DCIT, CC II, v. Dhanwant Singh,

ITSSA 59/DEL/2007 | misc
Pronouncement Date: 22-01-2010 | Result: Dismissed

Appeal Details

RSA Number 5920116 RSA 2007
Assessee PAN AANPS1780M
Bench Delhi
Appeal Number ITSSA 59/DEL/2007
Duration Of Justice 2 year(s) 11 month(s) 2 day(s)
Appellant DCIT, CC II,
Respondent Dhanwant Singh,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-01-2010
Date Of Final Hearing 16-12-2009
Next Hearing Date 16-12-2009
Assessment Year misc
Appeal Filed On 19-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA VICE PRESIDENT & SHRI C.L. SETHI JUDICIAL MEMBER IT(SS)A NO. 59/DEL/2007 BLOCK PERIOD : 01.04.1996 TO 03.03.2003 DCIT CENTRAL CIRCLE-11 NEW DELHI. VS. SHRI DHANWANT SINGH 877 1 ST FLOOR QUTAB ROAD DELHI. (APPELLANT) (RESPONDENT) C.O. NO. 287/DEL/2009 BLOCK PERIOD : 01.04.1996 TO 03.03.2003 SHRI DHANWANT SINGH 877 1 ST FLOOR QUTAB ROAD DELHI. VS. DCIT CENTRAL CIRCLE-11 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SAMPATH SHRI S. KRISH NAN ADV. & SHRI ANIL JAIN C.A. RESPONDENT BY : STEPHEN GEORGE CIT DR O R D E R PER: C.L. SETHI J.M. THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 01.12.2006 PASSED BY THE LD. CIT(A) IN THE MATTER OF AN BLOCK ASSESSMENT MAD E BY A.O. U/S 158BC OF THE INCOME TAX ACT 1961 (THE ACT) FOR THE BLOCK PERI OD FROM 01.04.1996 TO 03.03.2003. IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 2 OF 14 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN C ONNECTION WITH THE ABOVE APPEAL. 3. WE SHALL FIRST TAKE THE APPEAL FILED BY THE REVE NUE. 4. THE GROUND OF APPEAL RAISED BY THE REVENUE ARE A S UNDER:- ON THE FACTS AND IN LAW AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT(A) HAS ERRED IN : 1. DELETING THE ADDITION OF RS. 15 LACS MADE ON ACCOU NT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION OF HOUSE V-9 /19 DLF CITY GURGAON. 2. DELETING THE ADDITION OF RS. 20 05 902/- MADE IN PU RCHASE OF PROPERTY AT LG-040 MEGHA MALL SHOPPING COMPLEX G URGAON. 3. DELETING THE ADDITION OF RS. 4 70 000/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INCOME DETERMINED ON THE BAS IS OF SEIZED DOCUMENTS AS PER ANNEXURE A-22. 4. DELETING THE ADDITION OF RS. 1 19 131/- MADE ON ACC OUNT OF FOREIGN TOUR. 5. DELETING THE ADDITION OF RS. 82 234/- MADE BY THE A .O. ON ACCOUNT OF DIFFERENCE OF STOCK. 5. IN THIS CASE A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE BUSINESS AND RESIDENTIAL PREMISES OF VARIOUS PARTNERS/ DIREC TORS IN GROUP OF CASES. ACCORDINGLY A NOTICE U/S 158BC OF THE ACT WAS ISSU ED TO THE ASSESSEE AGAINST WHOM ALSO THE SEARCH WAS CONDUCTED. IN RESPONSE TO THE NOTICE ISSUED U/S 158BC THE ASSESSEE FILED HIS BLOCK RETURN DECLARIN G UNDISCLOSED INCOME AT RS. NIL. DURING THE ASSESSMENT PROCEEDINGS THE A.O. H AD RELIED AND/OR REFERRED TO CERTAIN PAPERS/ DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. 6. WITH REGARD TO THE ADDITION OF RS. 15 00 000/- BEING SUBJECT MATTER OF GROUND NO. 1 TAKEN BEFORE US THE A.O. HAS MADE REF ERENCE TO THE ANNEXURE-A- IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 3 OF 14 22 A-25 A-26 A-27 AND A-30 FOUND AND SEIZED DURI NG THE COURSE OF SEARCH OPERATION. IN THESE DOCUMENTS THE CONSTRUCTION ACC OUNT FOR CONSTRUCTION OF HOUSE AT V-9/19 DLF CITY PHASE-III GURGAON WAS RECORDE D. FROM THESE DOCUMENTS A TOTAL CONSTRUCTION EXPENDITURE WAS WORKED OUT AT RS . 27 11 656/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CONSTRUCTION EXPENDITURE WITH EVIDENCE. THE ASSESS EE VIDE HIS LETTER DATED 03.03.2005 AND 14.03.2005 SUBMITTED BEFORE THE A.O. THAT AS PER STATEMENT AND DOCUMENTS FILED BY THE ASSESSEE ALONGWITH THE AFORE SAID LETTERS A TOTAL AMOUNT SPENT ON CONSTRUCTION CAME TO RS. 13 56 761/- UP TO THE DATE OF THE SEARCH AND THE DETAILED EXPLANATION AND JUSTIFICATION OF THE S AME WERE SUBMITTED. 7. THE AFORESAID EXPLANATION OF THE ASSESSEE ALONGW ITH THE DOCUMENTS AND RECONCILIATION CHART SUBMITTED BY THE ASSESSEE WAS CONSIDERED BY THE A.O. THE A.O. STATED THAT SAME ENTRIES REFLECTED THE ANNEXUR E-I WERE ALSO FOUND IN SOME OTHER ANNEXURES. THE A.O. THEREAFTER AFTER CONSI DERING THE ENTRIES IN THE SEIZED DOCUMENTS AND OTHER DOCUMENTS HAD TAKEN THE TOTAL UNEXPLAINED CONSTRUCTION EXPENDITURE AT RS. 15 00 000/- IN PLACE OF RS. 27 1 1 656/-. THE A.O. HAD THEN TAKEN A VIEW THAT SINCE THE ASSESSEE FAILED TO EXPL AIN THE SOURCE OF INVESTMENT IN CONSTRUCTION OF THE HOUSE AND NO EVIDENCE WERE FILE D INSPITE OF MANY OPPORTUNITIES GIVEN TO THE ASSESSEE THE SUM OF RS. 15 00 000/- IS TREATED AS UNDISCLOSED INCOME INVESTED IN CONSTRUCTION OF HOUS E. 8. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT(A). IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 4 OF 14 9. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED TH AT THE ASSESSEE HAD MAINTAINED DAY TO DAY BOOKS OF ACCOUNT RECORDING TR ANSACTION OF CONSTRUCTION EXPENSES INCURRED BY THE ASSESSEE. IT WAS FURTHER CLARIFIED THAT EACH AND EVERY ITEM MENTIONED IN SEIZED ANNEXURE-A-22 A-25 A-26 A-27 AND A-30 ARE DULY RECORDED OR ENTERED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED RECONCILIATION STATEMENT POINTING OUT AND EXPLAINING EACH AND EVERY ENTRY OF TRANSACTION. IT WAS THEREFORE CONTENDED THAT THE ALL CONSTRUCTION EXPE NSES WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND IN SUPPORT THEREOF THE ASSESSE E ALSO FILED BALANCE SHEET WHICH CLEARLY REFLECTS THE ADDITION TO THE HOUSE CO NSTRUCTION TO THE EXPTENT OF RS. 13 69 500/-. THE ASSESSEE ALSO DREW THE ATTENTION OF THE LD. CIT(A) TO THE COPY OF CONSTRUCTION ACCOUNT APPEARING IN THE BOOKS OF ASSE SSEE EVIDENCING THE AMOUNT INCURRED BY THE ASSESSEE AND DULY RECORDED IN THE B OOKS OF ACCOUNT. IT WAS THEREFORE SUBMITTED THAT THE ACTUAL AMOUNT SPENT O N CONSTRUCTION WAS RS. 13 69 500/- AND NOT RS. 15 00 000/- AS ESTIMATED B Y THE A.O. IT WAS FURTHER SUBMITTED THAT THE A.O. WAS NOT JUSTIFIED IN STATIN G THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF INVESTMENT INASMUCH AS IN THE LIGHT O F THE ADMITTED POSITION THAT COMPLETE DETAILS OF CONSTRUCTION ACCOUNT ALONGWITH THE SOURCE WAS FILED DURING ASSESSMENT PROCEEDINGS. IT WAS THEREFORE CONTEND ED THAT THE ADDITION OF RS. 15 00 000/- MADE BY THE A.O. DESERVE TO BE DELETED. IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 5 OF 14 10. AFTER CONSIDERING THE A.O.S ORDER AND THE ASSE SSEES SUBMISSION AS WELL AS THE VARIOUS DOCUMENTS INCLUDING THE SEIZED DOCUMENT S THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- GROUND NO. 1 2 3 & 4 : RS. 15 00 000/- : AS REGAR DS THESE GROUNDS IT IS SEEN THAT THE TOTAL AMOUNT OF EXPEND ITURE ON CONSTRUCTION AMOUNTING TO RS. 27 11 656/- ARISES ON ACCOUNT OF T HE FACT THAT THE ENTRIES IN RESPECT OF ABOVE ARE REFLECTED IN DUPLICATE AND TRIPLICATE AT THE VARIOUS PLACES. THE REASON FOR THE SAME WAS THAT THE ENTRIE S HAVE BEEN MADE WHEN THE BILLS ARE RECEIVED ALSO WHEN THE PAYMENT WAS MADE AND YET WHEN THE ACCOUNT OF THE PARTIES WAS SETTLED. THE A .O. HIMSELF HAS ACCEPTED THIS POSITION IN THE ASSESSMENT ORDER AND THEN ONLY ESTIMATED THE COST OF CONSTRUCTION AT RS. 15 00 000/- INSTEAD OF RS. 27 11 656/-. HOWEVER THE FACT OF THE MATTER IS THAT ON PERUSAL OF THE CONSTRUCTION ACCOUNT AND THE BALANCE SHEET AS WELL AS ADDITION T O FIXED ASSETS IT REVEALS THAT A SUM OF RS. 13 69 500/- ONLY HAS BEEN SPENT BY THE ASSESSEE AS AGAINST RS. 15 00 000/- ESTIMATED. AS THE ASSES SEE HAS MAINTAINED SPECIFIC DETAILS OF THE EXPENDITURE INCURRED ON CON STRUCTION THE SAME HAS TO PREVAIL OVER THE ESTIMATE OF THE A.O. WHICH INV OLVES GUESS WORK. IN VIEW OF THE ABOVE THE ASSESSEE GETS RELIEF. THE A .O. IS DIRECTED ACCORDINGLY TO DELETE THE ADDITION OF RS. 15 00 000 /- 11. HENCE THE DEPARTMENT IS IN APPEAL. 12. THE LD. D.R. SUPPORTED THE A.O.S ORDER AND REI TERATED THE DISCUSSION AND OBSERVATION MADE BY THE A.O. IN SUPPORT OF THE ADDI TION MADE BY HIM. 13. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTEN TION TO THE VARIOUS DOCUMENTS FILED BEFORE THE A.O. AS WELL AS BEFORE T HE LD. CIT(A) EXPLAINING THE SOURCE OF INVESTMENT AMOUNTING TO RS. 13 69 500/- W HICH WAS DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT. HE FURTHER SUBMITTED THAT THE A.O. HIMSELF HAS ESTIMATED THE COST OF CONSTRUCTION AT RS. 15 00 000 /- AGAINST RS. 27 11 656/- REFLECTED IN THE SEIZED ANNEXURES IN VIEW OF THE F ACT THAT CERTAIN ENTRIES WERE IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 6 OF 14 ENTERED TWICE AND THRICE AT DIFFERENT PLACES IN DIF FERENT PAPERS. HE FURTHER SUBMITTED THAT SINCE THE ACTUAL EXPENDITURE TO THE EXTENT OF RS. 13 69 500/- HAS ALREADY BEEN DISCLOSED IN THE REGULAR BOOKS OF ACCO UNT THE QUESTION OF MAKING ANY ADDITION IN THE BLOCK ASSESSMENT COULD NOT ARIS E. 14. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFUL LY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 15. IT IS AN ADMITTED POSITION THAT THE A.O. HAS HI MSELF ESTIMATED THE COST OF CONSTRUCTION AT RS. 15 00 000/- AGAINST RS. 27 11 6 56/-. ON THE BASIS THAT CERTAIN AMOUNTS WERE ENTERED TWICE AND THRICE IN VARIOUS DI FFERENT PAPERS FOUND DURING THE COURSE OF SEARCH. THE A.O. HAS TAKEN THE AMOUN T OF RS. 15 00 000/- ON ESTIMATED BASIS. HE HAS NOT PIN POINTED OUT THE IT EMS OF EXPENDITURE OUT OF RS. 27 11 656/- TO ARRIVE AT A FIGURE OF RS. 15 00 000/ -. THE A.O. HAS FAILED TO POINT OUT ANY DISCREPANCY IN THE DETAILS SUBMITTED BY HIM BEFORE HIM. THE ASSESSEE HAS HIMSELF AS ACCEPTED THE POSITION THAT HE HAS SPENT THE SUM OF RS. 13 69 500/- TOWARDS CONSTRUCTION OF HOUSE. THE AMOUNT TAKEN BY THE A.O. AT RS. 15 00 000/- IS PURELY BASED ON SURMISES AND CONJUNCTURES AND WI THOUT ANY BASIS. WE THEREFORE TAKE THE CORRECT AMOUNT OF CONSTRUCTION AT RS. 13 69 500/-. 16. COMING TO THE SOURCE OF RS. 13 69 500/- IT IS SEEN THAT THE SAID AMOUNT HAS BEEN DISCLOSED IN THE REGULAR BOOKS OF ACCOUNTS. T HE A.O. AS WELL AS THE D.R. HAS NOT BEEN ABLE TO POINT OUT ANY MATERIAL TO SHOW THA T THE AMOUNT OF RS. 13 69 500/- WAS NOT RECORDED IN THE REGULAR BOOKS O F ACCOUNT. SINCE THE AMOUNT IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 7 OF 14 SPENT TOWARDS CONSTRUCTION FOUND RECORDED IN THE SE IZED PAPERS WHICH HAS BEEN WORKED OUT TO BE RS. 13 69 500/- HAS BEEN DULY DIS CLOSED IN THE REGULAR BOOKS OF ACCOUNT THE QUESTION OF TREATING THE SAME AS UNDIS CLOSED INCOME IN THE BLOCK ASSESSMENT DOES NOT ARISE. WE ARE THEREFORE IN F ULL AGREEMENT WITH THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 15 00 000/- MADE BY THE A.O. THUS THIS GROUND NO. 1 RAISED BY THE REVENUE IS REJECTED. 17. NEXT GROUND IS WITH REGARD TO THE ADDITION OF R S. 20 05 902/- MADE BY THE A.O. ON ACCOUNT OF PURCHASE OF PROPERTY AT LG-040 MEGHA MALL SHOPPING COMPLEX GURGAON. 18. IN THE ASSESSMENT ORDER IT IS MENTIONED BY THE A.O. THAT ANNEXURE-A-24 WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE AND AS PER PAGE NO. 4 9 11 AND 12 OF THIS ANNEXURE IT WAS FOUND THAT THE ASSESSEE HA D ACQUIRED PROPERTY NO. LG- 040 MEGHA MALL DLF SHOPPING COMPLEX GURGAON FOR CONSIDERATION OF RS. 47 16 336/- OUT OF WHICH THE SUM OF RS. 20 05 902/- WERE PAID BEFORE THE SEARCH. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE AFORESAID PAYMENT MADE. THE ASSESSEE FILED ITS REPLY ON 03.03.2005 STATING THAT THIS AMOUNT WAS PAID ON VARIOUS DATES AND THE ENTIRE PAYMENT WERE MADE BY W AY OF ACCOUNT PAYEE CHEQUE. THE COPY OF RELEVANT BANK STATEMENT WAS SUB MITTED BEFORE THE A.O. AFTER CONSIDERING THE ASSESSEES EXPENSES THE A.O. MADE THE ADDITION OF RS. 20 05 902/- BY OBSERVING AS UNDER:- FROM THE PERUSAL OF ALL THE DOCUMENTS FILED BY THE ASSESSEE IT IS NOTICED THAT THE AMOUNT HAS BEEN WITHDRAWN FROM THE PROPRIE TORY CONCERN AND IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 8 OF 14 CHEQUES WERE ISSUED BUT THIS AMOUNT WAS ONLY REPRES ENTS THE SALE CONSIDERATION OF THE PROPRIETARY CONCERN M/S. SIMCO SALES CORPORATION. THIS AMOUNT WAS NEVER GIVEN BACK TILL DATE. THIS A MOUNT WAS ALSO NEVER BROUGHT UNDER TAXATION BECAUSE IT WAS ONLY SALE PRO CEEDS WHICH WERE USED TO GIVE ENTRIES FOR MAKING PAYMENT FOR THE PUR CHASE OF THIS PROPERTY. THE TRANSACTIONS ALTHOUGH ARE MADE BY CHEQUES BUT T HESE ARE NOT GENUINE TRANSACTION BECAUSE STATEMENT OF AFFAIRS FILED BY T HE ASSESSEE FOR THE BLOCK PERIOD HAS NEVER SHOWN DECREASE IN CAPITAL OF THE ASSESSEE RATHER IT INCREASES EVERY YEAR. THEREFORE THE SOURCE OF INV ESTMENT OF RS. 20 05 902/- IS REMAINED UNEXPLAINED AND ADDED IN UN DISCLOSED INCOME OF THE ASSESSEE. 19. ON AN APPEAL THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE TOTAL AMOUNT OF RS. 20 05 902/- WERE PAID BY FOUR ACCOUN T PAYEE CHEQUES AS DETAILED BELOW:- S. NO. CHEQUE NO. DATE AMOUNT BANK A/C NO. 1 230169 11.07.2001 686000 563 2 263633 02.22.2001 461420 563 3 551172 17.01.2002 458482 563 4 1800801 31.05.2002 400000 3390 TOTAL 2005902 20. IT WAS FURTHER SUBMITTED THAT THESE CHEQUES WER E PAID OUT OF BANK ACCOUNT OF ASSESSEES PROPRIETARY CONCERNED NAMELY SIMCO SALES CORPORATION AND SIMRAN SALES CORPORATION. COPY OF BANK ACCOUNT EVI DENCING THESE ENTRIES WERE ALSO FILED BEFORE THE A.O. FOR HIS VERIFICATION. H E THEREFORE SUBMITTED THAT THE A.O. WAS VERY MUCH UNJUSTIFIED IN MAKING THE ADDITI ON. 21. AFTER CONSIDERING THE ASSESSEES EXPLANATION AN D THE VARIOUS DOCUMENTS FILED BY THE ASSESSEE THE LD. CIT(A) DELETED THE A DDITION BY OBSERVING THAT THE AMOUNT OF RS. 20 05 902/- HAS ALREADY BEEN DISCLOSE D BY THE ASSESSEE IN THE REGULAR BOOKS OF ACCOUNTS AND THE ENTRIES WERE ALSO FOUND RECORDED IN THE BOOKS IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 9 OF 14 OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE LD. CIT (A) THEREFORE TAKEN A VIEW THAT THE PAYMENT AND THE SOURCES THEREOF HAS BEEN PROPERLY EXPLAINED BY THE ASSESSEE. THE LD. CIT(A) THEREFORE DIRECTED THE A.O. TO DELETE THE ADDITION. 22. AFTER HEARING BOTH THE PARTIES AND PERUSING THE ORDERS OF THE AUTHORITIES BELOW AND THE VARIOUS MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILS OF THE PAYMENT WE FIND THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THAT THE SUM OF RS. 20 05 902/- HAS BEEN DULY RECORDED IN THE ASSESSEE S BOOKS OF ACCOUNT AND THE AMOUNT HAS BEEN PAID OUT OF THE DISCLOSED BANK ACCO UNT OF THE ASSESSEE MAINTAINED IN THE NAME OF THE ASSESSEES PROPRIETAR Y CONCERN. WE ARE THEREFORE OF THE OPINION THAT THE A.O. HAS MADE THIS ADDITION PURELY ON IMAGINATION AND WITHOUT CONSIDERING THE VARIOUS DOCUMENTS AND DETAI LS SUBMITTED BY THE ASSESSEE. WE THEREFORE UPHELD THE ORDER OF THE LD. CIT(A) I N DELETING THE ADDITION. THUS THE GROUND NO. 2 RAISED BY THE REVENUE IS ALSO REJE CTED. 23. GROUND NO. 3 IS WITH REGARD TO RS. 4 70 000/- M ADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INCOME DETERMINED ON THE BASIS OF SE IZED DOCUMENTS AS PER ANNEXURE A-22. 24. IN THE ASSESSMENT ORDER THE A.O. HAS MADE THIS ADDITION OF RS. 4 70 000/- BY OBSERVING AS UNDER:- ANNEXURE A-22 PAGE-19 SHOWS THE FOLLOWING ENTRIES :- ON THE BACK SIDE OF THIS PAGE: 20 000 TAKEN FROM TONY ON 14.08.2002 PLUS 5 (5000) PLUS 30 (30000) 2+2 = 4 PAID TO LOVELY ON 14.10.2002 (4 00 000) 150 00 PAID TO TONY ON 20.11.2002. IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 10 OF 14 THE ASSESSEE WAS ASKED TO EXPLAIN THESE ENTRIES WIT H DOCUMENTARY EVIDENCE BUT HE HAS FAILED TO PROVE THE SAME WITH A NY EVIDENCE THEREFORE THIS AMOUNT RS. 4 70 000/- IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. 25. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED T HAT ALL THESE TRANSACTIONS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEES PROPRIETARY CONCERNED NAMELY SIMRAN SALES CORPORATION AND TH E COPY OF ACCOUNT OF TONY WAS FILED WITH THE A.O. AS PER ASSESSEES LETTER DA TED 03.03.2005. IT WAS FURTHER POINTED OUT THAT THE ASSESSEE ALSO FILED A CONFIRMA TION LETTER FROM THE AFORESAID PERSON (TONY) CONFIRMING THE ABOVE TRANSACTION ALON GWITH THE ASSESSEES LETTER DATED 03.03.2005. IT WAS FURTHER POINTED OUT THAT MR. TONY IS AN INCOME TAX ASSESSEE UNDER PAN NO. AANPS1780M. IT WAS FURTHER POINTED OUT THAT THE A.O. HAS WRONGLY PRESUMED 2 +2 =4 LACS WHEREAS IT W AS ACTUALLY RS. 4 000/-. IT WAS FURTHER SUBMITTED THAT THE A.O. HAD WRONGLY TAK EN THE OTHER FIGURES 5 AND 30 AS INCOME FROM OTHER SOURCES. 26. AFTER CONSIDERING THE A.O.S ORDER AS FAR AS S UBMISSION AND THE DOCUMENTS FILED BY THE ASSESSEE ALONGWITH THE SEIZED DOCUMENT S THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- GROUND NO. 8 AND 9 : AS REGARDS THESE GROUNDS IT IS SEEN THAT THE ENTRIES APPEARING ON PAGE 19 OF ANNEXURE A-22 S HOWS A FIGURE OF 2+2 WHICH HAS PRESUMED TO BE 4 LACS BY THE A.O. A S AGAINST 4 THOUSAND EXPLAINED BY THE ASSESSEE. THE ASSESSEES EXPLANATION IS SUPPORTED BY BOOK ENTRIES AND CONFIRMATION FROM MR. TONY AND MR. LOVELY. FURTHER A SUM OF RS. 20 000/- TAKEN FROM TONY ON 14.08.2000 AND A SUM OF RS. 15 000/- PAID TO TONY ON 20.11.200 2 HAS BEEN WRONGLY TAKEN TO BE UNDISCLOSED INCOME OF THE ASSESSEE. AL SO A SUM OF RS. 5000 + RS. 30 000/- HAS ALSO BEEN WRONGLY TAKEN AS UNDISC LOSED INCOME. WHEN IN FACT THESE ENTRIES HAVE BEEN ACTUALLY EXPLA INED WITH IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 11 OF 14 DOCUMENTARY EVIDENCES. APART FROM THE ABOVE THE PE RSON WHO HAS TAKEN AND GIVEN THE TEMPORARY LOANS IS ALSO ASSESSED TO T AX AND HE HAS CONFIRMED THE ABOVE ENTRIES ALSO. IN SUCH FACTS AN D CIRCUMSTANCES OF THE CASE IN MY OPINION THE SUM OF RS. 4 70 000/- STOO D PROPERLY EXPLAINED. THE ADDITION MADE BY THE A.O. IS ACCORDINGLY DELETE D. 27. AFTER CONSIDERING THE SUBMISSION OF BOTH THE PA RTIES AND PERUSING THE ORDERS OF THE AUTHORITIES BELOW INCLUDING EXPLANATI ON OF THE ASSESSEE SUPPORTED BY THE NECESSARY DOCUMENTS WE FIND THAT THE ADDITION OF RS. 4 70 000/- MADE BY THE A.O. WAS NOT JUSTIFIED. ALL THESE ENTRIES FOUND RE CORDED IN PAGE 19 OF ANNEXURE A-22 HAS BEEN DULY EXPLAINED BY THE ASSESSEE. THE CONCERNED PERSON MR. TONY AND MR. LOVELY HAS CONFIRMED THE TRANSACTION. THE REASONS GIVEN BY THE LD. CIT(A) IN DELETING THE ADDITION ARE FOUND TO BE JUS TIFIED. WE THEREFORE UPHELD THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITIO N. THUS THE GROUND NO. 3 TAKEN BY THE REVENUE IS ALSO REJECTED. 28. GROUND NO. 4 TAKEN BY THE REVENUE IS DIRECTED A GAINST THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 1 19 131/- MADE ON ACC OUNT OF FOREIGN TOUR. 29. THE A.O. HAS MADE THE ADDITION OF RS. 1 19 131/ - BY OBSERVING UNDER:- THE ASSESSEE HAS VISITED USA AND MALASIA AND SPENT RS. 88 653/- FOR USA AND RS. 30 478/- FOR MALAYSIA. THE ASSESSEE IN HIS REPLY DATED 15.02.2005 HAS STATED THAT PAYMENT WAS MADE THROUGH CHEQUES FROM THE PROPRIETARY CONCERN SIMCO SALES CORPORATION. SINCE THIS AMOUNT WAS NOT TAXED IN THE HANDS OF PROPRIETARY CONCERN AND T HIS AMOUNT WAS WITHDRAWN ONLY FROM THE SALE PROCEEDS OF M/S SIMCO SALES CORPORATION WHICH WAS LATER ON CLOSED DO NOT PROVE THE GENUINE NESS OF TRANSACTIONS THEREFORE THIS AMOUNT IS ALSO ADDED BACK AS UNEXPL AINED INCOME TO THE TAXABLE INCOME OF THE ASSESSEE. 30. ON AN APPEAL THE LD. CIT(A) DELETED THE ADDITI ON BY OBSERVING AND HOLDING AS UNDER:- IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 12 OF 14 GROUND NO. 11 12 13: AS REGARDS THESE GROUNDS IT IS SEEN THAT THE SUM OF RS. 1 19 131/- SPENT ON FOREIGN TRAVEL IS DULY D ISCLOSED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE ASSESSMEN T YEARS 1999-2000 AND 2001-02 AND IN THE DETAILS FILED BEFORE THE A. O. PRIOR TO THE DATE OF SEARCH DURING THE COURSE OF REGULAR ASSESSMENT PROC EEDINGS. IN VIEW OF THE ABOVE DOCUMENTARY EVIDENCES I AM OF THE OPINIO N THAT THE ABOVE EXPENDITURE ON FOREIGN TRAVEL HAS BEEN DULY EXPLAIN ED. HENCE THE ADDITION MADE BY THE A.O. AMOUNTING TO RS. 1 19 131 /- IS DELETED. 31. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD AND HAVING FOUND THAT THE ASSESSEE IN HIS REPLY DATED 1 5.02.2005 HAS CLEARLY STATED BEFORE THE A.O. THAT THE PAYMENT OF EXPENSES FOR FO REIGN TOUR WAS MADE THROUGH CHEQUES IN PROPRIETORY CONCERN M/S. SIMCO CORPORATI ON WHICH HAS NOT BEEN DISPUTED BY THE A.O. WE DO NOT FIND ANY BASIS TO S USTAIN THE ADDITION SO MADE BY THE A.O. IN THE LIGHT OF THE FACTS LD CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE THEREFORE UPHOLD THE ORDER OF LD. CIT(A) AND REJECT THIS GROUND NO. 4 RAISED BY THE REVENUE. 32. THE GROUND NO. 5 IS DIRECTED AGAINST THE LD. CI T(A)S ORDER IN DELETING THE ADDITION OF RS. 80 234/- MADE BY THE A.O. THE A.O. MADE THE ADDITION OF RS. 80 234/- ON ACCOUNT OF DIFFERENCE IN STOCK WORKED O UT BY HIM BY OBSERVING AS UNDER: AS PER THE BOOKS OF ACCOUNT OF M/S. SIMCO SALES CO RPORATION ON 01.04.2002 THE STOCK HAS SHOWN AT RS. 20 54 403/- B UT AS PER THE P & L ACCOUNT 2002 03 VALUE HAS SHOWN AT RS. 19 72 169/- . THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY IN STOCK. THE ASS ESSEE AS PER HIS LETTER DATED 22.03.2005 HAS STATED THAT:- THE CONCERN M/S. SIMCO SALES CORPORATION WAS CLO SED DOWN ON 31.03.2002 AND OPENING STOCK WAS TAKEN MANUALLY IN THE COMPUTER AT RS. 20.54 LAKH IN STEAD OF RS. 19 72 LAKH INADVE RTENTLY BY THE STAFF. SINCE THE CONCERN ALREADY CLOSED THERE IS NO SIGNIFICANCE OF OPENING STOCK OF SIMCO SALES CORPORATION. IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 13 OF 14 THIS PLEA OF THE ASSESSEE IS REJECTED AND DIFFEREN CE OF RS. 82 234/- IS ADDED BACK TO THE TAXABLE INCOME OF THE ASSESSEE . 33. HOWEVER ON AN APPEAL THE LD. CIT(A) DELETED T HE ADDITION BY OBSERVING AS UNDER:- GROUND NO. 14 & 15: AS REGARDS THESE GROUNDS IT I S SEEN THAT THE PARTNERSHIP FIRM M/S. SIMCO SALES CORPORATION CLOSE D ON 31.03.2002 AND ON THE DATE OF THE CLOSURE THE FIRM WAS POSSE SSED OF CLOSING STOCK AMOUNTING TO RS. 19 72 169/-. THIS REGISTERED FIRM WAS SUCCEEDED BY M/S. SIMRAN SALES CORPORATION AND THE CLOSING STOCK OF M/S SIMCO SALES CORPORATION BECAME THE OPENING STOCK OF M/S SIMRAN SALES CORPORATION AS ON 01.04.2002. THE VALUE OF THIS STOCK WAS INADV ERTENTLY TAKEN AT RS. 19 72 176/- WHICH HAS NOW BEEN RECONCILED AND IN ANY CASE THE DIFFERENCE OF RS. 82 234/- CANNOT BE ADDED AS UNDIS CLOSED INCOME. IN VIEW OF THE ABOVE THE ADDITION MADE BY THE A.O. OF RS. 82 234/- IS HEREBY DELETED. 34. AFTER CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW AND IN THE LIGHT OF THE FACTS OF THIS CASE WE ARE OF THE CONSIDERED OPINIO N THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION INASMUCH AS THE DISCREPANCY IN THE OPENING STOCK AND CLOSING STOCK WAS RECONCILED BY THE ASSESSEE. MOREOVER T HIS ADDITION IS NOT BASED ON ANY SEIZED DOCUMENTS OR PAPERS FOUND DURING THE COURSE OF SEARCH. THE STOCK POSITION WAS DISCLOSED IN THE REGULAR BOOKS OF ACCO UNT. WE THEREFORE UPHELD THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION AND RE JECT THIS GROUND RAISED BY THE REVENUE. 35. NOW WE SHALL COME TO THE C.O. FILED BY THE ASS ESSEE. 36. IN THE COURSE OF HEARING THE LD. COUNSEL FOR T HE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS NOT INCLINED TO PRESS THIS C.O. WHI CH IS DELAYED BY 194 DAYS FOR IT(SS)A NO. 59/DEL/2007 C.O. NO. 287/DEL/2009 14 OF 14 WHICH NO SATISFACTORY EXPLANATION HAS BEEN SUBMITTE D BY THE ASSESSEE WE THEREFORE REJECT THE CROSS OBJECTION FILED BY THE ASSESSEE. 37. IN THE RESULT THE APPEAL OF THE REVENUE AND TH E CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. 38. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 22 ND JANUARY 2010. SD/- SD/- (G.E. VEERABHADRAPPA) VICE PRESIDENT (C.L. SETHI) JUDICIAL MEMBER DATED: 22 ND JANUARY 2010. MAMTA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR