IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ITA No. 646/Ahd/2011 Assessment Year : 1996-97 Income Tax Officer, Shri Vinod A. Patel, Ward-1, Vs Prop: Shakti Construction & Anand Kailash Petrohem, 23, Shiv Complex, Nr. Laxmi Cinema, Subhash Road, Anand PAN : AESPP 6788 E (Appellant) (Respondent) Revenue by : Smt. Sonia Kumar, Sr DR Assessee by : Smt Arti N. Shah, AR Date of Hearing : 03/10/2016 Date of Pronouncement: 05/10/2016 ORDER This appeal by Revenue is directed against order of Learned Commissioner of Income Tax (Appeals)-IV, Baroda dated 16.12.2010 for Assessment Year 1996-97. 2. sole ground raised is as under:- On facts and in circumstances of case and in law learned CIT(A) erred in deleting addition of Rs.37,79,713/- made on account of on money without considering valuation report received from Valuation Officer valuing property at Rs.2,37,14,700/-. 3. ld. DR relied on order of Assessing Officer. 4. ld. Counsel for assessee, on other hand, contends that this is second round of proceedings. original addition was set aside by ITAT vide its order dated 04.01.2008. Thereafter, proceedings were taken up again. addition was made by AO merely repeating what was done in original proceedings. ld. CIT(A) deleted addition by following observations:- SMC-ITA No. 646/Ahd/2011 ITO vs. Vinod Patel AY : 1996-97 2 3.2 I have carefully considered facts of case and appellant s submissions. Addition of Rs.37,79,713/- in respect of on money was made in assessment under appeal, solely by following original assessment. Onus of proving receipt of on money was of Assessing Officer and not of appellant. However, Assessing Officer has not been able to bring evidence to justify addition on account of 'on money' either during set aside assessment or original assessment. During original assessment proceedings, conclusion of Assessing Officer regarding receipt of 'on money' was based solely on fact that four customers, whose statements were recorded, could not explain certain withdrawals from their bank accounts. These customers in their statements denied to have paid any on money' to appellant for premises purchased. During set aside proceedings, appellant filed affidavits of six more customers confirming payment of consideration as declared by appellant in books of accounts and return of income. Ld. CIT(A)-I, Baroda had deleted addition of Rs.37,79,713/- in respect of 'on money' in Order dated 31.3.2000. I am in agreement with Ld. CIT(A)-I, Baroda on legal position that even if no explanation could be filed by customers for cash withdrawn from their bank accounts, it could not become basis for presumption that amount was utilized for payment of 'on money'. As noted by Ld. CIT(A)-I, Baroda, all customers examined .by Assessing Officer during original assessment proceedings denied to have paid any 'on money' and in any case on basis of five customers, even if payment of 'on money' was proved in their cases, it could not be basis of estimating 'on money' for entire sales made during year. It was rightly held that suspicion can be basis for further investigation but it cannot assume character of evidence. As such, there is no basis, either in original assessment order or in order under appeal to justify addition of Rs.37,79,713/- on account of 'on money'. Separate proceedings were initiated u/s.147 by Assessing Officer for cost of construction estimated in DVO's report received after completion of assessment under appeal. As far as assessment under appeal and addition in respect of 'on money' therein is concerned, same is not sustainable on facts of case and in law. Addition of Rs.37,79,713/- is deleted. 4.1 It is contended that when customers themselves having denied that no on money was paid to assessee; merely because there were some entries in bank account of customers which they could not explain their own account, no adverse presumption can be drawn against assessee that these entries were on money received by it. Order of ld. CIT(A) is relied on. SMC-ITA No. 646/Ahd/2011 ITO vs. Vinod Patel AY : 1996-97 3 5. I have heard rival contentions, perused material available on record and gone through orders of authorities below. Ld. CIT(A) has given detailed findings of facts and categorically held that customers denied having made any on money payment. These were customers who could not explain their bank entries but this does not lead to any adverse assumption that this was on money paid to assessee. In view thereof, I find no infirmity in order of ld. CIT(A) deleting addition which is upheld. Accordingly, Revenue s appeal is dismissed. 6. In result, appeal of Revenue is dismissed. Order pronounced in Court on 5th October, 2016 at Ahmedabad. Sd/- R.P. TOLANI (JUDICIAL MEMBER) Ahmedabad; Dated 05/10/2016 Biju T. Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. CIT(A) 5.DR, ITAT, Ahmedabad 6. Guard file. BY ORDER, TRUE COPY (Dy./Asstt.Registrar) ITAT, Ahmedabad Income-tax Officer, Ward-1, Anand v. Vinod A. Patel