SH. RAJ SINGH SANGWAN,NEW DELHI vs. DCIT, NEW DELHI

O R D E R PER R. K. PANDA, AM : to 4105/Del/2009 filed by the assessee are directed against the separate orders dated 17.08.2009 of the CIT(A)-I, Ludhiana relating to assessment years 1999-2000 to 2004-05 respectively. ITA No.4106/Del/2009 appeals and are directed against the order dated 17.08.2009 of the CIT(A)-I, Ludhiana relating to assessment year 2005-06. Since common issues have been raised by the assessee in all these appeals, therefore, the appeals filed by the assessee as well as appeal filed by the Revenue are disposed of by this common order for the sake of convenience. (A.Y. 1999-2000) 2. Facts of the case, in brief, are that the assessee is an individual and is engaged in the business of property dealer. A search action u/s 132 was carried out at the residential premises of the assessee on 04.03.2005. In response to notice u/s 153A on 07.11.2005 issued by the Assessing Officer asking the assessee to file his return of income within 30 days, the assessee filed his return of income on 12.12.2005 declaring an income of Rs.31,690/- and agricultural income of Rs.1,78,000/-. Since the return of income was not accompanied with the copies of trading account, profit and loss account, capital account, statement of affairs, details of sundry creditors and debtors etc. the Assessing Officer issued a deficiency letter on 16.06.2006. The assessee removed the above defects by fling the requisite details vide reply dated 02.08.2006. The Assessing Officer, therefore, treated the date of filing of the return as 02.08.2006. noticed that the assessee has never filed his return of income before the date of search. The assessee is a famous property dealer of Charkhi Dadri which is established from the various documents such as maps, sale deeds, evidence of developing the land before selling into plots, names and address of the persons to whom plots were sold etc found during the course of search. Moreover, the assessee himself has shown, commission income from the sale and purchase of property. Further, in the statement recorded u/s 132(4), the assessee has admitted to have received income from commission from the sale and purchase of the properties and also developing the land before selling the same into plots.

The Assessing Officer, therefore, held that the assessee is doing business in dealing of property. He, therefore, rejected the contention of the assessee that he is only doing such property business on part time basis.

He, therefore, asked the assessee to justify this cash in hand with documentary evidence. The assessee in his reply dated 21.08.2006 submitted that he has sold agriculture land for Rs.2,40,000/- and received the proceeds in cash. The balance amount of Rs.1,20,000/- was explained to be out of savings from Rs.1,50,000/- to Rs.2,00,000/- per annum, from agricultural land of 164 Kanal.

The Assessing Officer, therefore, asked the assessee to substantiate with evidence regarding the savings of Rs.1,20,000/- out of agricultural income. The assessee submitted that during the financial year 1997-98, he was having around 197 Kanal of agriculture land and his agriculture income was more than Rs.1,50,000/-. The assessee also submitted copies of ‘J’ forms to substantiate the sale of agricultural produce to the extent of Rs.1,16,000/-. However, the Assessing Officer did not accept the contention of the assessee on the ground that when the assessee was having 4 bank accounts and he was frequently depositing and withdrawing money from these accounts and was investing in the properties regularly, therefore, the explanation of the assessee cannot be accepted in full. He, however, held that the assessee might be having the cash of Rs.2,90,000/- (2,40,000+50,000) out of past savings. He, therefore, rejected availability of the cash to the extent of Rs.70,000/- and made addition u/s 69A of the I.T. Act.

4.1 The Assessing Officer observed that there is cash credit of Rs.70,699/- on 27.05.1998 in the books of account of the assessee in name of Shri Sube Singh.

He, therefore, asked the assessee to substantiate with documentary evidence to prove the genuineness of the above credit. He also asked the assessee to file complete address of Shri Sube Singh. Although the assessee filed a written Sube Singh was not filed. Since the assessee could not file any details to substantiate with evidence to the satisfaction of the Assessing Officer in terms of the provisions of section 68, the Assessing Officer added Rs.70,699/- to the total income of the assessee.

5. The Assessing Officer observed that the assessee in his Balance Sheet has shown unsecured loan of Rs.2,00,000/- as on 31.03.1999. On being questioned by the Assessing Officer, it was submitted that the assessee obtained loan of Rs.1,00,000/- each from Shri Bhagwan Singh & Shri Daya Chand. Since the assessee did not produce Shri Bhagwan Singh before the Assessing Officer to justify his identity and creditworthiness, the Assessing Officer invoking the provisions of section 68 made addition of Rs.1,00,000/- to the total income of the assessee. Since the loan was disallowed u/s 68, the interest paid to the above person amounting to Rs.18,000/- which was debited in the Profit & Loss Account was also disallowed by the Assessing Officer.

After deducting the commission income declared by the assessee at Rs.8,250/- he made addition of Rs.51,750/- to the total income of the assessee.

From the copy of the sale/purchase deed, he observed that the assessee has made payment of Rs.92,400/- (i.e. Rs.80,000/- + Rs.12,400/- towards stamp duty). Since the assessee has disclosed only Rs.80,000/- the Assessing Officer made addition of Rs.12,400/- to the total income of the assessee. The Assessing Officer estimated the house hold expenses of the assessee at Rs.70,000/-. After deducting the withdrawal for house hold expenses shown by the assessee at income of the assessee. However, he ultimately did not make addition of that account on the ground that the commission income has already been enhanced which will take care of this house hold expenses.

Since the assessee did not produce the evidence for the remaining Rs.62,000/-, the Assessing Officer estimated the total agricultural income at Rs.1,60,000/- as against Rs.1,78,000/- declared by the assessee and made addition of Rs.18,000/- as non-agricultural income and accordingly made addition of Rs.18,000/- to the total income of the assessee.

10. The assessee filed an appeal before the ld. CIT(A) challenging the action of the Assessing Officer in treating the return as defective. The various additions made by the Assessing Officer were also challenged. Considering the arguments advanced by the assessee, the ld. CIT(A) upheld the action of the Assessing Officer in treating the return as defective. So far as the various additions made by the Assessing Officer are concerned, the ld. CIT(A) upheld the action of the Assessing Officer in making addition of Rs70,000/- on account of opening cash, Rs.70,699/- being credit appearing in the name of Shri Sube the interest thereon amounting to Rs.18,000/-. Ld. CIT(A) deleted the addition made by the Assessing Officer amounting to Rs.2,10,000/- on account of purchase of motor car. He also deleted the addition made by the Assessing Officer amounting to Rs.51,750/- on account of commission income received.

He, however, sustained the addition of Rs.4,024/- made by the Assessing Officer on account of sale of land and Rs.12,400/-on account of purchase of shop. Ld. CIT(A) further upheld the addition of Rs.46,000/- on account of house hold expenses. He also deleted the agricultural income of Rs.18,000/- declared by the assessee as agricultural income which was treated by the Assessing Officer as “income from other sources”. The CIT(A) thus gave part relief to the assessee for this assessment year.

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 02.08.2006, instead on 12.12.05 by treating the return as defective.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating a sum of Rs.70,699/- as unexplained credit under the provisions of section 68 of the Act.

9 to 4106/Del/2009 ITA No.4231/Del/2009 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,00,000/- u/s 68 of the Income Tax Act on account of loan from Sh. Bhagwan Singh.

6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.18000/-.

7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.4024/- to long term capital gain.

8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating a sum of Rs.12400/- as investment in shop out of undisclosed sources.

9. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.46000/- as income from undisclosed source on account of household expense.

11. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal

at the time of hearing and all the above grounds are without prejudice to each other.”

12. Ld. counsel for the assessee at the time of hearing did not press the ground no.2 and 4 for which ld. DR has no objection. Accordingly, the above two grounds are dismissed as not pressed.

13. Ground no.11 being general in nature is dismissed.

14. So far as ground no.1 is concerned, ld. counsel for the assessee referring to para 2, page 1 of the assessment order drew the attention of the Bench to the deficiency letter issued by the Assessing Officer on 16.01.2006. Referring to page 37 – 38 of the Paper Book, ld. counsel for the assessee drew the attention of the Bench to the letter issued by the assessee dated 25.01.2006 which was received by the Assessing Officer on 01.02.2006, copy of which is placed at contains the computation of income, he submitted that the assessee has declared only Rs.9,000/- as brokerage and commission income and after claiming miscellaneous expenses of Rs.750/- declared income of Rs.8,250/-. Since such meager income is on actual basis, therefore, assessee is not required to maintain any books of account, Profit & Loss Account and Balance Sheet etc. which was clarified before the Assessing Officer as well as before the ld. CIT(A).

However, the Assessing Officer treated the return filed as beyond the due date and the ld. CIT(A) upheld the same by relying on Clause (f) of Explanation 1 to sub-section (9) of section 139. Referring to the said provision, he submitted that the said clause is not applicable to the case of the assessee since he has received only Rs.9,000/- towards commission and has incurred expenses of Rs.750/- only towards miscellaneous expenses which is on actual basis.

The ground raised by the assessee is accordingly allowed.

Assessing Officer on account of non-production of Shri Bhagwan Singh before the Assessing Officer. Ld. counsel for the assessee, at the time of hearing, submitted that given an opportunity he will produce the said person before the Assessing Officer to substantiate with evidence to his satisfaction regarding the identity and creditworthiness of Shri Bhagwan Singh and the genuineness of the transactions. In view of the above and considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the above two grounds to the file of the Assessing Officer for adjudication of the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

ITA No.4101/Del/2009 (A.Y. 2000-01)

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 02.08.2006, instead on 12.12.05 by treating the return as defective.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making addition and disallowances dehors the seized material.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in holding that the appellant has not received any land through gift deed.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.4,90,000/- on account of purchase of land out of income from undisclosed sources of the appellant.

5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing a sum of Rs.95,000/- incurred on development of plot and thereby making an addition of Rs.95,000/- to short term capital gain.

6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.18000/- paid to Sh. Bhagwan Singh.

7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.50000/- as income from undisclosed source on account of household expense.

16 to 4106/Del/2009 ITA No.4231/Del/2009 8. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B. 9. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

30. Ld. counsel for the assessee did not press the ground no.2 and 5 for which the ld. DR has no objection. Accordingly, the above two grounds are dismissed.

31. Ground no.9 being general in nature is dismissed.

32. So far as ground no.10 is concerned, the same is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following the reasons given therein, this ground raised by the assessee is allowed.

33. Ground no.3 and 4 relates to the order of the ld. CIT(A) in confirming the action of the Assessing Officer in making addition of Rs.4,90,000/- on account of purchase of land.

The registration authority has valued the land at Rs.4,90,000/- and stamp duty is of Rs.30,630/-. He, therefore, asked the assessee to give complete address of Shri Ganga Dhar, his relationship with the assessee and also to produce the said Shri Ganga Dhar for recording his statement to substantiate such gift. However, the assessee failed to produce the said Shri Ganga Dhar. The Assessing Officer recorded the statement of Shri Raj Singh and came to the conclusion that he is not related to Shri Ganga Dhar and other members on behalf of whom Shri Ganga Dhar has made the gift. He, therefore, made addition of Rs.4,90,000/- to the total income of the assessee.

18 to 4106/Del/2009 ITA No.4231/Del/2009 “6.2 I have analyzed the matter and find that donor was holding GPA for this land as mentioned by the A.O. in the assessment order. It doesn’t emerge from the details available as to how the donor was having GPA on behalf of various persons residing at different places. The appellant couldn’t even furnish the address of these persons when asked by the A.O. That goes to show that how ephemeral the relationship is between the donor and donee. The appellant’s claim that his family was looking after the land for more than three decades also remains unsubstantiated. The lack of intimacy of relationship and no occasion for making the gift are strong factors in favour of the department to treat the gift as not genuine. Therefore, I hold that the appellant has failed to prove that it was a genuine gift flowing from natural love and affection and without consideration. The ground of appeal is dismissed.”

The above grounds are accordingly allowed for statistical purposes.

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 07.11.2006, instead on 12.12.05 by treating the return as defective.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.5,00,000/- on account of forfeited advance receipt against his capital asset.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,80,000/- as unexplained credit u/s 68 of the Income Tax Act.

5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.18000/-.

6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.54000/- as income from undisclosed source on account of household expense.

7. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.

8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

44. Ground no.2 by the assessee was not pressed for which ld. DR has no objection. Accordingly, the same is dismissed as not pressed.

45. Ground no.8 being general in nature is dismissed. have already decided the issue and the ground raised by the assessee has been allowed. Following similar reasoning this ground by the assessee is also allowed.

47. In ground no.3, the assessee has challenged the order of the ld. CIT(A) in confirming the addition of Rs.5,00,000/- made by the Assessing Officer on account forfeited advance receipt against his capital asset.

Since the land was not registered on 10.04.2000 as per the agreement, the assessee forfeited the advance and claimed the same as forfeited advance.

However, the Assessing Officer disbelieved the claim of the assessee and made addition of Rs.5,00,000/- to the total income of the assessee which was upheld by the ld. CIT(A) by observing as under :-

“5.2 I have gone through the facts of the case and find that assessee’s plea that the advance was received towards the sale of capital asset in the form of agricultural land cannot be accepted. It is an admitted fact that the appellant is a commission agent deriving income from working as a broker in the sale and purchase of land deeds. However, it is also a matter of fact that the appellant had been buying and purchasing land and also entering into agreements for sale and purchase of land as is evident from the following transactions entered into by the appellant : Assessment year 1999-2000 (i) On 12.2.98 the appellant sold agricultural land for Rs.2,40,000/-. (ii) Sole a plot of land on 12.8.98 for Rs.30,000/-. (iii)Purchased a shop for Rs.80,000/- at Bus Stand, Charkhi Dadri. 2000-01 Sold a plot of land on 24.6.99 for a sum of Rs.1,52,000/-.

22 to 4106/Del/2009 ITA No.4231/Del/2009 2001-02 i) Received a sum of Rs5 lacs from Sh. Ram Bhagat for sale of land. ii) Appellant entered into an agreement dated 21.11.2000 with Sh. Partap Singh for purchase of land and paid Rs.1,80,000/-. 5.3 From the above, it is very clear that buying and selling of land is being done in a very systematic and organized manner and with regularity by the appellant. Therefore, the land purchased becomes stock in trade in the hands of the assessee and he cannot take the shelter of the plea that it is a capital asset in his hand, as selling and purchasing of land constitutes the business of the assessee. Therefore, I upheld the action of the AO and the ground of appeal is dismissed.”

49. Ld. counsel for the assessee referred to the submissions made before the Assessing Officer as well as the ld. CIT(A). He also referred to page 19 to 21 of the Paper Book regarding the advance receipt of Rs.5,00,000/-. He also referred to page 31 to 33 of the Paper Book. In our opinion, the matter has not been adjudicated properly in the light of the various documents furnished especially when such documents are in Punjabi and no translated copy of same are available before us. We, therefore, restore this issue to the file of the Assessing Officer with a direction to give an opportunity to assessee to file the translated copy of the said agreement/documents. The Assessing Officer shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. The ground raised by the assessee is allowed for statistical purposes.

50. Ground no.4 relates to addition of Rs.1,80,000/- as unexplained credit u/s 68 of the I.T. Act.

Shri Partap Singh from whom he claimed to have received an amount of Rs.1,80,000/-, the Assessing Officer, invoking the provisions of section 68 made the addition which has been upheld by the ld. CIT(A). It is the submission of the ld. counsel for the assessee that given an opportunity he will produce the said person before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to produce the said person and prove ingredients of section 68 before him. The ground raised by the assessee is allowed.

Therefore, following similar reasoning this ground is allowed for statistical purposes.

ITA No.4103/Del/2009 (A.Y. 2002-03)

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 07.11.2006, instead on 12.12.05 by treating the return as defective.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,24,996/- on account of short term capital gains.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in holding the amount of Rs.65,500/- as income from undisclosed sources u/s 68 of the Income Tax Act.

5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh. Dayachand (Rs.18000/-) as per provisions of section-36 read with section 40A of the Income Tax Act.”

No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following similar reasoning, this ground raised by the assessee is allowed.

ITA No.4104/Del/2009 (A.Y. 2003-04)

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 30.11.2006, instead on 12.12.06 by treating the return as defective.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh. Dayachand (Rs.18000/-) as per provisions of section-36 read with section 40A of the Income Tax Act.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.77,000/- as income from undisclosed source on account of household expense.

26 to 4106/Del/2009 ITA No.4231/Del/2009 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

63. Ground no.2 was not pressed by the assessee for which ld. DR has no objection. Accordingly, the ground no.2 is dismissed.

64. Ground no.6 being general in nature is dismissed.

65. Ground no.1 is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground has already been allowed.

Following similar reasoning, this ground is also allowed.

ITA No.4105/Del/2009 (A.Y. 2004-05)

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 14.11.2006, instead on 12.12.05 by treating the return as defective.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in making additions and disallowances dehors the seized material.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.15,00,000/- on account of income from undisclosed sources and that too u/s 68.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh. Dayachand (Rs.18000/-) as per provisions of section-36 read with section 40A of the Income Tax Act.

5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.86000/- as income from undisclosed source on account of household expense.

6. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.

7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

ld. DR has no objection. Accordingly, the same is dismissed as not pressed.

“6.2 I have analyzed the matter and find that the assessee has failed to prove the creditworthiness of the person who gave the sum of Rs.15 lacs and the very genuineness of the transaction. The initial burden is on the appellant to prove the identity and creditworthiness of the creditor and genuineness of the transaction. This burden which is initially cast on the assessee cannot be shifted to the department. I am of the opinion that the agreement to sell and the cancellation thereof has only been used as a subterfuge to explain the bank deposits as observed by the A.O. I don’t find any merit in the ground of appeal and the same is dismissed.”

76. It is the submission of the ld. counsel for the assessee that given an opportunity to the assessee he will produce the said person before the Assessing receipt of Rs.15,00,000/-. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with direction to give an opportunity to the assessee to substantiate with evidence to his satisfaction regarding the receipt of Rs.15,00,000/- from Shri Bhagwan Singh and produce him before the Assessing Officer. The ground raised by the assessee is accordingly allowed for statistical purposes.

77. Ground no.4 is identical to ground no.6 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been restored to the file of the Assessing Officer for fresh adjudication. Following similar reasoning, this ground raised by the assessee is accordingly allowed for statistical purposes.

78. Ground no.5 relates to addition of Rs.86000/- an income from undisclosed source on account of low household expenses.

79. After hearing both the sides, we find as against Rs.54,000/- declared by the assessee as household expenses, the Assessing Officer estimated the household expenses at Rs.1,40,000/- resulting in addition of Rs.86,000/- which has been upheld by the ld. CIT(A). We find the above ground is identical to ground no.9 in ITA No.4100/Del/2009. We have already decided the issue and the ground raised by the assessee has been allowed. Following similar reasoning, this ground raised by the assessee is also allowed.

80. Ground no.6 relates to levy of interest u/s 234A and 234B which in our opinion mandatory and consequential in nature. Accordingly, the ground no.6 raised by the assessee is dismissed. (A.Y. 2005-06 - By Assessee)

81. The grounds raised by the assessee are as under :-

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in treating the return filed as on 30.11.2006, instead on 12.12.05 by treating the return as defective.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.6,68,164/- as income from business.

4. That having regarding to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.10,00,000/- under the provisions of section 68 of the Income Tax Act.

5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making an addition of Rs.1,51,000/- under the provisions of section 68 of the Income Tax Act.

6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in disallowing interest of Rs.36000/- paid to Sh. Bhagwan Singh (Rs.18000/-) and Sh Dayachand (Rs.18000/-) as per provisions of section36 read with section 40A of the Income Tax Act.

7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in treating addition of Rs.85000/- as income from undisclosed source on account of household expense.

8. That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A and 234B.

31 to 4106/Del/2009 ITA No.4231/Del/2009 9. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

83. Ground no.1 is identical to ground no.1 in ITA No.4100/Del/2009. We have already decided the issue and the ground of the assessee was allowed. So far as remaining grounds no.3 to 6 are concerned, the same are also identical to the grounds raised in the preceding years. We have already decided the issue and the above grounds have been restored to the file of the Assessing Officer with certain directions. Following similar reasoning, grounds no.3, 4, 5 and 6 are restored to the file of the Assessing Officer for fresh adjudication in the light of our direction in the preceding years. The above grounds by the assessee are accordingly allowed for statistical purposes.

84. Ground no.7 relates to addition of Rs.85000/- as income from undisclosed source on account of household expenses.

85. After hearing both the sides, we find as against Rs.60,000/- declared by the assessee towards household expenses, the Assessing Officer estimated the same at Rs.1,45,000/- resulting addition of Rs.85,000/- which has been confirmed by the ld. CIT(A). We find the this ground is identical to ground ground raised by the assessee has been allowed. Following the same reasoning, this ground raised by the assessee is allowed.

86. Ground no.8 relates to levy of interest u/s 234A and 234B which, in our opinion is mandatory and consequential in nature. Accordingly, this ground raised

by the assessee is dismissed. (A.Y. 2005-06 - By Revenue)

87. Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that the assessee entered into an agreement in respect of 23 kanal of land for a sum of Rs. 85 lacs out of which 10 kanal 19 marlah of land was purchased by the son and daughter of the appellant for an apparent consideration of Rs. 4,01,000/-. Ld. A.O concluded that this land has been purchased by the son and the daughter not for the ostensible consideration of Rs. 4,01,000/- but it must have been purchased at Rs.40,46,739/- which he calculated proportionately with reference to Rs. 85 lacs for 23 kanal. Therefore, Ld. A.O. made addition of Rs. 31,45,739/- in the hands of the assessee as unexplained payment by making the working as under:

Cost of 23 kanal of land 85,00,000 Cost of 10 kanal 19 marla of land 40,46,739 Less Paid as per Sale Deed 4,01,000 Less: Paid as bayana 5,00,000 For Addition 32,45,739

Sajjan Singh. It was further explained by the assessee in his statement that a part of this land has been purchased directly by the children for avoiding the fight and that he became a perforced witness. It was further explained by the assessee in his statement that no amount was paid. It was argued that in view of such statement recorded on oath, the action of the A.O. without any basic material or evidence presuming that the payment has been made by the assessee is illegal and the addition was made contrary to the material on record.

“9.2 I have analyzed the matter and find that the examination of seized documents revealed that the appellant had entered into an agreement with Sh. Jai Singh and others for purchase of land measuring 23 kanals for a consideration of Rs. 85 lacs. For this purpose the appellant had also given a sum of Rs. 5 lacs as advance money. However, the seized documents further revealed that out of this land of 23 kanals, 12 kanal and 01 marla were sold to Sh. Ram Kishan, Sh. Dhajja Ram and Sh. Meer Singh and others for a consideration of Rs. 4,52,000/-. The remaining land measuring 10 kanal and 19 marla was sold by Sh. Jai Singh & Others to Sh. Sudeep Kumar and Smt. Sarita Devi son and daughter of the assessee respectively and Sh. Sukhbir Singh for a consideration of Rs. 4,01,000/- on 19.1.05. In the sale deed executed for purchase of this land by the son and daughter of the appellant the assessee is one of the witnesses. According to the AO, the appellant was a party to this deal and he is one of the beneficiary of this transaction as he had given an advance of Rs. 5 lacs for purchase of this land and has also admitted that he did not receive back the same. Accordingly, the AO held that the son and daughter of the appellant bought 10 kanal 19 marlas of land for a consideration of Rs. 40,46,739/- by adopting proportionate cost as given in the agreement to sell. The calculation of which has been given in para 8(vii) of the order and, thus, the A.O. made addition of Rs. 31,45,739/- by holding that this money has been paid by the appellant out of his concealed business income. The residence of the appellant was searched and nothing came to the light of the department that over and above the sum of Rs. 5 lacs which was paid as advance for purchase of this land, something more was also paid to acquire this land. Also, there is nothing on record to suggest that the agreement entered into by the appellant to purchase the land in question finally fructified and the land was acquired by him at the agreed consideration. There is also nothing on record that the sum of Rs. 31,45,739/- has been paid over and above the apparent consideration of Rs. 4,01,000/- by the appellant on behalf of his son and daughter for acquiring this land. If any addition was to be made after enquiring the prevalent market rate

35 to 4106/Del/2009 ITA No.4231/Del/2009 and any other related factor, the same had to be made in the hands of the purchasers of the land i.e. son and daughter of the appellant and Sh. Sukhbir Singh. The addition has been made by the AO without any basis and the same is deleted.”