Pavan Kumar Gupta, Bangalore v. ACIT, Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NOS.399 400 597 & 401(BANG)/2010 (ASST.YEARS: 2001-02 2002-03 2003-04 & 2004-05) SHRI PAVAN KUMAR GUPTA NO.586 18 TH E MAIN 6 TH BLOC KORAMANGALA BANGALORE. APPELLANT VS. ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1(2) BANGALORE. RESPONDENT APPELLANT BY: SHRI H.N.KHINCHA. RESPONDENT BY : SHRI D.PRABHAKAR REDDY. O R D E R PER SMT. P. MADHAVI DEVI JM : ALL THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE ORDERS OF THE CIT(A)-VI BANGALORE DATED 3-3-2010 F OR THE ASSESSMENT YEARS 2001-02 2002-03 2004-05 AND THE ORDER DATED 15-4-2010 FOR THE ASSESSMENT YEAR 2003-04. 2. ITA NO.399(BANG)/2010: AS REGARDS GROUND NOS.3 AND 4 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND BELONGS TO M/S.MARBLE CENTRE INTERNA TIONAL (P) LTD. GROUP OF CASES. A SEARCH ACTION U/S 132 OF TH E INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] TO OK PLACE IN THE ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 2 OF 14 RESIDENCE OF THE ASSESSEE ON 8-3-2007. CONSEQUENT TO THE SEARCH THE CASE WAS CENTRALIZED AND NOTICE U/S 153 A WAS ISSUED ON 17-7-2007 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR WITHIN 30 D AYS FROM THE DATE OF RECEIPT OF THE NOTICE. THE ASSESSEE FI LED THE RETURN OF INCOME ON 9-8-2007 DECLARING THE SAME INCOME I.E . RS.71 670/- DECLARED EARLIER IN THE RETURN OF INCOM E FILED ON 3-7-2001. DURING THE ASSESSMENT PROCEEDINGS U/S 14 3(3) READ WITH SECTION 153A OF THE ACT THE AO CALLED FOR THE BOOKS OF ACCOUNT AND THE BANK PASS BOOKS ETC. THE ASSESSEE F URNISHED THE SAME AND ON PERUSAL OF THE SAME AND THE STATEME NT OF AFFAIRS AS ON 31-3-2001 THE AO OBSERVED THAT THE A SSESSEE HAS SHOWN INVESTMENT OF RS.2 50 000/- IN THE SHARES OF M/S.RPG MARBLES (P) LTD. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF FUNDS FOR INVESTMENT AND THE ASSESSEE IN HIS WRI TTEN STATEMENT DATED 2-12-2008 STATED THAT THE SOURCES O F FUND IS LOAN FROM M/S.MARBLE WORLD. ON GOING THROUGH THE R ECEIPT & PAYMENTS MADE BY THE ASSESSEE THE AO OBSERVED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.3 40 000/- AS A LOAN WHILE HE RETURNED AN AMOUNT OF RS.1 40 000/- AND TH E BALANCE AMOUNT DUE BY THE ASSESSEE IS RS.2 LAKHS. HE FURTH ER OBSERVED THAT THE ASSESSEE HAS SHOWN RPG AS A CREDITOR FOR RS.2 34 095/- AND THE ASSESSEE HAS RECEIVED RS.1 LA KH ON 22-5-2000 AND HAS PAID RENT DEPOSIT OF RS.90 000/- ON 25-5-2000 TO ONE SMT. D.N. REVATHI. THUS HE HELD THAT THE AMOUNT AVAILABLE WITH THE ASSESSEE FOR INVESTMENT I S ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 3 OF 14 RS.1 10 000/- WHEREAS THE ASSESSEE HAS SHOWN INVEST MENT IN SHARES AT RS.2 50 000/- AND THE LIABILITY TO M/S.MA RBLE WORLD RS.2 34 095/-. HE ALSO OBSERVED THAT THE ASSESSEE HAS ALSO FILED CONFIRMATION FROM M/S.MARBLE WORLD FOR THE AD VANCE OF RS.2 34 095/-. HE ALSO OBSERVED THAT THE ASSESSEE MADE CASH DEPOSIT INTO HIS BANK ACCOUNT TO THE TUNE OF RS.65 000/-. AFTER CONSIDERING THE ABOVE DETAILS THE AO CAME TO THE C ONCLUSION THAT THE ASSESSEE DOES NOT HAVE SOURCES TO MAKE THE INVESTMENT AND ALSO THAT THE ASSESSEE HAS NOT EXPLA INED THE SOURCES OF CASH DEPOSIT TO THE TUNE OF RS.65 000/-. THEREFORE HE MADE THE ADDITION OF RS.65 000/- U/S 68 OF THE A CT AND UNEXPLAINED INVESTMENT U/S 69 OF RS.93 263/-. AGGR IEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION AND THE ASSESSEE IS IN SECOND APPEAL B EFORE US. 2.1 SHRI H.N.KHINCHA THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT AND HAS EXPLAINED THE SOURCES OF I NCOME AND THE ALSO SOURCE FOR MAKING INVESTMENT AND THE CASH DEPOSIT AND THE AO AND THE CIT(A) HAVE NOT PROPERLY APPRECIATED THE EVIDENCE AND HAVE ERRONEOUSLY MADE THE ADDITION. 2.2 SHRI D.PRABHAKAR REDDY THE LEARNED DEPARTMENT AL REPRESENTATIVE ON THE OTHER HAND HAS SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO PROVE THE SOURCES FOR THE DEPOSIT AND ALS O THE INVESTMENT THE ADDITIONS ARE JUSTIFIED. ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 4 OF 14 2.3 HAVING HEARD THE RIVAL SUBMISSIONS AND HAVING CONSIDERED THE MATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAS MADE THE FOLLOWING PAYMENTS: (I) M/S.MARBLE WORLD RS.1 40 000/- (II) RENT DEPOSIT TO SMT. D.N.REVATHI RS. 90 000/- (III) INVESTMENT IN SHARES OF M/S.RPG RS.2 50 000/- --------------- RS.4 80 000/- ========= FOR THIS INVESTMENT THE ASSESSEE HAS SHOWN TO HAVE TAKEN LOAN FROM M/S.MARBLE WORLD OF RS.3 40 000/- AND THE BALA NCE IS RS.1 40 000/- WHICH IS NOT EXPLAINED BY THE ASSESSE E. THE AO HAS ALSO OBSERVED THAT THE ASSESSEE HAS SHOWN AN AM OUNT OF RS.46 737/- AS THE NET INCOME AND AFTER TAKING THIS INTO CONSIDERATION ONLY THE UNEXPLAINED INVESTMENT IS RS .93 263/-. WE ALSO FIND THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCES OF DEPOSIT OF RS.65 000/- WHICH HAS BEEN AD DED U/S 68 OF THE ACT. ACCORDING TO US UNEXPLAINED CASH CRED ITS OF RS.65 000/- CAN BE ACCEPTED TO BE THE SOURCE OF INC OME FOR MAKING UNEXPLAINED INVESTMENT OF RS.93 263/- AND AF TER TELESCOPING THE ABOVE UNEXPLAINED CASH CREDIT THE BALANCE UNEXPLAINED INVESTMENT WOULD BE RS.28 263/-. AS TH E ASSESSEE HAS NOT BEEN ABLE TO PRODUCE THE EVIDENCE EVEN BEFO RE US TO EXPLAIN THE SOURCE OF INVESTMENT TO THE TUNE OF RS. 28 263/- WE DEEM IT FIT AND PROPER TO CONFIRM THE ADDITION OF R S.28 263/- AFTER ALLOWING TELESCOPING AS MENTIONED ABOVE. THES E GROUNDS ARE ACCORDINGLY PARTLY ALLOWED. ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 5 OF 14 2.4 GROUNDS OF APPEAL NO.1 IS GENERAL IN NATURE AN D NEEDS NO ADJUDICATION. GROUND NO.2 HAS NOT BEEN PRE SSED AND IT IS REJECTED AS NOT PRESSED. GROUND NO.5 IS ALSO REJECTED AS NOT PRESSED DUE TO SMALLNESS OF THE AMOUNT. GROUND NO.6 RELATING TO INTEREST U/S 234B IS CONSEQUENTIAL IN N ATURE AND THE AO IS DIRECTED TO COMPUTE THE INTEREST ACCORDINGLY. 2.5 IN THE RESULT THE ASSESSEES APPEAL IS PARTLY ALLOWED. 3. ITA NO.400(BANG)/2010: AS REGARDS GROUND NO.4 OF THE APPEAL BRIEF FACTS OF THE CASE ARE THAT CONSEQUENT TO THE SEARCH U/S 132 OF THE ACT THE ASSESSEE WAS REQUIRE D TO FILE RETURN OF INCOME U/S 153A OF THE ACT AND THE ASSESS EE FILED THE RETURN OF INCOME DISCLOSING THE SAME INCOME WHICH W AS DECLARED EARLIER FOR THE RELEVANT ASSESSMENT YEAR O N 24-5-2002. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 153A OF THE ACT THE AO OBSERVED THAT THE ASSESSEE HAS CLAI MED TO HAVE RECEIVED GIFT FROM HIS FATHER-IN-LAW SHRI LAKSHMINA RAYAN TAPARIA BY CHEQUE RS.44 800/- AND BY CASH RS.55 200 /- AMOUNTING TO RS.1 LAKH. HE OBSERVED THAT THE CHEQU E RECEIVED IS STATED TO BE FROM CANARA BANK BUT THE ASSESSEE H AS NOT FURNISHED THE DATE OF CHEQUE CHEQUE NO. WHERE DRAW N ETC. HE ALSO OBSERVED THAT THERE IS AN ENTRY IN PASS BOOK F OR RS.44 800/- ON 18-2-2002. THE ASSESSEE ALSO FILED C ONFIRMATION FROM THE DONOR WHEREIN IT IS MENTIONED AS BY CHEQU E RS.44 800/- CANARA BANK AND SIMILARLY IN THE SAME CONFIRMATION LETTER IT IS MENTIONED AS BY CASH RS. 55 200/-. AS ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 6 OF 14 THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY DOCUMENTAR Y EVIDENCE IN SUPPORT OF THE GIFTS RECEIVED THE AO M ADE THE ADDITION OF RS.1 LAKH U/S 68 OF THE ACT. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3.1 LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE HAS FILED THE DETAILS OF GIFT AND ALSO THE CONFIRMATION LETTER FROM THE DONOR. THUS HE HAS ESTABLISHED TH E IDENTITY AND GENUINENESS OF THE LOAN AND THEREFORE THE ADDITION SHOULD NOT HAVE BEEN MADE. HE FURTHER SUBMITTED THAT THE AO H IMSELF HAS OBSERVED THAT THE AMOUNT OF RS.44 800/- HAS BEEN EN TERED IN THE PASS BOOK ON 18-2-2002. THUS ACCORDING TO HIM THERE WAS NO OCCASION FOR MAKING THE ADDITION OF RS.44 80 0/- WHICH HAS BEEN RECEIVED BY CHEQUE. 3.2 LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OT HER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND DREW OUR ATTENTION TO THE ORDER OF THE CIT(A) WHEREIN IT IS CLEARLY MENTIONED THAT THE AMOUNT HAS BEEN RECEIVED IN CASH AND THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE TO PROVE THAT THE CHEQUE ISSUED IS ISSUED BY THE DONOR AS CL AIMED. ACCORDING TO HIM THEREFORE THE ADDITION IS JUSTIFI ED. 3.3 HAVING HEARD BOTH THE PARTIES AND HAVING CONSI DERED THE MATERIAL ON RECORD WE FIND THAT SHRI LAKSHMINA RAYANA TAPARA IS THE FATHER-IN-LAW OF THE ASSESSEE AND THE REFORE THERE IS RELATIONSHIP BETWEEN BOTH OF THEM FOR MAKING GIF TS. HOWEVER IT IS TO BE SEEN WHETHER THE DONOR HAS THE CAPACITY TO ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 7 OF 14 MAKE SUCH A GIFT. AS OBSERVED BY THE AO AN AMOUNT OF RS.44 800/- IS RECEIVED ON 18-2-2002 WHEREAS AN AM OUNT OF RS.55 200/- IS RECEIVED IN SMALL DENOMINATIONS OF R S.8 460/- RS.8 650/- RS.9 250/- RS.9 290/- RS.6 970 AND RS .8 850/-. AS PER THE CONFIRMATION LETTER OF THE DONOR THE GI FT DONATED BY HIM IS OF RS.44 800/- BY CHEQUE AND RS.55 200/- IN CASH. THE DONOR HAS NOT MENTIONED THE SMALL DENOMINATION OF M ONEY WHICH HE HAS ALLEGEDLY GIFTED. IN VIEW OF THE SAME WE ARE OF THE OPINION THAT THE GIFT OF RS.44 800/- RECEIVED I NTO THE BANK ACCOUNT HAS TO BE ACCEPTED WHEREAS THE GIFTS OF RS. 55 200/- CANNOT BE ACCEPTED WITHOUT THERE BEING A CONFIRMATI ON FROM THE DONOR AS TO THE NUMBER OF SMALL DENOMINATIONS OF GI FTS GIVEN BY HIM. IN VIEW OF THE SAME WE DELETE THE ADDITION O F RS.44 800/- AND CONFIRM THE ADDITION OF RS.55 200/- . 3.4 GROUND NOS.1 2 AND 6 BEING GENERAL IN NATURE N EED NO ADJUDICATION AND HENCE REJECTED. GROUND NO.3 IS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND THEREFO RE REJECTED AS SUCH. GROUND NO.5 IS CONSEQUENTIAL IN NATURE AND THEREFORE THE AO IS DIRECTED TO COMPUTE THE INTEREST U/S 234B ACCORDINGLY. 3.5 IN THE RESULT THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. 4. ITA NO.401(BANG)/2010 : GROUND NO.1 BEING GENERAL IN NATURE NEEDS NO ADJUDICATION. AS REGARD S GROUND NOS.2 AND 3 BRIEF FACTS ARE THAT THAT CONSEQUENT T O SEARCH U/S 132 IN THE RESIDENCE OF THE ASSESSEE ON 8-3-2007 T HE ASSESSEE ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 8 OF 14 WAS DIRECTED TO FILE RETURN OF INCOME U/S 153A. TH E ASSESSEE FILED RETURN OF INCOME ON 9-8-2007 DECLARING SAME I NCOME I.E. RS.1 76 105/- WHICH WAS DECLARED EARLIER ON 26-5-20 04. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SEC .153A OF THE ACT THE AO OBSERVED THAT THE ASSESSEE HAS SHOW N HIS WIFE SMT.INDIRA GUPTA AS A CREDITOR FOR RS.5 88 000/- AS AGAINST RS.3 LAKHS IN THE PREVIOUS YEAR. HE ALSO OBSERVED THAT THE ASSESSEE FILED DETAILS OF LOANS TAKEN/REPAID ALONG WITH COPY OF THE BANK STATEMENT OF THE CREDITOR OF THE ASSESSEE. ON GOING THROUGH THE SAME HE OBSERVED THAT THE DETAILS OF L OAN OF RS.23 000/- STATED TO HAVE BEEN GIVEN/RECEIVED IS N OT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. HE THEREFOR E MADE THE ADDITION OF RS.23 000/- AS UNEXPLAINED CREDIT U /S 68. FURTHER ON PERUSAL OF THE STATEMENT OF AFFAIRS AS O N 31-3-2004 THE AO OBSERVED THAT THE ASSESSEE HAS SHOWN A GIFT OF RS.90 000/- FROM HIS MOTHER SMT.KRISHNA KANTHA MAL OO. ON DIRECTION BY THE AO THE ASSESSEE FURNISHED THE CON FIRMATORY LETTER DATED 2-8-2007 AND ALSO A COPY OF THE RETURN OF INCOME AND MEMO OF INCOME AND STATEMENT OF AFFAIRS AS ON 3 1-3-2004 IN RESPECT OF HIS MOTHER. THE AO OBSERVED THAT THE CONFIRMATORY LETTER OF THE DONOR HAS NOT MENTIONED THE DATE AND THE MODE OF GIFT EXCEPT STATING THAT THE STATED AMO UNT IS GIFTED DURING THE YEAR 2003-04. HE ALSO OBSERVED THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE IN SUPPOR T OF THE GIFT AND EVEN FROM THE PHOTO COPY OF THE RETURN OF INCOME OF THE MOTHER OF THE ASSESSEE HE FOUND THAT THE TOTAL INC OME IS ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 9 OF 14 RS.93 980/- AND EVEN THOUGH THE GIFT OF RS.90 000/- IS SHOWN IN THE STATEMENT OF AFFAIRS AS ON 31-3-2004 HE HELD I T TO BE AN AFTER THOUGHT AND MORE PARTICULARLY BECAUSE THE CLO SING BALANCE IN CAPITAL ACCOUNT IS SHOWN AT RS.3 22 711/- AS ON 31-3-2003 WHILE THE OPENING BALANCE IN THE CAPITAL ACCOUNT IN THE STATEMENT OF AFFAIRS AS ON 31-3-2004 IS AT RS.7 04 973/-. THEREFORE HE REFUSED TO ACCEPT THIS STATEMENT OF A FFAIRS OF THE MOTHER OF THE ASSESSEE AND HELD THAT THE ASSESSEE H AS NOT PROVED THE GIFT BY DOCUMENTARY EVIDENCE. ACCORDING LY HE MADE THE ADDITION AS UNEXPLAINED CREDIT U/S 68 OF T HE ACT. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION AND THE ASSESSEE IS IN S ECOND APPEAL BEFORE US. 4.1 LEARNED COUNSEL FOR THE ASSESSEE WHILE REITERA TING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW S UBMITTED THAT THE ASSESSEES MOTHER SMT. KRISHNA KANTHA MALO O IS AN INCOME-TAX ASSESSEE AND HAS FILED RETURNS AND THE S TATEMENT OF AFFAIRS WAS FILED BEFORE THE AO WHEREIN GIFT HAS BE EN SHOWN BY HER. THUS ACCORDING TO HIM THE ASSESSEE HAS PROV ED THE GENUINENESS OF THE TRANSACTION IDENTITY AND THE CA PACITY OF THE DONOR AND THEREFORE THE AO WAS NOT JUSTIFIED IN MAK ING THE ADDITION U/S 68 OF THE ACT. 4.2 LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTH ER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THAT THE STATEMENT OF AFFAIRS OF THE DONOR HAS NOT BEEN FILED ALONG WITH RETURN OF INCOME AND THER E IS ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 10 OF 14 DISCREPANCY IN THE OPENING CAPITAL AS ON 31-3-2003 AND ALSO CLOSING BALANCE AS ON 31-3-2004 WHICH CLEARLY SHOWS THAT IT CANNOT BE RELIED UPON. THUS ACCORDING TO HIM THE ADDITION IS JUSTIFIED. 4.3 HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE MATERIAL ON RECORD WE FIND THAT THE ONLY ISSUE IS WHETHER THE ALLEGED GIFT OF RS.90 000/- FROM THE MOTHER OF THE ASSESSEE IS TO BE ACCEPTED OR NOT. THE ASSESSEE HAS STATED TO HAVE FURNISHED THE RETURN OF INCOME AND THE STATEMENT OF AFFAIRS FILED ALONG WITH THE RETURN OF INCOME BEFORE THE AO BUT T HE FACTUM OF GIFT OF RS.90 000/- IS ONLY REFLECTED IN THE STATEM ENT OF AFFAIRS. AS OBSERVED BY THE CIT(A) THE ASSESSEE HAS FILED A BANK STATEMENT WHEREIN THE AMOUNT OF RS.90 000/- IS DEPO SITED BY CLEARING ON 4-3-2004. AS RIGHTLY OBSERVED BY THE CIT(A) THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT RS.90 000/- DEPOSITED ON 4-3 -2004 INTO HIS BANK ACCOUNT IS COMING FROM THE BANK ACCOUNT OF SMT.KRISHNA KANTHA MALOO. EVEN BEFORE US THE ASSESS EE HAS NOT PRODUCED ANY EVIDENCE SUCH AS BANK STATEMENT OF SMT .KRISHNA KANTHA MALOO TO SHOW THAT THIS GIFT IS TRANSFERRED FROM HER ACCOUNT. IN VIEW OF THE SAME WE ARE OF THE OPINION THAT THE AO AS WELL AS THE CIT(A) HAVE BEEN RIGHT IN CONFIRMING THE ADDITION U/S 68 OF THE ACT. THIS GROUND OF APPEAL IS REJECTE D. 4.4 AS REGARDS GROUND NO.4 RELATING TO THE ADDITION OF RS.23 000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF TH E ACT LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 11 OF 14 HAS FURNISHED ALL THE DETAILS BEFORE THE AO BUT THE SAME HAS NOT BEEN CONSIDERED IN PROPER PERSPECTIVE. LEARNED DEP ARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORIT IES BELOW. 4.5 HAVING HEARD BOTH THE PARTIES WE FIND THAT AUTH ORITIES BELOW HAVE HELD THAT THE ASSESSEE HAS NOT PROVED WI TH DOCUMENTARY EVIDENCE THE CASH CREDIT OF RS.23 000/- AND EVEN BEFORE US THE ASSESSEE HAS FAILED TO PRODUCE ANY EV IDENCE. IN VIEW OF THE SAME THIS GROUND OF APPEAL IS ALSO REJ ECTED. 4.6 AS REGARDS GROUND NOS.5 AND 6 WE FIND THAT IT I S RELATING TO INTEREST U/S 234B OF THE ACT WHICH IS C ONSEQUENTIAL IN NATURE AND THEREFORE THE AO IS DIRECTED TO COMPUTE THE INTEREST ACCORDINGLY. 4.7 . IN THE RESULT THE APPEAL IS DISMISSED. 5. ITA NO.597(BANG)/2010: BRIEF FACTS OF THE CASE ARE THAT CONSEQUENT TO SEARCH U/S 132 OF THE ACT IN THE RESIDENCE OF THE ASSESSEE ON 8-3-2007 THE ASSESSEE WAS REQUIRED TO FILE THE RETURN OF INCOME U/S 153A. THE ASSESSEE FILED RETU RN OF INCOME ON 9-8-2007 DECLARING THE SAME INCOME I.E. RS.1 68 227/- WHICH WAS DECLARED EARLIER ON 20-5-2003. DURING TH E ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 153A THE AO OBSERVED THAT THE ASSESSEE HAS MADE THE INVESTME NT TO THE TUNE OF RS.15 30 500/- FOR WHICH THE ASSESSEE HAS E XPLAINED THE SOURCES OF FUND TO THE TUNE OF RS.11 15 000/-. HE ALSO OBSERVED THAT THE ASSESSEE HAS SHOWN GIFTS RECEIVED FROM HIS MOTHER OF RS.1 LAKH. THE ASSESSEE HAD ALSO FIELD LE TTER OF ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 12 OF 14 CONFIRMATION DATED 2-8-2008 BUT THE LETTER DOES NOT STATE THE DATE OF GIFT MODE OF GIFT ETC. THEREFORE HE REDU CED THE SOURCE OF FUND I.E. RS.11 50 000/- FROM THE TOTAL INVESTME NT AND FURTHER REDUCED THE GIFT FROM MOTHER OF RS.1 LAKH A ND AFTER COMPUTING THE NET INCOME OF RS.1 10 000/- HE ARRIV ED AT THE UNEXPLAINED INVESTMENT U/S 69 AT RS.4 05 500/-. AGG RIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND A PPEAL BEFORE US. 5.1 LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BY THE AUTHORITIES BELOW WHILE THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5.2 HAVING HEARD BOTH PARTIES WE FIND THAT AS REGAR DS THE GIFT ALLEGED TO HAVE BEEN RECEIVED FROM THE ASSESSE ES MOTHER OF RS.1 LAKH WE FIND THAT AS IN EARLIER ASSESSMENT YEAR THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE AS TO THE NATURE AND DATE OF GIFT AND FROM WHERE IT HAS BEEN RECEIVED. FOR THE DETAILED REASONS GIVEN IN THE ASSESSMENT YE AR 2004-05 WE TREAT THE SAME AS UNEXPLAINED CASH CREDIT OF THE ASSESSEE AND WE REJECT THE ASSESSEES GROUND OF APPEAL NOS.4 . 5.3 COMING TO THE UNEXPLAINED INVESTMENT WE FIND TH AT THE ASSESSEE HAS MADE THE INVESTMENT TO THE TUNE OF RS.15 30 500/- AND AFTER DISALLOWING GIFT FROM THE MOTHER OF ASSESSEE OF RS.1 LAKH THE SOURCE OF INVESTMENTS AR E TO THE TUNE OF RS.10 15 000/- AND THE NET UNEXPLAINED INVESTMEN T IS ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 13 OF 14 RS.1 10 000/-. AFTER REDUCING THE NET INCOME AS PE R STATEMENT OF RS.1 10 000/- THE TOTAL UNEXPLAINED INVESTMENT WOULD BE RS.4 05 500/-. FOR THE REASONS GIVEN BY US FOR THE ASSESSMENT YEAR 2001-02 WE DEEM IT FIT AND PROPER TO TELESCOP E THE UNEXPLAINED CASH CREDIT U/S 68 AS THE SOURCE OF INC OME FOR MAKING INVESTMENT. THUS AFTER REDUCING THE SAID A MOUNT OF RS. 1 LAKH THE TOTAL UNEXPLAINED INVESTMENT WOULD BE RS.3 05 500/-. EVEN BEFORE US THE ASSESSEE HAS NO T BEEN ABLE PRODUCE ANY EVIDENCE TO SUBSTANTIATE THE SOURCE OF THESE INVESTMENTS. IN VIEW OF THE SAME WE CONFIRM THE A DDITION OF RS.3 05 500/-. IN THE RESULT GROUNDS OF APPEAL NO. 2 AND 3 ARE PARTLY ALLOWED. GROUND NO.1 AND 6 ARE GENERAL IN NA TURE AND NEED NO ADJUDICATION. GROUND NO.5 BEING RELATING T O INTEREST U/S 234B IS CONSEQUENTIAL IN NATURE. THE AO IS DIR ECTED TO COMPUTE THE INTEREST ACCORDINGLY. 5.4 IN THE RESULT THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER EKS ITA NOS.399 TO 401 & 597(BANG)/2010 PAGE 14 OF 14 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE