Order appeal by Revenue and cross-objection by assessee, are directed against order of CIT(A) dt. 30th Nov., 2004, pertaining to asst. yr. 2001-02. 2. Revenue has raised following grounds of appeal : 1. Deleting addition of Rs. 50,918 made by AO on account of excess stock found during survey. 2. Deleting addition of Rs. 5,14,900 made by AO on account of unexplained cash credits under s. 68. 3. Deleting addition of Rs. 4,27,300 made by AO under s. 69B on account of unexplained investment in purchases of plot. 4. Deleting addition of Rs. 12,000 made by AO on account of inadequate withdrawals for household expenses. 3. In cross-objection assessee has raised following grounds of appeal : "1. Deleting addition of Rs. 50,918 made by AO on account of excess stock found during survey. 2. Deleting addition of Rs. 5,14,900 made by AO on account of unexplained cash credits under s. 68. 3. Deleting addition of Rs. 4,27,300 made by AO under s. 69B on account of unexplained investment in purchases of plot. 4. Deleting addition of Rs. 12,000 made by AO on account of inadequate withdrawals for household expenses." 4. First ground of Revenue s appeal relates to deletion of addition of Rs. 50,918 made by AO on account of alleged excess stock found. facts of this case are that assessee, who deals in lime products declared income of Rs. 1,92,070 by filing return of income on 31st Jan.,2002 along with copies of trading account, P&L a/c, balance sheet and capital account. business is done in name and style of M/s Hindustan Lime Products, Borunda. survey under s. 133A of Act was carried out at business premises of M/s Hindustan Lime Products, Mertacity on 15th Jan., 2001. Physical verfication of stock in trade was made. stock of lime was found at Rs. 2,56,803 as against Rs. 2,05,885 as per books. assessee did not maintain day-to-day stock register and also did not maintain quantitative details. Thus, stock was found excess by Rs. 50,918. To explain this anomaly Shri Satya Narain Agarwal in his statement recorded on 15th Jan., 2001 stated that goods purchased from one M/s Shiv Enterprises were returned as there was some dispute about same and that is why it was not accounted in books. He also stated variation in stock of Rs. 50,918 was on account of increase in GP during year. He has agreed to pay tax on total sales of Rs. 34,41,960 by applying net profit rate of 5 per cent which would give taxable income of around Rs. 1,70,000. In his return, assessee did not disclose excess stock found during course of survey. assessee explained vide letter dt. 19th Feb., 2004 that stock was worked out after applying GP rate of 3.37 per cent at time of survey whereas profit rate was 5.13 per cent and as such there was no variation in stock. AO did not agree with explanation of assessee, and made addition of Rs. 50,918 under s. 69 of Act as unexplained investment in stock. learned CIT(A), however, deleted this addition by accepting explanation of assessee. Therefore, Revenue is in appeal. 5. We have heard rival submissions and have perused available materials on record carefully. 6. It is undisputed fact that difference in stock was worked out during course of survey on basis of GP rate of 3.37 per cent shown in immediately preceding year whereas assessee in his statement recorded under s. 131 had stated that difference in stock was as result of application of profit rate of past year and if profit rate of current year was applied, there was no such difference. assessee had agreed to pay tax as per s. 44AF and he has also honoured same. assessee has shown net income of Rs. 1,82,315 by applying net profit rate of 5 per cent as against net profit worked out in P&L a/c of Rs. 91,385 which in our opinion clearly explains amount of Rs. 50,918 taken as difference in stock. Consequently, we confirm finding of learned CIT(A) and dismiss ground No. (1) of Revenue s appeal. 7. Ground No. (2) of Revenue s appeal relates to deletion of addition of Rs. 5,14,900 made by AO on account of unexplained cash credits under s. 68 of Act. 8. facts of this ground are that it was noticed by AO that cash credits were brought in books of accounts in names of 33 persons. Out of them cash credits of 32 persons had been squared up during accounting year itself. total amount involved in name of 33 cash creditors is Rs. 6,12,900. particulars of these cash creditors are as under : S.N Name of creditors Amou Date of Date o. nt credit of (Rs.) repay ment 1. Svs. Laxamn Luhar 18000 17.9.20 30.12. Meghwalo ka Bas Borunda 00 2000 2. Lunaram Meghwal 18000 18.9.20 24.3.2 Meghwalo Ka Bas 00 001 3. Baldev Ram Nayak 17000 12.9.20 9.2.20 00 01 4. Chhotu Ram Sharma, 18000 24.6.20 24.3.2 Borunda 00 001 5. Mahaveer Sharma, 17000 25.6.20 20.3.2 Borunda 00 001 6. Rajesh Agarwal Chhipo ki 15000 24.6.20 6.7.20 Pole, Mertacity 00 00 15000 20.9.20 24.9.2 19000 00 000 1.10.20 5.10.2 00 000 7. Sitaram Nayak Nayko Ki 18000 18.9.20 24.3.2 Dhani, Pundlu 00 001 8. Chhitar Ram Redas V & P - 16000 12.9.20 20.12. Gunat, Tehsil- Parbastar 00 2000 9. Lal Bahaduar Sahani Gotan 16000 13.9.20 9.2.20 Road , Borunda 00 01 10. Jagdish Redas, V & 15000 13.9.20 2.2.20 P-Gunat, Tehsil- Parbastar 00 01 11. Satyanarayan Sharma 15000 14.9.20 12.2.2 Sadar Bazar, Ren 00 001 12. Radheysyam Sharma 15000 14.9.20 29.03. Dagariyon Ka Mohalla 00 2001 Mertacity 13. Raju Harijan 15000 15.9.20 19.2.2 Village-Moriyana Tehsil 00 000 Degana 14. Panchu Singh Rawat 17000 15.9.20 21.12. Village Pratapgarh 00 2000 District- Pali 15. Mansi Ram Dewasi 17000 17.9.20 9.2.20 00 01 16. Sadique Village Malawas, 16000 17.9.20 20.12. Tehsil- Bilara 00 2000 17. Deen Mohammed Gotan 18000 13.6.20 20.03. Road, Borunda 00 2001 18. Islam Bhai Gotan Road, 15000 14.6.20 20.03. Borunda 00 2001 19. Jai Praksh Sukla Gotan 17000 24.6.20 9.02.2 Road, Borunda 00 001 20. Paras Sarggara Binjaro Ka 17000 18.9.20 20.12. Bas Malawas, Tehsil- 00 2000 Bilara 21. Pukhji Nayak Village : 18000 10.9.20 12.12. Bher Bhakri, Nagaur 00 2000 22. Chhotu Ram Nayak Nayko 16000 10.9.20 21.12. Ki Dhani 00 2000 23. Bhaguram Chokidar 15000 10.9.20 27.12. Village : ARdai 00 2000 Tehsil-Jetran 24. Om Praksh Agarwal Soni 17000 25.10.2 21.2.2 Chowk, Mertacity 000 001 25. Madan Singh Charan 18000 27.10.2 21.2.2 Borunda 000 001 26. Charna Ram Jat Borunda 18000 29.10.2 7.3.20 000 01 27. Kailash Mali Sojati Gate, 17000 29.10.2 8.3.20 Mertacity 000 01 28. Manoj Choudhary Mutho 18000 14.11.2 9.3.20 Ka Mohall, Mertacity 000 01 29. Jitendra Choudhary Mutho 17000 14.11.2 10.3.2 Ka Mohall, Mertacity 000 001 30. Kaludas, Shivhar Mandi 17000 16.11.2 22.2.2 Mertacity 000 001 31. Bhika Ram Dholi Mutho 14900 16.11.2 25.2.2 Mutha Nadi, Mertacity 000 001 27.2.2 001 32. Ramavtar Sikhwal 18000 16.11.2 23.2.2 Sikhwalo Ka Mohalla 000 001 Mertacity 33. Ramroop 45000 Total 6,12,9 00 When assessee was asked to explain nature of cash credits appearing in names of aforementioned persons, assessee explained same by filing written submission. AO examined explanation of assessee but did not found it favourable, so he made addition of entire amount. On contrary, learned CIT(A) examined all cash creditors with respect to their identity, capacity and genuineness of transactions and he ultimately gave following finding by accepting most of cash creditors as genuine and some were held as ingenuine. Thus, both parties are aggrieved and have taken their respective grounds. Ground No. (2) of Revenue s appeal and ground No. (1) of cross-objection are being decided together. 9. We have heard rival submissions and have perused available materials on record carefully. 10. It is settled position of law that assessee is duty bound to, prima facie, establish identity and capacity of cash creditors along with genuineness of transactions. Shri Laxman Lohar S/o Shanker Ram Lohar filed his affidavit in which he accepted factum of deposit with assessee of Rs. 18,000 and he also explained his source. But AO made inquiry through his Inspector, who also recorded his statement on 18th Feb., 2004, on basis of which this addition was confirmed. statement recorded by Inspector behind back of assessee has got no evidentiary value. Therefore averment of affidavits, which confirmed deposit of cash credit, remained uncontroverted. Therefore, this addition has to be deleted. Likewise, we have examined each and every cash creditor, out of 32 squared up cash creditors, 27 parties were examined by Inspector of Department. Even before Inspector 24 parties confirmed factum of loan having been given to assessee and also having been received it back by them. These parties also confirmed receipts of interest on their respective deposits. identity of these persons was established beyond doubt. We (sic They) have also explained their respective source(s) of income along with their monthly expenses. Therefore, their creditworthiness also stands explained being sufficiently proved on record. transactions are found genuine; therefore, there is no justification for addition on account of 27 squared up cash creditors. We confirm finding of learned CIT(A) to that extent and hold that learned CIT(A) has correctly deleted same. As regards 5 cash creditors, who were not examined but they had their duly sworn in and attested affidavits filed which remained uncontroverted. When affidavits remained uncontroverted by Department, averment of affidavit has to be taken as truthful. All of them have confirmed factum of their cash credits. Tribunal Jodhpur Bench has taken similar view in cases of ITO vs. Vardhman Industries (2006) 99 TTJ (Jd) 509, Kamal & Co. vs. Asstt. CIT (1998) 62 TTJ (Jp) 527 and Raja Ram Mohan Lal vs. ITO (1991) 40 TTJ (Jp) 320. There were only 3 cash creditors who did not confirm having given loan and having received same back. explanation of assessee in respect of them is that transactions in question took place in financial year 2000-01 whereas statements were recorded in February, 2004. It was also submitted that no oath was administered to these cash creditors. Apart from this, statements were recorded by Inspector, who has no legal authority to record statements. This is also consistent view of this Bench. Therefore, we accept these cash creditors also as genuine. As regards contention of AO regarding non-appearance of interest entry in copies of accounts of cash creditors assessee explained that interest was paid in cash and debited to interest account. This fact in our view is sufficient enough to explain above doubt of AO. Regarding transaction being not by cheque, it was explained that place where assessee has carried on business and further that in this line of business, banking habits are not normal. This is also valid explanation. Therefore, addition cannot be made merely because transaction was not through cheque. Hence, we accept all cash creditors as genuine and delete entire addition so made under s. 68 of Act. Otherwise also, assessee is entitled to set off of amounts of some cash creditors who denied factum of loan against extra income declared by assessee by declaring income under provisions of s. 44AF. Therefore, ground No. (2) of Revenue s appeal is dismissed and ground No. (1) of assessee s cross-objection is allowed. 11. next ground of appeal relates to addition of Rs. 4,27,300 made on account of alleged unexplained investment in purchase of plot. 12. facts of this ground are that assessee purchased plot of land along with one built-up room and verandah for (sum) of Rs. 2,00,000 which was disclosed. For stamp duty purposes, market value of property was taken at Rs. 6,27,300. assessee purchased this property from one Shri Budhraj S/o Shri Bhanwar Lal, resident of Mertacity. learned AO got inquiries conducted through his Inspector to verify actual price of this property. Inspector recorded statement of one Shri Pujkhraj Bhati, whose land was situated adjacent to plot purchased by assessee. In his statement, Shri Pukhraj Bhati, recorded on 18th Feb., 2004, stated that fair market value of this plot commonly known as godown, ranged between Rs. 9 lakhs to Rs. 12 lakhs. Finally, learned AO concluded that this plot was purchased for consideration of Rs. 6,27,300 and thus, added Rs. 4,27,300 after excluding disclosed investment of Rs. 2 lakhs in hands of assessee under s. 69 of Act as unexplained investment. learned CIT(A), however, deleted entire addition by relying on decision of Hon ble Tribunal Jodhpur Bench given in case of Jai Marwar Co. (P) Ltd. vs. Asstt. CIT in ITA No. 2226 [reported at (2003) 79 TTJ (Jd) 178 Ed.] in which it was held, by relying on decisions of Hon ble Supreme Court given in case of U.P. Jal Nigam vs. Kalra Property AIR 1966 SC 1170 and that of Hon ble Rajasthan High Court in case of CIT vs. Raja Narendra (1995) 123 CTR (Raj) 459 : (1994) 74 Taxman 157 (Raj), that rate fixed for collection of stamp duty cannot be relied upon to determine fair market value of land. 13. We have heard rival submissions and have perused available materials on record carefully. 14. We are aware that only on basis of stamp duty charged by sub-Registrar no addition can be made on account of estimated investment made in purchase of property. In this case, AO made addition simply on basis of valuation taken for stamp duty by sub-Registrar, even after making further inquiries, which were not relied by him. Therefore, by respectfully following abovenoted decision of Jodhpur Bench, we confirm impugned finding and dismiss ground No. (3) of Revenue s appeal. 15. last ground i.e., ground No. (4) of Revenue s appeal relates to deletion of addition of Rs. 12,000 made by AO on account of inadequate withdrawals for household expenses. 16. family of assessee consisted of 2 members only and total withdrawals shown by him and his wife were at Rs. 48,000, which was considered to be quite reasonable by learned CIT(A). On very face of it, in absence of any other material available on record, we also confirm impugned deletion. AO simply made this addition based on guesswork. We cannot approve same. We hold that learned CIT(A) has correctly deleted this addition. 17. other grounds i.e., ground Nos. (2) and (3) of cross-objection read as under : 2. That learned CIT(A) was not justified on facts and in law in confirming disallowance of Rs. 1,200 on account of telephone expenses more particularly when income of assessee has been determined under s. 44AF of IT Act,1961. 3. That learned CIT(A) was not justified on facts and in law in confirming separate addition of Rs. 3,780 when income of assessee has been determined under s. 44AF of IT Act, 1961. 18. AO made separate addition of Rs. 12,000 on account of disallowance out of telephone expenses and Rs. 3,780 as separate addition. These were not really pressed by learned Authorised Representative. Therefore, ground Nos. (2) and (3) of cross-objection are dismissed. 19. In result, appeal of Revenue is dismissed and cross-objection is partly allowed. *** Income-tax Officer v. Satyanarayan Agarwal