1. This order shall dispose of both the above matters arising out of the order of the CIT(A), Jalandhar, dt. 8th Sept., 1997, for the asst.
yr. 1990-91, 2. We have heard the learned representatives of both the parties and gone through the observations of the authorities below.
That, on the facts and in the circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs. 48,000 made on account of unexplained investment in the purchase of plot Newan, Tagore Nagar, Jalandhar.
4. Briefly, the facts relating to this issue are as regards addition of Rs. 48,000 on account of unexplained investment in the plot at Newan, Tagore Nagar, Jalandhar, which was disclosed in the statement under Section 132(4) of the IT Act but was later on explained through the cash flow statement. The AO, however, treated the same to be unexplained investment by observing that the assessee purchased said plot in the name of his wife, Smt, Urmila, through conveyance deed dt.
10th June, 1989, for Rs. 47,000 which was stated to have been met from cash flow statement. The source of investment was not proved to the satisfaction of the AO. It was submitted before the CIT(A) that the AO made the addition on the basis that the assessee had sold the above property on 26th Feb., 1991, for Rs. 48,000 but this property was purchased for Rs. 47,000 in June, 1989. From the disclosure, it would be evident that the assessee had made disclosure of Rs. 48,000. It was also explained that the assessee has sold the property and sale cannot be treated as surrender. It was also explained that the assessee through cash flow statement has explained the source. The CIT(A) initially, while considering the issue, was of the view that there are infirmity in the cash flow statement. However, in the later portion of the impugned order discussing the issue, the CIT(A) was of the view that the AO merely relied upon the disclosure made by the assessee in his statement under Section 132(4) of the IT Act. The CIT(A) further observed that in the cash, flow statement, there is cash entry of Rs. 86,196 for May, 1989, relating to the cash collection from sale of the land of New Ashok Nagar and thereafter in the seized material, there is entry regarding payment of Rs. 47,000 on 16th June, 1989, towards the purchase of the plot in Newan, Tagore Nagar, Jalandhar. The CIT(A) also observed that one ledger was seized and page No. 7 of the ledger gives the detail of the receipts and payments, which shows excess of Rs. 1,53,668 which was equally divided into the three persons and 1/3rd share of the assessee comes to Rs. 51,223, According to the CIT(A), this amount was then shown as receipt at ledger 3 (p. 61 of the cash flow Statement"). According-to the CIT(A), the basis of the assessee's making the entry for Rs. 86,196 is to add the advance payment which was also recovered and thus as against Rs. 51,223. The CIT(A) further observed that the credit entry of Rs. 51,223 cannot be disputed and the next entry thereafter in the cash flow statement is Rs. 47,000 for payment towards the purchase of the plot. The CIT(A) due to the proximity of this credit entry towards the payment of the purchase of the plot was of the view that source of the purchase of the plot is, therefore, explainable. The addition of Rs. 48,000 was accordingly deleted. During the course of argument, the learned Departmental Representative could not point out any infirmity in the order of the CIT(A), however, he has submitted that the CIT(A) initially was not satisfied with the cash flow statement, therefore, he should not have allowed the appeal of the assessee.
5. On the other hand, the learned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that the CIT(A) allowed the appeal of the assessee on the basis of the entries recorded in the seized documents which clearly explained the source of investment in the purchase of the plot.
6. On consideration of the above facts, we do not find any justification to interfere in the order of the CIT(A). The CIT(A) though initially found infirmity in the cash flow statement but he was satisfied that the source of investment is explained on the basis of entries recorded in the seized papers and documents. Such benefit could be given to the assessee for treating the investment explained.
Therefore, the learned Departmental Representative could not point out from any material or seized material, infirmity in the order of the CIT(A). In this view of the matter, the appeal of the Revenue has no merits and the same is accordingly dismissed.
7. This CO has been filed by the assessee in support of the order of the CIT(A). The same is dismissed in view of the above findings.
8. As a result, the Departmental appeal and the CO of the assessee are dismissed.