IN INCOME TAX APPELLATE TRIBUNAL BENCH : CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER] I.T.A.Nos.964 to 966/Mds/2016 Assessment years : 2006-07,2007-08 and 2008-09 Dr. Akilan Ramanathan Vs. Asstt. Commissioner of #9, State Bank Colony Income-tax Shastri Nagar Non-Corporate Circle 15(1) Adyar, Chennai 600 020 Chennai [PAN ACQPA2957G] (Appellant) ( Respondent) Appellant by : Shri M.P.Senthil Kumar, Advocate Respondent by : Shri Shiva Srinivas, JCIT Date of Hearing : 09-08-2016 Date of Pronouncement : 16-09-2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER These appeals of assessee are directed against separate orders of Commissioner of Income-tax (Appeals)-15, Chennai, dated 11.3.2016 for assessment years 2006-07, 2007-08 and 2008-09. 2. First we take up I.T.A.No.964/Mds/2016 for assessment year 2006-07. :- 2 -: ITA No. 964 to 966/16 3. Facts apropos are that assessee, holding Doctorate degree from Anna University, Chennai, was in Civil Service since 1997. He resigned from such service in June 2005 and thereafter worked as Pro-Chancellor, Bharath University, Chennai from July 2005 to June 2009. After this tenure, he worked as Advisor to Mahatma Gandhi Medical College from August 2005 to November 2010. Thereafter he worked as consultant in one M/s Info Plus Pvt. Ltd from April 2010 to March, 2011. Assessee was receiving salary, consultancy fees on retainership services and income from other sources. 4. For impugned assessment year, assessee filed return of income declaring income of ` 6,68,500/-. Assessment was reopened by issuing notice u/s 148 of Act. In pursuance of notice, assessee requested Assessing Officer to treat return originally filed as one in response to that notice. During course of assessment, it was noticed by Assessing Officer that assessee had Savings Bank account with State Bank of India, Indiranagar Branch, Indian Overseas Bank, Adyar Branch and another account with Indian Bank, MG Road, Pondicherry. Assessee had during course of assessment proceedings filed cash flow statement. Assessing Officer found that assessee had made cash deposit of ` 1 lakh in his account in State Bank of India on 27.12.2005. Source of deposit :- 3 -: ITA No. 964 to 966/16 explained by assessee was withdrawal of ` 2 lakhs from same account on 21.10.2005. However, Assessing Officer did not accept this contention. According to him, assessee could not adduce any evidence or reason for keeping sufficient cash with him for two months. addition of ` 1 lakhs was made u/s 68 of Act. 5. Aggrieved, assessee moved in appeal before CIT(A). Apart from challenging reopening of assessment, on merits it was submitted by assessee that deposit had come out of withdrawal from same SB account. However, CIT(A) sought remand report from Assessing Officer. In remand report Assessing Officer stated that evidence furnished by assessee was not satisfactory. Addition was confirmed by CIT(A). 6. Now before us, assessee has taken altogether seven grounds of which Ground Nos.1,4, 5, 6 & 7 are general needing no specific adjudication. 7. In Ground No.2 assessee assails reopening of assessment. Ld. AR submitted that he was not pressing this ground. Ground No.2 is dismissed as not pressed. 8. In Ground No.3 assessee assails addition of ` 1 lakh u/s 68 of Act. 9. ld.AR, strongly assailing orders of lower authorities, submitted that copy of SBI bank account placed at :- 4 -: ITA No. 964 to 966/16 page 9 of paper book clearly reflected withdrawal of ` 2 lakhs on 21.10.2005. As per ld. AR, merely because there was short gap of two months between withdrawal and deposit, lower authorities ought not have taken view that source of deposit was unexplained. 10. Per contra, ld. DR supported orders of authorities below. 11. We have considered rival contentions and perused orders of authorities below. Copy of SBI bank account placed at page 9 of paper book shows that assessee had withdrawn ` 2 lakhs on 21.10.2005 and made deposit of ` 1 lakhs on 27.12.2005. Observation of lower authorities was that assessee being not in business or profession as such, there is no need for keeping so much cash in his hands. In our opinion, this is only surmise and could not be valid reason for making addition. Assessee has choice of keeping money personally with him or in bank. Just because assessee is not businessman or professional would not be reason to disentitle him from claiming benefit that would otherwise be available. Assessee could have myriad of reasons for keeping cash in hand with him. We cannot say that assessee could not have shown source as withdrawal made by him from :- 5 -: ITA No. 964 to 966/16 bank account. We are of opinion that addition was not justified. Such addition is deleted. 12. In result, appeal for assessment year 2006-07 is partly allowed. 13. Now coming to I.T.A.No.965/Mds/2016 for assessment year 2007-08, assessee has altogether taken nine grounds of which Ground Nos.1,6,7,8 & 9 are general in nature needing no specific adjudication. 14. Ground No.2 with regard to reopening of assessment was not pressed by ld. AR. Accordingly, Ground No.2 is dismissed as not pressed. 15. In Ground No.3, assessee is aggrieved of addition of `31,39,000/- u/s 68 of Act which was confirmed by CIT(A). 16. Facts apropos re that assessee had during relevant previous year deposited cash of ` 31,39,000/- in his SB account with Indian Overseas Bank, Adyar. source thereof was explained to be withdrawals totalling ` 69,61,850/- from same bank and from his account with SBI, prior to date of deposit. Assessee also furnished copies of bank accounts. However, Assessing Officer was once again of opinion that there being considerable gap between withdrawals and placement of deposit, explanation of assessee could not be accepted. As per Assessing Officer, assessee ought to have proved that what was deposited was same :- 6 -: ITA No. 964 to 966/16 money which was withdrawn. He held that in absence of detailed cash flow, it would be difficult to believe that amounts withdrawn much prior to deposit could be accepted as source. He made addition of ` 31,39,000/- u/s 68 of Act. 17. In his appeal before CIT(A), argument of assessee was that books of account were required to be maintained only if person was carrying on profession or business. Relying on Rule 6(F), assessee submitted that unless and until assessee was carrying on one of profession mentioned in said Rule, it was not required to maintain cash book. CIT(A) sought remand report from Assessing Officer. In his remand report dated 27.1.2016, Assessing Officer simply stated that evidences furnished by assessee were not satisfactory. CIT(A) relying on such remand report confirmed addition. 18. Now before us, strongly assailing orders of authorities below, ld. AR submitted that deposits considered for addition were as under: Cash deposits Bank Date Amount deposited IOB, Adyar 03.05.2006 14,00,000/- IOB, Adyar 07.11.2006 2,00,000/- IOB, Adyar 25.11.2006 5,00,000/- :- 7 -: ITA No. 964 to 966/16 IOB, Adyar 02.01.2007 1,64,000/- IOB, Adyar 04.01.2007 1,50,000/- IOB, Adyar 08.01.2007 1,50,000/- IOB, Adyar 25.01.2007 3,00,000/- IOB, Adyar 28.02.2007 2,00,000/- IOB, Adyar 28.02.2007 75,000/- Total 31,39,000/- 19. As per ld. AR, out of above deposits, following amounts were withdrawn from various bank accounts held by assessee on earlier dates: S.No. Date Bank Amount in Rs. 1. 11.04.2006 From SBI, Indira Nagar Branch 5,00,000/- 2. 26.04.2006 From IOB, Adyar Branch 5,00,000/- 3. 26.04.2006 From SBI, Indira Nagar Branch 1,00,000/- 4. 26.04.2006 From SBI, Indira Nagar Branch 2,00,000/- 5. 01.04.2006 Cash in hand 1,64,343/- Total 14,64,343/- Further, as per ld. AR, deposit of ` 5,00,000/- on 25.11.2006 was out of withdrawal of ` 4,80,000/- on 17.11.2006 and ` 30,000/- on 20.11.2006. Deposit of ` 1,64,000/- on 2.1.2007 and ` 3,00,000/- on 25.1.2007, as per ld. AR were out of amount earlier advanced by assessee to his friend Shri Raghupathy which was refunded by latter. Insofar as deposit of `2,00,000/- and ` 75,000/- on 28.2.2007, as per ld. AR, these came out of following withdrawals from his SB account with Indian Bank, Pondichery: :- 8 -: ITA No. 964 to 966/16 Date Cheque No. Amount 10.01.2007 426456 Rs.50,000/- 10.01.2007 426458 Rs.50,000/- 10.01.2007 426455 Rs.50,000/- 23.01.2007 426462 Rs.60,000/- 23.01.2007 426469 Rs.20,000/- 17.02.2007 426463 Rs.60,000/- Thus, as per ld. AR, there were sufficient withdrawals from various banks in cash for making deposits. Contention of ld. AR was that time gap between these withdrawals and deposits was only ten months, this was not so significant so as to doubt source of deposits. Reliance was placed on copies of bank accounts placed in paper book. 20. Per contra, ld. DR submitted that it was difficult to believe that assessee kept so much cash in hand without any specific reason, especially when assessee was salaried employee. 21. We have considered rival contentions and perused orders of authorities below. Copy of assessee s SB account with State Bank of India, Indiranagar Branch, is placed at pages 4 to 5 of paper book and that of Indian Overseas Bank is placed at pages 1 to 3 of paper book. Copy of SB account with Indian Bank, Pondicherry is placed at pages 7 to 8 of paper book. Withdrawals mentioned by ld.AR and which are reproduced by us at para 19 :- 9 -: ITA No. 964 to 966/16 appear in these accounts either as self withdrawals or as cash withdrawals. Earliest date of withdrawal from State Bank of India was 11.4.2006 for sum of ` 2,00,000/-. last of deposits made with Indian Overseas Bank, Adyar considered for addition was ` 2,75,000/-dated 28.2.2007. Thus, time gap between earliest withdrawal and last of deposits was less than 11 months. Assessee had given explanation as to why he was withdrawing amounts. As per assessee, he was engaged in house construction in State Bank colony, Shastri Nagar, Adyar and was negotiating for property at UK through Indian real estate agent. Just because there was gap of about 11 months, we are of opinion that cash withdrawals made by assessee prior to date of deposits ought not have been disbelieved. cash balance of `1,64,343/- as on 1.4.2006 claimed as source is also in our opinion reasonable considering social standing of assessee. However, for deposit of ` 1,64,000/- on 2.1.2007 and ` 3,00,000/- on 25.1.2007, claim of assessee is that it was given by Shri Raghupathy as refund of advances earlier given by assessee to Shri Raghupathy. As per assessee, amounts given by him to Shri Raghupathy was through cheques. If so, there is no reason why Shri Raghupathy returned amount in cash. In our opinion, no reliable evidence has been filed by assessee for explaining :- 10 -: ITA No. 964 to 966/16 version give by assessee. Thus, source of deposits to extent of ` 4,64,000/-, in our opinion, remained unexplained. Insofar as balance amount is concerned, assessee was able to co-relate with withdrawals and deposits from his various bank accounts. Hence, we have no hesitation to restrict addition made for unexplained to ` 4,64,000/-. Assessee gets relief of ` 26,75,000/-. This ground is partly allowed. 22. In Ground No.4 grievance raised by assessee is that loans taken by him from his wife and father were disbelieved by Assessing Officer and addition of ` 26,60,000/- was made. 23. Facts apropos are that in cash flow statement filed by assessee before Assessing Officer, amount of ` 19 lakhs was shown as refund of loans earlier taken by assessee from his wife Smt.Anandhi Akilan. Similarly, another sum of ` 7,60,000/- was shown as refund of loan earlier taken from his father Shri V. Ramanathan. Assessing Officer was of opinion that assessee was unable to prove creditworthiness of these persons and made addition of ` 26,60,000/-. 24. In appeal before CIT(A), argument of assessee was that addition as such was made by Assessing Officer without :- 11 -: ITA No. 964 to 966/16 any specific discussion or reason. As per assessee, Assessing Officer himself had noted why amounts were earlier received from Smt. Anandhi Akilan and Shri V. Ramanathan. Contention of assessee was that these were not fresh loans. As per assessee, he had discharged onus of proving identity of creditor and also furnished their full address and PAN. Argument of assessee was that Smt. Anandhi Akilan had given sum out of sale consideration of ` 1,38,00,000/- received by her for sale of property at Karapakkam. sum as per assessee was earlier given by his wife for construction of house at Shastri Nagar, Chennai. Insofar as ` 7,60,000/- received from his father Shri R. Ramanathan was concerned, argument of assessee was that Smt. Anandhi Akilan had given advance of ` 36,50,000/- to Shri V. Ramanathan out of which latter had given sum. CIT(A) sought remand report from Assessing Officer. Assessing Officer in his remand report dated 27.1.2006 stated that evidences furnished by assessee were not satisfactory. CIT(A) confirmed addition of ` 26,60,000/-. 25. Now before us ld. AR strongly assailing order of CIT(A) submitted that repayment of unsecured loans taken at earlier date could not be considered as unexplained credit for making addition u/s 68 of Act. Further, as per ld. AR, full address :- 12 -: ITA No. 964 to 966/16 and PAN of both Smt. Anandhi Akilan and Shri V. Ramanathan were furnished to Assessing Officer. According to ld. AR, Smt. Anandhi Akilan had entered into agreement on 29.1.2007 for selling property to M/s Sri Abisai Builders. Ld. AR submitted that property which was sold by Smt. Anandhi Akilan devolved on her through settlement deed dated 27.10.2006. Reliance was placed on copy of sale agreement placed at pages 14 to 20 of paper book and copy of settlement deed dated 27.10.2006 placed at pages 28 to 33 of paper book. Thus, as per ld. AR, CIT(A) ought not to have disbelieved source of Smt. Anandhi Akilan. Insofar as source of Shri V. Ramanathan was concerned, ld. AR submitted that Shri V. Ramanathan had given confirmation letter which gave his PAN and address. Referring to page 45 of paper book, ld. AR submitted that loans originally given by these persons through account payee cheques. As per ld. AR, they had sufficient source to advance loan hence, Assessing Officer could not have disbelieved their source nor repayment made by assessee. 26. Per contra, ld. DR submitted that assessee could not show why he had taken so much loans from his father and wife. As per ld. DR, version given by assessee could not be believed. 27. We have considered rival contentions and perused orders of authorities below. Additions were made based on figures :- 13 -: ITA No. 964 to 966/16 appearing in cash flow statement filed by assessee. In cash flow, assessee had shown loan from his father and his wife and also repayment thereof. Assessee had also furnished confirmation letters from Smt. Anandhi Akilan and Shri V. Ramanathan, copies of which are placed at page 13 and 44 and 45 of paper book. In confirmation letter Smt Anandhi Akilan had given her address and PAN and also confirmed her source. Smt Anandhi Akilan had clearly stated that amounts were given out of consideration received by her for sale of land at karapakkam owned by her. Shri V. Ramanathan had explained his source as advance received by him for sale of flat No.A001 owned by him at East Avenue, Kesavaperumalpuram. lower authorities did not bring any evidence on record to show how and why these confirmations could not be believed. In our opinion, assessee had proved genuineness of transaction and creditworthiness of creditors. amounts were received by account payee cheques. We are of opinion that addition made by Assessing Officer has no legs to stand. addition stands deleted. Ground No.4 is allowed. 28. In Ground No.5, assessee aggrieved on additions made for following unsecured loans u/s 68 of Act: (i) Bharat University ` 3,00,000/- (ii) Jerusulam College `1,50,000/- (iii) Jay Jee Enterprises `5,00,000/- :- 14 -: ITA No. 964 to 966/16 (iv) Shri Venkatraman `5,00,000/- (v) Shri Mohan `1,00,000/- (vi) Shri B. Nagarajan `5,00,000/- (vii) Shri Jayaganthan `3,00,000/- (viii) Shri Mohan Kumar `4,00,000/- Total `27,50,000/- 29. Facts apropos are that in cash flow statement filed by assessee, above amounts were shown as loans. Assessing Officer was of opinion that assessee could not establish creditworthiness of parties and addition of `27.50 lakhs was made. 30. Before CIT(A), argument of assessee was that confirmation of Bharat University showing its PAN was filed. Similarly, as per assessee, he had filed confirmation from Jerusulam college. Insofar as Jay Jee Enterprises is concerned, argument of assessee was that not only it was confirmed by said party but its full address and PAN were filed. Similarly, as per assessee he had provided all details of Shri Venkataraman, Shri Mohan, Shri B. Nagarajan, Shri Jayaganthan and Shri Mohan Kumar. CIT(A) sought remand report from Assessing Officer. In remand report dated 27.1.2016 Assessing Officer stated that explanation of assessee was not satisfactory. CIT(A) confirmed addition of `27,50,000/-. 31. Now before us, ld. AR strongly assailing order of CIT(A), submitted that confirmation letter given by Bharat University :- 15 -: ITA No. 964 to 966/16 copy of which was placed at page 79 of paper book clearly gave their address and PAN. Similarly as per ld. AR, confirmation letter given by Jerusulam College copy of which is placed at page 79 of paper book also gave their full details and PAN. Ld. AR submitted that copy of ledger account of assessee appearing in books of account of Jerusulam College is placed at page 80 of paper book. In so far as Jay Jee Enterprises is concerned, ld. AR submitted that confirmation alongwith address and PAN was placed at page 81 of paper book alongwith statement of account of assessee in their books at pages 82 and 83 of paper book. Insofar as Shri Venkataraman was concerned, ld. AR submitted that assessee had filed copy of ledger account of assessee in books of Shri Venkataraman. Strong reliance was placed on page 84 of paper book. Similarly, Shri B. Nagarajan also gave confirmation letter copy of which is placed at page 87 of paper book. As per ld. AR, said confirmation gave address of Shri B. Nagarajan alongwith his PAN. Ld. AR submitted that bank account of Shri B. Nagarajan copy of which was available at page 86 of paper book clearly proved clearing of cheque in name of assessee on 28.1.2007. Insofar as Shri Jayaganthan was concerned, ld. AR submitted that such person had also given confirmation with his address as well as PAN. Shri Jayaganthan had also in support of his :- 16 -: ITA No. 964 to 966/16 source furnished copies of income tax returns for assessment years 2004-05, 2005-06, 2006-07 and 2007-08. Insofar as Shri Mohan Kumar was concerned, ld. AR placed reliance on confirmation letter filed by him which was placed at page 105 of paper book. Ld. AR submitted that additions were made by lower authorities ignoring all above details furnished by assessee. 32. Per contra, supporting orders of authorities below, ld. DR submitted that creditworthiness of above parties were not proved by assessee. According to him unless and until creditworthiness of parties were shown merely because alleged loans were received cheques, would not make it genuine. As per ld. DR, supporting cash flow statement filed could not be relied upon. 33. We have considered rival contentions and perused orders of authorities below. Insofar as loan of ` 3,00,000/- from Bharat University, assessee has placed on record confirmation from university at page 78 of paper book. Such confirmation is in letter pad of said university and gives details like address and its PAN. Similarly, for loan of ` 1,50,000/- claimed to have been raised by Jerusulam College also, assessee had placed similar confirmation at page 79 of paper book. In our opinion, lower :- 17 -: ITA No. 964 to 966/16 authorities brushed aside these confirmations which gave details of persons without any proper reason. Assessing Officer ought not have assumed that they were not creditworthy since they were institutions of repute. 34. Coming to advance received from Jay Jee Enterprises of `5,00,000/-, assessee had filed confirmation which is placed at page 81 of paper book. This sum of `5,00,000/- was received by cheque and PAN and address of said firm was available. copy of assessee s account in their books was also made available. In our opinion, these evidence were unfairly rejected by lower authorities. 35. Coming to advance of `5,00,000/- from Shri Venkataraman, assessee has placed on record copy of ledger of Venkarataman for period 1.3.2011 to 31.3.2011 at page 84 of paper book. Lower authorities had rejected it for no good reason. 36. Insofar as advance of `5,00,000/- from Shri B. Nagarajan, assessee had placed on record confirmation from said person which is available at page 85 of paper book. said Shri Nagarajan had given details of cheque and also stated that he was NRI residing in Dubai. Copy of his bank account with Corporation Bank is placed at page 86 of paper book. Here also, :- 18 -: ITA No. 964 to 966/16 lower authorities had taken unfair presumption that Shri Nagarajan was not creditworthy. 37. Coming to loan of ` 3,00,000/- from Shri Jayaganthan claimed to have been raised from Shri Jayaganthan, assessee had filed copy of bank account of Shri Jayaganthan with Indian Overseas Bank, Adyar Branch. Copy of confirmation letter of Shri Jayaganthan is placed at page 87 of paper book and this gives his PAN and address. Assessee had also filed copies of returns of Shri Jayaganthan for various assessment years. No doubt, in these returns, said person had not shown any significant income. However, Balance Sheet filed by said person along with his return which is available on record show that for year ended 31.3.2004 he had advanced ` 2,07,800 which had increased to ` 5,90,500/- by year ended on 31.3.2005. Advances shown by said person in his Balance Sheet as on 31.3.2006 came to ` 6,85,600/-. Hence to say that concerned person was not creditworthy, based on income tax returns was in our opinion not correct. Assessee had discharged onus of showing creditworthiness of Shri Jayaganthan and also genuineness of transaction. :- 19 -: ITA No. 964 to 966/16 38. Coming to loan of ` 4,00,000/- from Shri Mohan Kumar, assessee has filed confirmation from Shri Mohan Kumar which is available at page105 of paper book. However, said confirmation was not supported by any evidence. Except stating that amount of advance was out of his savings, nothing is available to show what was source of income of Shri Mohan Kumar. Hence, in our opinion, assessee was not able to show that loan of ` 4,00,000/- claimed to have raised from Shri Mohan Kumar was genuine. 39. Insofar as loan of ` 1 lakh from Shri Mohan was concerned, no evidence whatsoever was adduced by assessee. In our opinion, assessee has been able to prove source of loans to following persons: (i) Bharat University `3,00,000/- (ii) Jerusulam College ` 1,50,000/- (iii) Jay Jee Enterprises ` 5,00,000/- (iv) Shri Venkataraman `5,00,000/- (v) Shri B, Nagarajan `5,00,000/- (vi) Shri Jayaganthan `3,00,000/- Total `22,50,000/- We find that additions made to extent of rs` 22,50,000/- out of total sum of `27,50,000/- has to be deleted. We delete such addition and sustain addition to extent of ` 5,00,000/-. Ground No.5 is partly allowed. :- 20 -: ITA No. 964 to 966/16 40. In result, appeal of assessee for assessment year 2007-08 is partly allowed. 41. Coming to assessment year 2008-09 in I.T.A.No. 966/Mds/2016, assessee has taken altogether twelve grounds of which Ground Nos.1,9,10,11 & 12 are general in nature, requiring no specific adjudication. Ld. AR did not press Ground No.2 which assails reopening of assessment u/s 147 of Act. Hence, this ground is dismissed as not pressed. 42. In Ground No.3, grievance of assessee is regarding addition of `14,00,000/- made u/s 68 of Act for investment brought back from M/s Triple Technology which was confirmed by CIT(A). 43. Facts apropos are that assessee had in its cash flow statement for relevant previous year shown sum of `14,00,000/- as received from M/s Triple Technology. M/s Triple Technology was company floated by assessee alongwith his wife. As per assessee, said company did not do any business activity and sum of `14,00,000/- invested by assessee in said company was returned during relevant previous year. However, Assessing Officer was of opinion that except book entry , assessee could not produce any evidence in support of his version. He :- 21 -: ITA No. 964 to 966/16 refused to believe claim of assessee and made addition u/s 68 of Act. 44. In appeal before CIT(A), argument of assessee was that he had invested sum of ` 2,00,000/- in financial year 2005-06 and `15,00,000/- in financial year 2006-07 in M/s Triple Technology. As per assessee, said company had refunded sum of ` 14,00,000/- out of said amount. CIT(A) sought remand report from Assessing Officer. Assessing Officer in his remand report dated 27.1.2016 stated that evidence produced by assessee was not satisfactory. CIT(A) therefore, sustained addition. 45. Now before us, ld.AR strongly assailing orders of authorities below, submitted that assessee had made investment of ` 2,00,000/- in financial year 2005-06 which was reflected in his cash flow statement for said year placed at page 1 of paper book. According to him, assessee further made investment of `15,00,000/- during financial year 2006-07 which was shown in cash flow statement for financial year 2006-07 placed at page 2 of paper book. According to ld.AR Balance Sheet of M/s Triple Technologies as on 31.3.2006 paced at page 4 of paper book clearly proved that out of total share application money of :- 22 -: ITA No. 964 to 966/16 `5,00,000/- received by said company, shares were issued only for ` 1,00,000/- and balance was pending with it. As per ld. AR refund was made out of such sums invested by assessee in M/s Triple Technologies. 46. Per contra, ld. DR supported orders of authorities below. 47. We have considered rival contentions and perused orders of authorities below. As per assessee, he had invested `.2,00,000/- during financial year 2005-06 and ` 15,00,000/- during financial year 2006-07 in shares of M/s Triple Technologies. only evidence placed on record is Balance Sheet of M/s Triple Technologies for financial year 31.3.2006. In said Balance Sheet no doubt amount of `4,00,000/- is shown as share application money pending allotment. However, assessee could not bring in any evidence to show whether this was refunded during relevant previous year and whether additional funds of ` 15,00,000/- claimed by assessee to have been invested during financial year 2006-07 was received back during relevant previous year. No doubt if money has been returned by said company to assessee, credit could be given to assessee to that extent. However, in our opinion, issue requires fresh look by Assessing :- 23 -: ITA No. 964 to 966/16 Officer. We, therefore, set aside orders of authorities below and remit issue regarding receipt of `14,00,000/- from M/s Triple Technologies back to Assessing Officer for consideration afresh in accordance with law. Ground No.3 is allowed for statistical purposes. 48. In Ground No.4, grievance of assessee is regarding confirmation of addition of `22,14,000/- being credits to bank account. 49. Facts apropos are that assessee had during previous year deposited cash of `22,14,000/- in his account with Indian Overseas Bank, Adyar Branch. Explanation of assessee was that he had prior to said date withdrawn `30,65,000/- from very same bank account which was utilized for making deposits. However, Assessing Officer was of opinion that there was significant time gap between withdrawal and deposit. According to him, claim of assessee that very same money which was withdrawn was used for making deposits could not be accepted. As per Assessing Officer, assessee was not doing any business and was only salaried employee. Further, assessee had not maintained any books of account. Thus, as per Assessing Officer, version given by assessee could not be accepted. Addition of `22,14,000/- was made u/s 68 of Act. :- 24 -: ITA No. 964 to 966/16 50. In appeal before CIT(A), argument of assessee was that books of account were not required to be maintained since assessee was not carrying on any business or profession as laid down u/s 44AA. As per assessee, he was also not doing any profession in nature prescribed in Rule 6F of Income Tax Rules. Assessee argued that withdrawals made earlier from very same bank account were utilized for making deposits. CIT(A) sought remand report from Assessing Officer. Assessing Officer in his remand report dated 27.1.2016 stated that evidence furnished by assessee was not satisfactory. Considering remand report of Assessing Officer, CIT(A) confirmed addition. 51. Now before us strongly assailing orders of lower authorities, ld. AR submitted that following deposits were considered for making addition u/s 68 of Act : Bank Date Amount deposited IOB, Adyar 07.05.2007 2,00,000/- IOB, Adyar 22.05.2007 2,50,000/- IOB, Adyar 02.07.2007 3,00,000/- IOB, Adyar 24.10.2007 9,00,000/- IOB, Adyar 31.10.2007 1,50,000/- IOB, Adyar 13.11.2007 64,000/- IOB, Adyar 01.12.2007 60,000/- IOB, Adyar 04.12.2007 50,000/- IOB, Adyar 07.01.2008 80,000/- IOB, Adyar 06.02.2008 80,000/- IOB, Adyar 06.03.2008 80,000/- Total 22,14,000/- :- 25 -: ITA No. 964 to 966/16 As per ld. AR, sum of `7,00,000/- was received as gift from his co-brother Shri A. Sudamani who was working as engineer in Multinactional Company. Details of gift given by said person were as under: 07.05.2007 `2,00,000/- 02.07.2007 `3,00,000/- 31.10.2007 ` 1,50,000/- 04.12.2007 ` 50,000/- ` 7,00,000/- Ld. AR further submitted that out of deposits mentioned above, sum of ` 2,00,000/- on 7.5.2007, `3,00,000/- on 2.7.2007, ` 1,50,000/- on 31.10.2007 and ` 50,000/- on 4.12.2007 came out of above gifts. Despite confirmation from Shri A. Sudamani placed at page 15 of paper book, as per ld.AR, Assessing Officer disbelieved gift received by assessee. Argument of ld. AR was that parents of said Shri Sudamani were hosted by assessee when they came for medical treatment in Chennai. It was for pure love and affection said Shri Sudamani gave gift to assessee. Ld. AR further submitted that copies of tax returns of Shri Sudamani for assessment years 2005-06, 2006-07 and 2007-08 were furnished before Assessing Officer which were disregarded. As far as cash deposit of ` 2,50,000/- made on 22.5.2007, ld. AR submitted that it came out of earlier withdrawal of `3,00,000/- on 12.4.2007 :- 26 -: ITA No. 964 to 966/16 and `4,00,000/- on 21.4.2007. As far as cash deposit of ` 9,00,000/- on 24.10.2007, argument of ld. AR was that same amount was withdrawn on 23.10.2007 for purchase of land and since deal did not materialize money was deposited back on very next day. 52. Insofar as following cash deposits were concerned, ld. AR submitted that it came out of salary savings withdrawn from Indian Bank, Pondicherry on 23.11.2007: Sl.No Date Deposited Amount on Rs. 1. 13.11.2007 64,000/- 2. 01.12.2007 60,000/- 3. 07.01.2008 80,000/- 4. 06.02.2008 80,000/- 5. 06.03.2008 80,000/- Total 3,64,000/- According to ld. AR, deposits stood clearly explained but these were rejected by lower authorities for no reason. 53. Per contra, ld. DR strongly supporting orders of lower authorities submitted that assessee could not substantiate time gap between receipt of money and deposit in bank account. :- 27 -: ITA No. 964 to 966/16 54. We have considered rival contentions and perused orders of authorities below. Insofar as sum of ` 2,00,000/- deposited on 7.5.2007, ` 3,00,000/- deposited on 2.7.2007, ` 1,50,000/- deposited on 31.10.2007 and ` 50,000/- deposited on 4.12.2007, claim of assessee is that it came out of gift of `7,00,000/- received from his co-brother, Shri A. Sudamani. In support, assessee has placed before us copy of confirmation letter dated 16.11.2012 given by Shri A. Sudamani. Shri Sudamani has given his PAN and address. He has also furnished copies of income tax returns for assessment years 2005-06, 2006-07 and 2007- 08. No doubt income admitted by Shri A. Sudamani for assessment year 2005-06 came to ` 1,88,520/-, for assessment year 2006-07 it came to `4,65,970 and for assessment year 2007-08 it came to ` 7,04,747/- after claiming various deductions. Incidentally, Shri A. Sudamani was Engineer in MNC and thus had source of income for giving gift to assessee. lower authorities have not disputed claim of assessee that Shri A. Sudamani is co-brother of assessee. In such situation, we are of opinion that assessee had brought on record sufficient evidence to prove creditworthiness of Shri A. Sudamani and also factum of gift. :- 28 -: ITA No. 964 to 966/16 55. Coming to deposit of `2,50,000/- on 22.5.2007, it is not disputed that assessee had withdrawn `3,00,000/- on 12.4.2007 and `4,00,000/- on 21.4.2007 from his account with Indian Overseas Bank, Adyar. Assessee could very well say that deposit of `2,50,000/- on 22.5.2007 had come out of above drawings. In our opinion, period of one month was not long enough to disbelieve claim of assessee that earlier withdrawals were used for making deposit. 56. Coming to deposit of `9,00,000/- on 24.10.2007, assessee had equal withdrawal of cash on preceding day as evident from copy of bank of assessee with Indian Overseas Bank placed at page 10 of paper book. Insofar as remaining amount of `3,64,000/- is concerned, we find that assessee had withdrawn out of his salary earnings parked in his account with Indian Bank, Pondichery, sum of `3,50,000/- on 23.11.2007. Copy of this bank statement has been placed at pages 11 to 13 of paper book. said bank account has in its credit side salary income received by assessee. In such situation, we are of opinion that assessee could claim withdrawal of ` 3,50,000/- on 23.11.2007 as proper source for deposits made on 13.11.2007, 1.12.2007, 7.1.2008, 6.2.2008 and 6.3.2008 more particular given in para 5.2 :- 29 -: ITA No. 964 to 966/16 above. It is also not in dispute that assessee had shown agricultural income of `14,79,500/- in his return for impugned assessment year. So, we cannot say that sum of `3,64,000/- deposited by assessee on above dates were from unexplained sources. We are of opinion that assessee had sufficiently explained deposits of `22,14,000/- in his bank account. In view of above, orders of lower authorities on this issue is set aside and addition of `22,14,000/- stands deleted. Ground No.4 is allowed. 57. In Ground No.5, assessee s grievance is that addition of `7,00,000/- was made disbelieving gift claimed by assessee to have been received from Shri A. Sudamani, co-brother of assessee. 58. above issue has already been considered by us while adjudicating Ground No.4 in earlier part of this order regarding source of deposit of `22,14,000/- in his bank account with Indian Overseas Bank. We have held therein that assessee was able to show source and creditworthiness of Shri Sudamani. In light of findings given in para 54 above, we are of opinion that addition of `7,00,000/- was not called for. We set aside orders of lower authorities on this issue and delete addition. Ground No.5 is allowed. :- 30 -: ITA No. 964 to 966/16 59. In Ground No.6, grievance raised by assessee is addition of `3,04,077/- made for difference in salary as admitted in return of income and as shown in cash flow statement which was confirmed by CIT(A). 60. Facts apropos are that assessee had shown `26,90,000/- as salary income from Bharath University in his return of income. However, in cash flow statement, he has shown `29,94,777/- as income from said university. As per Assessing Officer, authorized representative of assessee had agreed for addition of difference of `3,04,777/-. Accordingly, addition of `3,04,777/- was made by Assessing Officer. 61. Aggrieved assessee went in appeal before CIT(A). Argument of assessee before CIT(A) was that difference between amount shown in return of income and that shown in cash flow statement was on account of tax deduction at source. However, in remand report furnished by Assessing Officer, it was stated that sufficient evidence in this regard was not produced by assessee. CIT(A) confirmed addition. 62. Now before us, ld. AR submitted that cash flow statement reflected income tax payment of `6,13,215/- . As per :- 31 -: ITA No. 964 to 966/16 ld. AR, such income tax payment of `6,13,215/- comprised of following items: Description Amount Income tax (self assessment ) 1,65,000 TDS from Mahatma Gandhi Medical 1,43,438 College TDS from Bharat University 3,04,777 Income tax as reflected in cash flow for 6,13,215 F.Y 2006-07 Ld. AR submitted that if TDS of `3,04,777/- was reduced from gross amount of `29,94,777/- then salary income of ` 26,90,000/- reflected in return of income was correct. 63. Per contra, ld. DR supported orders of authorities below. 64. We have considered rival contentions and perused orders of authorities below. What we find is that assessee had shown `26,90,000/- as salary income in his return. However, actual salary was `29,94,777/- against which there was tax deduction of `3,04,777/-. It means that gross salary received by assessee was ` 29,94,777/- and not ` 26,90,000/- shown by assessee in his return of income. Thus, it is clear that assessee had understated his salary at `26,90,000/-. We find that addition was :- 32 -: ITA No. 964 to 966/16 rightly done by authorities below. We do not find any reason to interfere with order of CIT(A). Ground No.6 is dismissed. 65. In Ground No.7, grievance of assessee is regarding addition of `5,27,753/- being difference in total cost of construction of house as admitted by assessee and as valued by DVO. 66. Facts apropos are that assessee had purchased house on 3.5.2006 and claimed expenditure of `23,46,170/- to have been incurred during assessment year 2007-08 and `12,05,077/- during assessment year 2008-09. total construction cost as per assessee came o ` 35,51,247/-. Assessing Officer referred valuation of construction to DVO. DVO in his report valued cost of construction at ` 40,79,000/-. Clarification of assessee was sought. In his reply assessee stated that DVO had considered CPWD rates whereas State PWD rates alone could be applied. If State PWD rates were considered, as per assessee, difference would be only ` 1,82,804/- for ground floor and ` 1,24,468/- for first floor. Assessee also claimed that building was constructed under self-supervision and additional 5% rebate had to be given for it. Thus, claim of assessee was that there was no reason to make any addition for unexplained value of construction. :- 33 -: ITA No. 964 to 966/16 However, Assessing Officer was not impressed. According to him, report of DVO was technically correct one. Assessee had not assailed said report on any particular point. Thus, he held tht difference between value estimated by DVO and cost furnished by asse was unexplained investment of assessee for impugned assessment year. Accordingly, addition of ` 5,27,753/- was made. 67. Appeal of assessee did not meet with success before CIT(A). 68. Now before us, ld. AR strongly assailing order of authorities below submitted that State PWD rates alone should be adopted for working out cost of construction. In support, reliance was placed on judgment of Madras High Court in case of A. Abdul Rahim vs ITO, 258 ITR 714. 69. Per contra, ld. DR supported orders of authorities below. 70. We have considered rival contentions and perused orders of authorities below. What we find is that assessee had not given any valuation of its own for adoption of state PWD rates. When valuation made by DVO was put to assessee, he sought substitution of CPWD rates with State PWD rates. No doubt, :- 34 -: ITA No. 964 to 966/16 in view of judgment of Madras High Court in A. Abdul Rahim(supra) assessee could very well say that State PWD rates were more appropriate since it considered location specific differences. Another concern of assessee is that it was not given benefit of self-supervision. In our opinion, issue requires fresh look by Assessing Officer. assessee should be given opportunity to explain why State PWD rates should be adopted and why rebate for self-supervision should be given to him. Accordingly, orders of lower authorities are set aside and issue is remitted back to Assessing Officer for deciding afresh in accordance with law. Ground No.7 is allowed for statistical purposes. 71. In Ground No.8 grievance of assessee is that CIT(A) sustained addition of ` 14,79,500/- out of total agricultural income of `25,74,979/- claimed by assessee. 72. Facts apropos are that assessee had in his cash flow statement show sum of `14,79,500/- as net inflow from agricultural operations. When explanations were sought it was stated that it had gross agricultural income of ` 25,74,979/-. Assessee was required to support claim of agricultural income. In reply, assessee stated that agricultural operations were done in unorganized way and bills and vouchers were not available. Assessee submitted :- 35 -: ITA No. 964 to 966/16 patta and chitta to support claim of agricultural income. Assessing Officer was of opinion that patta and chitta simply give area which was used for agricultural purpose but did not give any hint about income from such operation. Nevertheless, Assessing Officer accepted that assessee was having 36.90 acres of agricultural land. He held that in absence of books of account and details, earning of agricultural income could at best be estimated at ` 15,000/- per acre. Thus, as per Assessing Officer for 36.90 acres, agricultural income earned by assessee at best would be `5,53,500/- against assessee s claim of `25,74,979/-. balance of ` 20,21,479/- was added as unexplained income under head income from other sources. 73. Aggrieved assessee moved in appeal before CIT(A) Argument of he was that assessee was cultivating water melon, Korean grass and black gram. As per assessee net amount of ` 25,74,979/- claimed on agricultural operation was after expenditure of `10,95,479/- incurred. Further as per assessee, total inflow in cash flow statement was only `14,79,500/- and therefore, there could be no case for any addition in excess of this amount. CIT(A) sought remand report from Assessing Officer. In remand report Assessing Officer stated that :- 36 -: ITA No. 964 to 966/16 assessee was unable to furnish any evidence in support of its claim. However, as per CIT(A) since assessee had shown receipt of ` 14,79,500/- alone as inflow from agricultural operation, addition had to be restrained to this sum. He therefore, restricted addition to `14,79,500/- effectively giving relief of `10,95,479/- to assessee. 74. Now before us, ld. AR submitted details of agricultural crop as under: Name of crop Income (in Expenditure (In Profit (In Rs.) Rs.) Rs.) Water Melon 16,10,152 8,22,347 7,87,805 Korean Grass 8,15,535 2,46,210 5,69,325 Urad Dhal 1,49,292 26,922 1,22,370 Total 25,74,979 10,95,479 14,79,500 75. As per ld. AR, average income per acre comes to `40,095/- which was not considered by Assessing Officer. Assessing Officer had unfairly estimated income from agricultural activities at ` 15,000/- per acre. Therefore, according to ld. AR, addition was not warranted. 76. Per contra, ld. DR strongly supported orders of authorities below. :- 37 -: ITA No. 964 to 966/16 77. We have considered rival contentions ad perused orders of authorities below. It is not disputed that assessee was having 36.90 acres of agricultural land. Claim of assessee is that it was cultivating water melon, Korean grass and black gram in above agricultural land and it had income of ` 40,095/- per acre. As against this Assessing Officer has estimated ` 15,000/- per acre. Considering land holding of assessee, we are of opinion that income of ` 20,000/- per acre would be reasonable. Thus, agricultural income of assessee for 36.90 acres of land in our opinion could have been better estimated at ` 7,38,000/-. Assessee had shown in cash flow statement only ` 14,79,500/-. So addition in our opinion has to be restricted to ` 7,41,500/-. We therefore, delete balance addition of `7,38,000/- and relief of ` 7,41,500/- is given to assessee. Ground No.8 is treated as partly allowed. 78. Ground No.8.4 is alternative to ground No.8 taken by assessee. Since we have already given direction that addition has to be restrained to ` 7,38,000/-, above ground has become redundant. :- 38 -: ITA No. 964 to 966/16 79. In result, appeal of assessee is partly allowed. 80. To summarize, all appeals of assessee are partly allowed. Order pronounced in open court on 16th September, 2016, at Chennai. Sd/- Sd/- (G. PAVAN KUMAR) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai Dated: 16th September, 2016 RD Copy to: 1. Appellant 4. CIT 2. Respondent 5. DR 3. CIT(A) 6. GF Akilan Ramanathan v. Asstt. Commissioner of Income-tax, Non-Corporate Circle 15(1), Chennai