JAYSINHA LAXMAN PATIL,,SANGLI vs. INCOME-TAX OFFICER, WARD - 2(3),, SANGLI

आदेश / ORDER

PER R.S.SYAL, VP :

This appeal by the assessee arises out of the order passed by the CIT(A)-1, Kolhapur on 02-05-2018 in relation to the assessment year 2007-08.

2 ITA No.1226/PUN/2018 Mr. Jaysinha Laxman Patil

Assessing Officer (AO) as unexplained investment u/s.69 of

the Income-tax Act, 1961 (hereinafter also called ‘the Act’).

a proprietor of M/s. Wardan Medical Corner at Atpadi, Sangli.

A survey was conducted in which the fact of the assessee

having constructed a house transpired. The assessee submitted

that a plot was purchased for Rs.3.00 lakh and an expenditure

of Rs.13,50,000/- was incurred on its construction. Regarding

source of investment in plot, it was submitted that a loan at

75% of the value of plot was taken from Bank of Maharashtra

and remaining 25% was contributed out of business income.

The AO accepted such an explanation. As regards the

investment in construction, the assessee submitted that a loan

of Rs.7.00 lakh was obtained from M/s. Griha Finance and the

remaining Rs.6.50 lakh was invested out of business income.

Since there was no reflection of such business income in the

books of account, the assessee declared additional income of

Rs.6.50 lakh. However, at the time of filing the return, the

assessee made out a claim that a sum of Rs.2,50,000/- was a

declared source for which investment was made in

construction. It was stated that a sum of Rs.2.00 lakh was

3 ITA No.1226/PUN/2018 Mr. Jaysinha Laxman Patil

received from his wife out of her HUF’s share and further a

sum of Rs.50,000/- was withdrawn from business by means of

an accounting entry. The AO did not accept the genuineness

of transactions and made an addition, inter alia, of

Rs.2,50,000/-. The AO did not accept the assessee’s

contention and made the addition. The ld. CIT(A) called for

the remand report from the AO about the assessee’s

explanation of having received a sum of Rs.2.50 lakh from

genuine and known sources. The AO tendered his remand

report dated 10-11-2011, which has been reproduced on pages

7 and 8 of the impugned order. Not convinced, the ld. CIT(A)

sustained the disallowance of Rs.2.50 lakh. The assessee in

the instant appeal is aggrieved by the sustenance of addition of

Rs.2.50 lakh.

material on record. A sum of Rs.2.00 lakh was claimed to have

been received by the assessee from his wife. The ld. CIT(A)

called for the remand report from the AO qua the explanation

of Rs.2.00 lakh and further about the withdrawal of

Rs.50,000/- from the business. The AO gave remand report on

both the scores, which is reproduced as under :

ITA No.1226/PUN/2018 Mr. Jaysinha Laxman Patil

“As per the directions and to verify the contents of the affidavit of Shri Gulabrao Babusaheb Shinde, the person was summoned to this office and his statement was recorded. In the affidavit, Shri Gulabrao B. Shinde has deposed that alongwith himself, his brothers Shri Sharadrao Bapusaheb Shinde and Shri Kluisarao B. Shinde and mother Smt. Manutai B. Shinde have given an amount of Rs.2,00,000/- to Mrs. Kavita Jaysinh Patil, Wife of the assessee Shri Jaysinh Laxman Patil. The statement of Shri Gulabrao Bapusaheb Shinde was recorded on 19-09-2010 (copy of the statement is enclosed herewith for ready reference).

From the statement recorded following facts are emerged: 1. Out of four family members, three brothers of Mrs. Kavita J. Patil wife of the assessee all are in service, the gist of the statement recorded is given hereunder.

Shri Sharadrao Bapusaheb Shinde is working as Headmaster with P.K. Sawant Vidyalaya, Adare. Tal.Chiplun, Dist. Ratnagiri. He is assessed to tax under PAN AFJPS9693A. He has stated that an amount of Rs.62,000/- has been paid to his sister, was out of housing loan taken from Ratnagiri District Secondary Teacher Co-op. Credit Society, Ratnagiri. The Photostat copy of the certificate regarding loan taken was verified and kept on record.

Shri Khushabrao Bapusaheb Shinde was working with I.T. C. Movers Pvt. Ltd. Mumbai & his wife Mrs. Anita K. Shinde was doing business of retail trading of cloth & Tailoring job at Mumbai. Both the husband & wife were assessed to tax and filing the returns of income at Income Tax Office, Panvel, Dist. Raigad. The Photostat copies of the returns of income in Form No.2D SARAL have been verified & placed on record. From the returns of income, it is seen that for A.Y. 2008-09 Shri Kluisabrao B. Shinde has declared income from salary @ Rs.68,000/- & his wife has declared income from business @ Rs.85,160/-. According to the Affidavit he has given an amount of Rs.30,000/- to the sister.

Shri Gulabrao Bapusaheb Shinde in the statement recorded, has stated that he is in service with Bharati Shipyard at Ratnagiri as a crane operator. He further stated that he has paid Rs.62,000/- to his sister out of withdrawals from the bank. The say putforth was verified from the evidences produced.

Smt. Manutai B. Shinde according to the submission & affidavit of Shri Gulabrao B. Shinde, she has given Rs.42,000/- to her daughter Mrs. Kavita J. Patil. In this connection Shri Gulabrao B. Shinde has stated that the family is holding Agricultural land

5 ITA No.1226/PUN/2018 Mr. Jaysinha Laxman Patil

admeasuring 15 Acres out of which 8 Acres land is irrigated. It is verified from the 7/12 extract & Form 8, which are placed on record. As regards withdrawal of Rs.50,000/- from the Books of Accounts I wish to submit as under : During the course of survey the assessee has stated that an amount of investment of Rs.6.5 lakhs in the construction of house was made out of business income but was not reflected in the books of the business. In this connection it is evident from the record that the assessee till the date of survey he was not maintaining the books of accounts. However according to the statement the assessee has maintained the books of account, after the survey proceedings. In the books maintained the assessee has shown an amount of Rs.50,000/- was withdrawn. This has been verified, from the records. As a result of exercise carried out, it is found that the affidavit can be relied upon. As regards amount of Rs.50,000/- withdrawn from the business, it is verified from the books, that the assessee has transferred the amount. In view of the above, the assessees appeal may be decided on the merits of the case, if approved.”

that the family members of the assessee’s wife admitted that a

sum of Rs.62,000/- was given to her by Shri Sharadrao

Bapusaheb Shinde, brother of assessee’s wife who was

working as Headmaster; a sum of Rs.30,000/- was given by

Sh. Khushabrao Bapusaheb Shinde who was working in ITC

Movers Pvt. Ltd. Mumbai; a sum of Rs.62,000/- was given by

Sh. Gulabrao Bapusaheb Shinde, who was working with

Bharati Shipyard; and a sum of Rs.42,000/- was given by Smt.

Manutai Bapusaheb Shinde. All these relatives deposed that

6 ITA No.1226/PUN/2018 Mr. Jaysinha Laxman Patil

they did give a sum of Rs.2.00 lakh to the wife of the assessee.

It is apparent from the remand report that the depositions made

before the AO have not been controverted with any cogent

material or evidence. Rather, the AO has himself recorded in

the remand report that “the affidavit filed can be relied upon”.

the AO in his remand report has categorically recorded that

“as regards the amount of Rs.50,000/- withdrawn from the

business it is verified from the books, that the assessee has

transferred the amount.”

accepting the genuineness of source of investment of Rs.2.50

lakh, I hold that the ld. CIT(A) ought not to have sustained the

addition to this extent. I, therefore, direct to delete the

addition of Rs.2.50 lakh.

ITA No.1226/PUN/2018 Mr. Jaysinha Laxman Patil

आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश

अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-1, Kolhapur 4. The Pr. CIT-1, Kolhapur िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 19-02-2019 Sr.PS 2. Draft placed before author 19-02-2019 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *