SH. SUNIL DUTT JAIN, PROP. M/S JAIN FOOD PRODUCTS,,266/33, DIGGI CHOWK, AJMER vs. ACIT, CENTRAL CIRCLE, , AJMER

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: HON’BLE SHRI SANDEEP GOSAIN, JM & HON’BLE SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 309/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2018-19. cuke Shri Sunil Dutt Jain, Asstt. Commissioner of Income –tax, Vs. Prop. M/s. Jain Food Products, C.R. Building, 266/33, Diggi Chowk, Opposite Session Court, Ajmer. Jaipur Road, Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AAQPJ 8741 H vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 372/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2018-19. cuke Joint Commissioner of Income –tax, Shri Sunil Dutt Jain, Vs. C.R. Building, Prop. M/s. Jain Food Products, Opposite Session Court, 266/33, Diggi Chowk, Jaipur Road, Ajmer. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AAQPJ 8741 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal, CA jktLo dh vksj ls@ Revenue by : Shri Arvind Kumar (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 12/07/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 29/08/2023 vkns'k@ ORDER PER BENCH : These are two cross appeals by the assessee and revenue directed against the order dated 21.03.2023 of ld. CIT (A), Udaipur-2 passed under section 250 of

the IT Act, 1961 for the assessment year 2018-19. For the sake of convenience,

both these appeals are being disposed off by this combined order. The grounds

raised by the assessee and revenue are as under :-

ITA NO. 309/JP/2023 (ASSESSEE’S APPEAL):

ITA NO. 372/JP/2023 (DEPARTMENTAL APPEAL):

Ground No. 1 : (Assessee)

of manufacturing, wholesale and retail business of Namkeen and Sweet products in

his proprietary concern M/s Jain Food Products. This is the family business of

assessee which he carries out along with his brother Shri Kamal Kant Jain. He filed

the original return of income for the year under consideration on 30.10.2018

declaring total income of Rs.22,82,810/-. A search and seizure action under section

132 of the I.T. Act, 1961 was carried out on 12.09.2018 at the residential and

business premises of Jain Group of Ajmer wherein the assessee is also covered.

Pursuant to search, the AO issued notice under section 153A of the Act on

29.05.2019 which was duly served upon the assessee by E-mail. In response to

the notice, the assessee filed the return of income on 12.06.2019 declaring the

income of Rs. 22,82,810/-. A notice under section 143(2) was issued on

30.09.2020 and the same was duly served upon the assessee by e-mail. Query

letter along with notices under section 142(1) were also issued on 03.12.2020,

27.02.2021 and 02.06.2021. In response to these notices, the assessee submitted

the desired details in the assessment proceedings. The seized books of accounts

and other books of accounts have been examined on test check basis.

2.1 The AO observed that in search Pages 56-58 of Annexure AS 20 (PB 161-184)

found from the residence of assessee revealed that Shri Indrajeet Singh purchased

an agricultural land on 06.03.2017 for Rs.14,00,000/- which was sold for

Rs.15,50,000/- as per agreement dated 04.05.2017 keeping the name of buyer

blank in all the documents, i.e. Sale Agreement, Will and Power of Attorney.

2.2 The assessee in his statement dated 12.09.2018 recorded u/s 132(4) of IT

Act, 1961, in reply to Question No.31 (PB 14-15) and Question No.54 (PB 36)

admitted that he has purchased the said agricultural land from Shri Indrajeet Singh

for Rs.15.50 lacs which has not been recorded in his books of accounts and thus

offered the same as his unaccounted investment. Immediately thereafter assessee

vide letter dated 23.10.2018 to DDIT, Investigation, Ajmer (PB 51-64, specific Page

59) retracted from his statement stating that his name is not written in any of the

documents. He has neither purchased this agricultural land nor made any payment

towards the said purchase.

2.3 To examine the above facts, summon u/s 131 of IT Act was issued by DDIT,

Investigation, Ajmer to Shri Indrajeet Singh. Shri Indrajeet Singh vide letter dated

Nil (PB 165) explained the reason for keeping the documents with assessee.

Thereafter his statement u/s 131 dated 05.02.2019 (PB 166-167) was also

recorded wherein he explained the reasons for giving these documents to the

assessee and also confirmed that as on date the ownership of land remains with

him.

2.4 The AO, however, held that it is a general tendency of market that one who

wants to invest one’s unaccounted money in property, takes the chain of document

i.e. Power of attorney, Will and Agreement of Sale by keeping the name of the

beneficiary blank from the seller and pays his unaccounted money. Later on

whenever he feels feasible or wants to sell this property, he completes his chain of

document by filing the name of the beneficiary and sell the property. In this case

also, same has been followed by Shri Sunil Dutt Jain to invest his unaccounted

money and he purchased the property from Shri Inderjeet Singh Koli for an amount

of Rs.15,50,000/- by keeping blank in beneficiary’s name. On the basis of these

documents Shri Sunil Dutt Jain in due course of time would have either registered

the above property in the name of self or family member or could sold this land to

another party directly by just filling the name of beneficiary in blank space in all

the documents. These original chain documents were found in possession of Shri

Sunil Dutt Jain at his residence. Also during the search proceedings, in his

statement he accepted the dealing of this land in Rs.15,50,000/- and voluntarily

surrendered the amount for tax. During post search proceedings as well as in

assessment proceedings, Shri Sunil Dutt Jain retracated from his earlier statement

of 12.09.2018 recorded at the time of search proceedings merely on one ground

that documents executed by Shri Inderjeet Singh Koli are left blank and his name

is not mentioned anywhere on the documents as a purchaser. Thus it is established

that Shri Sunil Dutt Jain has purchased agriculture land from Shri Inderjeet Singh

Koli by investing his unaccounted money. Therefore, an amount of Rs.15,50,000/-

is considered as his unexplained investment u/s 69 read with section 115BBE of the

I.T. Act, 1961.

2.5 Aggrieved by the order, assessee preferred an appeal before the ld. CIT (A).

The ld. CIT(A) held that addition made by the AO is based on statement u/s 132(4)

and corroborative evidences. The statement recorded during search operation u/s

132(4) is having strong evidentiary value. The appellant is found in possession of

original Sale deed and Power of Attorney of the same plot of land. The sale deed is

duly signed by the seller in the presence of two witnesses. The document is duly

notarized by an advocate named Shri Yuvraj Singh and date of 04.05.17 is noted on

this document. The fact that this document is found from the possession of the

appellant proves that the transaction is done by the appellant. In addition to this

General Power of Attorney was also found and seized where the name of person in

favour of whom this power is given is not written but it is also signed by Shri

Inderjeet Singh. For the same property sale deed and General Power of Attorney is

prepared on the same date. After a substantial gap of time the appellant retracted

from the statement which is nothing but an effort to avoid the tax liability. The

statement of Shri Inderjeet Singh after search is not reliable because this does not

disproved the signature of him on sale deed prepared on stamp paper, in this sale

deed cash receipt of Rs.15,50,000/- is noted and Shri Inderjeet Singh is an

interested party and admission by him will cast tax liability on him. Accordingly by

relying on the various case laws, he confirmed the addition made by AO.

Now the assessee is in appeal before us.

authorities on the basis of statement of assessee dated 12.09.2018 recorded u/s

132(4) where he has admitted that he has purchased the agricultural land from

Shri Inderjeet Singh for Rs.15.50 lacs and on the basis of unexecuted sale

agreement, Power of Attorney & Will signed by Shri Inderjeet Singh where the

name of buyer/name of person in whose favour it has been executed has been left

blank but were found in the possession of assessee made/confirmed the addition in

the hands of assessee by treating it as unexplained investment u/s 69 of the Act.

3.1 Regarding statement of assessee dated 12.09.2018 recorded u/s 132(4) it is

submitted that immediately thereafter assessee vide letter dated 23.10.2018 to

DDIT, Investigation, Ajmer (PB pages 51-64, specific Page 59) retracted from his

statement stating that his name is not written in any of the document. He has

neither purchased this land nor made any payment towards the said purchase. To

examine this fact, summon u/s 131 of IT Act was issued by DDIT, Investigation,

Ajmer to Shri Inderjeet Singh. Shri Inderjeet Singh vide letter dated Nil (PB 165)

submitted that in order to repay the loans he was in urgent need of funds and

therefore he has given these documents to assessee so that the land can be sold

as soon as possible and his need of funds can be fulfilled. However neither any

transaction was carried out by him with the assessee nor he has given the

ownership of this land to assessee. These facts were also confirmed by him in his

statement u/s 131 dated 05.02.2019 (PB 166-167). The DDIT, Investigation, Ajmer

or the AO have not controverted such statement. Hence the statement of assessee

which has been immediately retracted thereafter cannot be the basis for making

the addition.

3.2 So far as unexecuted Sale Agreement, Power of Attorney & Will signed by

Shri Inderjeet Singh which were found in the possession of assessee is concerned, it

is submitted that assessee’sname is not written in any of these documents. Shri

Inderjeet Singhin his letter dated Nil (PB 165) and statement u/s 131 dated

05.02.2019 (PB 166-167) has explained the reason as stated above for keeping

these documents with the assessee. Hence no addition can be made in the hands

of assessee on the basis of these documents.

3.3 The Ld. CIT(A) has made certain observations at Pages 7 to 15 of its order

and relied on certain case laws. He has stated that retraction of statement after a

considerable time is not acceptable. However, he ignored that retraction is within 40

days of recording of statement u/s 132(4) which cannot be said to be after a

considerable lapse of time. Further Shri Inderjeet Singh in post search proceedings

has filed a letter dated Nil to DDIT, Investigation, Ajmer explaining the correct facts

and these facts were also reiterated in statement u/s 131 dated 05.02.2019. The

same is not controverted by the lower authorities. Therefore, addition confirmed by

Ld. CIT(A) is without appreciating the correct facts.

In view of above, addition of Rs.15.50 lacs confirmed by Ld. CIT(A) be

directed to be deleted.

authorities.

through the orders of the revenue authorities. We note that both the lower

authorities on the basis of statement of assessee dated 12.09.2018 recorded u/s

132(4) wherein he has admitted that he has purchased the agricultural land from

Shri Inderjeet Singh for Rs.15,50,000/- and on the basis of unexecuted Sale

Agreement, Power of Attorney & Will signed by Shri Inderjeet Singh wherein the

name of buyer/name of person in whose favour it has been executed has been left

blank but were found in the possession of assessee, made/confirmed the addition in

the hands of assessee by treating it as unexplained investment u/s 69 of the Act.

However, we find that assessee vide letter dated 23.10.2018 to DDIT, Investigation,

Ajmer retracted from his statement stating that his name is not written in any of the

documents. To examine this fact summon u/s 131 of IT Act was issued by DDIT,

Investigation, Ajmer to Shri Inderjeet Singh who vide letter dated Nil and statement

recorded u/s 131 dated 05.02.2019 stated the reasons as to why these documents

were given by him to the assessee. We find that in search no evidence is found to

prove that assessee has paid Rs.15,50,000/- to Shri Inderjeet Singh. The statement

given u/s 132(4) is also retracted within 40 days. Thus in the absence of any

material on record that assessee has paid Rs.15,50,000/- to Shri Inderjeet Singh,

addition made/confirmed by lower authorities is not justified. Hence the addition

made is deleted. This ground no. 1 of the assessee is allowed.

adjudication.

Ground No. 2 of Assessee and Ground No. 2 of Revenue :

are taken up together.

papers indicating advance given was seized as per Pages 1-23 of Annexure A-1. The

AO on the basis of these papers took the amount of cash loan given at

Rs.2,08,50,000/-. On these papers there is reference of loan given to Shri Pramod

Gupta. In the statement recorded u/s 132(4), the assessee in reply to Question

No.36 (PB 25) offered the same for tax. In post search proceedings the assessee

vide letter dated 23.10.2018 to DDIT, Investigation, Ajmer (PB 54-55) explained that

correct amount of loan given is Rs.1,10,00,000/- and not Rs.2,08,50,000/-. He

further explained that source of such loan is out of the funds from business earned

in earlier years. Statement of the assessee u/s 131(1A) dated 23.10.2018 was also

recorded wherein in reply to Question No.6 (PB 66) & Question No.12 (PB 69) he

again explained that the correct amount of loan given is Rs.1,10,00,000/-.

Thereafter statement of Shri Pramod Gupta was recorded u/s 131 dated 29.11.2018

(PB 71-74), wherein he confirmed that he has taken loan of Rs.60 lacs from the

assessee directly and has arranged loan of Rs.50 lacs from the assessee for other

person. The AO on the basis of Page 35 of Annexure AS-26 (PB 183) observed

that assessee had advanced loan of Rs. 20 lacs between 15.02.2018 to 25.03.2018

to Shri Pramod Gupta. The interest calculated on such amount is @ 24% p.a.

Further on the same paper there is calculation of interest for the month of April to

June of Rs.3,47,000/- p.m. The principal amount considering interest rate of 24%

p.m. works out at Rs.1,73,50,000/-. Accordingly it is held that amount of loan

advanced is Rs.1,93,50,000/-. Further the claim of assessee as to the source of

such amount is not acceptable as discussed at Pages 15 to 18 of the order.

Accordingly AO made addition of Rs.1,93,50,000/-u/s 69A of the Act. Aggrieved by

the order of AO, the assessee preferred appeal before the ld. CIT (Appeals). The ld.

CIT (A) held that Pages 1 to 23 of Annexure AS-1 and Page 35 of Annexure AS-26

are not interlinked and the interest rate assumed @ 24% for reverse calculation to

find out principal amount of loan is not matching with interest rate of 18%

mentioned on Pages 1-23 of Annexure AS-1 and the statement of assessee recorded

u/s 132(4) and that of Shri Pramod Gupta. Accordingly the ld. CIT(A) worked out

the amount of advance as per Pages 1-23 of Annexure AS-1 at Rs.1,15,00,000/-

(including Rs.5,00,000/- as per Page No.5 of Annexure AS-1) and allowed relief of

Rs.78,50,000/-.

us.

under :

“ It is submitted that at Pg 1 to 23 of Annexure AS-1 (PB 171-179) the details of loan given is noted as under:-

Pg Name of Amount (in Period Remarks No. borrower Rs.) 4 Sh. Ram Gopal 15,00,000 01.02.18 - to 30.06.18 5 Sh. Kamal 0 01.02.18 The amount given is Nayan to Rs.10 lacs but it is 31.03.18 crossed which means that it is realized. 5 Jitendra Agarwal 0 01.07.18 Amount given is Rs.5 lacs on 01.07.18 which falls in AY 2019-20 6 AnkurChouhan 10,00,000 01.02.18 - to 30.06.18 7 Sh. Pramod 5,00,000 01.02.18 - Gupta to 30.06.18 8 Vijay Gupta 10,00,000 01.02.18 - to 30.06.18 9 Pramod Gupta 5,00,000 01.01.18 There is a noting of to Rs.90 lacs (60+20+10) 31.05.18 which is total advance given to Pramod Gupta 10 Vijay Gupta 10,00,000 01.02.18 - to 30.06.18 11 Mukesh 10,00,000 01.02.18 -

Chauhan to 30.06.18 12 Soni Balasiya 5,00,000 01.02.18 - to 30.06.18

13 Vijay Singh 15,00,000 01.02.18 - Rawat to 30.06.18 14 Leena Kashyap 5,00,000 01.02.18 - to 30.06.18 15 Chella Ram 10,00,000 01.02.18 - to 30.06.18 16 Pramod Gupta 2,50,000 01.02.18 - to 30.06.18 17 Pramod Gupta 3,00,000 01.02.18 - to 30.06.18 18 Pramod Gupta 4,00,000 01.02.18 - to 30.06.18 19 Pramod Gupta 4,00,000 01.02.18 - to 30.06.18 Total 1,13,50,000

From the above table it can be noted that total advance noted is Rs.1,13,50,000/-. At Pg 9 there is noting of Rs.90 lacs (60 lacs+20 lacs+10 lacs). The amount of Rs.60 lacs represent the total of advance given at Pg 6 (Rs.10 lacs), Pg 7 (Rs.5 lacs), Pg 8 (Rs.10 lacs), Pg 10 (Rs.10 lacs), Pg 13 (Rs.15 lacs), Pg 16 (Rs.2.5 lacs), Pg 17 (Rs.3 lacs), Pg 18 (Rs.4 lacs), Pg 19 (Rs.4 lacs) totaling to Rs.63.50 lacs which is settled on 01.06.2018 at Rs.60 lacs. Rs.20 lacs and Rs.10 lacs represents the estimated interest and other phutkar amount which is included to make the total at Rs.90 lacs. Thus the advance given to Pramod Gupta is Rs.60 lacs and to other person through Pramod Gupta is Rs.50 lacs totaling to Rs.110 lacs. The Ld. CIT(A) has included Rs.5 lacs on the basis of Pg 5 of Annexure AS-1 (PB 172)which in fact is given on 01.07.2018 falling in AY 2019-20 and therefore this amount cannot be added.

So far as Pg 35 of Annexure AS-26 (PB 183) is concerned, it is an independent paper in as much as no link of Rs.20 lacs mentioned on top of Pg 35 is established with any of the entry noted in Annexure A-1. Further the AO by reverse working by taking interest rate of 2% p.m. on the amount of Rs.3,47,000/- has worked out the principal amount at Rs.1,73,50,000/-. On the paper the interest rate of 24% p.a. is not mentioned. As against this the assessee and Sh. Pramod Gupta in their statement has admitted that advance is given at the interest rate of 18% p.a. Hence on the basis of Pg 35 of Annexure AS-26 it cannot be presumed that assessee advanced Rs.1,93,50,000/- ignoring the person-wise detail of advance given noted at Pg 1-26 of Annexure A-1 and also admitted by Sh. Pramod Gupta.

Thus the advance given during the year as per these papers is Rs.1.10 crores and not Rs.1.15 crores as taken by ld. CIT(A) or Rs.1,93,50,000/- as taken by the AO and therefore the ground of the department be dismissed.

So far as the source of giving advance is concerned the same is out of past income. This is also evident from the seized document at Annexure A-2 (PB 97-99), Annexure A-3 (PB 100-104), Annexure A-22 (PB 105-106) and Exhibit 28 (PB 107-108). These papers indicate that Sh. Mirchu Mal owned a plot on which he intended to built a shopping complex and therefore he entered into understanding with Sh. Godu, Jaggu & Amit Meghnani (Group I) and Sh. Vinod & assessee (Group II) to carry out the construction having share of 66.66% of Mirchu Mal, 20% of Group I and 13.33% of Group II(PB 104). The seized paper shows the amount invested in construction by Group I and Group II as under:-

Duration Exhibit Page Construction Amount PB No. No Amount Invested Party Name 07.04.2010 to 2 3 Vinod 6,50,000 99 06.12.2011 05.04.2010 to 3 7 Godu, Jaggu & Amit 6,50,000 03.07.2010

28.08.2010 to 28 7 Godu, Jaggu & Amit 8,71,000 09.10.2010 3 7 Sunil Dutt Jain 10,50,000 104 18.11.2011 to 28 11 Sunil Dutt Jain 2,61,854 05.12.2011 (Second Phase) 34,82,854 Construction Cost Share 22 27 Godu, Jaggu & Amit 15,40,000 107 22 27 Vinod, Sunil Dutt Jain 10,50,000 107 22 27 Amount against 6,50,000 107 advance received by pool of developers

28,50,000 given to contractor and 3,90,000 for other 32,40,000 expenses

On Pg 27 of Exhibit 28 since Godu, Jaggu & Amit wanted to exit, the assessee gave a proposal to pay Rs.17,82,600/- (Rs.15,40,000+ Rs.2,42,600 interest) but it was finalized at Rs.18,44,000/- (Rs.15.50 lacs for investment & Rs.2,94,000/- for interest). Vinod also intended to exit from the project and ultimately they were paid Rs. 24,94,000/- as noted at Pg 7 of Exhibit 3 (PB 104) as under:-

Duration Exhibit Payment done by Amount PB No. Sunil Dutt Jain (in Rs.) 08.10.2011 3 To Godu, Jaggu & Amit 10,00,000 104 18.11.2011 3 To Godu, Jaggu & Amit 8,44,000 104 18.11.2011 2 To Vinod 6,50,000 99 Total 24,94,000

Thus after exit of these persons, Sh. Mirchu Mal has 66.66% share and assessee has 33.33% share in the project. The shops in the project were sold for Rs.1,15,90,000/- as per the following details:-

Date Exhibit Page Amount(in No. of PB No No Rs.) shops 17.04.2010 A-28 27 34,40,000 3 shops 107 17.04.2010 A-28 27 59,00,000 2 shops 107 28.04.2010 A-28 27 22,50,000 2 shops 107 Total 1,15,90,000

Thus assessee received 33.33% of Rs.1,15,90,000/-, i.e. Rs.38,63,000/- as his share which was available with the assessee for giving the advances. This fact is

also explained by the assessee in post search proceedings vide letter dt. 23.10.2018 (PB 56) and in reply to Q. No.7 & 8 of statement u/s 131(1A) dt.23.10.2018 (PB 67-68).

Apart from the above source, assessee sold Plot No.311, Green City, Sikar Road, Jaipur to Smt. Amrita vide sale deed dt. 26.12.2012 (PB 82- 93).The actual sales consideration at which the property is sold is Rs.20,88,000/- which is also the DLC value(PB 89)but at the insistence of buyer the same has been shown in the sale deed at Rs.7,25,000/-(PB 88).Thus assessee has received additional consideration of Rs.13.63 lacs (20,88,000-7,25,000) in cash. Though sales consideration of Rs.7,25,000/- is recorded in the sale deed but tax has been paid by assessee by taking the sale consideration at Rs.20,88,000/- as evident from the return (PB 80). Out of Rs.13.63 lacs, an amount of Rs.2,00,000/-was utilized for purchase of ‘Chabutari’ in AY 2013-14 but since it was cancelled the assessee received back Rs.2 lacs. Thus an amount of Rs.13.63 lacs was also available for giving the advances.

From the above it can be noted that assessee has sources of funds available to the extent of Rs.52.26 lacs (38.63 lacs +13.63 lacs) for providing advances. Hence out of total advances of Rs.110 lacs, source to the extent of Rs.52.26 lacs is proved from the seized record and therefore addition can be sustained to the extent of Rs.57.74 lacs.

In view of above, ground of the department be dismissed and ground of the assessee be allowed as submitted above.”

gone through the orders of the revenue authorities. We note that the AO on the

basis of papers found in search made addition of Rs.1,93,50,000/- on account of

unexplained advances but the ld. CIT(A) restricted the addition to Rs.1,15,00,000/-.

However, we find that actual advance as per these papers is Rs.1,13,50,000/- as at

Page 9 there is a noting of Rs.90 lacs (60 lacs+20 lacs+10 lacs). The amount of

Rs.60 lacs represent the total of advance given at Page 6 (Rs.10 lacs), Page 7 (Rs.5

lacs), Page 8 (Rs.10 lacs), Page 10 (Rs.10 lacs), Page 13 (Rs.15 lacs), Page 16

(Rs.2.5 lacs), Page 17 (Rs.3 lacs), Page 18 (Rs.4 lacs), Page 19 (Rs.4 lacs) totalling

to Rs.63.50 lacs which is settled on 01.06.2018 at Rs.60 lacs. Rs.20 lacs and Rs.10

lacs represents the estimated interest and other phutkar amount which is included to

make the total at Rs.90 lacs. Thus the advance given to Shri Pramod Gupta is Rs.60

lacs and to other person through Shri Pramod Gupta is Rs.50 lacs totalling to Rs.1.10

crores. The ld. CIT(Appeals) has included Rs.5 lacs on the basis of Page 5 of

Annexure AS-1 which in fact is given on 01.07.2018 falling in A.Y. 2019-20.

Therefore the unexplained investment in advances as per the papers is

Rs.1,10,00,000/-. We also find that Page 35 of Annexure A-26 is an independent

paper and therefore on the basis of reverse working the advances worked out by the

AO at Rs.1,93,50,000/- ignoring the person wise details of advances found in search

is not correct and thus the ground of the department is dismissed.

12.1 We further note that source of such advance is partly verifiable from

Rs.38,63,000/- received by the assessee as his share received from Shri Mirchu Mal

in the shops built in his shopping complex as is evident from the document seized at

Annexure A-2, A-3, A-22 & Exhibit 28 in F.Y. 2010-11 & 2011-12. Further assessee

has funds available of Rs.13.63 lacs from sale of plot at Green City, Jaipur in F.Y.

2012-13. Thus the source of funds to the extent of Rs.52.26 lacs is available with

the assessee to give advance of Rs.110 lacs. Therefore, addition is sustained to the

extent of Rs. 57,74,000/- (1,10,00,000-52,26,000). Thus the ground of assessee

is partly allowed.

Ground No. 3 of Assessee and Ground No. 3 of Revenue :

are being disposed of together.

observed that assessee has given advance @ 24% p.a. He therefore calculated

interest for the month of February & March, 2018 @ 2% p.m. on the cash loan of

Rs.1,93,50,000/- and made addition of Rs.7,74,000/- u/s 69A r.w.s. 115BBE of the

Act. Aggrieved by the order of AO, the assessee preferred appeal before ld. CIT (A).

The ld. CIT(A) at Pages 25-26, Para 6 to 6.2 of its order held that appellant offered

Rs. 3.55 lacs for these 2 months @ 18%. He, therefore, directed the AO to work out

the interest income by applying interest rate of 18% p.a. on the amount of

Rs.1,15,00,000/- for the month of February & March, 2018.

Ground No. 2 above, the cash loan advanced is Rs.1.10 core and the interest rate is

18% p.a. Therefore, interest income can be computed @ 1.5% p.a. for 2 months on

Rs.1.10 crore which works out at Rs.3,30,000/- as against Rs.3,45,000/- confirmed

by ld. CIT(A) and Rs.7,74,000/- made by the AO.

In view of above, ground of the department be dismissed and ground of the

assessee be allowed as submitted above.

of the department is dismissed.

Order pronounced in the open court on 29/08/2023.

Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBkSM+ deys'k t;arHkkbZ ½ (RATHOD KAMLESH JAYANTBHAI) (SANDEEP GOSAIN) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29/08/2023. Das/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Sunil Dutt Jain, Ajmer.

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेजज. त्महपेजतंत