Bhavnesh Saini, JM-This appeal by assessee has been directed against the order of ld. CIT(Appeals) Karnal dated 05.10.2010 for assessment year 2007-08.
2. We have heard ld. Representatives of both the parties, perused the findings of authorities below and considered the material available on record.
3. On ground No. 1, 2 and 3, assessee challenged the addition of Rs. 45,57,569/-. Ground Nos. 2 and 3 are argumentative in nature therefore, these have not been pressed by ld. counsel for the assessee.
4. The facts of this issue are that assessee is engaged in purchase and sale of land. During the year under consideration, he sold land of Rs. 80,27,109/-. The Assessing Officer received information from the Investigation Wing of the Department and from the Ld. Commissioner of Income Tax, Karnal regarding purchase and sale of land carried out by the assessee during the year. As per this information, assessee carried out 61 transactions during the year which included four transactions relating to purchase of the land and 57 transactions relating to the sale of land. On perusal of the copies of Registration Deed, the Assessing Officer noted that 17 transactions of sale of land, situated at Azad Nagar, Darra Khera (Thanesar) were made by the assessee as General Power of Attorney of Shri Bhupinder Pal, Ishwar Dayal, Ved Parkash, all sons of Shri Jyoti Parsad and Shri Ghansham and Shri Babu Ram S/o Shri Bhupinder Pal village Sehla Tehsil Barara, District Ambala. The Assessing Officer asked the assessee to explain the nature of transactions, to furnish affidavits of these persons duly attested from Notary and to produce them before Assessing Officer. It was contended that assessee does not have any relation with these persons but being neighbours and their properties were situated adjacent to the property of the assessee and his wife, assessee sold their properties as an agent. Regarding furnishing of affidavit and identity proof, with PAN number and assessments of these persons, assessee submitted that same may be summoned by issuing summons. The Assessing Officer noted that though burden to prove the genuineness of the transactions made as General Power of Attorney lay with the assessee, yet on the request of the assessee, Assessing Officer issued summons under section 131 of the Income Tax Act but neither of these persons attended the proceedings before Assessing Officer. The assessee was confronted with these facts and assessee was again requested to produce these persons to prove the genuineness of these transactions.
4(i) The Assessing Officer wanted to verify the facts and again issued summons under section 131 of the Income Tax Act and they were requested to attend the office of the Assessing Officer but again, neither anybody attended nor any reply was received from them. The Assessing Officer, meanwhile issued summons under section 131 to some of the purchasers of the land in respect of these transactions and 10 out of 17 purchasers gave in writing that deal was made with the assessee and the payment was also made to him before Sub Registrar, Thanesar. They also admitted that they do not know the owners of these plots. The Assessing Officer recorded the statement of the assessee and the assessee in his statement stated that he was given Power of Attorney to get these plots registered in the office of Sub Registrar, Thanesar but the rest of the work like agreement, receiving payment etc. have been done by these persons. The contention of the assessee was not found tenable because in the Registration Deed, it was mentioned that sale consideration would be received by assessee in the office of Sub Registrar, Thanesar and photo of the assessee is also affixed on the sale deed. The Assessing Officer, therefore, inferred that assessee was real owner of the property which was purchased by him in benami names of these persons.
4(ii) The Assessing Officer further referred to the report of the Inspector through whom field enquiries were got conducted. The Inspector mentioned in his report that these persons are not man of means and verbally they have denied to have made any purchase and sale of land at Kurukshetra. Even they have denied knowing the assessee. The Assessing Officer reproduced the report of the Inspector in the assessment order. The Assessing Officer summarized these facts in the assessment order and held that land measuring 18 K and 16 M in Darra Khera, Kurukshetra was purchased by the assessee in benami names by investing his own money and accordingly worked out the capital gain earned by assessee with respect to the land sold during the year resulting in an addition of Rs. 45,57,569/-. The findings of the Assessing Officer have been referred to by the ld. CIT(Appeals) in the impugned order.
5. The addition was challenged before ld. CIT(Appeals) and written submission of the assessee is reproduced in the appellate order in which the assessee briefly reiterated the same facts as were pleaded before A.O. and also submitted that the assessee conducted the transactions as General Power of Attorney holder. The assessee is not benami owner of the properties. The persons have confirmed the assessee being GPA holder before Sub Registrar in their replies. The assessee performed the acts and obligations as General Power of Attorney holder only and there was no element of profit involved in the transactions carried out by the assessee. The Assessing Officer did not conduct the inquiry properly. During short span of time, it was difficult for assessee to produce these persons. It was submitted that assessee is not benami owner of any of the property. The burden of proving that transactions were sham is on the person who alleged these facts. The burden has not been discharged. Report of the inspector was not confronted to the assessee and even the statements of the purchasers were also not confronted to the assessee. The alleged report of the inspector is incorrect and the details have been noted in the impugned order to show that the owners have also conducted other dealings in the properties. The details furnished before Sub Registrar were also furnished in which ownership of the property vests with the owners and assessee was appointed only as GPA holder. It is unbelievable that assessee would make huge investments in the names of the strangers. The assessee, therefore, submitted that statements of the owners were false and motivated. The assessee is not owner of the property. The owners admitted in the GPA that they are absolute owner of the property therefore, no addition should be made against the assessee.
5(i) The ld. CIT(Appeals), considering the explanation of the assessee and material on record, confirmed addition and dismissed this ground of appeal of the assessee. The ld. CIT(Appeals) reproduced the Power of Attorney in favour of the assessee in the impugned order and noted that absolute powers have been given in the Power of Attorney to sell or mortgage or transfer the property. The assessee could not file any confirmation of the owner of the properties and they have not been produced before Assessing Officer for examination. The ld. CIT(Appeals), therefore, confirmed the finding of the Assessing Officer that properties have been purchased benami in the name of thee persons and on the same reasoning as have been given by the Assessing Officer, dismissed this ground of appeal of the assessee.
6. The ld. counsel for the assessee reiterated the submissions made before authorities below. He has referred to PB-30 which is General Power of Attorney (GPA) in favour of assessee executed by the owners of the property i.e. Shri Bhupinder Pal, Shri Ghanshyam and others and submitted that right of the assessee was only as General Power of Attorney holder and has no right or interest in the property in the sale. PB-144 and 150 are some of the Sale Deeds in favour of the original owners dated 25.10.2005 and 21.10.2005. PB-51 to 73 are the sale deeds executed by the assessee as GPA holder on behalf of the owners of the property and ld. counsel for the assessee submitted that there is no evidence on record that the sale consideration received on behalf of the owners have been used by the assessee as owners of the properties. The Assessing Officer issued summons under section 131 of the Act against the owners but they did not appear before the Assessing Officer and Assessing Officer has not taken any coercive method against them. Therefore, no fault can be attributed against the assessee. PB-34 to 37 are the correspondence by Sub Registrar, Bhind, Madhya Pradesh and Sub Registrar, Kurukshetra in which the Sub Registrar, Bhind addressed the letter to the original owners of the property, Shri Bhupinder Pal and others seeking their confirmation of executing Power of Attorney in his office and the original owners have confirmed in their written reply before Sub Registrar, Bhind, MP confirming execution and registration of the Power of Attorney by them in favour of the assessee. Same facts were also brought to the notice of Sub Registrar, Kurukshetra. The report of the Inspector was not confronted to the assessee and the report of the Inspector, as noted in impugned order, are vague and shows that even Inspector has not personally contacted the owners of the properties under sale. Purchasers' written reply before Assessing Officer were also not confronted to the assessee and no right of cross- examination have been given to the assessee. Therefore, the material collected at the back of the assessee, cannot be read in evidence against the assessee.
6(i) PB-83 and 84 are the orders of JCIT, Kurukshetra dropping the penalty proceedings against original owners Shri Bhupinder Pal, Shri Ghanshyam Das, Shri Ved Parkash and Shri Ishwar Dayal under section 272A(1)(c) of the Income Tax Act for non-compliance of summons under section 131 of the Income Tax Act. The ld. counsel for the assessee, therefore, submitted that when JCIT dropped the penalty proceedings against owners of the property under sale, no fault could be attributed against the assessee for not producing these owners before A.O. The Department could have recorded their statement at that time when penalty proceedings were dropped against them. It would also prove that all the owners of the properties are existing and genuine persons. PB-20 is reply before Assessing Officer in which assessee explained that assessee acted as GPA holder on behalf of the owners as agent and therefore, no addition could be made against the assessee. PB- 25 is reply before ld. CIT(Appeals) in which it was explained that Assessing Officer, instead of examining the issue accepted the reports as authentic and statements of purchasers were also recorded at the back of the assessee and same have not been confronted to the assessee. PB-141 is the certificate issued by Sub Registrar, Thanesar, Kurukshetra in which it was explained that sale deeds executed by assessee were neither as owner nor seller and many sale deeds have been executed by the sellers Shri Bhupinder Pal etc. The ld. counsel for the assessee, therefore, submitted that the authorities below, without any reasons, made the addition against the assessee.
6(ii) PB-200 is reasons recorded for re-opening of the assessment in subsequent assessment year 2008-09 in which on the same basis of assessee's selling the property as GPA holder, the assessment was reopened in assessment year 2008-09. The reply of the assessee is filed at PB-202 in which assessee explained that properties have been sold by him as GPA holder on behalf of the original owners as explained above and copies of the sale deeds executed by him as GPA holder were filed and it was explained that assessee performed the act of agent as GPA holder and charged the commission. PB-206 is the assessment order dated 20.04.2015 under section 143(3)/147 for subsequent assessment year 2008-09 in the case of the assessee in which returned income of Rs. 96,970/- have been accepted and no addition have been made on account of capital gain for selling the properties on behalf of the original owners above as GPA holder. He submitted that on principle of consistency, no addition should be made against the assessee in the assessment year under appeal.
7. On the other hand, ld. DR submitted that assessee is colonizer and developer of the properties. There was no relation between assessee and the owners, therefore, it is highly unbelievable that assessee would act as GPA holder. No commission have been charged by the assessee in this year for selling the properties, therefore, assessee is not able to prove its case before Assessing Officer. The Assessing Officer issued summons under section 131 of the Act at the instance of the assessee but the parties did not appear before Assessing Officer for examination. PB-43 is statement of the assessee recorded by Assessing Officer in which he has explained GPA was executed in Madhya Pradesh in his favour without his consent. The properties belong to Kurukshetra but GPA has been registered at Bhind Muraina (MP). The authorities below shall have to consider the issue in the light of human probabilities by considering the surrounding circumstances. The ld. DR relied upon decision of the Supreme Court in the case of D.D.More 82 ITR 540 and submitted that all money have been received by assessee as benami owner, therefore, addition was rightly made on capital gains. The ld. DR produced the assessment record for subsequent assessment year 2008-09 and submitted that it is a fact that no addition have been made on account of capital gains in assessment year 2008-09 against the assessee. The ld. DR clarified that in assessment year 2008-09, assessee charged the commission, therefore, this might be the reason for not making the addition on account of capital gains on the same facts.
8. We have heard ld. Representatives of both the parties and perused the material available on record. PB- 30 is GPA executed by the owners of the properties in favour of the assessee for selling the land in question. The GPA is registered in which the owners have specifically mentioned that they are owner and in possession of the properties in question and with their consent, they have executed the Power of Attorney in favour of the assessee giving him the right to sell, mortgage the property etc. and it was also stated that all the acts done by the General Attorney would be deemed to be acts performed by them and same would be binding on them. It would, therefore, show that owners of the property have acknowledged in the GPA that they are owners of the different properties through which the power have been given to the assessee to sell/mortgage properties etc. as General Attorney and all acts of the General Attorney shall be deemed to be acts done on their behalf. The GPA, thus, would not prove that assessee was owner of the properties in question. Copies of the sale deeds executed in the names of original owners are filed in the Paper Book which are of October,2005 and it is clearly mentioned in the sale deeds that the owners of the properties out of their own funds and sources, purchased the properties from different parties. There is no mention of name of assessee in the sale deed in their favour. No evidences have been brought on record to prove that assessee in fact purchased the properties in October,2005 in his own right or out of his own source. No evidence has also been brought on record that by executing GPA in favour of the assessee, assessee in-fact purchased the properties from the owners by paying the sale consideration. Therefore, there is no evidence on record to prove that assessee was benami owner of the property in questions.
9. We may also note here that after enactment of Benami Prohibition Act, nothing could be proved that assessee was benami owner of the property in question. The assessee specifically pleaded before the authorities below that report of the Inspector was not confronted to the assessee. The report of the Inspector is noted in the impugned order in which he has explained that he made local enquiries only. It appears from the report that he did not even meet the owners of the property. There is no mention in the impugned orders if the report of the Inspector was confronted to the assessee or any right to cross-examine the Inspector was given to the assessee. Similarly, some of the purchasers have given in writing that they have dealt with the assessee and made payment to the assessee at the time of registration of the sale deeds in their favour while assessee acted as Power of Attorney holder on behalf of the owners. But, it is not explained, whether the replies filed by the purchasers were confronted to the assessee or any right have been given to the assessee to cross-examine these purchasers on behalf of the assessee. The assessee in his reply before ld. CIT(Appeals) (PB-26) specifically explained that addition is made on the basis of the report of the Inspector and statements of the purchasers recorded at the back of assessee. But, Assessing Officer did not confront or supply these documents to the assessee. These facts, therefore, clearly show that no report of the Inspector and statement of purchasers were confronted to the assessee and no right have been given to allow cross-examination of the Inspector and the purchasers on behalf of the assessee. Therefore, any material collected the back of the assessee cannot be read in evidence against the assessee. We rely upon decision of Supreme Court in the case of Kishan Chand Chella Ram 125 ITR 713.
9(i) We may also note that the entire case made by the authorities below was based upon GPA executed in favour of the assessee and assessee acted as attorney on behalf of the owners for selling the properties. The authorities below have failed to note that rights of General Power of Attorney holder would not be greater than that of the owners. No evidence have been brought on record if the sale consideration was used and appropriated by assessee as owner of the property or misappropriated against consent of the owners of the property. PB-34 is the letter issued by Sub Registrar, District Bhind, Madhya Pradesh in the names of original owners Shri Bhupinder Pal etc. in which their confirmation is sought for executing and registering Power of Attorney in favour of the assessee. PB-37 is reply filed by the owners of the properties Shri Bhupinder Pal etc. to Sub Registrar, District Bhind (MP) in which they have confirmed executing and registering Power of Attorney in favour of the assessee. PB-35-36 are correspondence between Sub Registrar, District Kurukshetra and Sub Registrar, Distt. Bhind (MP) in respect of execution and registration of the GPA under consideration. These facts would clearly show that the original owners of the property have executed GPA genuinely in favour of the assessee for specific purposes as mentioned in the GPA. The assessee, on execution and registration of the GPA would not become owner of the property.
9(ii) The authorities below have drawn adverse presumption against the assessee because assessee failed to produce the owners of the properties before Assessing Officer for examination or for filing confirmation or affidavits by the owners of the properties, thereby issuing summons under section 131 of the Act. PB-83 to 84 are the penalty orders passed by JCIT, Kurukhetra in the cases of original owners S/Shri Ishwar Dayal, Ved Parkash, Ghanshyam Dass & Bhupinder Pal under section 272(A)(1)(c) of the Act whereby penalty proceedings for non-compliance of the summons under section 131 have been dropped after considering their replies. It would show that the original owners exist and are genuine persons and in the penalty proceedings appeared before JCIT, Kurukshetra. Therefore, at that time, their statements could have been recorded but the JCIT was satisfied with their explanation for not complying with the summons under section 131 of the Act. Therefore, no fault could be attributed against the assessee for not producing these persons before Assessing Officer for confirming the transactions in the matter conducted by the assessee as GPA holder only. Such circumstance could not be read adverse against the assessee for the purpose of making addition. The ld. CIT(Appeals) in para 2.05 has noted various deals of sales/purchases made by the original owners which would prove that they were man of means as against the report submitted by the Inspector to say that during course of local enquiry, these persons were found not man of means. PB- 141 and 142 are certificates issued by Sub Registrar, Thanesar, Kurukshetra confirming that the sale deeds executed by the assessee were not as owner or seller of the properties. These facts and evidences brought on record clearly proved that assessee acted only as an agent of the owners on the basis of GPA executed in his favour. The assessee did not own any capital asset, therefore, there is no question of transfer of any capital asset by assessee so as to attract the provisions of capital gains. There is no evidence on record to prove that assessee transferred any capital asset for the purpose of earning capital gains. The findings of authorities below are merely based on presumptions and inferences only.
10. The assessee further brought on record that in subsequent assessment year 2008-09, Assessing Officer recorded reasons for re-opening of the assessment on identical facts because assessee sold the properties as GPA holder on behalf of the original owners for a sum of Rs. 1,30,50,000/-. The assessee in response to the statutory notice under section 148 replied before Assessing Officer that he has acted as GPA holder only and did not receive any consideration and acted on behalf of the original owner only. The assessee charged commission from the owners of the properties for selling their properties as GPA holder. The Assessing Officer accepted the explanation of the assessee in regular assessment order under section 143(3)/147 vide order dated 20.04.2015 and no addition on account of capital gain of the similar nature as have been made in assessment year under appeal, have been made and returned income of Rs. 96,970/- have been accepted.
10(i) It is well settled law that Income Tax authorities shall have to follow rule of consistency. We rely upon decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang Vs CIT 193 ITR 321, decision of Madhya Pradesh High Court in the case of Godavari Corporation Ltd. 156 ITR 835 and decision of Hon'ble Punjab & Haryana High Court in the case of Vikas Chemi Gum (India) 276 ITR 32. The ld. DR contended that in assessment year 2008-09, assessee charged commission from the original owners for executing sale deeds as GPA holder but in assessment year under appeal i.e. 2007-08, no commission have been charged, therefore, facts are distinguishable. We do not accept contention of ld. DR because facts are identical as have been considered in assessment year under appeal 2007-08 and subsequent assessment year 2008-09 because it was found that assessee sold the properties as GPA holder on behalf of the same original owners. Therefore, the character of transaction would not change even if commission charged or not. Considering the above facts, it is clear that when revenue has accepted contention of the assessee in subsequent assessment year 2008-09 that assessee acted as GPA holder only and no capital gain is chargeable in his hands, therefore, on identical facts, revenue cannot direct to charge capital gains in the hands of the assessee for selling properties by the assessee as GPA holder on behalf of the owners of the properties. The Revenue authorities shall have to follow rule of consistency.
11. Considering totality of facts and circumstances, we are of the view assessee is not owner of the properties of which he has acted as GPA holder only. No profit arises on executing Sale Deed by assessee as GPA holder. There is also no transfer of capital asset by assessee so as to attract the provisions of capital gains in his hands. Addition, therefore, is wholly unjustified and shall have to be deleted. We, accordingly, set aside the orders of authorities below and delete the addition of Rs. 45,57,569/-. Ground No. 1 of the appeal of the assessee is, accordingly, allowed.
12. On ground No. 4(a), the assessee challenged addition of Rs. 50,000/- in respect of advance money received from the buyers. The Assessing Officer observed that as per document No. 7695 dated 07.11.2008, it was contended by the assessee that deal was cancelled and advance money of Rs. 50,000/- received from the buyers was returned back. However, no evidence was filed. The assessee was, therefore, intimated through the letter to furnish documentary evidence and to produce the buyer for examining the transaction that when the advance was treated as forfeited, why addition should not be made against the assessee. The assessee contended that earnest money of Rs. 50,000/- was returned back and assessee did not forfeit this amount. The Assessing Officer, however, did not accept contention of the assessee because assessee did not furnish any evidence in support of the contention. The Assessing Officer noted that since it has been admitted by assessee that deal has been cancelled and no evidence of return of advance to the buyer has been filed and the buyer was also not produced for verification of the transaction, therefore, addition was made of Rs. 50,000/-. The assessee reiterated the same facts before ld. CIT(Appeals) and it was submitted that assessee made Agreement to Sell a plot to the widow lady Smt. Santosh Sharma and received Rs. 50,000/- as earnest money but later on, above deal was cancelled and compromise was done through her brother-in-law Shri Mohinder Sharma and assessee returned the money and noted the same facts in the cash book.
12(i) The ld. CIT(Appeals) did not accept contention of the assessee. As per agreement, "in case the buyers do not pay balance amount on the fixed date, advance money will be treated as forfeited". However, assessee claimed to have returned advance of Rs. 50,000/- to the buyer but no evidence has been filed therefore, according to agreement, when amount is forfeited, the same is liable to be added in the hands of the assessee. The ld. CIT(Appeals) dismissed this ground of appeal of the assessee. The ld. counsel for the assessee referred to Agreement. PB-85 and 89 is the copy of the cash book to show that Rs. 50,000/- have been returned to the owner. On the other hand, ld. DR relied upon orders of the authorities below.
13. On consideration of the rival submissions, we do not find any merit in this ground of appeal of the assessee. According to the agreement, the buyer shall have to get Sale Deed registered and to pay the balance amount by 05.01.2007. It is admitted fact that no sale deed was executed and terms of the agreement were not complied with. The assessee claimed to have refunded advance money of Rs. 50,000/- to the buyer but no evidence have been produced in support of the contention that actually assessee refunded amount of Rs. 50,000/- to the buyer. Mere entry in the cash book without supporting document is not enough to prove the return of the amount in question, therefore, authorities below as per agreement, rightly inferred that amount in question have been forfeited and as such had become income of the assessee. In the absence of any evidence on record, we do not find any justification to interfere with the orders of the authorities below. This ground is accordingly, dismissed.
14. On ground No. 4(b), assessee challenged the addition of Rs. 3,17,712/- on account of 15% disallowance out of development charges. During assessment proceedings, assessee filed copies of the bills/vouchers in respect of these expenses. The Assessing Officer noted from some of the vouchers that the same did not contain signature of the recipient and did not mention their complete address. The assessee was asked to produce these persons with their identity in order to verify payment of development charges. The assessee failed to establish genuineness of the expenditure therefore, 15% expenses were disallowed. The ld. CIT(Appeals), on the same reasoning confirmed the addition and dismissed this ground of appeal.
14(i) After considering rival submissions, we do not find any merit in this ground of appeal of the assessee. The assessee pleaded before ld. CIT(Appeals) that he is not investigating agency and has no power to call any person for investigation. The explanation of the assessee shows that assessee has no evidence or material to rebut findings of authorities below. This ground of appeal has no merit, the same is dismissed.
15. On ground No. 4(c), assessee challenged addition of Rs. 12,000/- on account of commission paid for sale of plot for Rs. 5 lacs. The assessee sold plot for Rs. 5 lacs and after deducting commission of Rs. 12,000/-, net sale consideration of Rs. 4,88,000/- was shown as sale. However, assessee failed to produce any evidence in support of the payment of the commission. No name and complete address of the agent etc. were filed. In the absence of any evidence on record, addition was made of Rs. 12,000/-. The ld. CIT(Appeals), on the same reasoning confirmed addition.
15(i). After hearing rival contentions, we do not find any merit in this ground of appeal of the assessee. The assessee failed to produce any evidence of payment of the commission. No particulars were given and no evidence have been filed as to what services have been rendered by the agent on behalf of the assessee. In the absence of any evidence, we do not find any merit in this ground of appeal of the assessee. The same is dismissed.
16. On ground No. 4(d), assessee challenged addition of Rs. 2,58,004/- made out of interest of Rs. 8,94,340/- by disallowing proportionate interest on account of interest free loans for non business purposes. It is noted by the authorities below that assessee claimed interest of Rs. 8,94,340/-. During assessment proceedings, Assessing Officer noted that assessee made interest free loans to some persons for non business purposes. The Assessing Officer proposed to disallow proportionate interest on account of interest free loans made for non business purposes. The assessee furnished the details and made submissions which was not found tenable by Assessing Officer and made above disallowance. The assessee has given details of advances given to his family members and associates and it was explained that advance was given for discharging their business liability. The ld. CIT(Appeals), following decision of Hon'ble Punjab & Haryana High Court in the case of Abhishek Industries 205 CTR 304 dismissed this ground of appeal of the assessee. The assessee pleaded before ld. CIT(Appeals) that he owns his capital of Rs. 18 lacs and can well manage to advance interest free advance to his wife.
17. After considering rival submissions, we are of the view matter requires re-consideration at the level of the Assessing Officer. The ld. counsel for the assessee contended that assessee's capital was of Rs. 18 lacs and has sufficient surplus to give interest free advance and relied upon decision of Hon'ble Supreme Court in the case of Hero Cycles P. Ltd. Vs CIT 379 ITR 347 in which judgement of Hon'ble Punjab & Haryana High Court in the case of Abhishek Industries (supra) have been over- ruled. Hon'ble Supreme Court considered the credit balances available to the assessee i.e. reserves and surplus for the purpose of giving advances. In view of this matter, particularly when the authorities below have placed reliance upon decision of Hon'ble Punjab & Haryana High Court in the case of Abhishek Industries (supra) which is over-ruled by Hon'ble Supreme Court in the case of Hero Cycles P. Ltd., we set aside the orders of authorities below and restore this issue to the file of Assessing Officer with direction to re-decide this issue after verifying the facts of availability of the capital and reserve funds with the assessee and direct Assessing Officer to re-decide this issue in the light of decision of Hon'ble Supreme Court in the case of Hero Cycles P. Ltd. (supra). The Assessing Officer shall give reasonable sufficient opportunity of being heard to the assessee. This ground is allowed for statistical purposes.
18. On ground No. 4(e), assessee challenged addition of Rs. 20,010/- being 1/5th of several expenses i.e. petrol expenses, car repair, driver's salary and telephone expenses etc. The Assessing Officer noted that assessee claimed these expenses in which element of personal use by the assessee and family members cannot be ruled out. 1/5th of the expenditure was disallowed out of total expenses claimed of Rs. 1,00,051/-.
19. The ld. CIT(Appeals) confirmed the addition. On consideration of the rival submissions, we do not find any merit in this ground of assessee. No specific details have been produced before us to prove that these expenses have not been used by assessee and his family members for personal purposes. This ground is accordingly dismissed.
20. No other point is argued or pressed.
21. In the result, appeal of the assessee is partly allowed.