SRI SARAJIT KR BACHAR,SOUTH 24 PARGANAS vs. I.T.O WD - 53(4),KOLKATA., KOLKATA

The assessee has filed revised grounds of appeal and has requested that the said grounds of appeal be adjudicated.

Ground No.1 in the revised grounds of appeal reads as follows :- “1.That Ld. CIT(Appeal) has erred in facts in sustaining the addition of negative cash balance of Rs.5,26,770/- when in fact the cash balance was always positive throughout the year.”

Before us the ld. Counsel for the assessee filed a copy of the cash book as was produced before the AO and made a submission that there was no negative balance as mentioned by the AO in the order of the assessment. His limited request was to set aside the issue to the AO for fresh consideration.

The learned DR opposed the prayer of the assessee. According to him the negative cash balance were accepted by the assessee before the AO as well as the CIT(A). He pointed out that the cash book had not been impounded by the AO at the time of assessment proceedings and therefore veracity of cash book now filed before the Tribunal is doubtful.

I have considered the rival submissions and am of the view that the prayer as made by the ld. Counsel for the assessee cannot be accepted. As rightly pointed out by the learned DR., neither before the AO nor before the CIT(A), the assessee took a stand that there was no negative balance in the cash book. It is therefore not proper to Shri Sarajit Kr.Bachar A/.Y.2005-06 2 take cognizance of the cash book now sought to be filed before us. I, therefore, reject the request made on behalf of the assessee and dismiss ground No.1 raised by the assessee as otherwise the conclusions of the CIT(A) are just and proper.

Ground No.2 raised by the assessee reads as follows : “2. That the addition of Rs.3,67,625/- towards undisclosed investment is perverse in the absence of cross examination of affidavits.”

The assessee has purchased a plot of land at Sonarpur at a cost of Rs.6,47,625/- including cost of registration. In the balance sheet of the assessee a sum of Rs.2,80,000/- had been shown as advance for purchase of the plot. The deed was registered on 06.05.2004. AO in the absence of satisfactory explanation with regard to the source of fund for making investments to the extent of Rs.3,67,625/- (Rs.6,47,625 – 2,80,000) treated the said sum as unexplained investment.

Before the CIT(A) the assessee submitted that contributions were made by other members of the family and that was the source for purchase of the property. The affidavits of the family were filed before CIT(A). CIT(A) called for a remand report from the AO and the AO in the remand report submitted that the affidavit was being filed after a lapse of time and it cannot be accepted. CIT(A) accepted the remand report of the AO and confirmed the addition made by the AO.

I have considered the rival submissions and am of the view that in the light of the affidavits filed by the relatives of the assesse, the AO ought to have examined them before coming to a conclusion about the truth or otherwise of the stand taken by them. Without examination of these persons it is not possible to come to a conclusion that they do not have source of funds for making such contribution. I, therefore set aside the order on this issue and remand the issue to the AO for fresh consideration. The AO will carry out examination of the deponent of the affidavits and thereafter decide the issue in accordance with law after affording opportunity of being heard to the Assessee. Consequently ground no.2 of the assessee is treated as allowed for statistical purposes. Shri Sarajit Kr.Bachar A/.Y.2005-06 3

In the result the appeal of the assessee is partly allowed for statistical purposes.