N.K.MOHNOT,CHENNAI vs. ACIT, CHENNAI

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

All the appeals of the assessee are directed against the respective

order of CIT(A) and pertains to assessment years 1977-78, 1983-84,

2 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

1984-85, 1991-92 & 1992-93. Therefore, we heard all the appeals

together and disposing off the same by this common order.

1977-78 in ITA No.1383/Mds/2016. Shri D.Anand, the learned counsel for

the assessee submitted that the assessee was a partner in M/s.Emkay

Credit Corporation. The assessee made investment to the extent of

Rs.1,67,000/- during the year under consideration. The investment made

by the assessee was confirmed by the respective parties. In fact, the

assessee invested a sum of Rs.35,000/- in M/s.Emkay Credit Corporation

which was not disclosed in the return of income. The interest income

from the advance of Rs.1,67,000/- and share income from the

partnership also was not explained before the assessing officer.

Therefore, the assessing officer made an addition of Rs.1,67,000/- as

unexplained investment and after considering the capital balance

available, the balance amount of Rs.1,27,000/- was taken as un-

explained income by the assessing officer. Referring to the order of

CIT(A), the learned counsel for the assessee submitted that the Cash

Flow Statement was filed before the assessing officer and CIT(A). The

assessee has disclosed credit from Shri Anjay Prakash to the extent of

Rs.20,000/- and Smt.Meenakumari to the extent of Rs.40,000/-. The

3 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

assessee has also disclosed credit from Shri K.Parasmal Jain to the extent

of Rs.30,000/- and M/s.Sanjay Commercial Corporation to the extent of

Rs.22,000/-. This statement of account for the above said purpose were

also filed before the assessing officer and CIT(A). The assessee has

disclosed the source for making investment to the extent of

Rs.1,27,000/-. Since the assessing officer himself admitted the capital

balance of Rs.40,000/-, the CIT(A) is not justified in confirming the

addition of Rs.1,27,000/-.

the department submitted that in the earlier round of litigation, this

Tribunal remanded back the matter to the file of AO with a direction to

redo the assessment. Accordingly, the assessing officer re-examined the

matter afresh and made addition to Rs.1,27,000/-. According to the

learned representative, the assessing officer worked out the undisclosed

investment of Rs.1,67,000/- and reducing the capital balance of

Rs.40,000/- he made a net addition of Rs.1,27,000/-. The assessee could

not produce the so called creditors before the assessing officer for

examination. Therefore, the assessing officer found that the assessee

made unexplained investment to the extent of Rs.1,27,000/-. In the

4 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

absence of any material, the CIT(A) has rightly confirmed the addition

made by the assessing officer.

perused the relevant material available on record. The assessing officer

made addition on the ground that the assessee could not produce the

creditors for examination. This Tribunal is of the considered opinion that

when the assessee furnished the name and other particulars of the

creditors, merely because the assessee could not produce the creditors,

that cannot be a reason for making addition. The Income Tax Act more

particularly Section 131 of the Act gives ample power to the assessing

officer to summon any person for examination. In this case, the

assessing officer has not taken any pain to summon the creditors for

examination. Under normal circumstances, this Tribunal would have

remanded back the matter to the file of the AO with a direction to

summon the respective creditors for examination. In this case, we are not

doing so, because, the assessment year under consideration is 1977-78.

After 38 years even if the matter is remanded back to the file of the A.O.

for examination of the respective creditors may not serve any purpose.

Moreover, the addition made by the assessing officer is only

Rs.1,27,000/-. After taking into consideration, the lapse of time and also

the fact that this is the second round of litigation, this Tribunal is of the

5 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

considered opinion that the addition made by the assessing officer to the

extent of Rs.1,27,000/- cannot be sustained. Accordingly, the orders of

both the authorities below are set aside and addition of Rs.1,27,000/- is

deleted.

and Rs.2,868/- towards interest income and undisclosed share income of

the assessee from the partnership firm M/s.Emkay Credit Corporation.

We heard Shri D.Anand, the learned counsel for the assessee and Shri

Supriyo Pal, the learned department representative. The addition of

Rs.9,441/- was made on account of interest said to be received by the

assessee from the advances and another addition of Rs.2,868/- which is

made towards undisclosed share of income from M/s.Emkay Credit

Corporation. The addition was made on the ground that the assessee

failed to prove the genuineness of the investment made. In the earlier

part of this order, this Tribunal deleted the addition of Rs.1,27,000/- on

the ground that the assessing officer has not taken any steps to examine

those creditors. It is also a fact that the investment made by the

assessee was admitted by the respective persons. In those

circumstances, it cannot be said that the genuineness of the investment

made by the assessee was not proved. Therefore, the addition of

6 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

Rs.9,441/- towards interest income on the advance made by the

assessee is not sustainable. Moreover, the share income from M/s.Emkay

Credit Corporation was made by the assessing officer without any inquiry

and no reason was adduced in the assessment order. The assessing

officer has simply observed that as per the original assessment order an

addition of Rs.2,868/- is made. It is an admitted fact that the original

order was set aside by this Tribunal and the assessing officer was

directed to redo the assessment. The assessing officer without redoing

the assessment as per the direction of the Tribunal has simply restored

the addition made in the earlier assessment order. This Tribunal is of the

considered opinion that such an addition cannot be made on the basis of

earlier assessment order. Since the assessment was reframed by the

assessing officer by the direction of this Tribunal, we are unable to

uphold the addition of Rs.9,441/- and Rs.2,868/- respectively.

Accordingly, the orders of both the authorities below are set aside and

the addition of Rs.9,441/- and Rs.2,868/- are deleted.

in ITA No.1383/Mds/2016 is allowed.

7 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

No.1384/Mds/2016, Shri D.Anand, the learned counsel for the assessee

submitted that the first issue arises for consideration is addition of

Rs.48,11,610/-. According to the learned counsel, the assessing officer

made an addition on the basis of the so called credit found in the bank

account of third parties. The assessing officer also made an addition of

Rs.15,580/-. This addition was made on the basis of the credit found in

the bank accounts of The Bank of Rajasthan Ltd. and The Vysya Bank

Ltd. A credit also was found in the bank account of Indian Overseas

Bank. According to the learned counsel, the assessee has furnished all

the details for source of making deposit in the bank account. The learned

counsel submitted that this Tribunal remanded back the matter to the file

of the AO to consider the material filed by the assessee and thereafter

decided the matter afresh. Inspite of the direction of the Tribunal, the

Assessing Officer confirmed the addition made in the original assessment

without any reasons. The Assessing Officer failed to examine the material

filed by the assessee as directed by this Tribunal. The learned counsel

further submitted that the credit found in the bank account are from

professional fees. According to the learned counsel, the assessee is a

chartered accountant and the fees received from the respective client

was deposited in all the banks. Merely because, the assessee could not

8 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

produce the books of accounts, it cannot be said that the assessee has

not received any fees from the respective clients.

representative submitted that the AO found credit in three bank accounts

maintained by the assessee in The Bank of Rajasthan Ltd. and The Vysya

Bank Ltd. and Indian Overseas Bank to the extent of Rs.1,20,050/-. The

assessee has not produced any material to support the source of making

this deposit. Therefore, the AO found that this sum of Rs.1,20,050/- was

over and above the professional fee disclosed by the assessee in the

profit and loss account. In the absence of any material, the CIT(A) has

rightly confirmed the addition made by the AO.

submitted that some of the cheques and pay in slip was found with the

assessee. Some of the pro-note executed in favour of M/s.Ashoka

Traders was also found in the lockers of the bank of Rajasthan. Even

though the assessee is not a partner, the partnership firm was totally

controlled by the assessee. Therefore, the addition was rightly made by

the assessing officer.

9 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

perused the relevant material available on record. Admittedly,

M/s.Ashoka Traders is a partnership firm and the assessee is not a

partner. The addition made by the assessing officer is only in respect of

the credit found in the bank account which stands in the name of

M/s.Ashoka Traders. The AO claims that some of the pro-note, pay in

slips and cheques of M/s.Ashoka Traders was found with the assessee.

Traders. The fact remains that pro-notes, cheques and pay in slips

belongs to Ashoka Traders. Therefore, it is for the revenue to prove how

the cheques, pay in slips and pro-notes relates to the assessee, when it

is apparently belong to M/s.Ashoka Traders. In the absence of any

material on record, it cannot be said that the assessee was controlling

M/s.Ashoka Traders. Therefore, as rightly submitted by the learned

counsel for the assessee, the addition if any, has to be made in respect

of cheques, pay in slips and pro-notes found only in the hands of

M/s.Ashoka Traders and certainly not in the hands of the assessee.

Therefore, the addition made in the hands of the assessee to the extent

of Rs.20,13,000/- is not justified. Accordingly, the orders of the lower

authorities are set aside and the addition of Rs20,13,000/- are deleted.

10 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

credit found in the Bank of Rajasthan Ltd. to the extent of Rs.71,050/-

and in the Vysya Bank Ltd. to the extent of Rs.32,900/- and in the Indian

Overseas Bank to the extent of Rs.16,000/-. The total deposit comes to

nearly Rs.1,20,050/-. The assessing officer found that the assessee has

not filed any material before him. Therefore, he treated the above said

deposit as professional fees received over and above what was disclosed

in the profit and loss account. The fact remains is that the assessee is a

practicing chartered accountant and he deposited the fee in the bank

account and also disclosed the same in the profit and loss account. From

the order of the lower authorities, it appears that the assessee has

furnished the list of professional receipts. The assessing officer found

that the list given by the assessee was incomplete and the address of the

person from whom the professional fee was collected is not available on

record. Therefore, the assessing officer could not make any cross

verification from whom the professional fee was said to be received by

the assessee. The fact remains that the assessee has furnished additional

information before this Tribunal in the first round of litigation. The

information filed by the assessee was not examined by the AO as

directed by this Tribunal. Even though the assessing officer observed

11 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

that there was obstacle in cross verifying the details filed by the

assessee, it is not known, what are the obstacles faced by the assessing

officer. The Assessing Officer has simply disallowed the claim of the

assessee on the general observation without examining the details filed

by the assessee as directed by the Tribunal. Therefore, this Tribunal is

unable to uphold the order of the authorities below. Accordingly, the

order of the authorities below are set aside and the addition of

Rs.1,20,050/- is deleted.

Rajendra K.Sheth, the assessing officer for the reasons recorded by him

of making addition in the hands of M/s.Ashoka Traders, made addition of

Rs.50,000/- on the loan advanced to Shri Rajendra K.Sheth and another

sum of Rs.9,000/- towards interest thereon. In the case of M/s.Ashoka

Traders, there was a credit in the bank account of M/s.Ashoka Traders

and the addition was made in the hands of the assessee on the

assumption that the assessee was having control over M/s.Ashoka

Traders. In the case of Shri Rajendra K.Sheth, no material was found by

the revenue authorities during the course of search operation. In the

absence of any material, this Tribunal is of the considered opinion that

there cannot be any addition on a casual reference by the assessing

12 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

officer. The CIT(A) also has not discussed anything in the impugned

order. Therefore, this Tribunal is unable to uphold the orders of the

lower authorities. Accordingly, the orders of lower authorities are set

aside and the addition made towards loan to Shri Rajendra K.Sheth to

the extent of Rs.50,000/- and the interest of Rs.9,000/- is deleted.

assessing officer assumed that the assessee’s silence amounts to

admission. Therefore, he made addition of Rs.40,000/- towards loan and

Rs.5,000/- towards interest. The CIT(A) also confirmed the addition. It is

pertinent to note that this Tribunal has remitted back the matter to the

file of the AO for re-consideration in the light of the material on record in

the first round of litigation. There is no discussion with assessment order

with reference to the material available on record to indicate that the

assessee advanced loan of Rs.40,000/- to M/s.Vummidiara (M.Frs.) Ltd.

There is no discussion in the order of CIT(A) order as well. It is not

known whether the assessee advanced loan to M/s.Vummidiara (M.Frs.)

Ltd. It is for the AO to bring on record the materials available on record

to show that the assessee has advanced a sum of Rs.40,000/- on interest

to M/s.Vummidiara (M.Frs.) Ltd. In the absence of any such material, this

Tribunal is of the considered opinion that the addition made by the AO to

13 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

the extent of Rs.40,000/- towards loan and interest of Rs.5,000/- is not

justified. Accordingly, the orders of lower authorities are set aside and

the addition of Rs.45,000/- is deleted.

From the order of the lower authorities, it appears that certain materials

like books of accounts, pay in slips relating to deposit of money in the

The Vysya Bank Ltd. were found in the premises of the assessee. It

appears from the orders of the lower authorities that the assessee

explained them that the assessee is not a partner in M/s.Emkay Credit

Corporation. The AO found that there are seven partners in M/s.Emkay

Credit Corporation and the assessee is not a partner in M/s.Emkay Credit

Corporation. However, it appears that the assessee’s father

Mr.P.D.Mohnot and assessee’s brother, Mr.S.P.Mohnot are partners in

M/s.Emkay Credit Corporation. The AO has also found that during the

assessment year 1977-78 and 1978-79, the assessee was also one of the

partners in M/s.Emkay Credit Corporation. Therefore, the AO found that

the credit found in the bank account of M/s.Emkay Credit Corporation

belongs to the assessee. The fact that M/s.Emkay Credit Corporation is a

partnership firm and assessable separately under the Income Tax Act is

not in dispute. The AO without any basis found that M/s.Emkay Credit

14 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

Corporation was controlled by the assessee. This Tribunal is of the

considered opinion that when the assessee is not a partner in M/s.Emkay

Credit Corporation during the year under consideration, merely because,

he was a partner for the assessment year 1977-78 & 1978-79, there

cannot be any addition for the year under consideration. The deposit of

the money in the bank account of M/s.Emkay Credit Corporation can at

the best be added to the total income of the partnership firm M/s.Emkay

Credit Corporation. However, at any stretch of imagination, the same

cannot be added in the hands of the assessee. Therefore, this Tribunal is

unable to uphold the orders of the lower authorities. Accordingly, the

orders of lower authorities are set aside and the addition made in the

hands of the assessee in respect of deposit made in the bank account of

M/s.Emkay Credit Corporation is deleted.

Savings Bank Account No.1176 in the name of one Shri Prakash Chandra

K.Jain. From the order of the lower authorities, it appears that Shri

Prakash Chandra K.Jain maintain a bank account in the bank of

Rajasthan Ltd. The Assessing Officer found that the bank account was

opened and operated by assessee in the name of Shri Prakash Chandra

K.Jain. The existence of Shri Prakash Chandra K.Jain is not in dispute. It

15 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

appears that the assessee represented Shri Prakash Chandra K.Jain

before the income tax authorities. The assessee also appears to have

filed a writ petition. These facts were taken adversely by both the

authorities below against the assessee. The fact remains that Shri

Prakash Chandra K.Jain is an independent assessee. The existence of

Shri Prakash Chandra K.Jain is not in dispute. Therefore, the deposit

made in the bank account of Shri Prakash Chandra K.Jain can at the best

be added in the hands of Shri Prakash Chandra K.Jain and not in the

hands of the assessee. Merely because, the assessee represented Shri

Prakash Chandra K.Jain before the income tax authorities and also filed a

writ petition in connection with bank locker, this Tribunal is of the

considered opinion that, that cannot be a reason for making any addition

in the hands of the present assessee. Therefore, we are unable to uphold

the order of the lower authorities. Accordingly, the orders of both the

authorities are set aside and the addition made in respect of deposit of

money in savings bank account No.1176 in the bank of Rajasthan Ltd. in

the name of Shri Prakash Chandra K.Jain is deleted.

of Rajasthan Ltd. in the name of M/s.Emkay Enterprises. From the order

of the AO, it appears that the letter pad, rubber stamp, etc. of

16 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

M/s.Emkay Enterprises was found in the premises of the assessee.

M/s.Emkay Enterprises is a partnership firm. There are two partners. The

assessee is admittedly not the partner in M/s.Emkay Enterprises. The

money was deposited to the extent of Rs.5,05,000/- in the bank account

of M/s.Emkay Enterprises maintained in the bank of Rajasthan Ltd. The

AO presumed that the assessee was controlling the administration of

M/s.Emkay Enterprises on the basis of letter pad and rubber stamp said

to be found in the premises of the assessee. This Tribunal is of the

considered opinion that in the absence of any material and the assessee

is not a partner in M/s.Emkay Enterprises, merely because the letter pad

and rubber stamp were found in the premises of the assessee that

cannot be a reason for making any addition. This Tribunal is of the

considered opinion that at the best, the addition can be made either in

the hands of M/s.Emkay Enterprises or in the hands of any of its partner.

Therefore, we are unable to uphold the order of the lower authorities.

Accordingly, the orders of both the authorities are set aside and the

addition of Rs.5,05,000/- in the hands of the present assessee is deleted.

M/s.Emkay Investments. The assessing officer found that M/s.Emkay

Investments was having a bank account in the bank of Thanjavur Ltd.,

17 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

Egmore Branch. Shri S.K.Bhandari was the proprietor of M/s.Emkay

Investments. The assessing officer found that the pay in slips and

cheques of M/s.Emkay Investments was found in the premises of the

assessee. Shri S.K.Bhandari, the so called proprietor of M/s.Emkay

Investments was assessed to income tax and represented by the

assessee being practicing chartered accountant. The AO doubted the

existence of Shri S.K.Bhandari. It is not known when Shri S.K.bhandari

was an independent person and he was also assessed by the Income Tax

department and how it can be said that Shri S.K.Bhandari was not in

existence. It is not the case of the revenue that the assessee was

operating the bank account of M/s.Emkay Investments. The only

objection of the department is that pay in slips, cheques were found in

the possession of the assessee. Therefore, the assessee was controlling

M/s.Emkay Investments. This Tribunal is of the considered opinion that

even if it is presumed that the assessee was controlling M/s.Emkay

Investments, M/s.Emkay Investments being a proprietorship concern, the

addition can be made only in the hands of Shri S.K.Bhandari who is the

proprietor of M/s.Emkay Investments. If Shri S.K.Bhandari was not in

existence as claimed by the Assessing Officer, there cannot be any

assessment in the name of Shri S.K.Bhandari. In the case before us, Shri

S.K.Bhandari was assessed to tax. Therefore, now the revenue cannot

18 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

claim that Shri S.K.Bhandrari is a nonexistent person. In this case,

without making any enquiry, the AO presumed that Shri S.K.Bhandari

was not in existence since the assessee could not produce Shri

S.K.Bhandari before AO. The inability of the assessee to produce Shri

S.K.Bhandari cannot be a reason to treat that Shri S.K.Bhandari was not

in existence especially when Mr.Bhandari was assessed to income tax. In

view of the above, this Tribunal is of the considered opinion that the

addition if any has to be made only in the hands of Shri S.K.Bhandari and

not in the hands of the assessee. Therefore, we are unable to uphold the

order of the lower authorities. Accordingly, the orders of both the

authorities are set aside and the addition made by the assessing officer is

deleted.

the order of the AO, it appears that Xerox copies of two pro-notes

executed in favour of Indu Investments for Rs.25,000/- and Rs.35,000/-

was found in the premises of the assessee. The document does not

disclose in whose favour the same was executed. Since the pro-note was

found in the premises of the assesssee, the assessing officer presumed

that the money was advanced by the assessee. This Tribunal is of the

considered opinion that unless and until it is established that the

19 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

assessee advanced money merely because a blank pronote that too

Xerox copy was found, it cannot be said that the assessee advanced

money to Indu Investments. This Tribunal is of the considered opinion

that on the basis of the Xerox copy of the so called pro-note said to be

executed by Indu Investments, there cannot be any addition in the

hands of the assessee. Accordingly, the addition made to the extent of

Rs.60,000/- towards loan and Rs.12,000/- towards interest is not

justified. Therefore, we are unable to uphold the orders of the lower

authorities. Accordingly, the orders of both the authorities are set aside

and the addition made by the assessing officer is deleted.

name of Srhi N.Purushothaman and Shri C.Bella. From the order of the

lower authorities, it appears that two passbooks relating to Savings Bank

Account in Trivandrum Cooperative Bank Ltd., Trivandrum in the name of

Srhi N.Purushothaman and Shri C.Bella was found in the premises of the

assessee. Apparently, the bank account stands in the name of Srhi

N.Purushothaman and Shri C.Bella. The existence of Srhi

N.Purushothaman and Shri C.Bella is not in dispute. Therefore, this

Tribunal is of the considered opinion that the bank account apparantely

stands in the name of Srhi N.Purushothaman and Shri C.Bella. Merely

20 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

because of the passbook relating to that account was found in the

premises of the assessee, that cannot be a reason for making any

addition in the hands of the assessee. Therefore, this Tribunal is unable

to uphold the order of the lower authorities. Accordingly, the orders of

both the authorities are set aside and the addition of Rs.12,685/- is

deleted.

Rs.1,18,000/- towards loan in the name of M/s.Bombay Finance and

C.P.Enterprises. From the order of the lower authorities, it appears that

M/s.Bombay Finance advanced a sum of Rs.50,000/- to one

Mr.Premkumar Sheth. Certain documents relating to advance of money

by M/s.Bombay Finance was found in the premises of the assessee.

Similarly, certain documents relating to loan advance to C.P.Enterprises

to Smt.Jasmine K.Sheth also was found in the premises of the assessee.

In the absence of any explanation from the assessee, the assessing

officer appears to have made an addition in the hands of the present

assessee. The fact remains is that M/s.Bombay Finance and

C.P.Enterprises advanced a sum of Rs.50,000/- each to Mr.Premkumar

Sheth and Smt.Jasmine K.Sheth. It is apparent from the material

available on record that the assessee is not a party to the loan

21 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

transaction. It is also not the case of the revenue that the assessee is

related to M/s.Bombay Finance and C.P.Enterprises. This Tribunal is of

the considered opinion that when the apparent loan transaction was

between Bombay Finance and Mr.Premkumar Sheth, no addition can be

made in the hands of the present assessee. Similarly, when the

transaction was between C.P.Enterprises and Smt.Jasmine K.Sheth, there

cannot be any addition in the hands of the present assessee. What is

apparent from the face of the record cannot be ignored by the revenue

authorities in the absence of any other material. Therefore, this Tribunal

is unable to uphold the addition of Rs.1,18,000/-. Accordingly, the orders

of both the authorities below are set aside and the addition made by the

AO to the extent of Rs.1,18,000/- is deleted.

in the name of Kushal Traders. From the order of the lower authorities, it

appears that Kushal Traders is a partnership firm. The assessee’s father

is also one of the partner. It is also not in dispute that the assessee is

not a partner in Kushal Traders. The AO presumed that the partnership

firm Kushal Traders was owned and controlled by the assessee. It is not

known when the assessee is not a partner, how he can own and control

a partnership firm. Merely because the assessee’s father was a partner in

22 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

M/s.Kushal Traders, this Tribunal is of the considered opinion that the

deposit made in Kushal Traders account cannot be considered as deposit

made by the assessee. At the best, the addition can be made either in

the hands of the M/s.Kushal Traders or in the hands of the partners of

the said firm. At any stretch of imagination, there cannot be any addition

in the hands of the present assessee. Therefore, this Tribunal is unable

to uphold the order of the lower authorities. Accordingly, the orders of

both the authorities are set aside and the addition made by the AO is

deleted. To sum up, the addition made to the extent of Rs.48,11,610/- is

deleted.

No.1385/Mds/2016, similar additions were made as it was made for the

assessment year 1983-84. Similar arguments were advanced by the

learned counsel for the assessee and the learned representative for the

department, as it was advanced for the assessment year 1983-84. The

CIT(A) also confirmed the order of the assessing officer on the same

reason as it was given for the assessment year 1983-84. Since identical

addition made was deleted by this Tribunal for the assessment year

1983-84 for the same reason, the addition made by the assessing officer

for the assessment year 1984-85 is also deleted.

23 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

No.1386/Mds./2016, the first issue arises for consideration is addition of

Rs.55,795/-. On the basis of the refund said to be received by M.M.

Enterprises on the basis of forged TDS certificate. Shri D.Anand, the

learned counsel for the assessee submitted that the identical issue was

considered by the Tribunal in the assessee’s own case for the

assessment year 1985-86 in ITA No.2318 (Mds)/90 and this Tribunal

found that there was no material to indicate that the assessee was a

beneficiary of the refund. For the assessment year 1985-86 also, there

was an allegation that the assessee received refund on behalf of many

persons. This Tribunal found that even though economic offense cases

are pending against the assessee, the fact remains that the assessee was

not beneficiary of the so called refunds. Therefore, the similar addition

was deleted by CIT(A) which was confirmed by this Tribunal. In view of

this, according to the learned counsel, addition made by the assessing

officer was not justified.

also. The fact remains that there was an allegation against the assessee

that on the basis of the forged TDS certificate, he received TDS amount

24 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

of Rs.55,795/- on behalf of M/s. M.M. Enterprises. The learned

department representative submitted that the issue of TDS on the basis

of the forged TDS certificate travelled up to the Madras High Court in the

case of Thangamani. The Madras High Court in fact set aside the order of

this Tribunal in the case of Thangamani. The CIT(A) in fact followed the

order of the Madras High Court. The CIT(A) by following the judgment of

the Madras High Court confirmed the order to the Assessing Officer.

perused the relevant material available on record. This Tribunal in the

assessee’s own case for the assessment year 1985-86 examined the

issue and found that the assessee is not the beneficiary of the refund

said to be received on the basis of the forged TDS certificate. The CIT(A)

referred to the judgment of Madras High Court in CIT Vs. K.Thangamani,

a copy of Madras High Court judgment is not available on record.

Therefore, we are unable to go through the judgment of the Madras High

Court. It is also an admitted fact that for the assessment year 1985-86,

this Tribunal found that the assessee is not the beneficiary of the so

called refund received on behalf of several other companies. It is not the

case of the revenue that the order of this Tribunal in the assessee’s own

case for the assessment year 1985-86 was challenged before High

Court. In the absence of copy of the judgment of the Madras High Court

25 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

in Thangamani’s case before this Tribunal we are considered opinion that

the matter need to be re-examined by the assessing officer. Accordingly,

the orders of the lower authorities are set aside and the issue is remitted

back to the file of the AO. The AO shall reexamine the matter afresh and

thereafter decide the same in accordance with law after considering the

judgment of the Madras High Court in CIT Vs. K.Thangamani and the

decision of this Tribunal in the assessee’s own case for the assessment

year 1985-86 in ITA No.2318 (Mds)/90 after giving reasonable

opportunity to the assessee.

statistical purposes.

consideration is addition of Rs.1,15,000/- under Section 69 of the Act.

Shri D.Anand, the learned counsel for the assessee submitted that the

assessee has deposited Rs.1,15,000/- on various dates in the bank

account. The assessee explained that the assessee has received

professional fee to the extent of Rs.60,000/-. The assessing officer found

that the total professional fee received by the assessee for the

assessment year 1991-92 was Rs.2,13,515/- Out of this, the assessee

26 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

has spent Rs.49,400/- towards audit. The assessee has taken the net

receipt of Rs.1,64,450/- to the profit and loss account. The assessing

officer after considering the expenses of the family and the deposits

made in the bank account maintained in Union Bank of India, Sowcarpet

Branch, Madras made an addition of Rs.65,000/- under Section 69 of the

Act. Similarly, the cash deposit made on 19.10.1991 was also taken as

unexplained investment under Section 69 of the Act to the extent of

Rs.50,000/-. According to the learned representative, these are of

professional receipts. The assessee’s family is a hindu undivided family.

All the family members including the assessee’s brother, father, etc. are

living together. All of them have independent source of income.

Therefore, the assessing officer is not justified in estimating the drawings

for the personal expenditure. Therefore, the addition made by the

assessing officer to the extent of Rs.1,15,000/- is not justified.

the department submitted that the assessing officer after considering the

deposits made in the bank account and the total professional receipts

found that the deposits made in the bank account in the month of April

and May was from undisclosed source. Therefore, he brought the same

to the extent of Rs.65,000/- for taxation. Similarly, the deposit made on

27 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

19.10.1991 for Rs.60,000/- was also from undisclosed source. Therefore,

the CIT(A) has rightly confirmed the addition made by the assessing

officer.

perused the relevant material available on record. The assessee is

practicing as chartered accountant. It is not in dispute that he has

received professional fee from 226 clients. The assessing officer

estimated the net professional fee at Rs.1,64,450/-. The assessing officer

has also found that the assessee has paid Rs.44,000/- towards PPF and

Rs.6,475/- towards LIC. The fact remains is that the assessee’s family is

a hindu undivided family. All the family members including the assessee’s

brother, father, etc. are living together. Therefore, the family expenses

for meeting the day to day needs could be shared by all the members of

the hindu undivided family. In those circumstances, this Tribunal is of the

considered opinion that the AO is not justified in making addition of

Rs.1,15,000/-. The professional receipt disclosed by the assessee and the

fact that the assessee was living in a joint family cannot be ignored by

the assessing officer while making an addition on estimate basis.

Therefore, this Tribunal is of the considered opinion that the addition

made by the assessing officer to the extent of Rs.1,15,000/- is not

28 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

justified. Accordingly, the orders of the lower authorities are set aside

and the addition made by the AO to the extent of Rs.1,15,000/- is

deleted.

under Section 69C of the Act. Shri D.Anand, the learned counsel for the

assessee submitted that during the year under consideration, the

assessee has repaid jewel loan taken from Vysya Bank Limited, on

29.01.1992 to the extent of Rs.97,200/-. The assessee explained before

the assessing officer that the jewel loan was in fact taken by his wife and

repaid by his wife. The learned counsel for the assessee submitted that

the loan taken by his wife and repayment thereof reflected in seized

material. Merely because the jewel loan was not reflected in the ledger

book maintained by the assessee’s wife Smt.Hema Mohnot, the assessing

officer made addition ignoring the material found during the course of

search operation. Since the loan was taken by the assessee’s wife

according to the learned counsel, no addition can be made in the hands

of the present assessee.

submitted that there is no reference about the jewel loan taken by the

29 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

assessee’s wife in the ledger book maintained by Smt.Hema Mohnot.

Moreover, the details of the jewel loan availed by the assessee was not

produced before the AO. Therefore, the explanation of the assessee that

the jewel loan was obtained by his wife is an afterthought.

perused the relevant material available on record. It is not in dispute that

the seized material item No.58 shows that this jewel loan was availed by

assessee’s wife Smt.Hema Mohnot from Vysya Bank Ltd. This Tribunal is

of the considered opinion that the assessing officer cannot ignore this

vital document found during the course of search operation. Mere non

reference in the ledger book maintained by the assessee’s wife regarding

the jewel loan availed by her cannot be a reason to ignore the information

/ material found during the course of search operation. Therefore, this

Tribunal is of the considered opinion that the addition made by the

assessing officer to the extent of Rs.97,200/- in the hands of the

assessee is not justified. This Tribunal is of the considered opinion that

the addition if any could be made only in the hands of Smt.Hema Mohnot

in case she could not explain the source for repayment of jewel loan.

Accordingly, the addition made by the assessing officer is deleted.

30 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

under Section 68 of the Income Tax Act. Shri D.Anand, the learned

counsel for the assessee submitted that the assessee has received hand

loan of Rs.4,000/- from Mr.K.J.Joy. The AO made an addition on the

ground that the assessee could not establish the claim of loan. According

to the learned counsel, the assessee has furnished the address of Shri

K.J.Joy who advanced money to the assessee. The AO has not taken

any pain to examine Shri K.J.Joy. When the assessee claims that the

assessee received Rs.4,000/- from Shri K.J.Joy, the Assessing Officer

cannot reject the claim of the assessee merely because, no confirmation

letter was filed from the creditor. It is for the AO to examine the creditor

and find out the genuineness of the transaction.

the department submitted that though the assessee claimed before the

CIT(A) that he furnished all the details of Shri K.J.Joy from whom the

money was received by the assessee, there was no reference in the

order of AO about the so called details said to be furnished by the

assessee. Even before CIT(A), the assessee has not furnished any letter

from the so called Shri K.J.Joy. Therefore, the CIT(A) has rightly

confirmed the addition made by the assessing officer.

31 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

perused the relevant material available on record. The assessee claims

that the he received a hand loan of Rs.4,000/- from Shri K.J.Joy. The

assessee also claims that he furnished the name and address of the

creditor before the AO. The AO however disallowed the claim of the

assessee on the ground that the assessee was not successful in

establishing the claim. The CIT(A) had been confirmed the order of the

AO on the ground that there was no indication in the assessment order

about furnishing of the address of the creditor before the AO. The fact

remains is that the AO made addition of Rs.4,000/- on the ground that the

assessee was not successful in establishing the claim of hand loan. That

means the assessee has furnished certain details regarding the creditor.

When the assessee has furnished certain details regarding the creditor,

then it is for the AO to examine the creditors in order to find the

genuineness of the transaction. Since the AO has not taken any such

exercise to find out the genuineness of the transaction, this Tribunal is of

the considered opinion that there cannot be any addition under Section

68 of the Income Tax Act merely because the assessee could not

produce the creditor before the AO. Therefore, this Tribunal is of the

considered opinion that the addition made by the AO to the extent of

Rs.4,000/- is not justified. Accordingly, the orders of the lower authorities

32 I.T.A. Nos. 1383, 1384, 1385, 1386 & 1387/Mds/2016

are set aside and the addition made by the AO to the extent of Rs.4,000/- is deleted.

Order pronounced on 25th November, 2016 at Chennai.

Sd/- Sd/- (�ड.एस. सु�दर �संह) (एन.आर.एस. गणेशन) (D.S. Sunder Singh) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, �दनांक/Dated, the 25th November, 2016.

sp. आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A) 4. आयकर आयु�त/CIT, 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.