ORDER
Hari Om Maratha, J.M.
1. This is a recalled matter. This appeal by the assessee was previously dismissed for non-prosecution, but the same was recalled when the assessee showed a reasonable cause, vide our order dt. 1st Aug., 2005. The assessment year involved is 1996-97 and the first appellate order, which has been challenged, is dt. 7th March, 2001.
2. The assessee is a partner in the firm M/s Anand Medical Agencies, Bhilwara, and his only source of income is from remuneration and interest from the above partnership firm. He filed his returns declaring total income of Rs. 39,150 on 19th March, 1997. When it was scrutinized, it was noticed that the declared income consisted of remuneration of Rs. 31,663 and interest of Rs. 7,791. Although the assessee does not maintain books, yet his accounts with firm for the relevant period were submitted before the learned AO, which revealed that he deposited Rs. 15,000 and Rs. 10,000 on 3rd Feb., 1996 and 24th March, 1996, respectively, with the firm. The source of the above Rs. 25,000 was stated to be from withdrawals on 13th Nov., 1995 and 10th Dec., 1995 and were actually contra entries. He also explained that the moneys withdrawn for specific purposes as above but the same was not utilised and thus redeposited. The learned AO doubted this version because according to him the purpose for which the money was withdrawn was not explained, the reasons for keeping the cash in home for 2/3 months not properly explained, why this money was not deposited in the bank or in the firm, immediately. The learned AO, therefore, added this sum of Rs. 25,000 as unexplained. To support his finding, the learned AO elaborately discussed in his order the household expenses and opined that this amount may have been spent towards these daily expenses. But the learned AO categorically mentioned in his order that it was very difficult to pinpoint what was the source of these deposits, since the assessee did not have any other known source(s) of income, nevertheless he made the addition of Rs. (25,000 + 5,000)= 30,000 on estimate basis, being the income from undisclosed source.
3. This addition was challenged by the assessee. The first appellate authority confirmed the addition of Rs. 25,000 but deleted the further addition of Rs. 5,000, which was added without any reasoning at all.
4. The assessee is further aggrieved and raised the plea against the addition of Rs. 25,000.
5. I have heard the rival submissions and perused the evidence on record.
6. The learned Authorised Representative, Shri T.P. Gaggar has vehemently argued that the addition in question is uncalled for. When the assessee has explained that Rs. 15,000 and Rs. 10,000 were withdrawn from his capital account in the books of the firm on 13th Nov., 1995 and 10th Dec., 1995, respectively, and there is no evidence with the Department that this amount had been spent somewhere else, therefore, in the light of the facts that the assessee has no other source of income, why the learned AO should conclude that this is undisclosed income of the assessee. He has also justified the household withdrawals.
7. The learned Departmental Representative has simply placed reliance on the order of the learned CIT(A).
8. After giving a thoughtful consideration to the facts, circumstances and orders of the authorities, I am not inclined to agree with the reasoning of the learned AO or learned CIT(A) for that matter, insofar as the impugned addition is concerned. The deletion of Rs. 5,000 is quite justified, as this had not valid base or to say no base at all. This addition shows the thinking process of the learned AO, who it appears, was bent upon making addition on his whims. No matter what one thinks to be a reasonable reason in the given facts of a case to justify more expenses, but without proof, no legal authority would be permitted to make ad hoc and baseless additions.
9. It is the categorical finding of the learned AO despite he made in-depth investigation, that he did not have any proof to pinpoint exact source of the amount so deposited, but even then he went on making this addition. No law would permit such an action. He may be correct in his subjective approach, but it is the objective approach, which can survive and can be upheld legally. The assessee has explained the source of the relevant deposit being from the withdrawals as stated above. It is true that the relevant and ancillary queries of the learned AO remained unanswered, but the assessee has discharged his primary onus. There is no further evidence with the learned AO to rebut this primary proof. Insofar as the low withdrawals of Rs. 18,000 towards household expenses are concerned, the learned AO has no reasonable material to justify higher expenses except his subjective thinking. Therefore, in my considered opinion, the learned AO has tried to justify his act, but he failed to legally justify the same. I have to delete this baseless addition, which of course cannot be sustained, when the assessee has no other source of income and has submitted plausible source, which could not be countered.
10. Therefore, the addition of Rs. 25,000 sustained by the learned CIT(A) is hereby ordered to be deleted.
11. In the result, the appeal is accepted.