This appeal is filed by assessee is directed against order of Commissioner of Income tax (Appeals)-Ujjain (hereinafter referred to as ld. CIT (A)) dated 07.03.2013. This appeal pertains to Assessment Year 2006-07. This appeal arises out of assessment order dtd. 08.12.2009 passed u/s. 143(3)/147 of Income Tax Act, 1961 [herein after referred to as "the Act ) by ITO Ward 2(1) Ujjain [hereinafter referred to as AO ]. assessee has taken following grounds of appeal:- 1. On facts and in circumstances of case, learned Commissioner of Income tax (Appeals) has erred in confirming addition of Rs. 10, 28,000/- as unexplained investment u/s. 69 with M/s. Kunjika Construction Pvt. Ltd. 2. On facts and in circumstances of case learned Commissioner of Income tax (Appeals) has erred in confirming addition of Rs. 20, 00,000/- as unexplained investment u/s. 69 in purchase agreement. 2. Succinctly, facts of case are that assessee is individual engaged in construction business and director of M/s. Kunjika Construction Pvt. Ltd. assessee has not filed his return within time allowed under section 139(1) of Act. Hence, notice under section 148 of Act was issued on 29.12.2008 and served upon assessee on 05.01.2009. In response to which, assessee has filed return of income on 16.01.2009 declaring total income at Rs. 96,000/- and showing income from business and profession under provisions of section 44AD of Act. While completing assessment in case of M/s. Kunjika Construction Pvt. Ltd., statement u/s. 131 of Act was recorded from assessee Shri Vijay Jain, director of company. Wherein it was admitted that he has purchased shares of Rs. 35,000/- of M/s. Kunjika Construction Pvt. Ltd. : W and also invested in share application money at Rs. 44,28,000/-. source of investment was claimed as under: From own capital/savings Rs. 1,75,710/- Loans from16 friends and relatives Rs. 3,00,000/- Loan from Shri Devi Dutta Yeolo Rs. 34,00,000/- From recovery of opening debtors Rs. 5,52,290/- Total Rs. 44,28,000/- 3. AO examined source and found that assessee has raised loans of Rs. 34,00,000/- ( Rs. 29,00,000 on 21.11.2005 and Rs. 5,00,000 on 18.11.2005) from Shri Devdutta Yeolo. This source was found acceptable by AO. However, balance amount of Rs. 10,28,000/- (44,28,000- 34,00,000) was not found explained. It was further noticed that assessee deposited amount in cash and paid in cash to Shri Navin Sodani, stamp vendor for purchase of stamps in respect of registration of immovable property purchased in case of M/s. Kunjika Construction Pvt. Ltd. Thus assessee has paid cash to Sodani of Rs. 25,13,000/-. assessee has found to have invested Rs. 19,15,000/- by cheque. AO observed that assessee was having cash of Rs. 14,85,000 ( 34,00,000- 19,15,000) . / d E / z ^ s : W assessee has not explained source of cash deposit of Rs. 10,28,000/- ( 25,13,000- 14,85,000) out of which cash deposits of Rs. 25,13,000/- .The source of cash of Rs. 10,28,000/- was explained out of own money / saving of Rs. 1,75,710/- Rs. 3 lakh from 16 persons as loan and Rs. 5,52,290/- out of recovery from old debtors of which source has not been explained , hence same was added as unexplained investment under section 69 of Act. claim of loans from 16 person being friends and relatives was not found acceptable as identity, credit worthiness and genuineness of transactions of was not proved as creditors as assessee has failed to produce creditors in-spite of number of opportunity allowed to assessee. confirmation produced was not complete nor were persons assessed to tax. AO also not accepted explanation regarding own capital balance and savings of Rs. 175,710/- and opening balance of debtors at Rs. 5,52,290/-. In addition to above, AO has made addition of Rs. 10,28,000/- Beside this, AO also added sum of Rs. 4,81,700/- deposited in cash in bank account in absence of details. Being aggrieved, assessee filed appeal before ld. CIT (A) / d E / z ^ s : W 4. ld. CIT (A) has deleted addition of Rs. 4, 81,700/- cash deposits in bank account by holding that cash balance was available in cashbook of assessee. However, addition of Rs. 10, 28,000/- was confirmed by holding that assessee has failed to establish creditworthiness and genuineness of transactions of creditors. ld. CIT (A) also supported his view by placing reliance on number of case laws discussed in appellate order at para 3.1.7 to 3.1.12 including CIT vs. P. Mohanakala (2007) 291 ITR 278 (SC) wherein it was held In cases where explanation offered by assessee about nature and source of sum found credited in books of account is not satisfactory, there is prima facie evidence against assessee with viz receipt of income. burden is on assessee to rebut same and if he fails to do so, it can be held against assessee that it was receipt of income nature. money came through cheque and was paid through banking channels was by itself not of consequence. ld. CIT (A) further relied in case of Sumati Dayal vs. CIT (1995) 214 ITR 801(SC) wherein it was held Any sum credited in books of account may be added under section 68 ,if explanation offered about nature and source thereof is , in opinion of A.O. not / d E / z ^ s : W satisfactory. In CIT vs. Durga Prasad More (1969) 72 ITR 807(SC) it was held even where no entry was made in books of accounts in respect of certain receipt, receipt was assessable as undisclosed income. apparent must be considered as real until it is shown that there were reasons to believe that apparent was not real and taxing authorities are entitled to look into surrounding circumstances, to find out reality and matter has to be examined by applying test of human probabilities. Since three things were not satisfied viz: identification of creditor, credit worthiness of creditor and genuineness of transactions. Therefore, ld. CIT (A) upheld finding in respect of cash credit of Rs. 3 lakhs. 5. learned counsel for assessee submitted that assessee filed confirmation of all sundry creditors and produced books of accounts evidencing all entries of opening cash balance and cash received from debtors. ld. A. R. submitted that fund was withdrawn from business being carried on by Assessee. said business was stopped during financial year under consideration and assessee has started company M/s. Kunjika Construction Pvt. Ltd. It was also claimed that assessee has filed return of income on 13.01.2006 for / d E / z ^ s : W assessment year 2005-06 ( copy placed at page 17 of paper book) in which it was clearly shown opening capital balance at Rs. 8,08,718/- .(Paper book page 18). Therefore, it was contended that this amount of capital balance and from recovery of business debtors, amounts was deposited in company. 6. Per contra, Ld. Senior (DR) , relied on orders of lower authorities and contended that ld. CIT (A) has dealt with issue in detailed and also supported his view by placing reliance on various case laws as discussed in his appellate order at para 3.1.15. Therefore, action of AO may be upheld. 7. We have heard rival submissions and have gone through orders of lower authorities and perused material available on record. We find that assessee has claimed source of cash deposits of Rs. 11,28,000/- with M/s. Kunjika Construction Pvt. Ltd./ Navin Sodani is out of own capital/savings of Rs. 1,75,710/- , Rs. 5,52,290/- from recovery of opening debtors and Rs. 3,00,000/- loans from friends and relatives. learned counsel for assessee has claimed that assessee had opening capital balance at Rs. 8,08,718/- as on 31.03.2005. Out of which previously mentioned amount has been invested with company. Ld. Senior (DR) has also not / d E / z ^ s : W rebutted this contention that assessee has filed his return of income for assessment year 2005-06 0n 13.01.2006 that full amount of opening capital balance of Rs. 8,08,718/- was shown as on 31.03.2005. However, we noticed that out of this opening balance , assessee has applied funds of Rs. 43,500/- as investment in vehicle, Rs. 75,600/- towards jewellery and Rs. 15,780/- towards house hold equipment s and Rs. 1,21,481/- is cash and bank balance. This leaves only amount of Rs.3,65,450/- being opening capital balance, Rs. 36,840/- capital in business on account of closure of business, and Rs. 1,50,000/- being loan and advance, aggregating to Rs. 5,52,290/-(365450+36840+150000). Therefore, this amount can be treated as explained as against source of cash deposits out of Rs.7,38,000 claimed at Rs. I.e. (175710+552290) leaving balance of Rs. 1,75,710/- as unexplained investment. As regards loans from friends and relatives of Rs. 3,00,000/- is concerned , we find that assessee has failed to produce sundry creditors for examination having been allowed sufficient opportunity of being heard by AO on various dates viz. 03.07.2009, 03.08.2009, 10.08.2009, 14.09.2009, 07.10.2009 and finally on 04.11.2009. assessee has filed confirmation / d E / z ^ s : W only on 08.12.2009, which are stereo type letters without PAN thereon. Further, none of creditors is assessed to tax. Details of date money advanced and returned back is not filed nor any interest is charged thereon. It is pertinent to note that these advances were not returned back even after lapse of 4 years. amount claimed to have been received from 14 creditors is below Rs. 20,000/- which has been intentionally done to escape from receiving amount by cheques. Even mode of receiving of amount from Shri Kailash Chand Jain (father) and Smt. Pushpa Jain (mother) Rs. 50,000/- each is also in cash. onus cast upon assessee to prove identity, credit worthiness and genuineness of transactions has not been discharged. Thus, these three ingredients of section 68 of Act are remained unsatisfied. Further decision in case of CIT vs. P. Mohanakala (2007) 291 ITR 278 (SC) and Sumati Dayal vs. CIT (1995) 214 ITR 801(SC) relied on by ld. CIT (A) also support view of lower authorities. In view of these circumstances, finding of lower authorities are upheld for addition of Rs. 4,75,710/- and balance addition of Rs. 4,75,710/- is deleted. This grounds of appeal of allowed is therefore, partly allowed. / d E / z ^ s : W 8. Ground No. 2 relates to addition of Rs. 20,00,000/- as unexplained investment u/s. 69 of Act in purchase agreement. 9. Briefly stated facts of case are that, assessee in his statement recorded on 19.12.2008 has stated that amount deposited as advance from directors at Rs. 19,01,550/- in M/s. Kunjika Construction Pvt. Ltd. relates to him. source of this investment was claimed to be sum of Rs. 8,00,000/- advance amount received from Shri Santosh Kumar Lalwani on account of agreement to sale of land executed by assessee along with Shri Ajay Singh Kushwaha between Shri Santosh Kumar Lalwani on 15.08.2005. This amount was deposited with M/s. Kunjika Construction Pvt. Ltd. AO has also recorded statement of Shri Santosh Kumar Lalwani on 01.12.2009 u/s. 131 of Act. In statement u/s. 131 of Act, Shri Santosh Kumar Lalwani stated that amount of Rs. 20,00,000/- was paid by Shri Vijay Jain and Shri Ajay Singh Kushwaha to Shri Devidas and others as token of purchase of land; situated at Gram- Nanakheda, Hari Phatak Road, Ujjain, survey No. 329, Rakhwa 0.067 and consequently, on that basis he had executed agreement for purchase of land and paid Rs. 8,50,000/- to Shri / d E / z ^ s : W Vijay Jain . It was observed that land so intended to be purchased from Shri Devidas and others , assessee has made agreement of sale of around 1/3rd of land to Shri Santosh Kumar Lalwani for Rs. 43,27,4000/- and received advance of Rs. 8,00,000/- on 15.08.2005. assessee has claimed that amount of Rs. 7,85,000/- was deposited on 21.11.2005 with M/s. Kunjika Construction Pvt. Ltd. out of amount received on 15.08.2005. AO also noted that assessee has not denied contention of statement of Shri Santosh Kumar Lalwani. AO further observed that assessee intentionally not produced agreement executed between Shri Devidas and others and Shri Vijay Jain & Shri Ajay Singh Kushwaha, because only agreement can took truth open. assessee has not produced source of amount advanced to Shri Devidas & others. In view of statement of Shri Santosh Kumar Lalwani; and not filing copy of agreement entered into between assessee with Shri Santosh Kumar Lalwani, AO held that assessee had paid Rs. 20,00,000/- as Bayana to Shri Devidas and others at time of executing agreement for purchase of land. Being aggrieved, assessee has filed appeal before ld. CIT (A). / d E / z ^ s : W 10. During course of appellate proceedings, assessee has taken plea that he had agreed to purchase land situated at Survey No. 329, Nanakheda Ujjain from Shri Devidas S/o Shri Natharmal and others on oral agreement and paid Rs. 51,000/- by way of token money. Immediately, thereafter he agreed to sell 1/3rd of this land to Shri Santosh Kumar Lalwani and received Rs. 8 lakhs as (Bayana) advance amount. It was also contended that Shri Santosh Kumar Lalwani has lodged Civil Suit against assessee, therefore, he intentionally given false statement against assessee. It was also contended that in response to summon issued u/s. 131 , Shri Devidas, owner of property appeared before AO on 19.04.2012 , but AO was not there therefore, he has filed written submissions to Income Tax Department wherein he has confirmed contention of assessee that he has received Rs. 51,000/- from Shri Vijay Jain and Shri Ajay Singh Kushwaha against agreement to sale of land situated at 329 , Nanakheda Ujjain. He also admitted that there was oral agreement for sale of land. In support of his contention, assessee enclosed written submissions of Shri Devidas and affidavits of himself and Shri Ajay Singh Kushwaha. In remand report, AO stated that Shri Devidas has not / d E / z ^ s : W mention date of receipt of advance and when amount was re paid back as agreement cancelled. AO also objected that assessee has not produced agreement executed with Shri Devidas, nor filed written submissions from him during course of assessment proceedings. assessee has not commented on statement of Shri Santosh Kumar Lalwani nor filed any affidavit during course of assessment proceedings. AO also stated that agreement executed between was not oral agreement rather it was written agreement wherein it specifically been written that agreement executors (purchaser) shall reserve right to register property in name of seller or others in part or in full. ld. CIT (A) observed that there is clear mention in agreement dtd. 15.08.2005, that there had been written agreement between appellant and owners of property Shri Devidas S/o Nather Mal, Shri Ashok S/o Neman das and Shri Lal Chand S/o Ram Chandra, which duly authorised appellant to register property in name of self or others in part or in full . Therefore, contention of appellant that this was only agreement cannot be accepted, because such authorization can`t be given by seller only based on oral agreement. Further, no / d E / z ^ s : W one would pay such huge amount of Rs. 8 lakh based on oral agreement, which cannot be displayed to anyone. Moreover, amount claimed to be Rs. 51,000/- only towards oral agreement can`t form basis for passing Rs. 8,00,000/- for one third of land. ld. CIT (A) further observed that affidavits submitted are self-serving evidence documents and given as after thought cannot be accepted. Accordingly, ld. CIT (A) confirmed addition by holding that as appellant had received Rs. 8, 00,000/- as advance against agreement to sell 1/3rd of said property from Shri Santosh Kumar Lalwani. Since appellant failed to produce copy of first agreement executed between appellant and owners of property which duly existed as mentioned in copy of agreement executed between appellant and Shri Santosh Kumar Lalwani. 11. Being aggrieved, assessee has filed this appeal before this tribunal. learned counsel for assessee submitted that Shri Devidas resides in Dubai. During course of assessment proceedings , in response to summon u/s. 131 , Shri Devidas attended office on 19.04.2012 but since case could not be taken up by AO hence he filed letter stating / d E / z ^ s : W that he entered into oral agreement and had received Rs. 51,000/- as advance. It was further stated that agreement was cancelled due to unavoidable circumstances, for transfer of land and amount of Rs. 51,000/- was returned back. Thus it was contended that Shri Devidas has categorically stated that he received only Rs. 51,000/- statement of Shri Santosh Kumar Lalwani cannot be considered under any circumstances, since no opportunity for cross examination was provided. Further, he is hostile witness and has filed suit under section 138 against assessee. Under these circumstances, statement of third party cannot be relied on and on that basis, no addition can be made. 12. Per contra, Ld. Senior (DR) submitted that Shri Vijay Jain is unable to produce copy of agreement between him and Shri Devidas whereas Shri Santosh Kumar Lalwani admitted that he has seen said agreement and as per agreement, Shri Vijay Jain gave amount of Rs. 20 lakhs to Shri Devidas. Therefore, statement of Shri Santosh Kumar Lalwani is in nature of evidential value. In para 3.3.5 of appeal order, ld. CIT (A) has recorded categorical finding that without written agreement , appellant has no power to register any property / d E / z ^ s : W of which he has no ownership only on basis of oral agreement. additional evidence in form of affidavits are after thought and self-serving evidence. AO has given finding after considering entire facts and not only based on statement of Shri Santosh Kumar Lalwani. Therefore, Ld. Senior (DR) argued that appeal of assessee deserved to be dismissed. 13. We have heard rival submissions, have gone through orders of lower authorities, and perused material available on record. We find from orders of lower authorities that assessee in his statement recorded on 19.12.2008 by AO has claimed that amount deposited as advance from directors at Rs. 19,01,550/- in M/s. Kunjika Construction Pvt. Ltd. relates to him. source of this advance is claimed to be Rs. 8,00,000/- received from Shri Santosh Kumar Lalwani as advance towards agreement to sale of land to vide agreement executed on 15.08.2005. To verify this contention of assessee, AO examined Shri Santosh Kumar Lalwani and recorded his statement on oath on 01.12.2009 u/s. 131 of Act. We find that Shri Santosh Kumar Lalwani has accepted that he had entered into agreement to purchase land situated at Gram Nanakheda, Ujjain on 15.08.2005 and paid amount of Rs. 8 / d E / z ^ s : W lakh as advance because of Bayana being advance for land intended to be purchased by him. It is also noticed that assessee along with Shri Ajay Singh Kushwaha have purchased said land from Shri Devidas & others by paying Rs. 51,000/- as Bryana amount. assessee further stated that they have entered into agreement for sale of 1/3rd land to Shri Santosh Kumar Lalwani on 15.08.2005 and received Rs. 8 lakh as advance out of which assessee has deposited Rs. 19.05 lakh as advance in M/s. Kunjika Construction Pvt. Ltd. We find that Shri Santosh Kumar Lalwani has also accepted this fact and AO has accepted this source of payments. However, we further find that Shri Santosh Kumar Lalwani has also stated in same statement recorded on 01.12.2009 stating that Shri Vijay Jain and Shri Ajay Singh Kushwaha have paid sum of Rs. 20 lakhs towards purchase agreement of said land to Shri Devidas & others. We find that assessee is not able to explain source of payment of Rs. 20 lakhs. It is contention of assessee that no such payment has been made by them. However, we find that this contention is not supported by any documentary evidence. It is claim of assessee that there was oral agreement for purchase of land at Survey No. 329 Nanakheda / d E / z ^ s : W Ujjain and only Rs. 51,000/- were given as advance. This contention of assessee is not found acceptable by AO and ld. CIT (A). We find that assessee has not been able to produce Shri Devidas for examination before AO. assessee has also failed to produce agreement for purchase of land from Shri Devidas & others. learned counsel for assessee stated that statement of Shri Santosh Kumar Lalwani is not reliable as no opportunity of cross examination was provided and witness has filed suit against assessee hence he is hostile witness. We find that this contention of assessee is not tenable in law and facts. We find from assessment proceedings that AO has asked assessee to produce Shri Devidas for examine but this opportunity was not availed by Assessee. We also note that Shri Vijay Jain has not made any comments on contention of statement of Shri Santosh Kumar Lalwani, during course of assessment proceedings. We further find that at one hand assessee is relying on statement of Shri Santosh Kumar Lalwani of having received Rs. 8 lakh from him, but on same footing assessee has not accepting other part of statement of Shri Santosh Kumar Lalwani, that he has paid sum of Rs. 20 lakh to Shri Devidas & / d E / z ^ s : W other as against intended purchase of land. It is settled position of law that statement is to be believed as whole and not in piecemeal as one-part suits to assessee and other part does not suits to assessee. We have seen agreement for purchase of land dtd. 15.08.2005 between Shri Vijay Jain along with Shri Ajay Singh Kushwaha and Shri Devidas & others. perusal of para 1 of said agreement placed at paper book page 36 of assessee, which find place at page 5 of assessment order also and same is referred in question 14 of statement of Shri Santosh Kumar Lalwani, which clearly shows that there is written agreement with assessee from owner of land and as written in said agreement, they have right to sell property and register property in name of self or others in part or in full. Further, in reply to question 14 of his statement (Shri Santosh Kumar Lalwani) , has clearly stated that he has entered into this agreement and paid sum of Rs. 8 lakhs after seeing executors of said agreement for purchase of 1/3rd part of land had agreement with original owner of land in which it was clearly mentioned that they have right to sell said property and so far as he remember they have paid Rs. 20 towards Bayana for purchase of said land. We also find that / d E / z ^ s : W Shri Santosh Kumar Lalwani had agreed to purchased 1/3rd of land for Rs. 43,27,400/- and paid Rs. 8 lakhs as advance for same which means that total value of said land must be three times of Rs. 43 lakh meaning there by around Rs. 120-130 lakhs. Therefore, in same way , Shri Vijay Jain, is very likely might have paid 1/5th of as advance as Bayana at Rs. 120/5=24 lakhs or Rs. 20 lakhs ). Since assessee has failed to produce agreement for purchase of land with Shri Devidas & others, therefore, we are of considered view that lower authorities have justified in making addition of Rs. 20 lakhs on this account. We also find that AO has not only made addition based on statement but also having regards to entire circumstances of case. circumstantial evidence and surrounding circumstances make view of AO as correct. We also find mentioned that purchaser (executors) of said agreement have written agreement of purchase of said land or executor. We find that in said agreement, it has been clearly mentioned that assessee has agreement by which they have authorised to sell land and get registered same in name of prospective buyers. In view of these circumstances, we uphold finding of : W lower authorities. Accordingly, Ground No. 2 of appeal is dismissed. 14. In result, appeal of assessee is partly allowed. 15. order pronounced in open court on 17th October, 2016. Sd/- Sd/- (D.T.GARASIA) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 26th October, 2016.OPM Vijay Jain v. Income Tax Officer, Ward 2(1), Ujjain