ACIT, PALI V. Shri Ram Vilas Soni S/o Sh. Late Moolchandji, PALI

ITA 134/JODH/2002

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70306 (ITAT-JODHPUR)
• Duration Of Justice: 11 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-11-2013
• Assessment Year: misc
• Appeal Filed On: 17-04-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Assessee Lawyers: U C JAIN
• Keywords: Unexplained investment; Search and seizure; Salary income; Block assessment
• Section: 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO1999-2000 ASST. COMMISSIONER OF INCOME TAX, VS. SHRI RAM VILA S SONI, CIRCLE, PALI. S/O. LATE SHRI MOOLCHANDJI SONI, 66, GOL NIMBRA PALI. (PAN: R-703 (BA). (APPELLANT) (RESPONDENT) APPELLANT BY : DR. DEEPAK SEHGAL, CIT (DR) RESPONDENT BY : SHRI U.C. JAIN DATE OF HEARING : 12.11.2013 DATE OF PRONOUNCEMENT : 28.11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), JODHPUR DATED 04.02.2002. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, AS INDIVIDUAL, FILED HIS RETURN, IN COMPLIANCE TO NOTICE ISSUED UNDER SE CTION 158BC OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT) DATED 20.01.2000. A SEARCH AND SEIZURE OPERATION 2 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 UNDER SECTION 132 OF THE ACT WAS CARRIED OUT BY THE REVENUE DEPARTMENT AT THE RESIDENTIAL AS WELL AS OFFICIAL PREMISES OF THE ASS ESSEE ON 03.02.1999. DURING THE SEARCH, VARIOUS INCRIMINATING DOCUMENTS WERE FOUND WHICH WERE SEIZED AS PER PANCHNAMA. IN COMPLIANCE, THE ASSESSEE FILED RETUR N FOR THE BLOCK PERIOD DISCLOSING NIL UNDISCLOSED INCOME. HOWEVER, THE BL OCK ASSESSMENT ORDER WAS MADE AT TOTAL UNDISCLOSED INCOME OF RS.33,75,477/-. AGGRIEVED , THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO HAS ALLOWED PAR T RELIEF TO THE ASSESSEE. AGAINST THIS, THE REVENUE HAS FILED APPEAL BUT THE ASSESSEE HAS NOT FILED ANY APPEAL AS IT WAS STATED BY THE LD. AUTHORIZED REPRESENTATI VE IN THE OPEN COURT. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN : 1. DELETING THE ADDITION OF RS.2,05,000/- ON ACCOUN T OF UNEXPLAINED INVESTMENT TREATING IT RELATING TO HUF. WHEREAS TH E ASSESSEE HIMSELF ADMITTED IN THE STATEMENT RECORDED DURING THE COURS E OF SEARCH PROCEEDING THAT THE INVESTMENT WAS HIS UNDISCLOSED INCOME. 2. DELETING THE ADDITION OF RS.90,000/- MADE ON ACC OUNT OF NON- DISCLOSURE OF SALE OF FACTORY PREMISES HOLDING THE SAME BELONGED TO HUF WHEREAS AS PER SALE DEED THE OWNER OF THE FACTORY W AS THE ASSESSEE IN INDIVIDUAL CAPACITY. 3. DELETING THE ADDITION OFRS.5,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY TREATING WIT HOUT ANY BASIS, IT BELONGED TO THE HUF OF THE ASSESSEE. 4. DELETING WITHOUT ANY BASIS THE ADDITION OFRS.5,5 8,580/- MADE ON ACCOUNT OF PROFIT ON SALE OF LAND. 3 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 5. DELETING THE ADDITION OF RS.90,000/- MADE ON ACC OUNT OF OPENING CAPITAL IN THE NAME OF SMT. MHINI DEVI, WIFE OF THE ASSESSEE, IGNORING THE FACT THAT THE ASSESSEE DID NOT PRODUCE SMT. MOHINI DEVI AND ALSO COULD NOT PROVE THE SOURCE OF OPENING CAPITAL. THE SO CA LLED BOOKS OF SMT. MOHINI DEVI WAS NOT FOUND AT THE TIME OF SEARCH. 6. DELETING THE ADDITION OF RS.1,05,000/- MADE ON A CCOUNT OF RENTAL INCOME OF NOHRA SHOWN IN THE HAND OF WIFE, WHEREAS SHE COULD NOT PROVE THAT THE INVESTMENT IN NOHRA WAS MADE BY HER. 7. DELETING ON THE BASIS OF UNSUBSTANTIATED CLAIM T HE ADDITION OF RS.80,000/-, RS.24,000/-, RS.9,000/- AND RS.80,000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN VARIOUS PLOTS. 8. DELETING THE ADDITION OF RS.4,11,711/- MADE ON A CCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTIES IN THE NAME OF NAGRAJ SONI, SON OF THE ASSESSEE, WITHOUT CONSIDERING THE FINDING OF TH E A.O. SHRI NAGRAJ SONI IS A SALARIED EMPLOYEE EARNING OF RS.1500/- P. M. AS ON AVERAGE AND SUCH HUGE SALARY CAN NOT BE POSSIBLE OUT OF IT. 9. RESTRICTING WITHOUT ANY BASIS ADDITION OF RS.9,7 6,986/- TO RS.48,850/- MADE ON ACCOUNT OF SALES NOT RECORDED I N THE REGULAR BOOKS OF THE ASSESSEE. THAT THE APPELLANT RESERVES ITS RIGHT TO ADDITION , AMEND OR LATER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APP EAL IS FINALLY HEARD FOR DISPOSAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE RECORD. 4. THE FIRST GROUND OF THIS APPEAL PERTAINS TO DELE TION OF ADDITION OF RS.2,05,000/- ADDED ON ACCOUNT OF UNEXPLAINED INVES TMENT TREATING IT RELATING TO HUF. THE ASSESSEE HAD HIMSELF ADMITTED IN HIS STAT EMENT RECORDED UNDER SECTION 4 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 132(4) OF THE INCOME TAX ACT, 1961 (THE ACT FOR S HORT) TO BE HIS UNDISCLOSED INCOME. SIMILARLY, DELETION OF RS.90,000/- ADDED O N ACCOUNT OF NON-DISCLOSURE OF SALE OF FACTORY PREMISES STAND TREATED AND BELONGIN G TO ASSESSEES HUF. LIKE-WISE, AS PER GROUND NO.3, DELETION OF THE ADDITION OF RS. 5,00,000/- HAS BEEN DELETED ON THE SAME REASONING. THEREFORE, WE PROCEED TO DECID E ALL THESE 3 GROUNDS IN ONE GO. 5. TO UNDERSTAND THE FACTS AND THE RIVAL SUBMISSION S ON THE ISSUE AS WELL AS THE FINDING OF THE LD. CIT(A), WE WILL EXTRACT PARAGRAP H NOS.3 TO 5.2 AT PAGE NOS.2 TO 8 OF CIT(A)S ORDER :- 3. IN GROUND NO. 1, THE APPELLANT SUBMITTED THAT T HE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 205000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT BECAUSE THE APPEL LANT HAD REASONABLY EXPLAINED THE SOURCE OF INCOME OUT OF WHICH INVESTM ENT WAS MADE. THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER WA S NOT AT ALL JUSTIFIED IN MAKING THE ADDITION AMOUNTING TO RS. 205000/- BECAU SE THE APPELLANT HAD GIVEN REASONABLE EXPLANATION IN THIS RESPECT. I T WAS SUBMITTED BY HIM THAT AS A MATTER OF FACT, THE APPELLANT DID NOT MAKE ANY INVESTMENT TO THE TUNE OF RS. 205000/- BUT SHRI RAMVILAS MOOLCHAN D SONI HUF HAD MADE THIS INVESTMENT. SHRI RAMVILAS MOOLCHAND SONI HUF IS ASSESSED TO TAX AND HAD FILED RETURN OF INCOME SHOWN SUCH INVES TMENT. IT WAS FURTHER STATED BY THE LD. COUNSEL THAT THE HUF HAD ALSO MAI NTAINED REGULAR BOOKS OF ACCOUNT FROM 1.4.1993 AND INVESTMENT AMOUN TING TO RS. 205000/- WAS DULY ENTERED IN SUCH BOOKS. THE LD COU NSEL SUBMITTED THAT ON PARTITION OF BIGGER HUF THE APPELLANT HAD RECEIV ED FOUR PROPERTIES AS HIS SHARE AND OUT OF INCOME FROM SUCH ANCESTRAL PRO PERTIES THE HUF OF THE APPELLANT HAD ACQUIRED THE PROPERTY UNDER CONSI DERATION. THE LD COUNSEL FURTHER HAD GIVEN THE FOLLOWING CHART EXPLA INING THEREIN ACQUISITION OF VARIOUS PROPERTIES BY THE HUF: - S. AMOUNT DESCRIPTION OF THE PROPERTY SOURCE OF INV ESTMENT BY 5 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 NO. HUF 1. 205000/- PLOT NO. 14 MANDLI KHURD PALI. REGULAR ACCOUNT & BOOKS (COPY FILED BEFORE AO & CIT (A). 2. 90000/- FACTORY AT MANDIA ROAD, PALI PLOT NO. 18 BY PARTITION DEED DATED 1.4.1982 3. 500000/- PLOT NO. 16, 17, 18 MANDLI KHURD PALI (POINT NO.2 RS. 558580/- OF AOS ORDER) BY PARTITION DEED DATED 1.4.1982 4. 80000/- 16 PLOTS AT KHASRA NO. 1229 NILGIRI ROAD, PALI ACCOUNTED FOR IN REGULAR ACCOUNT BOOKS OF THE HUF 5. 24000/- PLOT NEAR BUS STAND, PALI -DO- 6. 80000/- SAME PROPERTY OF S. NO. 5 ABOVE DOUBLE COUNTING 7. 9000/- SAME PROPERTY OF S. NO. 6 ABOVE -DO- THE LD. COUNSEL SUBMITTED RELIED UPON THE DECISION OF HONOURABLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. RAJENDR A PRASAD GUPTA 25 TH VOLUME OF TAXWORLD PAGE 87- IN SUPPORT OF HIS CONT ENTION THAT PROCEEDINGS U/S 158BB ARE THAT OF UNDISCLOSED INCOM E AND SINCE INVESTMENT AMOUNTING TO RS. 205000/- STOOD ALREADY DISCLOSED BY THE HUF OF THE APPELLANT, THE ASSESSING OFFICER WAS WHO LLY UNJUSTIFIED IN MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVES TMENT AMOUNTING TO RS. 205000/-. 3.1 THE ASSESSING OFFICER HAD DISCUSSED THIS ON PAG ES 2 AND 4 OF THE ASSESSMENT ORDER. HE NOTED THAT AS PER PAGE 30 OF A NNEXURE A-4 OF PANCHNAMA THERE WAS A SALE AGREEMENT BETWEEN SHRI K HIVRAJ SONI (SELLER) AND SHRI NAGRAJ SONI SON OF THE APPELLANT. THE AGREEMENT DATED 18.11.1995 WAS DULY SIGNED BOTH BY THE SELLER AND T HE PURCHASER AND THE SALE CONSIDERATION WAS RS. 205000/- IN CASH. THE AS SESSING OFFICER FURTHER FOUND THAT AS PER PAGES 24 AND 25 OF ANNEXU RE A-4 THERE WAS ANOTHER SALE AGREEMENT DATED 16.9.98 WHEREBY THE AP PELLANT SOLD THE ABOVE PLOT TO SHRI JAGDISH S/O SH. MITHALAL BRAHMIN FOR RS. 321000/-. THE ASSESSING OFFICER FOUND THAT THE APPELLANT RECE IVED RS. 51000/- ON THE DATE OF AGREEMENT ITSELF AND REMAINING AMOUNT W AS TO BE RECEIVED ON OR BEFORE 16.12.1998 BUT THE SAID AGREEMENT COULD N OT BE MATERIALIZED AND WAS CANCELLED. THE ASSESSING OFFICER FURTHER NO TED THAT DURING THE COURSE OF STATEMENT RECORDED AT THE TIME OF SEARCH THE APPELLANT HAD 6 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 STATED THAT HIS SON, I.E. SHRI NAGRAJ SONI, DID NOT HAVE ANY INCOME OTHER THAN SALARY INCOME. THE APPELLANT FURTHER HAD ADMIT TED THAT INVESTMENT AMOUNTING TO RS. 205000/- WAS NOT ENTERED IN THE BO OKS OF ACCOUNT. THE ASSESSING OFFICER ALSO DID NOT ACCEPT THAT THE SAID PROPERTY BELONGS TO THE HUF AND HAD GIVEN REASONS FOR THE SAME. THE ASS ESSING OFFICER FURTHER REFERRED TO SECTION 64(2) OF THE ACT AND HE LD THAT THE APPELLANT HAD INVESTED RS. 205000/- IN THE HOUSE PROPERTY OUT OF HIS UNDISCLOSED SOURCES DURING THE FINANCIAL YEAR 1995-96 AND ACCOR DINGLY, HE MADE THE ADDITION AMOUNTING TO RS. 205000/- ON ACCOUNT OF UN EXPLAINED INVESTMENT IN THE PURCHASE OF HOUSE PROPERTY. 3.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. CO UNSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION OF RS. 205000/- ON ACCOUN T OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY. AFTER DUE C ONSIDERATION OF THE MATTER, I HOLD THAT THE ASSESSING OFFICER OF WAS NO T JUSTIFIED IN MAKING THIS ADDITION BECAUSE THE APPELLANT HAD NOT MADE AN Y INVESTMENT IN PURCHASE OF PROPERTY. IN FACT, HUF OF THE APPELLANT HAD MADE THE INVESTMENT IN THE PURCHASE OF PROPERTY OUT OF ANCES TRAL FUNDS AND HAD RECORDED SUCH INVESTMENT IN THE BOOKS OF ACCOUNTS M AINTAINED. SHRI RAMVILAS MOOLCHAND SONI HUF HAD FILED RETURNS OF IN COME AND HAD DULY SHOWN THEREIN THE INVESTMENTS MADE BY IT. FURT HER, BLOCK ASSESSMENT IS AN ASSESSMENT OF UNDISCLOSED INCOME A ND INCOME THAT IS ALREADY DISCLOSED BY THE HUF OF THE HUF OF THE APPE LLANT CANNOT BE ADDED IN THE HANDS OF THE APPELLANT BECAUSE IT WOUL D AMOUNT TO TAXING THE SAME INCOME TWICE. ACCORDINGLY, I HOLD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 205 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY. THUS, ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. THE APP ELLANT WILL GET A RELIEF OF RS. 205000/-. 4. IN GROUND NO. 2, THE APPELLANT SUBMITTED THAT TH E ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 90000/- ON ACCOUNT OF UNDISCLOSED INCOME BECAUSE THE APPELLANT WAS NOT THE OWNER OF THE FACTORY BUILDING IN RESPECT OF WHICH SALE CONSIDERA TION WAS RECEIVED. THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER WA S NOT JUSTIFIED IN MAKING THIS ADDITION BECAUSE THE APPELLANT HAD NOT SOLD THE FACTORY. AS A MATTER OF FACT, M/S MOOLCHAND HUF HAD SOLD THE FACT ORY IN 1990 AND AFTER GIVING THE BENEFIT OF INDEXATION AND OTHER FA CTORS, CAPITAL GAIN IN THE HANDS OF MOOLCHAND HUF WAS WORKED OUT AT NIL. I T WAS FURTHER 7 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 STATED BY THE LD. COUNSEL THAT THE HUF HAD ALSO MAI NTAINED REGULAR BOOKS OF ACCOUNT AND HAD DULY SHOWN THEREIN VARIOUS INVESTMENTS MADE AND INCOME EARNED. THE LD .COUNSEL RELIED UPON THE DECISION OF HONOURABLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. RAJENDRA PRASAD GUPTA 25 TH VOLUME OF TAXWORLD PAGE 87- IN SUPPORT OF HIS CONTENTION THAT PROCEEDINGS U/S 158BB ARE THAT OF U NDISCLOSED INCOME AND THE HUF WAS THE ACTUAL OWNER OF THE PROPERTY IN RESPECT OF WHICH SALE CONSIDERATION WAS RECEIVED AMOUNTING TO RS. 90 000/- AND HAD DULY SHOWN CAPITAL GAIN ON SALE OF SUCH PROPERTY, THE AS SESSING OFFICER WAS WHOLLY UNJUSTIFIED IN MAKING THE ADDITION ON ACCOUN T OF UNDISCLOSED INCOME AMOUNTING TO RS. 90000/-. 4.1 THE ASSESSING OFFICER HAD DISCUSSED THIS ISSUE IN THE ASSESSMENT ORDER. HE NOTED THAT DURING THE COURSE OF SEARCH DO CUMENTS WERE FOUND IN RESPECT OF SALE OF FACTORY. THE ASSESSING OFFICE R FOUND THAT THE SO- CALLED FACTORY AT F-149 MANDIA ROAD WAS IN THE NAME OF THE APPELLANT IN HIS INDIVIDUAL CAPACITY AND NOT IN THE HUF CAPACITY . THE ASSESSING OFFICER HAD NOT ACCEPTED THE EXPLANATION OF THE APP ELLANT AND HAD GIVEN REASONS FOR DOING SO. THE ASSESSING OFFICER HELD TH AT SALE PROCEEDS OF THE FACTORY AMOUNTING TO RS. 90000/- WERE NOT SHOWN IN RETURN OF INCOME BY THE APPELLANT AND ACCORDINGLY, THE HE MADE THE A DDITION OF RS. 90000/- ON ACCOUNT OF UNDISCLOSED INCOME FOR THE AS SESSMENT YEAR 1990- 91. 4.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD COU NSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION OF RS. 90000/- ON ACCOUNT OF UNDISCLOSED INCOME ON ACCOUNT OF SALE PROCEEDS OF FACTORY BUILD ING. AFTER DUE CONSIDERATION OF THE MATTER, I HOLD THAT THE ASSESS ING OFFICER OF WAS NOT JUSTIFIED IN MAKING THIS ADDITION BECAUSE THE APPEL LANT HAD NOT RECEIVED ANY SALE PROCEEDS OF FACTORY BUILDING IN HIS INDIVI DUAL CAPACITY. IN FACT, MOOLCHAND HUF HAD SOLD THE PROPERTY AND SHOWN CAPIT AL GAIN AT NIL AFTER BENEFIT OF INDEXATION AND OTHER RELEVANT FACT ORS. THE HUF HAD FILED RETURNS OF INCOME AND HAD DULY SHOWN THEREIN THE IN VESTMENTS MADE AND INCOME EARNED BY IT. FURTHER, BLOCK ASSESSMENT IS A N ASSESSMENT OF UNDISCLOSED INCOME AND INCOME THAT IS ALREADY DISCL OSED B YTHE HUF CANNOT BE ADDED IN THE HANDS OF THE APPELLANT BECAU SE IT WOULD AMOUNT TO TAXING THE SAME INCOME TWICE. ACCORDINGLY, I HOL D THAT THE ASSESSING OFFICRE WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 90000/- ON ACCOUNT OF UNDISCLOSED INCOME ON ACCOUNT OF SALE OF FACTORY BUILDING AT 8 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 F-149 MANDIA ROAD, PALI. THUS, ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. THE APPELLANT WILL GET A RELIEF OF RS. 90000/-. 5. IN GROUND NO. 3, THE APPELLANT SUBMITTED THAT TH E ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 500000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE O F PROPERTY BECAUSE THE APPELLANT HAD NOT MADE ANY INVESTMENT IN THE PU RCHASE OF PROPERTY. THE LD COUNSEL SUBMITTED THAT THE ASSESSING OFFICER WAS NOT AT ALL JUSTIFIED IN MAKING THIS ADDITION ON ACCOUNT OF UNE XPLAINED INVESTMENT IN PLOT BECAUSE, AS A MATTER OF FACT, THE APPELLANT HA D NOT PURCHASED THE PLOT NO. 16, WHICH WAS LATER ON SOLD AND INCOME WAS EARNED. IT WAS SUBMITTED BY HIM THE PROPERTY UNDER REFERENCE BELON GED TO MOOLCHAND HUF AND THE SAME WAS REGULARLY SHOWN IN THE BALANCE SHEET OF SUCH HUF. IN THE YEAR 1998-99 THE HUF PROPOSED TO SELL T HIS LAND FOR RS. 1500000/- BUT FOR SOME REASONS THE SAME COULD NOT B E SOLD AND THE SALE AGREEMENT WAS CANCELLED AND FURTHER, WHEN THE PROPE RTY WAS SOLD IN 1999 THE HUF DULY RECORDED THE SALE PROCEEDINGS. TH E LD. COUNSEL THAT DURING THE COURSE OF STATEMENT ALSO AT THE TIME OF SEARCH THE APPELLANT HAD STATED THAT NO SUCH SALE WAS EFFECTED BY HIM IN RESPECT OF PLOT NO. 16. THE LD COUNSEL FURTHER SUBMITTED THE SAME REASONS A S WERE MADE IN RESPECT OF OTHER ADDITIONS AS DISCUSSED ABOVE. 5.1 THE ASSESSING OFFICER HAD DISCUSSED THIS ISSUE ON PAGES 4 AND 5 OF THE ASSESSMENT ORDER. HE NOTED THAT DURING THE COUR SE OF SURVEY CERTAIN DOCUMENTS WERE FOUND AND SEIZED ACCORDING TO WHICH THE APPELLANT WAS ALSO INDULGED IN REAL ESTATE BUSINESS. AS PER PAGE NO. 14 AND 15 OF ANNEXURE A-4 FOUND AND SEIZED DURING SEARCH PROCEED INGS, THE ASSESISNG OFFICER NOTED, THE APPELLANT HAD PURCHASED PLOT NO. 16 FROM SHRI MOTILAL BUT OBTAINED ONLY POWER OF ATTORNEY. FROM PAGES 9-1 1 OF THE SAID ANNEXURE THE ASSESSING OFFICER FURTHER CONCLUDED TH AT THE APPELLANT HAD MADE A SALE AGREEMENT DT. 12.8.95 IN RESPECT OF PLO T NOS. 16, 17 AND 18 FOR RS. 1501111/- TO SHRI JAGDISH LAL S/O DEVI LAL SONI. THE ASSESSING OFFICER FURTHER NOTED THAT THIS AGREEMENT DATED 12. 8.95 WAS CANCELLED AND ADVANCE OF RS. 150000/- WAS RETURNED BACK. THE ASSESSING OFFICER WORKED OUT THE VALUE OF ONE PLOT AT RS. 500000/- AN D HELD THAT THE APPELLANT COULD NOT EXPLAIN THE INVESTMENT MADE IN THE PURCHASE OF SUCH PLOT. THE ASSESSING OFFICER HAD MADE THE ADDITION O F RS. 500000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE O F PLOT IN THE ASSESSMENT YEAR 1999-2000. 9 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 5.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD COU NSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF PLOT. AFTER DUE CONSIDERATION OF THE MA TTER, I HOLD THAT THE ASSESSING OFFICER OF WAS NOT JUSTIFIED IN MAKING TH IS ADDITION BECAUSE THE APPELLANT HAD NOT MADE ANY INVESTMENT IN PURCHASE O F PROPERTY. IN FACT, SHRI MOOLCHAND HUF WAS THE OWNER OF THE PROPERTY UN DER REFERENCE AND HAD SHOWN SUCH PROPERTY IN THE BALANCE SHEET. SHRI MOOLCHAND HUF HAD FILED RETURNS OF INCOME AND HAD DULY SHOWN THEREIN THE INVESTMENTS MADE BY IT. FURTHER, BLOCK ASSESSMENT IS AN ASSESSMENT O F UNDISCLOSED INCOME AND INCOME THAT IS ALREADY DISCLOSED BY THE HUF CAN NOT BE ADDED IN THE HANDS OF THE APPELLANT BECAUSE IT WOULD AMOUNT TO T AXING THE SAME INCOME TWICE. ACCORDINGLY, I HOLD THAT THE ASSESSIN G OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 500000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY. THUS, ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. THE APP ELLANT WILL GET A RELIEF OF RS.500000/- . 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO N OT FIND ANY REASON TO INTERFERE IN THE IMPUGNED FINDING. THE LD. CIT(A) HAS NOT BEEN ABLE TO DISSUADE US FROM REASONING GIVEN BY LD. CIT(A) TO MAKE THE IMPU GNED DELETIONS. RATHER, WE ARE CONVINCED AND SATISFIED WITH THE REASONING THAT ALL THESE INCOMES BELONG TO THE ASSESSEE HUF AND, THEREFORE, CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE AS INDIVIDUAL. ACCORDINGLY, WE CANNOT ALLOW GROUND NO S.1, 2 & 3 OF THIS APPEAL AND THUS DISMISS THE SAME. 7. GROUND NO.4 PERTAINS TO DELETION OF ADDITION OF RS.5,58,580/- MADE ON ACCOUNT OF PROFIT ON SALE OF LAND. THE FACTS OF TH IS GROUND ARE THAT THESE PLOTS QUA WHICH THE A.O. HAS CALCULATED CAPITAL GAINS ON THEI R SALE HAVE BEEN DISCLOSED BY THE 10 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 HUF IN THE BOOKS OF ACCOUNT MAINTAINED BY HUF OF TH E ASSESSEE. ADMITTEDLY, NO EVIDENCE WAS FOUND DURING THE SEARCH TO ESTABLISH T HAT IN FACT THESE PLOTS BELONGED TO THE ASSESSEE AS INDIVIDUAL. THEREFORE, NO ADDIT ION CAN BE MADE IN THE HANDS OF THE ASSESSEE AS INDIVIDUAL AND THE LD. CIT(A) HAS C ORRECTLY DELETED THE IMPUGNED ADDITION. AS A RESULT, GROUND NO.4 STANDS DISMISSE D. 8. GROUND NO.5 RELATES TO DELETION OF ADDITION OF R S.90,000/- ADDED ON ACCOUNT OF OPENING CAPITAL STANDING IN THE NAME OF MOHINI D EVI, WIFE OF THE ASSESSEE. THE A.O. MADE THIS ADDITION ONLY BECAUSE THE ASSESSEE D ID NOT PRODUCE SMT. MOHINI DEVI AND COULD NOT ESTABLISH THE SOURCE THEREOF IN THE HANDS OF HIS WIFE. IN FACT, GROUND NO.6 IS ALSO CONNECTED WITH SMT. MOHINI DEVI S RENTAL INCOME FROM NOHRA WHICH HAS BEEN ADDED IN THE HANDS OF THE ASSESSEE. THE CIT(A) HAS DECIDED THESE ISSUE CONJOINTLY. THE FACT AND REASONING FOR DELET ION ARE AS UNDER :- 7. IN GROUND NOS. 5 AND 6, THE APPELLANT SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDIT IONS OF RS. 90000/- AND RS. 105000/- ON ACCOUNT OF BOGUS CAPITAL AND RE NTAL INCOME IN RESPECTIVELY BECAUSE THE APPELLANT HAD GIVEN REASON ABLE EXPLANATION IN RESPECT OF INVESTMENT MADE BY SMT MOHINI DEVI, WIFE OF THE APPELLANT. THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICE R WAS NOT AT ALL JUSTIFIED IN MAKING THE ADDITION OF RS. 90000/- BEC AUSE THE APPELLANT HAD NOT MADE ANY INVESTMENT TOWARDS PURCHASE OF NOHRA. IN FACT, WIFE OF THE APPELLANT SMT. MOHINI DEVI WAS THE OWNER OF THE PRO PERTY KNOWN AS SINDHI COLONY NOHRA. SHE HAD PURCHASED THE SAID PRO PERTY IN 1993. AS REGARDS SOURCE OF INVESTMENT THE LD. COUNSEL SUBMIT TED THAT SMT. MOHINI DEVI HAD PURCHASED THIS NOHRA FOR A CONSIDERATION O F RS. 27000/- BY 11 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 SELLING HER STRIDHAN. IT WAS SUBMITTED BY HIM THAT IT IS COMMON IN HINDU SOCIETY THAT LADIES DO RECEIVE GOLD ORNAMENTS ON TH E OCCASION OF MARRIAGE AND ON OTHER SOCIAL OCCASIONS SUCH AS BIRT H OF CHILD. MOREOVER, THE LD. COUNSEL SUBMITTED THAT SMT. MOHINI DEVI IS ASSESSED TO TAX AND HAD FILED RETURNS OF INCOME SHOWING THEREIN RENTAL INCOME IN RESPECT OF SUCH PROPERTY. IT WAS SUBMITTED BY HIM THAT SINCE T HE APPELLANT HAD REASONABLY EXPLAINED THE INVESTMENT MADE HIS WIFE I N THE PROPERTY, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT HAD MADE UNEXPLAINED INVESTMENT IN THE NAME OF HIS WIFE . HE SUBMITTED FURTHER THAT INCOME ALREADY DISCLOSED IN THE HANDS OF APPELLANTS WIFE COULDNT BE ADDED IN THE HANDS OF THE APPELLANT, AS IT WOULD LEAD TO TAXING THE SAME AMOUNT TWICE. 7.1 THE ASSESSING OFFICER HAD DISCUSSED THIS ISSUE IN PARA 4, ON PAGES 6 TO 8, OF THE ASSESSMENT ORDER. THE ASSESSIN G OFFICER FOUND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APP ELLANT PRODUCED PHOTOCOPIES OF BOOKS OF ACCOUNTS OF SMT. MOHINI DEV I, WIFE OF THE APPELLANT. HE NOTED THAT OPENING CAPITAL IN THE BOO KS PRODUCED WAS SHOWN AT RS. 90000/- AS ON 1.4.1993. THE ASSESSING OFFICER REQUIRED THE APPELLANT TO FURNISH EXPLANATION IN RESPECT OF OPEN ING CAPITAL SHOWN IN THE BOOKS OF SMT. MOHINI DEVI AND ALSO TO PRODUCE H ER. THE APPELLANT SUBMITTED THAT SOURCE OF INVESTMENT BY SMT. MOHINI DEVI WAS FROM OLD SAVINGS. THE ASSESSING OFFICER NOTED THAT SMT. MOHI NI DEVI WAS NOT PRODUCED . THE ASSESSING OFFICER HELD THAT THE APPE LLANT HAD FAILED TO PROVE THE GENUINENESS OF CAPITAL OF RS. 90000/- AND ALSO THE RENTAL INCOME FOR THE BLOCK PERIOD IN THE NAME OF SMT. MOH INI DEVI. ACCORDINGLY, RELYING UPON THE DECISION OF HONOURABL E ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. LALLUMAL 126 ITR 43- THE ASSESSING OFFICER MADE THE ADDITION AMOUNTING TO RS. 90000/- ON ACCOUNT OF BOGUS CAPITAL INTRODUCED IN THE NAME OF APPELLANTS WIFE. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 105000/- ON ACCOUNT OF RE NTAL INCOME FROM NOHRA AS HE DID NOT ACCEPT THAT THE SINDHI COLONY NOHRA WAS OWNED BY SMT. MOHINI DEVI AMOUNTING TO RS. 105000/- (RS . 12000/- FOR ASSESSMENT YEAR 1994-95 + RS. 16000/- FOR ASSESSMEN T YEAR 1995-96 + RS. 17000/- FOR ASSESSMENT YEAR 1996-97 + RS. 18000 /- FOR ASSESSMENT YEAR 1997-98 + RS. 18000/- FOR ASSESSMENT YEAR 1998 -99 + RS. 24000/- FOR ASSESSMENT YEAR 1999-2000). 7.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. CO UNSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER 12 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 WHILE MAKING THESE ADDITIONS. AFTER DUE CONSIDERATI ON OF THE MATTER, I HOLD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED I N MAKING THESE ADDITIONS BECAUSE THE APPELLANT HAD GIVEN REASONABL E EXPLANATION IN RESPECT OF INVESTMENT MADE BY HIS WIFE SMT. MOHINI. IN FACT, IT WAS SMT. MOHINI DEVI AND NOT THE APPELLANT, WHO HAD PURCHASE D THE SINDHI COLONY NOHRA. DURING THE COURSE OF SEARCH NO EVIDEN CE WAS FOUND THAT THE APPELLANT HAD MADE ANY INVESTMENT IN PURCHASE O F SUCH NOHRA. SMT. SMOHINI DEVI IS ASSESSED TO TAX AND HAD FILED RETUR NS OF INCOME SHOWING THEREIN INVESTMENTS MADE AND INCOME EARNED BY WAY O F RENT. SMT. MOHINI DEVI HAD PURCHASED SINDHI COLONY NOHRA IN 19 93 BY SELLING HER STRIDHAN. ACCORDINGLY, I HOLD THAT THERE WAS NO JUS TIFICATION ON THE PART OF THE ASSESSING OFFICER TO HOLD THAT THE APPELLANT HAD INTRODUCED HIS UNDISCLOSED INCOME IN THE NAME OF HIS WIFE. INCOME AND INVESTMENT ALREADY DISCLOSED BY SMT. MOHINI DEVI BY FILING RET URN OF INCOME CANNOT BE ADDED IN THE HANDS OF THE APPELLANT. I, THEREFOR E, DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS C APITAL CREATING IN THE NAME OF SMT. MOHINI DEVI AND ON ACCOUNT OF UNDI SCLOSED RENTAL INCOME AMOUNTING TO RS. 90000/- AND RS. 105000/- AR E HEREBY DELETED. THUS, THE APPELLANT WILL GET A RELIEF OF RS.195000/- {RS.90000/- + RS.105000/-} 9. BEFORE US, SIMILAR STAND WAS TAKEN BY BOTH THE P ARTIES. IN THE LIGHT OF THE REASONING AND THE FACTS OBTAINING ON RECORD WITH RE GARD TO THESE TWO GROUNDS, WE ARE UNABLE TO ACCEPT THE ARGUMENTS OF THE LD. C.I.T . (D.R.). THEREFORE, WE CONFIRM THE DELETION OF ADDITION MADE BY THE A.O. ON ACCOUN T OF BOGUS CAPITAL ALLEGEDLY CREATED IN THE NAME OF SMT. MOHINI DEVI BY THE ASSE SSEE AND ON ACCOUNT OF UNDISCLOSED RENTAL INCOME AND THUS DISMISS GROUND N O.5 & 6 OF THIS APPEAL. 10. GROUND NO.7 PERTAINS TO ADDITION MADE ON ACCOUN T OF UNEXPLAINED INVESTMENTS IN VARIOUS PLOTS. LIKE-WISE, GROUND NO .8 IS ALSO CONNECTED. SO FAR AS 13 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 THE FACTS ARE CONCERNED IN RESPECT OF GROUND NO.7, WE EXTRACT PARAGRAPH NOS.8, 8.1 & 8.2 OF CIT(A)S ORDER, TO UNDERSTAND THE FACTS AN D CONTENTIONS OF THE PARTIES. 8. IN GROUND NO. 7 & 8, THE APPELLANT SUBMITTED TH AT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING AN ADDITIONS OF RS. 80000/- AND RS. 24000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PUR CHASE OF PLOT DURING THE ASSESSMENT YEAR 1996-97 AND 1997-98 RESPECTIVEL Y. FURTHER, IN GROUND NO. 9 AND 10, THE APPELLANT SUBMITTED THAT T HE ASSESSING OFFICER HAD MADE AN ADDITION OF 9000/- AND RS. 80000/- IN R ESPECT OF THE SAME PLOTS (I.E. PLOT IN RESPECT OF WHICH ADDITION OF RS . 80000/- WAS MADE IN THE ASSESSMENT YEAR 1996-97 & 1997-98). THE LD COUN SEL SUBMITTED THAT THE ASSESSING OFFICER WAS NOT AT ALL JUSTIFIED IN M AKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE O F PLOTS BECAUSE THE APPELLANT HAD NOT MADE ANY INVESTMENT IN THE PURCHA SE OF PLOTS. IT WAS SUBMITTED BY HIM THAT IN FACT, HUF OF THE APPELLANT HAD MADE SUCH INVESTMENT. THE LD. COUNSEL SUBMITTED THAT HUF OF T HE APPELLANT HAD MAINTAINED REGULAR BOOKS OF ACCOUNTS AND FILED RETU RNS OF INCOME. FURTHER, BLOCK ASSESSMENT IS AN ASSESSMENT OF UNDIS CLOSED INCOME AND INCOME THAT IS ALREADY DISCLOSED BY THE HUF CANNOT BE ADDED IN THE HANDS OF THE APPELLANT BECAUSE IT WOULD AMOUNT TO T AXING THE SAME INCOME TWICE. 8.1 THE ASSESSING OFFICER HAD DISCUSSED THESE ADDIT IONS ON PAGES 8 AND 9 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICE R FOUND THAT THE APPELLANT HAD PURCHASED 16 PLOTS OF AGRICULTURAL LA ND FROM LALCHAND GANDHI ON 13.3.1996 FOR A CONSIDERATION OF RS. 8000 0/-. FURTHER, ONE PLOT AT SUMERPUR ROAD WAS PURCHASED ON 9.9.96 FOR R S. 24000/- BY THE APPELLANT JOINTLY WITH SHRI SUBHASH SONI. THE ASSES SING OFFICER REQUIRED THE APPELLANT TO EXPLAIN THE SOURCE OF INCOME OUT O F WHICH INVESTMENTS WERE MADE IN PURCHASE OF SUCH PLOTS AND ALSO AS TO WHY SUCH PLOTS WERE NOT SHOWN IN THE BOOKS OF ACCOUNTS. THE APPELLANT S UBMITTED THAT THE PLOTS WERE PURCHASED IN HUF CAPACITY AND NOT IN HIS INDIVIDUAL CAPACITY. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION AND HAD GIVEN REASONS THERE FOR. THE ASSESSING OFFICER HELD THAT THE APPELLANT HAD MADE UNEXPLAINED INVESTMENT IN THE PURCHASE OF SUCH PLOTS AND ACCORDINGLY, HE MADE ADDITIONS OF RS. 80000/- AND R S. 24000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF PL OTS FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98 RESPECTIVELY. THE ASSESSING OFFICER FURTHER FOUND THAT IN THE BOOKS OF HUF THER E WAS A PLOT OF LAND 14 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 NEAR NILGIRI ROAD FOR RS. 80000/- AND ANOTHER PLOT AT SUMERPUR ROAD FOR RS. 9000/-. THE ASSESSING OFFICER HAD ADDED THE VAL UE OF SUCH PLOTS IN THE HANDS OF THE APPELLANT AMOUNTING TO RS. 89000/- (RS. 80000/- IN THE ASSESSMENT YEAR 1996-97 + RS. 9000/- IN THE ASSESSM ENT YEAR 1997-98). 8.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD COU NSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER WHILE MAKING THE ADDITIONS ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN PURCHASE OF PLOTS. AFTER DUE CONSIDERATION OF THE M ATTER, I HOLD THAT THE ASSESSING OFFICER OF WAS NOT JUSTIFIED IN MAKING TH IS ADDITION BECAUSE THE APPELLANT HAD NOT MADE ANY INVESTMENT IN PURCHASE O F PLOTS. IN FACT, HUF OF THE APPELLANT HAD MADE THE INVESTMENT IN THE PURCHASE OF PROPERTY OUT OF ANCESTRAL FUNDS AND HAD RECORDED SU CH INVESTMENT IN THE BOOKS OF ACCOUNTS MAINTAINED. SHRI RAMVILAS MOOLCHA ND SONI HUF HAD FILED RETURNS OF INCOME AND HAD DULY SHOWN THEREIN THE INVESTMENTS MADE BY IT. FURTHER, BLOCK ASSESSMENT IS AN ASSESSMENT O F UNDISCLOSED INCOME AND INCOME THAT IS ALREADY DISCLOSED BY THE HUF OF THE APPELLANT CANNOT BE ADDED IN THE HANDS OF THE APPELLANT BECAUSE IT W OULD AMOUNT TO TAXING THE SAME INCOME TWICE. ACCORDINGLY, I HOLD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 104 000/- (RS. 80000/- IN ASSESSMENT YEAR 1996-97 + RS. 24000/- IN ASSESSMENT YEAR 1997-98) ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE O F PLOTS. I FURTHER FIND THAT THE ASSESSING HAD MADE ADDITIONS OF RS. 80000/ - AND RS. 9000/- IN RESPECT OF THE SAME PLOTS. I, THEREFORE, DELETE ADD ITIONS TOTALING TO RS. 89000/- ALSO (RS. 80000/- IN ASSESSMENT YEAR 1996-9 7 + RS. 9000/- IN ASSESSMENT YEAR 1997-98). THUS, IN RESPECT OF GROUN D NOS. 7-10, THE APPELLANT WILL GET RELIEF AMOUNTING TO RS.193000/- {RS. 104000/- + RS.89000/-}. 11. BEFORE US, SIMILAR ARGUMENTS WERE ADVANCED BY B OTH THE PARTIES. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE CANNOT AGREE WITH THE CONTENTIONS OF THE A.O. ACCORDINGLY, WE CONFIRM THE IMPUGNED DELETIO N AND DISMISS GROUND NO.7 & 8 OF THIS APPEAL. 15 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 12. THE LAST GROUND I.E. GROUND NO.9 IS REGARDING R EDUCTION OF ADDITION FROM RS.9,76,986/- TO RS.48,850/- OUT OF ADDITION MADE O N ACCOUNT OF SALES NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE . THE A.O. HAS DISCUSSED THIS ISSUE AT PARAGRAPH NO.7 OF HIS ORDER AND HE HAS NOTED THA T DURING THE COURSE OF SEARCH, AS PER EXHIBIT-A-3 OF PANCHNAMA IN THE CASE OF THE ASS ESSEE A ROUGH LEDGER BOOK OF M/S RAM VILAS MOOLCHAND, PROP. RAM VLAS SONI HAS BE EN SEIZED WHICH CONTAINED DETAILS OF TRANSACTIONS OF CREDIT SALES FROM F.Y. 1 992 TO 1998. DURING SEARCH, IN HIS STATEMENT, THE ASSESSEE STATED THAT ALL THE TRANSAC TIONS INCLUDED IN THE ABOVE LEDGER CANNOT BE VERIFIED FROM THE REGULAR BOOKS OF ACCOUN TS AND, THEREFORE, AGREED TO PAY TAX ON THEM. THE A.O. HAS WORKED OUT UNRECORDED SA LE FOR THE ENTIRE BLOCK PERIOD FOR RS.9,76,986/- AND HAS ADDED THE SAME IN THE BLO CK PERIOD. THE LD. CIT(A) HAS GIVEN HIS FINDING IN PARAGRAPH NO.10.2 AS UNDER :- 10.2 I HAVE CONSIDERED THE SUBMISSION OF THE LD CO UNSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION OF RS. 976986/- ON ACCOUN T OF UNRECORDED SALES MADE BY THE APPELLANT DURING THE BLOCK PERIOD . AFTER DUE CONSIDERATION OF THE MATTER, I HOLD THAT THE ASSESS ING OFFICER WAS NOT JUSTIFIED IN MAKING THIS ADDITION. THOUGH, THE APPE LLANT HAD NOT RECORDED THE SALES EFFECTED DURING THE BLOCK PERIOD BUT ADDI TION CANNOT BE MADE IN RESPECT OF ENTIRE AMOUNT OF SALES EFFECTED. IN MY V IEW, IT WOULD BE FAIR AND REASONABLE IF ADDITION IS MADE ON ACCOUNT OF UN DISCLOSED INCOME BY APPLYING NET PROFIT RATE OF 5% ON SALES EFFECTED EA CH YEAR. THUS, ADDITION MADE BY THE ASSESSING OFFICER IS RESTRICTED TO RS. 48850/- (RS. 976986/- X 5/100). YEAR WISE BREAKS UP OF ADDITION ON ACCOUNT OF PROFIT ON UNRECORDED SALES IS AS UNDER: - ASSESSMENT YEAR SALES AS PER APPELLANT NET PROFIT @ 5% 16 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 1989-90 3350/- 167/- 1990-91 14833/- 742/- 1991-92 31354/- 1568/- 1992-93 20178/- 1009/- 1993-94 28552/- 1428/- 1994-95 74227/- 3711/- 1995-96 212300/- 10615/- 1996-97 176104/- 8805/- 1997-98 208656/- 10433/- 1998-99 76220/- 3811/- 1999-2000 131212/- 6561/- THUS, THE APPELLANT WILL GET A RELIEF OF RS.928136/- (RS.976986/- MINUS RS.48850/-). 13. BEFORE US SIMILAR ARGUMENTS WERE MAINTAINED BY BOTH THE SIDES. FROM THE VERY FACTUAL MATRIX AND AFTER CONSIDERING THE YEAR- WISE BREAK-UP OF ADDITIONS ON ACCOUNT OF PROFIT ON UNRECORDED SALES, WE ARE OF TH E CONSIDERED OPINION THAT THE LD. CIT(A) HAS CORRECTLY DECIDED THIS ISSUE AND HAS DON E JUSTICE TO THE ASSESSEE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THIS FINDING OF LD. CIT(A) AND DISMISS GROUND NO.9 OF THIS APPEAL. 14. IN THE RESULT, APPEAL OF THE REVENUE STANDS DIS MISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH NOVEMBER, 2013 PBN/* 17 ITA NO.134/JU/2002 BLOCK PERIOD: 1989-90 TO 1999-2000 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR