1 IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI R.C. SHARMA(AM) AND SHRI AMARJIT SINGH (JM) ITA Nos. 6797 & 8927/MUM/2010 Assessment Years: 2007-08 & 2008-09 ACIT Central Circle 14 Vs. Shri Surendra S. Barmecha R.No. 102, 11th Floor, 7 C Ratan Milan, Old CGO Annexe Building Ghod Dod Road, Surat Mumbai- 400020 Gujarat, PAN No. AAAPB6520A & ITA Nos. 9055/MUM/2010 Assessment Years: 2008-09 Shri Surendra S. Barmecha Vs. ACIT Central Circle 14 6/1910, Ambica Mansion Old CGO Building(Annex) Jadkhadi, Mahinderpura 11th Floor, M.K. Road Surat Mumbai- 400020 PAN No. AAAPB6520A & ITA Nos. 8928/MUM/2010 Assessment Years: 2008-09 ACIT Central Circle 14 Vs. Shri Sangeet S. Barmecha R.No. 102, 11th Floor, 7 C Ratan Milan, Old CGO Annexe Building Ghod Dod Road, Surat Mumbai- 400020 Gujarat, PAN No. AAAPB6520A (Assessee) (Respondent) 2 Revenue by : Shri. H.N. Singh Assessee By : Shri. B.V. Jhaveri Date of Hearing : 07/09/2016 Date of pronouncement : 19/10/2016 O R D ER PER R.C. SHARMA, ACCOUNTANT MEMBER : These are cross appeals filed by Assessee and Revenue against order of Ld. CIT(A) for AY 2007-08 & 2008-09, in matter of order passed under section 143(3) r.w.s 153 of Act. 2. Rival contentions have been heard and records perused. 3. Brief facts of case are that assessee is proprietor of M/s. Barmecha Exports and trading in Gold and Diamond jewellery. assessee is also engaged in money lending business. search & seizure u/s 132 was carried out in premises of assessee and his group concerns on 05/10/2007. During course of search action, Rs. 4,88,950/- was found at residence and Rs. 46,660/- was found at business premises, out of which Rs. 3,00,000/- was seized as unexplained cash. In course of search papers were found from business premises and residence which revealed that assessee was also carrying on business of money lending using funds of family. said loose papers were collected and marked as BS-13 by officers carrying out search. Considering these loose papers assessee prepared cash book (account) and arrived at peak amount of investment of Rs. 13,09,871/- in A.Y. 07-08 and Rs. 44,44,820/- in A.Y. 08-09. said amounts were offered by assessee in his returns of income. assessee s son, Mr. Saurabh Barmecha was also carrying on business of dealing in jewellery in name & style of M/s. Sangeeta Gems who had carried out certain unaccounted transactions in previous year relevant to A.Y. 07-08 for which papers were found. said loose papers were collected and marked BS- 9, BS-10, BS-12 & BS-13. Accordingly Mr. Saurabh Barmecha made disclosure 3 of income of peak amount of investment of Rs. 28,11,366/- in his return of income for A.Y. 07-08. Similarly, Smt. Sneha Saurabh Barmecha, proprietress of M/s. Balaji Jewels had also offered income of Rs. 23,49,670/- for A.Y. 2008-09. assessee has made disclosure of Rs. 1,50,00,000/-, out of which Rs. 13,09,871/- has been disclosed for relevant assessment year 2007-08 by assessee and Rs. 30,16,511/- has been disclosed by assessee s son Shri Saurav Barmecha for A.Y. 2007-08. Remaining disclosure has been made for other assessment years. In AY 2007-08 assessing officer made addition of Rs. 41,81,369/- on account of unexplained investment u/s. 69 of Act in money lending business. reason given by Assessing Officer is recorded in para-5 of impugned assessment order. After considering remand report sent by AO, CIT(A) deleted addition after having following observations : 2.6.1 I have carefully and dispassionately considered facts and circumstances of case, impugned assessment order, contentions of page No. 67, report of Assessing Officer, rejoinder, written submission and arguments made by learned AR before me. assessee has already explained modus operandi adopted which was explained by - assessee during course of search & seizure. He has also disclosed investment of Rs. 1.5 crore in money lending business and has paid taxes thereupon. assessee has not retracted said disclosure of Rs. 1.5 crore. Learned AR has explained each and every entry recorded on impugned page No. 67 of Annexure BS- 13 which may be reproduced as under: PG 40 SB 40 KJ 30 -30 1/05 11 10 15 96 4177 -1500 ST 3/05 SANGEETA 2677 KJ- 30 4 500 Mum 5/05 2167 -750 ST 8/05 Ashish 11-77000 Int. 1417 - 11 77000 Recd. 1/05 1100 ST 9/05 x x 327 2.6.2 Learned AR has argued that assessee had given cheque of Rs. 40 lakhs to Mr. Prakashchandra S. Gandhi (PG-40) on 07/03/2005 on interest. Therefore, for AY 2005-06, assessee had debited account of said "PG" by interest amount of Rs. 29,150/- and for AY 2006-07 by sum of Rs. 2,80,000/-. said loan was repaid by "PG" together with interest on 28th September 2007 and is recorded in assessee's balance sheet furnished along with return of income for AYs. 2006-07 & 2007-08. Therefore, aforesaid account of "Mr. PG" was squared off prior to date of search. Copies of confirmation of "PG" were forwarded to Assessing Officer as additional evidence. No adverse comments on merits received from Assessing Officer. Therefore, entry "PG- 40" is explained. 2.6.3 SB-40 has been explained as Shri Surendra S. Barmecha (assessee) had given said loan of Rs. 40 lakhs to "PG" which is reflected in his return of income for AY 2006-07 in balance sheet. said loan is also reflected in assessee's balance sheet for AY 2007-08 because out of aforesaid loan of Rs. 40 lakhs, Rs. 30 lakhs has been repaid by "PG" on 3rd May 2007. Therefore, only sum of Rs. 10 lakhs was outstanding as on 01-05-2007. Therefore entry of SB-40 " -30 01/05/2004 is explained. 10 2.6.4 Mrs. Sangeeta Barmecha had lent Rs. 30 lakhs by account Payee cheque dated 21-03-2006 to M/s. Krishna Jewels (KJ -30) on interest. said loan was repaid by said "KJ on 01-11-2007 and 02-02-2008 along with interest. Copies of confirmation from said "KJ were submitted as additional evidence and forwarded to Assessing Officer 5 for his comments. No adverse comments received on merits from Assessing Officer. On facts and in circumstances" KJ -30" is explained by learned AR. 2.6.5 Thereafter said Mrs. Sangeetci S. Barmecha lent Rs. 11 . lakhs by account payee cheque dated 21-03-2006 to Mr. Ashish Gandhi (Ashish) on interest. Interest was calculated at Rs. 77,000/- up to 31-03- 2007. said loan along with said interest aggregating to Rs. 11,77,000/- was repaid by said "Mr. Ashish" to Mrs. Sangeeta Barmecha on 3rd May 2007. Copies of confirmation from said Mr. Ashish Gandhi were enclosed as additional evidence and forwarded to Assessing Officer for his comments. Assessing Officer has not commented adversely on said evidences on merit. Therefore, bottom right side of seized paper 67 of Anexure BS-13 is explained. This is further explained by I balance sheet for FY 2005-06 and FY2006-07 of said Mrs. Sangeeta Barmecha. These loans are reflected in disclosed balance sheet of Mrs. Sangeeta Barmecha along with interest (net of TDS) 2.6.6 Mrs. Sangeeta Barmecha had lent Rs. 15 lakhs by account payee cheque on 21-03-2006 to M/s. Krishna J'ewels (KJ) on interest which was repaid by said "KJ" on 28-09-2007. Copies of confirmation from KJ" were submitted as additional evidences and forwarded to Assessing Officer" for his comments. These confirmations explained entry of "15". This is further explained from balance sheet for FY 2005-06 and 2006- 07 of said Mrs. Sangeeta Barmecha. impugned loan of Rs. 15 lakhs is duly reflected in her balance sheet along with interest (net of TDS). 2.6.7 Mrs. Surendra Bcrmechc received Rs. 30 lakhs from PG" and Mrs. Sangeeta Barmecha (assessee's wife) received Rs. 11,77,000/- from Ashish". Thus assessee and his wife received in aggregate Rs. 41,77,000/-. This fact is recorded on page No. 67 of BS-13 as "4177". 2.6.8 assessee and his wife are partners in M/s. Nav Mongal Corporation which was formed on 19-03-2007. assessee invested capital of Rs. 27,50,000/- in said M/s. Nav Mangal Corporation in 6 month of May 2007. Therefore, assessee had recorded following entries on said page No. 67 of BS-13 as reproduced below: 4177 -1500 ST 3105 2677 - 500 Mum 5105 2167 -750 ST 6105 1417 Thereafter assessee s wife gave cheque of Rs. 11.50 laks as her capital to M/s. Nav Mangal Corporation and therefore, assessee recorded following further facts on said slip being 67 of BS-13 as under: 1417 - 1100 ST 9105 327 2.6.9 assessee had submitted copies of submissions of assessee s accounts and his wife s accounts in books of M/s. Nav Mangal Corporation which were forwarded as additional evidence to Assessing Officer for his comments. Leaned AR explained that confirmation of accounts reveals that assessee s account was credited by sum of Rs. 27,50,000/- on 07/05/2007 as capital investment by assessee. Similarly, confirmation of account of Mrs. Sangeeta Barmecha in books of accounts of M/s. Nav Mangal Corporation reveals that her account was credited by sum of Rs. 11 lakhs on 02/05/2007 and by sum of Rs. 11,50,000/- on 07/05/2007. These entries are explained in return of income, computation of income and audited accounts of M/s. Nav Mangal Corporation for FY 2007-08. These documents were also forwarded as additional evidence to Assessing Officer for his comments. No adverse comments on merits received from Assessing Officer. These are further explained by balance sheet of assessee for FY 2007-08, which was furnished along with return of income for relevant assessment year 2008-09 and it records investment of assessee in M/s. Nav Mangal Corporation at 7 Rs. 41,58,822/-. Similarly, balance sheet of Mrs. Sangeeta Barmecha for FY 2007-08 records investment made by her in M/s. Nav Mangal Corporation at Rs. 41,61,617/-. 2.6.10 Learned AR explained each and every entry recorded on said page No 67 of Annexure BS-13. Learned AR has taken great pain and due diligence to explain that each figure recorded on page No. 67 of Annexure BS-13 are accounted by assessee, his wife and his daughter-in-law in their regular books of accounts and said entries in respect of loans given by account payee cheques or investments made through regular books of accounts in partnership firm M/s. Nav Mangal Corporation in which assessee and his wife are partners. Learned AR explained that figure of "4177" is properly explained and incorrect conclusion made in ex-parte manner by Assessing officer is contrary to said seized page No. 67 and contrary to facts on record filed by assessee and his family \ before Assessing Officer in form of balance sheet, audited accounts and other relevant documents as discussed above. therefore, addition of Rs. 41,77,000/- made by Assessing Officer AY 2007-08 is not sustainable and same is reduced completely. 4. Against above order of CIT(A), revenue is in further appeal before us and has taken ground with regard to violation of Rule 46A. 5. We have considered rival contentions and carefully gone through order of authorities below and found from record that during appellate proceeding Ld. CIT(A) has called for remand report in respect of Page no.2 & 67 of Annexure BS-13 for which opportunity was not given to assessee during course of assessment proceeding. copy of page 67 of Annexure BS-13 was forwarded by Ld. CIT(A) to AO for his comment. We find that assessee has furnished additional evidence in form of confirmation of account from third party in books of assessee as well as copy of invoice and extract of books of account from third party. Before Ld. CIT(A) assessee has explained reasons how he was prevented by sufficient cause in 8 not producing such evidences during course of assessment proceeding. After considering reasonable cause, CIT(A) accepted additional evidence and to give opportunity to AO to examine same, called remand report from AO. After considering remand report as well as rejoinder filed by assessee in reply to remand report, CIT(A) observed that confirmation of account reveals that assessee s account was credited by sum of Rs. 27,50,000/- on 07/05/2007 as capital investment by assessee. Similarly CIT(A) recorded finding to effect that as per confirmation of account of Mrs. Sangeeta Barmecha in books of M/s. Nav Mangal Corporation reveals that her account was credited by sum of Rs. 11,00,000/- on 02/05/2007 and by sum of Rs. 11,50,000/- on 07/05/2007. We also found that these entries were duly explained in return of income, computation of income and audited accounts of M/s Nav Mangal Corporation for AY 2007-08. In view of detailed findings recorded by CIT(A), after considering remand report, which is as per material on record, no interference is required in finding so recorded by Ld. CIT(A)resulting in deletion of addition of Rs. 41,81,369/-. findings so recorded by CIT(A) have also not been controvered by department by bringing any positive material on record. In AY 2008-09 AO made addition on account of unexplained stock found in excess and also on account of investment under section 69 in immovable property. Addition was also made by AO on account of investment in money lending business. 6. Rival contentions have been heard and records perused. 7. Brief facts of case are that assessee is resident individual and has disclosed income in his return under - heads - Income from House Property, Profit & Gains from business & Profession, Speculation Business, Capital Gains, and Income from other Sources. Search & seizure action u/s. 132 were carried out in premises of assessee and his family concerns on 05-10-2007. search resulted in seizure of various incriminating documents, cash and jewellery items as discussed by AO in relevant assessment order. During 9 course of search cash of Rs. 4,88,950/- and Rs. 46,660/- found from residence and business premises respectively . Out of such amount, cash of Rs. 3,00,000/-- was seized. No addition was made on account of cash found in hands of assessee by AO. Regarding jewellery found, worth Rs. 1,33,91,371/- no addition was made by AO because assessee had already disclosed such jewellery under VDIS 1997 Scheme. Copies of relevant VDIS Certificate and relevant valuation report were examined and accepted by AO as discussed in para - 5 of relevant assessment order. AO made addition of 42,02,460/- on account of difference in stock as discussed on page-5, para-6 of relevant assessment order. With regard to addition of Rs. 42,02,460/- AO has observed that in balance sheet of M/s. Barmecha Exports as on 31- 03-2008, closing stock was disclosed at Rs. 35,85,250/-. He compared this figure with Panchanama dated 05-10-2007, wherein, Departmental valuers M/s. Jafferbhai S. Daginawala inventorized assessee's three family concerns' diamond stock and jewellery found in course of search as on 02/05/2007 at Rs. 77,87,710/-. AO added difference of aforesaid two figures because books of accounts and stock registers were not produced. 8. After considering remand report Ld. CIT(A) deleted addition after having following observations: 3.3.1 I have carefully and dispassionately considered facts and circumstances of case, assessment order, written submissions, statement of facts, additional evidences, rejoinder filed by AO and arguments made by learned AR. undisputed facts are that in course of search, authorized officers of Department collected jewellery as well as stock of diamonds from business premises at 6/1910 Jedhakhadi, Mahidharpura, Surat, where three business concerns were operating namely M/s Barmecha Exports, (Proprietor: Mr. Surendra S. Barmecha) (b) Mrs. Balaji Jewels, (Proprietor: Mrs. Sneha Barmecha) (c) M/s Sangeeta Gems, (Proprietor: Mr. Saurabh Barmecha). Authorized Officers also collected diamond stock from Bank Locker and 10 all such diamond jewellery and stock were valued by Department Valuer M/s. Jafferbhai S. Daginawala, vide his report dated 05-10-2007, which was signed by Authorized Officer as well as by assessee and witnesses. When assessee was confronted about diamond stock (packets) found by Authorized Officer during course of such search & seizure action, assessee vide question No. 25 in particular, and question Nos. 16 & 17 in general, replied that all diamond packets found in said voult are part of stock-in-trade of (a) M/s Barmecha Exports, (b) Mrs. Balaji Jewels, (c) M/s. Sangeeta Gems. In course of assessment proceedings, assessee vide his letter dated 23/11/2009 gave reconciliation of diamond stock belonging to aforesaid three business concerns operating from said premises. As. per explanation, three family concerns of assessee were having aggregate stock of diamonds weighing 871.25 cts. As on date of search as per particulars given below: M/s. Barmecha Exports - 527.83 cts Proprietor: Mr. Surendra S. Barmecha (Page 251) Mrs. Balaji Jewels -298.53 cts Proprietor: Mrs. Sneha Barmecha (Page 250) M/s. Sangeeta Gems -44.89 cts Proprietor: Mr. Saurabh Barmecha (Page 249) --------------- 871.25 cts. 3.3.2 During course of search & seizure Department found diamond stock-in-trade weighing 598.06 cts. During course of search & seizure as well as during course of assessment roceedings, appellant explained that balance stock (273.19 cts.) was issued to brokers viz. Rameshbahi & others for offering same for sale to other dealers in market for such purposes Jangads were available in office file as recorded in his statement u/s. 132(4) in Question No. 17. AO has arbitrarily compared actual stocks of three business concerns found on 05/10/2007 with book value of only one concern M/s. Barmecha Exports that too on 31/03/2008. He has not given any reason for coming 11 to such irrational conclusion. I agree with learned AR s reasoning that contrary to facts on record, stock of three business concerns as on date of search (i.e. 05/10/2007) cannot be compared with closing stock of only one business concern as on 31/03/2008. Such comparisons are arbitrary and unreasonable and therefore cannot be sustained. AO should have taken value of closing stock as on 05/10/2007 from books of accounts of aforesaid three business concerns operating from same premises and stock of which were found from business premises as well as from locker premises as explained by appellant during course of search and seizure and as per addresses given in their respective returns of income available with AO. Had he taken correct value of stock in trade as per books of accounts on date of search i.e. on 05/10/2007, it is case of learned AR that both cartage as well as value of stock in trade found during course of search was fully explained and fully recorded in books of accounts maintained by appellant. AO has not done so even though books of accounts were seized by Department and computer date back-up was available with A.O. No addition would have been necessary. Secondly, if AO decided to compare value of stock in trade found during course of search as on 05/10/2007 with closing stock as on 31/03/2008, he should have fairly considered closing stock of all three business concerns operating from same premises and stock of which were found by search team from business premises as well as form bank locker. balance sheets of aforesaid three concerns i.e.(a) M/s. Barmecha Exporst, (b) Mrs. Balaji Jewels, (c) M/s. Sangeeta Gems were available with AO and value of closing stock as on 31/03/2008 of aforesaid concerns are recorded in balance sheet, Audit Report & Profit & Loss A/c as per particulars given below: M/s Barmecha Exports Rs. 35,73,750 (361.38 cts.) Mrs. Balaji Jewels Rs. 25,47,303 9209.74 cts.) M/s. Sangeeta Gems Rs. 40,41,570/- (310.89 cts.) Rs. 101,62,623 (882.01 cts.) 12 No addition was called for because actual stock was less than book value. Thirdly, even if he would have taken value of opening stock as on 01/04/2007 of all three business concerns, stock of which were found from business premises and bank lockers as established during course of search & seizure operations, value of such opening stock was Rs. 87,93,191/- (876.66cts.). Having regard to facts and circumstances, AO has erred in comparing stock of three business concerns as on date of search with stock of only one business concern and that too on date 31/03/2008. If he would have compared actual stock-in-trade found during course of search and seizure with stock in trade recorded in books of accounts of three business concerns on same date, then entire stock was explained. No addition was needed. AO should have seen returns of income of three concerns for AY 2007-08 and 2008-09 and seized records as well as statement given by appellant during course of search & seizure and then no addition was called for. Having regard to facts and circumstances of case, diamond stock in trade found during course of search & seizure as on 05/10/2007 is fully explained. AO has drawn unfair comparison, firstly, he has compared value and cartage on two different dates and secondly, he has compared stock in trade of three business concerns with that of only one business concern. addition made by AO on such irrational comparison cannot be sustained and same is therefore reduced to Nil. Ground No. 4 is therefore, allowed. 9. We have considered rival contentions and carefully gone through orders of authorities below as well as remand report sent by AO and reply called by CIT(A), we found that after analyzing stock kept with each of firm, CIT(A) after recording detailed finding reached to conclusion that AO has drawn unfair comparison. Firstly, he has compared value and cartage on two different dates and secondly, he has compared stock in trade of three business concerns with that of only one business concern. CIT(A) further recorded finding to effect that as per Balance Sheet of all three concerns, value of closing stock as on 31/03/2008 as recorded in Banalce 13 Sheet, Audit Report and Profit and Loss Account are correct and no addition was called for because actual stock was less than book value. detailed finding was recorded by CIT(A) are as per material on record. Accordingly, we do not find any reason to interfere in finding so recorded by CIT(A) which resulted into deletion of addition made on account of difference in stock. 10. AO has also made addition of Rs.25,80,000 on account of unexplained investment in immovable property. AO has dealt with this issue at para 7 at page 5-7 of his order. By impugned order Ld. CIT(A) deleted addition after having following observation: I have carefully and dispassionately considered facts and circumstances of case, relevant assessment order, written submissions made and arguments by learned AR. Learned AR has vehemently argued that AO has erred in law and in facts in making addition of Rs. 25,80,000/- because he has not followed due process of law and has never confronted assessee with alleged statement recorded by him from one Shri Sunil Jayantibhai Shah, behind assessee's back. For first time, reference of such statement was made in assessee's assessment order without giving any opportunity to assessee to furnish his rebuttal. Learned AR strongly contended that AO has not followed principles of natural justice and hence statement of said Shri Sunil Jayantibhai Shah, has no evidentiary value and entire addition made on basis of said statement is to be reduced completely in light of Honorable Supreme Court, Delhi High Court & M.P. High Court decisions in cases of Kishenchand Chellaram v. CIT (supra), CIT v. SMC Share Brokers Ltd. (supra) and Prakash Chand Nahta v. CIT (supra) respectively. Therefore, addition of Rs. 25,80,000/- on said statement recorded by AO without knowledge and without giving opportunity of rebutting said statement is bad in law and therefore, addition based on such statement is to be reduced completely. Secondly, learned AR had furnished complete details of Account Payee Cheques paid by assessee and his spouse at Rs. 39,80,000/- and Rs. 37,20,000/- respectively as 14 discussed in preceding paragraphs. Learned AR has submitted that initially assessee and his spouse jointly agreed to purchase approximately 3000 sq. ft. area of building under construction by M/s. Sumangal Corporation at Surat. assessee also made , cash payments of Rs. 11,00,000/- to said builder on 17-08-2007 for providing strong room on 2nd floor for which extra beam was allowed in ceiling of first floor. Subsequently, assessee and his spouse changed plan and decided to purchase smaller premise on 1st & 2nd floors of building admeasuring only 2201 sq. ft. carpet area. As result, said builder refunded difference amount of Rs. 14,80,000/- on 27-03-2008 by account payee cheque. In view of said refund of Rs .. 14,80,OOO/-, net payment made by assessee and his spouse is worked out at Rs. 62,20,000/- from earlier Rs. 77,00,000/- (Rs. 77,00,0001-- minus Rs. 14,80,000/-). In addition, cash of Rs. 11,00,000/- was also paid for providing strong room. In relevant assessment year, AO observed that though assessee and his spouse have jointly made payment of Rs. 77,00,000/- to said builder for booking premises in said building, assessee and his spouse have recorded only Rs. 62,20,000/- in books of accounts and difference of Rs. 14,80,000/- was not recorded in books of accounts. Therefore, AO held that assessee or his spouse had made unaccounted investment of Rs. 14,80,000/- by cheque and Rs. 11,00,000/- by cash in said building being constructed by M/s. Sumangal Corporation at Surat. Learned AR has strongly contended that even said Shri Sunil Jayantibhai Shah, in his statement recorded on 09-10-2007 has confirmed that assessee and his spouse made payments aggregating to Rs. 77,00,000/- on booking premises in "Union Square Building" being constructed by M/s. Sumangal Corporation at Surat. This fact exactly matches with payment details furnished by assessee and his spouse in course of assessment proceedings and therefore, there is no dispute that assessee and his spouse had paid jointly Rs. 77,00,000/- to said M/s. Sumangal Corporation. Subsequent to statement of said Shri Sunil Jayantibhai Shah, recorded on 09/10/2007, assessee and his spouse changed plan and instead 15 of 3000 sq.ft carpet area appellant and her husband decided to buy only 2201 sq. ft.on 1st & 2nd floors. In these circumstances M/s. Sumangal Corporation refunded sum of Rs. 14,80,000/- on 26-03-2008. assessee and his spouce executed agreement for purchase of said 1st & 2nd floor area on 19-03-2008 admeasuring 2201 carpet area which is duly registered with Sub -Registrars of Assurances at Surat. assessee had also furnished copy of their bank statements to further confirm receipt of refund of Rs .14,80,000/- from said M/s. Sumangal Corporation, which is credited in her ABN Amro Bank Account on 27-03-2008. Even without these bank statements, facts are clear as discussed in preceding paragraphs. In respect of investment of Rs. 11,00,000/- in cash made by assessee, same was reportedly disclosed by him while arriving at peak credit of money lending business. He has already disclosed Rs. 71,39,927/- in his hands and has paid taxes along with Return of income furnished u/s. 153A of Act. This matter of taxation of peak credit is elaborately discussed in ground No. 6, where peak offered by assessee at Rs. 44,44,820/- has been enhanced by me to Rs. 91,59,410/-. Having regard to facts and circumstances of case, I find considerable force in arguments of learned AR I agree with him that assessee and his spouse paid Rs. 77,00,000/- by cheque which were fully disclosed and out of their disclosed bank accounts. Out of such payment of Rs. 77,00,000/- made by them, Rs. 14.80 lacs was received back by Account Payee Cheque due to purchase of smaller flat (2201 sq. ft.) against booking of bigger flat (3000 sq. ft.) earlier for which payment of Rs. 77 lacs was made by assessee and his spouse. Therefore, difference of Rs. 14.80 lacs (Rs. 77 lacs - Rs. 62.20 lacs) cannot be added. Secondly, cash component of Rs. 11 lacs paid by assessee has separately been assessed while working out peak credit of unaccounted money lending business disclosed by him u/s. 132(4) of Act and taxes paid alongwith return of income furnished u/s 153A of Act. In my case, once AO has verified working of peak credit in unaccounted money lending business at time of disclosure u/s. 132(4) during course of assessment proceedings and again during course of remand 16 proceedings then there is no dispute. impugned addition of Rs. 25,80,000/- is therefore deleted. Ground No. 5 is allowed. 11. We have considered rival contentions and found from record that as per Statement of Shri Sunil Jayantibhai Shah recorded by department on 09/10/2007, he has confirmed that assessee and his spouse made payment aggregating to Rs.77,00,000/- on booking premises being constructed by Sumangal Corporation at Surat. This fact exactly matches with payment details furnished by assessee and his spouse in course of assessment proceedings. We also found that subsequent to statement of Shri Sunil Jayantibhai Shah, assessee and his spouse changed plan and instead of 3000 sq.ft carpet area decided to buy only 2201 sq.ft on first and second floor. Accordingly Sumangal Corporation refunded sum of Rs.14,80,000/- on 26/03/2008. Assessee and his spouse also executed agreement for purchase of said first and second floor area on 19/03/2008 admeasuring 2201 sq.ft carpet area which is duly registered with Sub-Registrar. Assessee has also submitted copy of three bank statements to further confirm receipt of refund of Rs. 14,80,000/- from said M/s. Sumangal Corporation. After recording detailed finding, CIT(A) has deleted addition made on account of unexplained investment. findings recorded by CIT(A) has not been controverted by learned DR, accordingly we do not find any reason to interfere in order of CIT(A) deleting addition made on account of unexplained investment in immovable property. 12. AO has also made addition of Rs. 4,04,98,654/- by observing that seized lose paper identified as BS-13 contained details regarding assessee s money lending business which was not recorded in books of account. Before Assessing Officer, assessee furnished explanation in form reconstructed Account No. C-9999 which form part of reconstructed cash book to explain money lending business and which was submitted during post-search investigation and on this account, assessee made disclosure of Rs. 44,44,820/- in unaccounted money lending business for period between 01- 17 04-2007 till date of search. After having following observation Ld. CIT(A) reduced / deleted addition: 5.3.1 I have carefully and dispassionately considered facts and circumstances of case. assessee has not disputed that he has been indulging in undisclosed money lending business, which was not recorded in his regular books of accounts. assessee had disclosed peak investment of such unaccounted money lending business at Rs. 44,44,8201- in AY 2008-09. assessee disclosed such peak amount and included same in his return of income for AY 2008-09 and paid taxes thereon. Therefore, there is no quarrel with proposition that assessee had indulged in undisclosed money lending business which was not recorded in his regular books of accounts. main dispute is regarding quantum of peak investment to be worked out in respect of such undisclosed money lending business. Learned AO in his remand report sent vide letter No. ACIT/C.C.14/Remand Report/2010-11 dated 09-08-2010 which was forwarded by Addl. CIT, Central Range-3, Mumbai vide letter No. Addl. CIT/CR-3/Rem. Rep/2010-11/189 dated 31-08-2010 has discussed vide para No. 3 & 4 that assessee was given sufficient opportunity of explaining seized material. He had asked assessee vide letter dated 07-08-2009 to produce ledger account, bank statement and confirmations, but assessee did not comply. In rejoinder, learned AR has submitted that after receipt of notices u/s. 143(2) & 142(1) of Act dated 30-01-2009, assessee submitted details vide letter dated 28-04-2009 which are enclosed at pages 170 to 183 of paper book. It was submitted that assessee had given page- wise explanation in respect of each of Annexure prepared in course of search, viz. BS-l to BS-10 prepared as per Panchanama dated 05-10- 2007 drawn at office premises of assessee at Surat. Secondly, assessee gave page-wise explanation in respect of Annexure A-1 to A-3 prepared as per Panchanama dated .12-10-2007 drawn at residence of assessee at Mumbai. Therefore, allegation of AO to fact that assessee did not comply with requirements of notices is incorrect and contrary to facts on record. Learned AR further argued 18 that if AO was not satisfied with explanation given vide his letter dated 06-10-2009, AO ought to have called for further explanation from assessee, but same was not done. Therefore, assessee had reason to believe that his explanation in respect of seized material was satisfactory and no further explanation was required to be given. 5.3.2 Vide his reply dated 28-04-2009, assessee explained pages 69 to 82 of BS-13 and submitted that these pages contained copies of ledger account of parties relating to money lending business. Learned AR added that vide para 12 of notice issued by AO on 07-08-2009, AO had made specific enquiry about pages starting from page-64 and ending with page-9 which were properly and satisfactorily explained to AO. If AO wanted to make any addition on basis of seized material on pages 69 to 82 of BS-13, he should have made specific enquiry about those pages, which was not done by him. It is only while passing assessment order, AO referred to those pages and since he has not asked for any specific explanation, he made addition in respect of pages 69 to 82 of BS-13, learned AR reiterated that addition made by AO on pages 69 to 82 of BS-13 were made without calling for specific explanation from assessee and therefore, assessee was prevented by sufficient cause from producing before AO such explanation and evidences which were relevant to present ground of appeal. It was forcefully argued by learned AR that assessee has complied with conditions of Rule 46A of I.T. Rules 1962. Learned AR further drew attention to para-2 of impugned assessment order, wherein, AO has recorded that in response to notices issued u/s. 143(2) & 142(1) of Act, Shri R.S. Lodha, C.A. attended from time to time and filed details called for. above said categorical statement of AO prove that assessee had produced of details called for by AO which was certainly included bank statement and ledger accounts ,.- etc. without which assessment cannot be completed. Learned AR prayed that additional evidences may kindly be admitted as same was necessary for disposal of grounds of appeal and was within requirement of Rule 46A. He also 19 relied on Honorable Bombay High Court decision in case of Smt. Prabhavati S. Shah vs. CIT (231 ITR 1), wherein, their Lordships have held that it is clear from sub-sec. (4) and (5) of sec. 250 of Income Tax Act 1961 that powers of Appellate Assistant Commissioner are much wider than powers of ordinary court. powers conferred on Appellate Assistant Commissioner u/s. 250(4) being quasi-judicial power, it is incumbent on him to exercise same, if facts and circumstances justify. Their Lordships further observed that assessee was never informed by Income-tax Officer that creditors were not available or unidentifiable. If she had been informed by Income-tax Officer in course of assessment proceedings that he was not inclined to accept loan as genuine because of non- availability of creditors, assessee could have tried to satisfy him about genuineness of loan by producing other evidence. 5.3.3 I have already admitted additional evidences as discussed by me vide para 2.3.1 and 2.3.2 appearing in pages 12 & 13 of this appellate order. Therefore, AO's objection to admission of additional evidence is overruled and additional evidences have been admitted in light of Honorable Supreme Court decision given in case of National Thermal Power Corporation Vs. CIT(supra) and Jute Corporation of India Ltd. Vs. CIT(supra)and in light of Bombay High Court decision in cases of Smt. Prabhavati Shah vs. CIT(supra) and Ahmedabad Electricity Co. Ltd. Vs. CIT(supra) 5.3.4 Learned AR further argued that AO did not raise specific queries in respect of pages 62 to 142 (as has been done by him for pages 64 to 9 of BS-13) before making addition on basis of said page? As argued earlier by learned AR, assessee was prevented by sufficient cause in not producing evidences to explain pages 79, 80 back side of page 80, page 81, /, back side of page 81 and page 82 of BS-13. He contended that addition of Rs. 1,08,38,630/- made by AO vide Tables appearing on page-9 of impugned assessment order is factually wrong because these pages are duly reflected in regular bank account of assessee group as also in regular books of 20 accounts of assessee group. Learned AR has emphasized on AO's observations in his remand report that additional evidences in respect of aforesaid pages (pages 79, both sides of pages 80 & 81 & page 82) were reflected in regular bank accounts of assessee and family members, Therefore, AO accepted that no addition in respect of entries recorded in aforesaid pages can be made to income of assessee. Learned AR therefore, argued that addition aggregating to Rs. 1,08,38,630/- made on basis of aforesaid pages 79, both sides of pages 80, 81 & page 82 may kindly be deleted. 5.3.5 I find considerable force in arguments of learned AR. AO has himself accepted that entries and explanations in respect of these pages are already reflected in regular and disclosed bank accounts of assessee and his family members. Therefore, addition of Rs. 1,08,38,630/- made on basis of aforesaid pages of Annexure BS-13 is deleted 5.3.6 AO on page - 8 of impugned assessment order has drawn table on various seized loose sheets eg. Page No. 69, back of page No.70, page No. 71, back of page No. 71, back of page No. 72, page No. 74, page No. 76, page No. 77, back of page No. 77, page No. 78 and back of page No. 78 which were not recorded in regular books of accounts. He added them and charged to tax. As discussed earlier, AO has added sum of Rs. 5,13,20,950/- which is sum total of (a) aforesaid entries recorded on Page No. 69, back of page No.70, both sides of page No. 71, back of page No. 72, page No. 74, page No. 76, both sides of page No. 77, and both sides of page No. 78 and (b) entries noted on loose sheets particularly on both sides of page No. 79, both sides of page No. 80, both sides of page No. 81 & 82 (Rs. 1,08,38,630/-). These entries are separately and regularly recorded in disclosed bank account and regular books of accounts of assessee. During course of remand proceedings, AO has examined aforesaid entries mentioned at (b) and have reported as under: 21 I have carefully considered assessee's submissions made vide letter dated 29-06- 2010 filed before your honor. evidences filed in form of extract of ABN-Amro Bank A/c. as referred in para 2(XVI) to (XXIV) of assessee's letter dated 29-06- 2010 have been verified with seized material and- same appears to have been reflected" It is further reported by AO that assessee was asked to furnish additional submissions / explanations by AO during course of remand proceedings which were made by assessee vide letters dated 16-07-2010 and 26-07-2010. Assessee's learned AR vide letter dated 16- 07-2010 submitted chart explaining pages 69 to 82 of Annexure BS-13 which shows that some of items have been considered in peak amount worked out for money lending business in cash and offered as undisclosed income. Some of entries relates to transactions already accounted. AO examined re-casted cash account from 01/04/2007 to 05-10-2007 and noticed that revised peak investment is worked out at Rs. 91,59,410 (on 19-09-2007) as against original re- casted cash peak submitted during course of search proceedings where peak investment was worked out at Rs. 44,44,8201- only and same was offered as undisclosed income of assessee for AY 2008-09. Learned AO has reported in remand report that now since correct peak is enhanced at Rs. 91,59,410/- , same should be considered instead of Rs. 44,44,820/- and assessee's objection to enhanced peak investment of Rs. 91,59,410/- should be rejected for following reasons: 1. re-casted cash-book is under name of assessee Mr. Surendra Barmecha and thus peak amount belong to him only. 2. bifurcation of disclosure made as submitted by assessee group which is as discussed in asstt. Order at para 9 clearly indicated that disclosure of Rs. 23,50,000/- made by Sneha Barmecha and Sumit Barmecha were on a/c. of unaccounted investment in diamond business for period 01/04/2007 to 04/10/2007. Thus said amount of disclosure was not available to Mr. Surendra Barmecha for his money- 22 lending business. Similarly, disclosure in case of Saurabh Barmecha was also on a/c. of unaccounted income from business which means not for money-lending business which is carried on by Surendra Barmecha. 3. On perusal of IT. records of Sumit Barmecha, it is noticed that is BIS of Y. E. 31.03.2008 amount of Rs. 19,00,0001- has been shown as asset under 'Disclosure account'. This shows clearly that amount was not given to Surendra Barmecha for money-lending business and can not be considered in peak amount of cash book of Surendra Barmecha. Similar facts are in case of other family members also. Further, assessee disclosed peak amount at Rs. 44,44,8201- which was offered for tax only after well considering amounts disclosed by other family members whose assessments have become final on this issue. assessee has also not substantiated by documentary evidence its claim for correlation between enhanced peak amounts of his cash book with amounts disclosed by other family members. This is after-thought argument which has no base. Hence, revised peak. amount is to be considered and asstt. needs to enhanced accordingly." 5.3.7 I have considered facts and circumstances of case. I agree with aforesaid considered view of learned AO. In view of above, peak investment has to be accordingly taxed at Rs. 91,59,410/- for pages 69, back of page No. 70, both sides of page No. 71, 77 & 78, back of page No. 72, 74 & 76. As result, there would be enhancement of Rs. 47,14,590/- (revised peak of Rs. 91,59,410 minus earlier peak of Rs. 44,44,820) in respect of table appearing on page-8. Learned AO is directed to tax revised peak (Rs. 91,59,410/-) instead of earlier peak offered by assessee in return of income (Rs. 44,44,820/-). This will lead to enhancement of peak investment offered by assessee. 5.3.8 Regarding AO's objection regarding entries recorded in seized loose papers, particularly Rs. 1,15,00,000/- from Mr. Saurabh Agra, Rs. 23 10,00,000/- from Mr. Bhagchandji, Rs. 58,50,000/- from Mr. Navin Mama and Rs. 16,02,720/- from Kirti Kaka, it is noticed that AO has given opinion that aggregate total of aforesaid item of Rs. 1,99,52,720/- should be added , as unexplained cash credit u/s. 68 of Act. However, AO's opinion is not in accordance with provisions of Act and same deserves to be rejected for reasons that Section 68 is applicable only when amount found credited in books of assessee [Baladin Ram. vs. CIT (1969) 71 ITR 427 (SC)]. It has been judicially held that book maintained by firm could not be treated as books of partners of firm so as to attract section 68 in course or assessment of individual partners [Smt. Shanta Devi vs. CIT (1988) 171 ITR 532 (P&H)] and Laxmi Narain Gupta vs. CIT (1980) 124 ITR 94 (Pat). Similarly, credits in books maintained by HUF cannot be o Tax under section 68 in names of coparcener of such HUF (Munshi Ram vs. CIT (1980) 126 ITR 48 (Del)]. Secondly, where there are several credits and debits entries in one cash credit account and source and nature of such credits are not satisfactorily explained, on logical consideration probabilities of human behaviour, funds operated from such account will be-taken to be one and same and hence to avoid multiple counting of same sums, only highest peak of amounts in that account could be taken as unexplained cash credit. [Ref: CIT vs. G.M. Chennabasappa (1959) 35 ITR ( 261 (AP)]. In present case enhanced peak of Rs. 91,59,410/- is taken as unexplained cash credit. 5.3.9 Having regard to facts and circumstances of case and for reasons mentioned in forgoing paragraph, Ground No. 6 is partly allowed. AO is directed to tax enhanced peak investment of Rs. 91,59,410/- instead of original peak investment of Rs. 44,44,820/- declared in return of income and assessed as such by AO. This will result in enhancement of peak investment in undisclosed money lending business by Rs. 47,14,590/- (91,59,410 minus 44,44,820). As result, addition of Rs. 4,04,98,654 is reduced to Rs. 91,59,410/-. As corollary, assessee gets relief of Rs. 3,13,39,244/ -. Ground No. 6 is partly allowed accordingly. 24 13. We have considered rival contentions and found that addition was made by AO on basis of seized document BS-3 regarding assessee s money lending business, on plea that same was not recorded in regular books of accounts. By impugned order CIT(A) after recording detailed finding at 4.3.1 to 4.3.9 deleted / reduced addition after observing that assessee has disclosed peak amount and included same in its return of income for assessment year 2008-2009 and paid taxes there on. CIT(A) found that in view of disclosure so made by assessee, there is no dispute to fact that assessee had indulged in undisclosed money lending business which was not recorded in his regular books of accounts. However, CIT(A) after calling remand report facts and figures modified order of AO and reduced addition to Rs. 91,59,410/-. detailed finding so recorded by CIT(A) is as per material on record and same is also based on remand report so sent by AO. Nothing was pointed out by learned DR so as to persuade us to deviate from findings so recorded by CIT(A) resulting into reducing addition made on account of investment in money lending business. Accordingly, we do not find any reason to interfere in order of CIT(A). 14. In appeal filed by assessee in A.Y 2008-09 assessee is aggrieved for enhancement of peak from 53,30,056/- to Rs. 91,59,410/-. 15. Rival contentions have been heard and record perused. 16. In course of assessment proceedings, assessee had given cash account incorporating transactions in loose papers, BS-13, and arrived at peak investment of Rs. 44,44,820/-. As disclosure of income made by assessee for A.Y. 2008-09 was Rs. 53,30,056/- which was higher than peak investment of Rs. 44,44,820/- and therefore, disclosed amount of Rs. 53,30,056/- was offered for taxation in return of income filed by assessee for A.Y. 2008-09. AO referring pages 69 to 82 of BS-13 held that assessee had earned undisclosed income of Rs. 5,13,20,950/-. On page 14 of assessment order AO observed: 25 Amount advanced for money lending Rs. 5,13,20,950/- as on 04/10/2007 was Less: Amount available with Rs. 54,91,240/- assessee as on 31/03/2007 Rs. 4,58,29,710/- Less: Amount disclosed by assessee in his return of income for Rs. 53,30,056/- A.Y. 2008-09 Rs. 4,04,98,654/- Amount added by A.O. From record we find that before Commissioner (Appeals), assessee had explained that AO had never sought explanation in respect of pages 69 to 82 of BS-13 and therefore, assessee adduced additional evidence before Commissioner (Appeals) which was forwarded to AO and remand report was obtained from AO. In additional evidence filed before Commissioner (Appeals), assessee had enclosed recast cash book (account) whereby peak amount of investment from loose papers, BS-13, was arrived at Rs. 91,59,410/- 17. There has also no dispute to fact that three business concerns were operating from same business premises at 6/1910, Ambika Mansion, Tadakhadi, Mahidherpura, Surat, namely, (a) M/s. Barmecha Exports, proprietor Mr. Surendra S. Barmecha, (b) M/s. Balaji Jewels, proprietor Mrs. Sneha Barmecha, and (c) M/s. Sangeeta Gems, proprietor Mr. Saurabh Barmecha. All loose papers were seized from aforesaid business premises and residential premises where assessee, his son and daughter-in-law were carrying on business as well as residing jointly. In answer to question No. 8 assessee had made disclosure of income of Rs. 1,50,00,000/- belonging to him and members of his family and accordingly, assessee had given bifurcation of said disclosure of income and which is accepted by A.O. Since assessee is head of family and case of assessee is 26 treated as only case arising out of search and as statement of assessee was recorded wherein disclosure of Rs. 1,50,00,000/- was made by assessee for and on his behalf and on behalf of members of family, recast cash book was given name of assessee, i.e., Mr. Surendra Barmecha. However, while making addition in hands of Mr. Saurabh Barmecha, son and Mrs. Sneha Barmecha, daughter-in law, officers of Department have relied upon and referred to statement of assessee. Thus, at that time, disclosure made by assessee is considered as disclosure for whole family. Taking same analogy, though recast cash book was given name of assessee, son as well as funds of assessee s daughter in-law were used by assessee while carrying on money lending business which was found from seized papers. said loose papers (BS-13) had papers belonging to Mr. Saurabh Barmecha and Mrs. Sneha Barmecha which are considered to arrive at peak investment. It is clear from above observations that said peak is worked out without taking into account undisclosed income offered for taxation in A.Y. 2007-08 by assessee and his son, Mr. Saurabh of Rs. 13,09,871/- and Rs. 30,16,511/- respectively i.e., aggregate amount of Rs. 43,26,382/- On perusal of page 132 it is seen that recast cash book was prepared from 01/04/2007 to 05/10/2007 and opening balance is taken at Rs. NIL, whereas assessee had undisclosed income of Rs. 43,26,382/- which was utilized in unaccounted business of money lending business which was continued on 01/04/2007 till date of search. 18. In view of above discussion we restrict enhancement of peak by Rs. 1003674/- [ 53,30,056 43,26,382] we direct accordingly. Thus, addition is upheld to extent of Rs.10,03,674/- ITA No. 8928 / M/ 2010 (Smt. Sangeeta Barmecha A.Y.2008-2009) 19. In this appeal Revenue is aggrieved for deleting protective addition made in hands of assessee on ground that substantive addition was made in hands of Shri Surendra Barmecha. protective addition so 27 made in hands of Smt. Sangeeta Barmecha was deleted by Ld. CIT(A) after observing as under: 2.3.1 I have carefully and dispassionately considered facts and circumstances of case, relevant assessment order, written submissions made and arguments by learned AR. Learned AR has vehemently argued that AO has erred in law and in facts in making protective assessments of Rs. 25,80,000/- because AO has not followed due process of law and has never confronted assessee with alleged statement recorded by AO from one Shri Sunil Jayatibhai Shah, behind assessee s back. For first time reference of such statement was made in assessee s assessment order without givin any opportunity to assessee to furnish her rebuttal. AO has not followed principles of natural justice and hence statement of said Shri Sunil Jayantibhai Shah, has no evidentiary value and entire addition made n basis of said statement is to be reduced completely in light of Honorable Supreme Court, Delhi High Court & M.P. High court decisions in cases of Kishenchand Chellaram V. CIT(supra), CIT vs. SMC Share Brokers Ltd. (supra) and Prakash Chand Nahta vs. CIT (supra) respectively. Therefore, addition of Rs. 25,80,000/- on said statement recorded by AO without knowledge and without giving opportunity of rebutting said statement is bad in law and therefore, addition based on such statement is to be reduced completely. Learned AR had furnished complete details of Account Payee Cheques paid by assessee and her husband at Rs. 39,80,000/- and Rs. 37,20,000/- respectively as discussed in preceding paragraphs. Learned AR has submitted that initially assessee and her husband jointly agreed to purchase approximately 3000 sq. ft. area of building under construction by M/s. Sumangal Corporation at Surat. assessee s husband had also made cash payments of Rs. 11,00,000/- to sais builder on 17/08/2007 for providing stron room n 2nd floor for which extra beam was allowed in ceiling of first floor. Subsequently, assessee and her husband changed plan and decided to purchase smaller premise on 1st & 2nd 28 floors of building admeasuring only 2201 sq. ft. carpet area. As result, said builder refunded difference amount of Rs. 14,80,000/- on 27/03/2008. In view of said refund of Rs. 14,80,000/-, net payment made by assessee and her husband is worked out at Rs. 62,20,000/- from earlier Rs. 77,00,000/- (Rs. 77,00,000/- minus Rs. 14,80,000/-) In addition, cash of Rs. 11,00,000/- was also paid for providing strong room. In relevant assessment year, AO observed that though assessee and her husband have jointly made payment of Rs. 77,00,000/- to said builder for booking premises in said building, assessee and her husband have recorded only Rs. 62,20,000/- in books of accounts and difference of Rs. 14,80,000/- was not recorded in books of accounts. Therefore, AO held that assessee or her husband had made unaccounted investment of Rs. 14,80,000/- by cheque and Rs. 11,00,000/- by cash in said building being constructed by M/s Sumangal Corporation at Surat. Learned AR has strongly contended that even said Shri Sunil Jayantibhai Shah, in his statement recorded on 09/10/2007 has confirmed that assessee and her husband made payments aggregating to Rs. 77,00,000/- on booking premises in Union Square Building being constructed by M/s Sumangal Corporations at Surat. This fact exactly matches with payment details furnished by assessee and her husband in course of assessment proceedings and therefore, there is no dispute that assessee and her husband had paid jointly Rs. 77,00,000/- to said M/s. Sumangal Corporation. Subsequent to statement of said Shri Sunil Jayantibhai Shah, recorded on 09/10/2007, assessee and her husband changed plan and instead of 3000 sq. ft carpet area, assessee and her husband decided to buy only 2201 sq. ft. carpet area on 1st and 2nd floors. In these circumstances, M/s. Sumangal Corporation refunded sum of Rs. 14,80,000/- on 26/03/2008. assessee and her husband executed agreement for purchase of said 1st & 2nd floor area on 19/03/2008 admeasuring 2201 carpet area which is duly registered with Sub-Registrars of Assurances as Surat. assessee had also furnished copy of her bank statement to further confirm receipt of refund of Rs. 14,80,000/- from said M/s. Sumangal Corporation, which 29 is credited in her ABN Amro Bank Account on 27/03/2008. Even without these bank statements, facts are clear as discussed in preceding paragraphs. In respect of investment of Rs. 11,00,000/- in cash made by her husband Shri Surendra Barmecha, same was disclosed by him while arriving at peak credit of money lending business. He has already disclosed Rs. 71,39,927/- in his hands and has paid taxes along with Return of income furnished u/s 153A of Act. Having regard to facts and circumstances of case, I find considerable force in arguments of learned AR I agree with him that assessee and her husband paid Rs. 77,00,000/- by cheque which were fully disclosed and out of their disclosed bank accounts. Out of such payment of Rs. 77,00,000/- made by them, Rs. 14.80 lacs was received back by Account Payee Cheque due to purchase of smaller flat (2201 sq. ft) against booking of bigger flat (3000 sq. ft) earlier for which payment of Rs. 77 lacs was made by assessee and her husband. Therefore, difference of Rs. 14.80 lacs (Rs. 77 lacs Rs. 62.20 lacs) cannot be added. Secondly, AO has made addition of Rs. 14.80 lacs in hands of assessee s husband in substantive manner. Therefore, protective addition does not survive in hands of present assessee. Thirdly, cash component of Rs. 11 lacs paid by assessee s husband has separately been assessed in hands of assessee s husband, which have been disclosed by him u/s. 132(4) of Act and taxes paid along with return of income furnished u/s/ 153A of Act. In any case, once AO has made assessment in hands of assessee s husband in substantive manner and there is no dispute about hand in which same is to be taxed, then protective addition in hands of assessee cannot be sustained. 20. It is clear from findings so recorded by Ld. CIT(A) that protective addition so made in hands of assesses was deleted on plea that substantive addition have already been made in hands of Shri Surindra Barmecha. Detailed findings so recorded by Ld. CIT(A)has not been controverted by Ld. DR , accordingly we do not find any reason to interfere in findings of Ld. CIT(A) resulting into deletion of protective addition. 30 21. In result Revenue s appeals are dismissed whereas appeal of assessee is partly allowed. Order pronounced in open court on 19/10/2016. Sd/- sd/- (AMARJIT SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 19/10/2016 AG (On Tour) Copy of Order forwarded to : 1. Assessee 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai ACIT, Central Circle 14, Mumbai v. Surendra S. Barmecha