ASSESSEE HAS FILED THE LEDGER ACCOUNT SHOWING THE CAPITAL INTRODUCED AS WELL AS BANK STAT EMENT AND THE ACCOUNT OF THE ASSESSEE IN THE CORPORATION BANK OF INDIA. HOWEVER IT IS NOT CLEAR FROM THE DETAILS FILED BY THE ASSESSEE ABOUT THE CASH AMOUNT INTRODUCED BY ASSESSEE OF RS.80 000/- AND ALSO AN AMOUNT OF RS.1 LAKH THROUG H CHEQUES DATED 20.08.2005 BECAUSE CORRESPONDING ENTRIES IS NOT IN THE STATEMENT OF BANK ACCOUNT. IN OUR VIEW THIS ISSUE REQUIRED PROPER VERIFICATION AND EXAMINATION AT THE LEVEL OF THE AO AND ITA NO. 277/MUM/2010 ITA NO. 345/MUM/2010 14 THE ASSESSEE HAS TO RECONCILE ALL THE AMOUNTS INTRO DUCED IN THE CAPITAL ACCOUNT DURING THE YEAR. ACCORDINGLY WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO FOR VERIFICATIO N AND EXAMINATION OF THE RELEVANT RECORD TO BE FILED BY THE ASESEEE THEN DECIDE THE SAME AS PER LAW. 24 IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL BY THE REVENUE IS ALSO ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 22.12.2010 SD SD (R.S.SYAL) (VIJ AY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ON THIS 22 ND DAY OF DEC 2010 SRL:161210 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI