Asstt.CIT,Central Cir.-1(1), Pune V. Shri Lajpalsingh M. Rajpal, Pune

ITA 1517/PUN/2004

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 66969 (ITAT-PUNE)
• Duration Of Justice: 8 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-12-2012
• Assessment Year: misc
• Appeal Filed On: 20-10-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: BHARAT H SHAH
• Keywords: Unexplained investment; Gift; Loose papers; Document seized; Valuation report; Block assessment; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.1517/PN/2004 (BLOCK PERIOD 1990-91 TO 2000-01) THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE1(1), PMT BUILDING, SWARGATE, PUNE. .. APPELLANT VS. LAJPALSINGH M. RAJPAL, 16, CYCLE SOCIETY, RASTA PETH, PUNE. .. RESPONDENT PAN NO. ACDTR 0545A ITA.NO.1539/PN/2004 (BLOCK PERIOD 01-04-1989 TO 14-03-2000) LAJPALSINGH M. RAJPAL, 83, SOPAN BAUG, PUNE 411001. PAN NO.ACDTR 0545A. .. APPELLANT VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE1(1), PMT BUILDING, SWARGATE, PUNE. .. RESPONDENT ASSESSEE BY : SHRI BHARAT H. SHAH REVENUE BY : SHRI S.K. SINGH DATE OF HEARING : 02-04-2013 DATE OF PRONOUNCEMENT : 30-04-2013 ORDER PER R.K. PANDA, AM : THE ABOVE CROSS APPEALS FILED BY THE REVENUE AND T HE ASSESSEE RESPECTIVELY ARE DIRECTED AGAINST THE ORDER DATED 1 2-08-2004 OF THE CIT(A)- I, PUNE RELATING TO BLOCK PERIOD 01-04-1989 TO 14-0 3-2000. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND CARRYING OUT THE BUSINESS OF TRANSPORTATION, FLEET OWNERS AND FINANCING ALONG WITH HIS WIFE AND SONS. A SEARCH U/S. 132 OF THE I .T. ACT WAS CONDUCTED AT 2 THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF THE ASSESSEE ON 14-03-2000 DURING WHICH LARGE NUMBER OF INCRIMINATING DOCUMENT S WERE FOUND SHOWING EVIDENCES OF SUPPRESSION OF INCOME. DURING THE COURSE OF SEARCH IN CASE OF THE ASSESSEE CASH AMOUNTING TO RS. 1,06, 400/- WAS FOUND BUT NOT SEIZED. GOLD WEIGHING 7115.500 GRAMS VALUED AT RS. 42,38,761 WAS FOUND DURING THE COURSE OF SEARCH OUT OF WHICH GOLD WEIGH ING 3755.57 GRAMS VALUED AT RS.16,19,826/- WAS SEIZED. DURING THE CO URSE OF SEARCH IT WAS FURTHER NOTICED THAT THE ASSESSEE HAS CONSTRUCTED A LAVISH BUNGALOW AND FURNISHED THE SAME WITH QUALITY FURNITURES AND INTE RIORS. THE INCRIMINATING PAPERS AND DOCUMENTS FOUND INDICATED UNACCOUNTED IN VESTMENT IN CONSTRUCTION, FURNITURE AND INTERIORS ETC. THE QUE RIES RAISED IN THE COURSE OF SEARCH REGARDING THE INVESTMENT IN THE PROPERTY WER E NOT PROPERLY EXPLAINED NOR THE ASSESSEE COULD EXPLAIN THE INVESTMENT WITH REFERENCE TO THE BOOKS OF ACCOUNTS. IN ORDER TO ASCERTAIN THE EXPENDITURE ON SUCH INVESTMENT THE SEARCH PARTY GOT THE VALUATION OF THE BUILDING DONE THROUGH A GOVERNMENT REGISTERED VALUER SRI NITIN M. LELE WHO SUBMITTED H IS REPORT ON 06-04-2000 DETERMINING VALUATION OF THE PROPERTY AT RS.65,24,6 46/- AS AGAINST THE VALUATION DECLARED BY THE ASSESSEE IN HIS BALANCE S HEET AT RS.29,43,600/-. 3. IN RESPONSE TO NOTICE U/S.158BC ON 23-01-2002 TH E ASSESSEE FILED HIS RETURN OF INCOME ON 18-03-2002 DECLARING UNDISCLOSE D INCOME OF RS.14,27,650/-. THIS REPRESENTED UNDISCLOSED INCOM E OF RS.12 LAKHS BEING OFFERED FOR TAXATION TO COVER UP THE ENTRIES MADE I N THE DIARIES/LOOSE PAPERS/DOCUMENTS FOUND DURING THE COURSE OF SEARCH. THE AMOUNT WAS OFFERED FOR THE BLOCK PERIOD THOUGH SHOWN IN THE A. Y. 2000-01. THE REST OF THE AMOUNT OF RS.2,27,650/- WAS COVERED UNDER THE R ETURN OF INCOME FOR 3 A.Y. 1999-2000 FOR WHICH THE RETURN WAS DUE ON 31-0 8-1999. HOWEVER, THE SAME WAS FILED ON 30-03-2001, I.E. AFTER THE DA TE OF SEARCH. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF JEWELLE RY FOUND AT THE RESIDENCE, THE INVESTMENT IN CONSTRUCTION/FURNITURE AND FIXTUR ES AND INVESTMENT IN PLOT OF LAND. SO FAR AS THE JEWELLERY FOUND AT THE RESI DENCE WEIGHING 7115.50 GRAMS VALUED AT RS.41,87,873/- IS CONCERNED THE ASS ESSEE EXPLAINED THE AVAILABILITY OF THE SAID JEWELLERY AS UNDER : TOTAL JEWELLERY FOUND 7115.50 GMS LESS : A) THE JEWELLERY AS PER WEALTH TAX/VDIS RETURN OF ASSESSEE AND HIS WIFE CHARANJEET KAUR RAJPAL 3785.730 GMS B) JEWELLERY OF MRS. CHABBRA (MOTHER IN LAW OF ASSESSEE) 262.820 GMS C) JEWELLERY OF GURUPREET KAUR RAJPAL (RECEIVED AS GIFT CONFORMATION FILED) 580 GMS D) JEWELLERY BELONGING TO TRJENDERJAUR RAJP AL (DAUGHTER) 250 GMS E) JEWELLERY OF JASMEET KAUR CHABRE 5 00 GMS F) JEWELLERY OF JASMEET CHABRA 100 GMS G) JEWELLERY OF GURPREETSINGH RAJPAL 10 0 GMS H) JEWELLERY OF HARDEEPSINGH RAJPAL 100 GMS --------------- 5678.550 -------------- BALANCE 1436.95 ------------- IT WAS SUBMITTED THAT THE VALUE OF THE ABOVE 1436 G MS AMOUNTING TO RS.8,45,718/- REPRESENT UNDISCLOSED INVESTMENT AND THE SAME MAY BE CONSIDERED AGAINST THE DISCLOSURE OF RS.12,00,000/- OFFERED FOR TAXATION IN THE BLOCK PERIOD. 4 5. HOWEVER, THE ASSESSING OFFICER WAS NOT FULLY CON VINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. SO FAR AS THE C LAIM OF JEWELLERY WEIGHING 100 GRAMS EACH BY THE PERSONS MENTIONED AT (F) TO (H) HE NOTED THAT THE PANCHANAMA MADE IN THE COURSE OF SEARCH DO ES NOT INDICATE THE FINDING OF SUCH JEWELLERY IN THE NAMES OF THOSE PER SONS. THEREFORE, HE TREATED THE JEWELLERY WEIGHING 1736.95 GRAMS VALUED AT RS.585.95 PER GRAM AMOUNTING TO RS.10,22,976/- AS UNDISCLOSED INVESTME NT IN THE GOLD FOR THE BLOCK PERIOD. SINCE THE ASSESSEE HAD DISCLOSED RS. 14,27,650/- WHICH INCLUDED RS.12 LAKHS ON ACCOUNT OF JEWELLERY THE AS SESSING OFFICER NOTED THAT THE SAME COVERS THE ENTIRE UNEXPLAINED INVESTM ENT IN GOLD AND ACCORDINGLY HE DID NOT MAKE ANY ADDITION. 6. THE ASSESSING OFFICER NOTED THAT DURING THE COUR SE OF SEARCH CERTAIN LOOSE PAPERS WERE SEIZED AT 16, CYCLE SOCIETY WHICH INDICATE POSSESSION RECEIPT OF THE IMMOVABLE PROPERTY SITUATED AT KATRA J, SURVEY NO.53/18/A. THE SEIZED PAPER INCLUDE THE COPY OF PURCHASE DEED DATED 31-03-1997 INDICATING THE TRANSACTION WITH THE ASSESSEE BEING PURCHASER OF LAND AND SMT. MATHUBAIL BABURAO KADAM, PANDURANG B. KADAM AN D HIS TWO SONS BEING OWNER OF THE LAND. THE VALUE MENTIONED IN TH E SALE AGREEMENT IS RS.15,75,000/-. ALTHOUGH THE SAID AGREEMENT IS UNS IGNED, HOWEVER, THE SEIZED DOCUMENTS CONTAIN THE POSSESSION RECEIPT GIV EN BY THE SELLER TO THE ASSESSEE. THIS DOCUMENT IS DULY SIGNED AND NOTORIS ED BY MR. Y.A. SHAIK. ACCORDING TO THESE PAPERS THE SELLER HAS RECEIVED T HE AMOUNT OF RS.7,87,500/-. THE AGREEMENT FURTHER SHOWS THAT TH ERE WAS ENCUMBRANCE OF A TENANT ON THE LAND AND THE OWNER HAS TAKEN THE RE SPONSIBILITY TO REMOVE THE ENCUMBRANCE AT HER COST AND GIVE PEACEFUL POSSE SSION WITHIN STIPULATED 5 PERIOD. THE OTHER PAPERS/DOCUMENTS SEIZED CLEARLY INDICATE THAT THE OWNER OF THE LAND HAS RECEIVED AN AMOUNT OF RS.3 LAKHS AN D FURTHER AN AMOUNT OF RS.4,87,500/- WAS TO BE RECEIVED BY THEM BEFORE 20- 04-1997. 6.1 FROM THE VARIOUS DOCUMENTS SEIZED THE ASSESSING OFFICER NOTED THAT THE ASSESSEE SHRI LAJPALSINGH RAJPAL HAS PAID RS.7, 87,500/- TO THE LAND OWNER SMT. MATHUBAIL B. KADAM AND OTHERS ON OR BEFO RE 14-05-1997 OUT OF WHICH AN AMOUNT OF RS.1,87,500/- WAS PAID BY CHEQUE AND THE BALANCE BY WAY OF CASH. ON VERIFICATION OF THE BALANCE SHEET THE ASSESSING OFFICER NOTED THAT AN AMOUNT OF RS.1,87,500/- WAS SHOWN TO HAVE BEEN PAID IN ADVANCE TO MATHUBAIL B. KADAM TOWARDS PLOT. THUS, THERE IS A DIFFERENCE OF RS.6 LAKHS IN THE INVESTMENT ON THIS ACCOUNT. REJE CTING THE EXPLANATION GIVEN BY THE ASSESSEE THAT ONLY AN AMOUNT OF RS.1,8 7,500/- HAS BEEN PAID BY CHEQUE AND NO CASH HAS BEEN PAID DUE TO INCUMBRANCE ON THE LAND THE ASSESSING OFFICER TREATED THE AMOUNT OF RS.6 LAKHS AS UNEXPLAINED INVESTMENT BY THE ASSESSEE FOR THE A.Y. 1998-99. 6.2 THE ASSESSING OFFICER SIMILARLY NOTED FROM THE SEIZED DOCUMENTS THAT THE ASSESSEE HAS PURCHASED A PROPERTY AT SURVEY NO. 53/7/A AT KATRAJ ADMEASURING 30.52R AND AT SURVEY NO.53/8/A ADMEASUR ING 33R. THE VARIOUS DOCUMENTS SEIZED SHOW THAT THE ASSESSEE HAS PURCHASED THE PROPERTY FOR A CONSIDERATION OF RS.4,22,000/-. ON BEING QUE STIONED BY THE ASSESSING OFFICER IT WAS SUBMITTED THAT THE ASSESSEE HAD DECL ARED RS. 4 LAKHS UNDER VDI SCHEME ON ACCOUNT OF INVESTMENT IN THIS PLOT AN D THE SAME IS APPEARING IN THE BALANCE SHEET AS ON 31-03-1998 AT RS.4 LAKHS. THUS, THE AMOUNT OF RS.22,000/- WAS FOUND TO BE UNDISCLOSED W HICH THE ASSESSING OFFICER ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE A.Y. 1998-99. 6 6.3 THE ASSESSING OFFICER FURTHER NOTED THAT THE SE IZED DOCUMENTS INDICATE UNACCOUNTED TRANSACTION OF THE ASSESSEE IN RELATION TO PURCHASE OF LAND FROM M.B.KADAM AND P.B. KADAM. ON ANALYSIS OF THE VARIOUS SEIZED DOCUMENTS HE NOTED THAT ON 16-07-1999 SRI P.B. KADA M HAS GIVEN ACKNOWLEDGEMENT FOR RECEIPT OF RS.50,000/- CONSISTI NG OF RS.35,000/- BEING CASH AND RS.15,000/- BEING CHEQUE RECEIVED FROM SHR I LAJPAL SINGH M. RAJPAL. SIMILARLY, SRI P.B. KADAM HAD GIVEN ACKNOW LEDGEMENT FOR RECEIPT OF RS.75,000/- ON 28-10-1999. AGAIN ANOTHER PAPER CONTAINS THE RECEIPT GIVEN BY SRI P.B. KADAM STATING THAT HE HAS RECEIVE D RS.25,000/- AND RS.75,000/- AS CASH (TOTAL RS.1 LAKH) FROM SRI L.M. RAJPAL AND A CHEQUE OF RS. 1 LAKH ON CITIZEN COOPERATIVE BANK LTD. NANAPET H, PUNE ON 18-02- 1998. 6.4 TO SUM UP THE ASSESSING OFFICER NOTED THAT VARI OUS SEIZED DOCUMENTS INDICATE THAT THE ASSESSEE HAD PAID AN AMOUNT OF RS .3,25,000/- TO SRI P.B. KADAM DURING THE PERIOD FROM 18-02-1998 ONWARDS, I. E. UPTO 31-02-1998 RS.2 LAKHS AND AN AMOUNT OF RS.1,25,000/- BETWEEN T HE PERIOD 1999 TO 2000 COVERING ASSESSMENT YEAR 1998-99 AND 2000-01 RESPEC TIVELY. ON VERIFICATION OF THE BALANCE SHEET FOR THE PERIOD 31 -03-2000 IT WAS SEEN THAT THE ASSESSEE HAS SHOWN THE INVESTMENT OF RS.1,15,00 0/- ON ACCOUNT OF ADVANCE TO MR. P.B. KADAM WITH THE OPENING BALANCE OF RS. 1 LAKH FOR THE PERIOD ENDING 31-03-1998 IN RESPECT OF ABOVE TRANSA CTION. SINCE THE ASSESSEE HAS PAID RS.3,25,000/- TO SRI P.B. KADAM R EPRESENTING RS.1,15,000/- BY CHEQUE AND RS.2,10,000/- BY CASH O UT OF HIS UNDISCLOSED INCOME OVER AND ABOVE THE AMOUNTS DISCUSSED EARLIER , THE ASSESSING OFFICER CONFRONTED THE SAME TO THE ASSESSEE. IN ABSENCE OF ANY SATISFACTORY 7 EXPLANATION THE ASSESSING OFFICER MADE ADDITION OF RS.1 LAKH FOR A.Y. 1998-99 AND RS.1,10,000/- FOR A.Y. 2000-01 AS UNACC OUNTED INCOME OF THE ASSESSEE. 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER CONFRONTED THE ASSESSEE REGARDING THE HUGE INVESTME NT HE HAS MADE TOWARDS THE CONSTRUCTION OF THE BUNGALOW, FURNITURE AND INT ERIORS. HE NOTED THAT NO BOOKS OF ACCOUNTS INDICATING THE INVESTMENT WERE PR ODUCED. THE BALANCE SHEET OF THE ASSESSEE FILED WITH THE DEPARTMENT SHO W INVESTMENT OF RS.29,43,600/- ON ACCOUNT OF CONSTRUCTION AND INTER IORS OF THE BUNGALOW AT SOPAN BAUG. TAKING INTO CONSIDERATION THE SUPERIOR QUALITY OF CONSTRUCTION AND FURNITURE THE ASSESSING OFFICER OBSERVED THAT THE VALUATION SHOWN IN THIS ACCOUNT WAS AT A LOWER SIDE. FURTHER, DURING THE COURSE OF SEARCH CERTAIN PAPERS WERE FOUND AND SEIZED AT 83, SOPAN B AUG WHICH ARE SEIZED AS PER BUNDLE NO.2 OF THE PANCHANAMA DATED 14-03-2000. HE NOTED THAT THE SEIZED PAPERS INDICATE THE FOLLOWING DETAILS TOWARD S COST OF CONSTRUCTION AND FURNITURE WHICH ARE NOT FOUND RECORDED IN THE BOOKS NOR SHOWN IN THE RETURNS OF INCOME FILED. PAGE NO. DESCRIPTION AMOUNT 1&2 SHIFTING OF RUBAL, MOORUM, SAND 82,757/- 3 PLUMBER BILL 6,495/- 4&5 BILL OF S.M. JADAV FOR SANITARY WORK 20,261/ - 7 TO 40 VARIOUS MEASUREMENT INDICATING BED ROOMS OF SONUBHAI, MAIN HALL, PAINTING WORK, POLISH WORK ETC. 41 LABOUR PAYMENT 1,28,500/- 41 (BACK S.) PAYMENT OF MATERIAL 3,07,590/- 47 BRICKS 15,400/- 50 BILL OF PATEL TRADERS 1,51,098/- 7.1 THE ASSESSING OFFICER NOTED FROM THE ABOVE DETA ILS THAT THESE ARE THE FEW INSTANCES FROM SEIZED MATERIAL IN WHICH THE BIL LS HAVE BEEN FOUND. THERE ARE CERTAIN OTHER PAPERS WHICH INDICATE THE E XPENSES ON FURNITURE AND 8 ELECTRONIC ITEMS ETC. ACCORDING TO THE ASSESSING O FFICER EVEN THOUGH THE PAYMENTS MIGHT HAVE BEEN MADE BY CHEQUE THE ASSESSE E COULD NOT PRODUCE THE RELEVANT BOOKS OF ACCOUNT AND HENCE THE ONLY RE COURSE LEFT WAS TO GET THE VALUATION MADE FROM THE VALUER. HE NOTED THAT SRI NITIN M. LELE, GOVERNMENT REGISTERED VALUER, CHARTERED ENGINEER, S URVEYORS AND LOSS ASSESSORS WAS CALLED UPON BY THE DEPARTMENT TO VALU E THE CONSTRUCTION AND FURNITURE AND FITTINGS IN THE BUNGALOW WHO CARRIED OUT AND SUBMITTED HIS REPORT ON 06-04-2010 VALUING THE BUILDING AT RS.77, 46,272/-. HOWEVER, AFTER CONSIDERING THE INDEXATION YEAR-WISE VALUATIO N WAS MADE WHICH IS AS UNDER : PERIOD FROM AS PER VALUER RS. AS PER ASSESSEE 92-93 1,41,486/- -- 93-94 NIL 4,55,000/- 94-95 4,56,660/- 5,25,000/- 95-96 5,58,512/- 5,30,000/- 96-97 6,54,708/- 4,85,400/- 97-98 7,02,901/- 2,70,000/- 98-99 19,42,687/- 1,12,400/- 99-2000 20,67,742/- 1,85,800/- TOTAL COST 65,24,646/- 25,36,600/- DECLARED UNDER VDIS + FOR THE PERIOD 94-96 5,66,000/- 31,29,600/- 7.2 THE ASSESSING OFFICER CONFRONTED THE ASSESSEE R EGARDING THE VALUATION MADE BY THE DVO WHO OBJECTED TO THE SAME ON THE GROUND THAT THE DEPARTMENTMENTAL VALUER HAS TAKEN 1468 SQ.FT. E XCESS AND FURTHER THE BASIS OF COST OF CONSTRUCTION ASSUMED BY THE DVO AT RS.595/- PER SQ.FT. IS ON THE HIGHER SIDE. IT WAS SUBMITTED THAT THE ASSE SSEE HAD PURCHASED MATERIALS AT VERY CHEAPER RATE AND HAS SAVED ALMOST 35% TO 50% AND THE RATE CONSIDERED BY THE ASSESSEES REGISTERED VALUER IS AT RS.425/- WHICH INCLUDES EXTRA VALUATION ON MARBLE FLOORING ETC. I T WAS SUBMITTED THAT THE 9 COST OF BOREWELL, COMPOUND WALL, TOILET, SANITARY W ARES, FURNITURE ETC. WERE EXTRAPOLATED AND VALUED BY THE DVO. IT WAS FURTHER SUBMITTED THAT NO PAPERS HAVE BEEN SEIZED TO INDICATE THAT ANY WORK O F CONSTRUCTION, FURNITURE IN EXCESS OF AMOUNTS SHOWN BY THE ASSESSEE HAS BEEN DONE. 7.3 AFTER RECEIVING THE LETTER FROM THE ASSESSEE TH E ASSESSING OFFICER AGAIN REFERRED THE MATTER TO THE DVO CALLING FOR HI S COMMENTS WHO OBJECTED TO THE SAME AND STUCK TO HIS OWN VALUATION. AFTER CONSIDERING THE OBJECTIONS OF THE ASSESSEE AND THE REPORT OF THE DV O THE ASSESSING OFFICER CONSIDERED THE COST OF CONSTRUCTION OF THE BUILDING AND FURNITURE AT RS.65,24,646/-. AFTER DEDUCTING THE AMOUNT OF RS.29 ,43,600/- DECLARED BY THE ASSESSEE IN THE BALANCE SHEET, THE ASSESSING OF FICER MADE ADDITION OF RS.35,81,046/- AS UNEXPLAINED INVESTMENT BY THE ASS ESSEE. 8. BEFORE THE CIT(A) THE ASSESSEE CHALLENGED THE AD DITION ON ACCOUNT OF JEWELLERY, ADDITION ON ACCOUNT OF INVESTMENT IN PLO T AND ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY. THE AS SESSEE ALSO CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN CHARGING SUR CHARGE @10% ON THE TAX COMPUTED FOR THE BLOCK PERIOD. AFTER CONSIDERING T HE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD. CIT(A) GAVE PART RELIEF ON ACCOUNT OF ADDITION OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY. HE DETER MINED THE COST OF THE HOUSE PROPERTY AT RS.40 LAKHS AND AFTER DEDUCTING T HE INVESTMENTS SHOWN BY THE ASSESSEE HE SUSTAINED THE ADDITION OF RS.10,56, 400/-. THUS, HE GAVE A RELIEF OF RS.25,24,646/- ON ACCOUNT OF INVESTMENT I N CONSTRUCTION OF THE HOUSE PROPERTY AND FURNITURE AND FIXTURES. 10 8.1 SO FAR AS THE ADDITION ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN JEWELLERY IS CONCERNED THE LD. CIT(A) ENHANCED THE SAME. WHILE DOING SO, THE LD.CIT(A) APART FROM CONFIRMING THE ADDITION OF 300 GMS CLAIMED TO BE BELONGING TO THE 3 MALE MEMBERS HELD THAT THE ASSES SING OFFICER HAS WRONGLY ALLOWED DEDUCTION OF 500 GMS JEWELLERY BELO NGING TO JASMITKAUR CHABRA. HE HELD THAT THE SAME REMAINS UNEXPLAINED AND NO BENEFIT OF CIRCULAR COULD BE GIVEN AT THE ASSESSMENT STAGE. F URTHER, THE ASSESSING OFFICER HAD OVERLOOKED THE FACT THAT DISCLOSURE OF JEWELLERY WAS AT RS.12 LAKHS AND NOT RS.10.22 LAKHS. SINCE THE SEIZED JEW ELLERY WEIGHING 4085.480 GMS HAS BEEN VALUED AT RS.17,29,015/- HE D IRECTED THE ASSESSING OFFICER TO ENHANCE THE AMOUNT BY RS.2,11,630/- FOR THE 500 GMS JEWELLERY STATED TO BE BELONGING TO JASMITKAUR CHABRA. 8.2 SO FAR AS THE ADDITION ON ACCOUNT OF INVESTMENT IN PLOT PURCHASED FROM SRI P.B. KADAM HE UPHELD THE ADDITION MADE BY THE AO. HE ALSO SUSTAINED THE SURCHARGE LEVIED BY THE ASSESSING OFF ICER ON THE TAX COMPUTED FOR THE BLOCK ASSESSMENT. 8.3 AGGRIEVED WITH SUCH PART RELIEF GIVEN BY THE CI T(A) THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US WITH TH E FOLLOWING GROUNDS : GROUNDS BY ASSESSEE : 1. THE LEARNED OFFICERS ERRED IN FACTS AND CIRCUMS TANCES OF THE CASE IN MAKING ADDITION OF RS.8,32,000/- ON ACCOUNT OF ALLE GED INVESTMENT IN PLOT PURCHASED FROM MR. P.B. KADAM. THE ADDITION SO MAD E MAY KINDLY BE DELETED. 2. WITHOUT PREJUDICE TO THE ABOVE AND ON FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION TO THE EXTENT OF RS.2,32,000/- (O UT OF RS.8,32,000/-) ON ACCOUNT OF ALLEGED PAYMENT FOR PURCHASE OF PLOT BE HELD TO BE COVERED IN THE UNDISCLOSED INCOME OF RS.12.00 LACS OFFERED IN THE RETURN OF TH E BLOCK PERIOD AND HENCE BE DELETED. 11 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND AS PE R PROVISION OF LAW ADDITION OF RS.10,56,400/- SUSTAINED BY THE LD. CIT (A) ON ACCOUNT OF ALLEGED EXPENDITURE IN FURNITURE AND FITTINGS AND CONSTRUCT ION OF BUNGALOW BASED ON REPORT OF PRIVATE VALUER BE DELETED. JUST AND PROP ER RELIEF MAY KINDLY BE GRANTED. 4. THE LD. ASSESSING OFFICERS BELOW ERRED IN CHARGI NG SURCHARGE @10% ON THE TAX COMPUTED FOR THE BLOCK PERIOD @60% AS PER T HE PROVISIONS OF SECTION 113. THE SURCHARGE @10% LEVIED MAY KINDLY BE DELET ED. 5. ON FACTS AND CIRCUMSTANCES OF THE CASE AND AS PE R THE PROVISION OF LAW ADDITION ON ACCOUNT OF JEWELLERY BE RESTRICTED TO R S.8,45,718/- (1436.95 GRAMS) INSTEAD OF RS.10,22,976/- (1736.95 GRAMS) BY ALLOWI NG BENEFIT OF 100 GRAMS EACH FOR JEWELLERY HELD BY 3 MALE MEMBERS AS AVAILABLE A S PER THE CIRCULAR OF CBDT. THE ENHANCEMENT OF RS.2,11,830/- MADE BY THE LD. CI T(A) MAY KINDLY BE DELETED. 6. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CAS E AND AS PER PROVISIONS OF LAW IT BE HELD THAT VARIOUS ADDITIONS MADE BY TH E LEARNED ASSESSING OFFICER WHILE DETERMINING THE IMPUGNED AND ALLEGED UNDISCLO SED INCOME IS BEYOND THE SCOPE AND PROVISIONS CONTAINED IN CHAPTER XIV B GOV ERNING THE BLOCK ASSESSMENT. 7. THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE, RAISE ANY GROUND OF APPEAL AT THE TIME OF HEARING. GROUNDS BY REVENUE : I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN THE LAW THE LD. CIT(A) ERRED IN IGNORING THE VALUATION REPORT OF DV O WHO VALUED COST OF CONSTRUCTION OF BUNGLOW AT SOPAN BAUG ALONG WITH FU RNITURE AND FIXTURES AT RS.65,24,646/- AND IN DIRECTING THE ASSESSING OFFIC ER TO TAKE THE COST OF CONSTRUCTION INCLUDING FURNITURE AND FIXTURES AT RS .40,00,000/- WITHOUT ASSIGNING ANY SCIENTIFIC BASIS FOR THE SAME, THEREBY ALLOWING RELIEF TO THE EXTENT OF RS.25,24,646/-. II. IN ALLOWING THE ABOVE RELIEF THE CIT(A) ERRED I N DIRECTING THE AO TO TAKE AREA OF CONSTRUCTION AT 4573 SQ.FT. IN PLACE OF 547 4 SQ.FT. MEASURED BY DVO AND IN IGNORING THE FACT THAT APPROVED PLAN WAS NOT SUB MITTED BY THE ASSESSEE TO THE DVO. III. FURTHER THE CIT(A) ERRED IN DIRECTING THE ASSE SSING OFFICER TO TAKE THE COST OF CONSTRUCTION OF RS.500 PER SQ.FT. IN PLACE OF RS.595 PER SQ.FT. TAKEN BY THE DVO, WITHOUT ASSIGNING ANY COGENT REASON. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET-ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR VA RY ANY OF THE GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 9. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE ARGUI NG GROUNDS OF APPEAL NO.1 & 2 SUBMITTED THAT THE AMOUNT OF RS.8,32,000/- CONSISTS OF TWO PARTS, I.E. RS.6 LAKHS AND RS. 2,32,000/-. SO FAR AS RS.6 LAKHS IS CONCERNED THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE SAME. 12 HOWEVER, FOR THE ADDITION ON ACCOUNT OF RS.2,32,000 /- HE SUBMITTED THAT IN CASE ANY BENEFIT IS GIVEN OUT OF ADDITION ON ACCOUN T OF INVESTMENT IN JEWELLERY THEN CORRESPONDING AVAILABLE FUNDS MAY BE SET OFF AND CONSEQUENTIAL RELIEF MAY BE GRANTED TO THE ASSESSEE . 9.1 SO FAR AS GROUND OF APPEAL NO.5 IS CONCERNED TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER CBDT INSTRUCTION NO.288/63/93-IT(INV), DT. 11-05-1994 CREDIT FOR 100 GMS OF JEWELLERY SHOU LD BE GIVEN TO EACH MALE MEMBER. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIE D IN REJECTING THE CLAIM OF THE ASSESSEE TOWARDS THE BENEFIT OF 100 GMS EACH FOR JEWELLERY HELD BY 3 MALE MEMBERS. FOR THIS PROPOSITION HE RELIED ON TH E DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF RAJENDRA C. SA HA VS. JCIT REPORTED IN 158 TAXMANN (MAGAZINE) 170. HE ALSO STRONGLY CHALL ENGED THE ENHANCEMENT OF 500 GMS OF JEWELLERY BELONGING TO MR S. JASMITKAUR CHABRA. HE SUBMITTED THAT THE ASSESSING OFFICER HAS ACCEPTE D THE SAME AND THEREFORE NO ADDITION IS CALLED FOR. 10. SO FAR AS GROUND APPEAL NO.3 BY THE ASSESSEE AN D THE ONLY GROUND OF APPEAL BY THE REVENUE IS CONCERNED THE LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION WAS MADE BY THE ASSESS ING OFFICER ON THE BASIS OF A REGISTERED VALUERS REPORT AND THE ADDITION WA S NOT BASED ON THE BASIS OF ANY SEIZED DOCUMENT OR THE DVO. HE SUBMITTED THAT IN CASE OF A BLOCK ASSESSMENT ADDITION HAS TO BE MADE BASED ON INCRIMI NATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH AND NO ADDITION C AN BE MADE MERELY ON THE BASIS OF PRESUMPTIONS AND SURMISES. HE SUBMI TTED THAT THE ASSESSEE HAS PRODUCED A COPY OF THE VALUATION REPORT DONE BY ASSESSEES REGISTERED VALUER AND THE VALUE DETERMINED BY THE VALUER TALLI ES WITH THE AMOUNT OF 13 CONSTRUCTION SHOWN IN THE BALANCE SHEET. THEREFORE , NO ADDITION UNDER THE CIRCUMSTANCES SHOULD BE MADE. 11. SO FAR AS CHARGING OF SURCHARGE ON THE TAX COMP UTED HE SUBMITTED THAT NO DOUBT THE ISSUE IS COVERED AGAINST THE ASSE SSEE BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS RAJIV B HATARA REPORTED IN 310 ITR 105. HOWEVER, SINCE THE HONBLE SUPREME COURT HAS REFERRED THE MATTER TO A LARGER BENCH AS REPORTED IN THE CASE OF CIT VS. VATIKA TOWNSHIP PVT. LTD. REPORTED IN 318 ITR 338, THEREFORE, A DIR ECTION MAY BE GIVEN TO THE ASSESSING OFFICER TO DELETE THE SURCHARGE IN CASE T HE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 12. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER. SO F AR AS THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT CREDIT OF 300 GMS BE GIVEN IN CASE OF 3 MALE MEMBERS THE LD. DEPARTMENTAL REPRESENTATIVE SU BMITTED THAT THE CBDT CIRCULAR IS FOR NON-SEIZURE OF JEWELLERY AND I T DOES NOT SPEAK OF EXPLAINING THE SOURCE OF THE SAID JEWELLERY. HE, T HEREFORE, SUBMITTED THAT THE ASSESSING OFFICER AND CIT(A) WERE JUSTIFIED IN NOT ACCEPTING THE CLAIM OF THE ASSESSEE FOR GIVING CREDIT OF 300 GMS OF JEW ELLERY FOR THE 3 MALE MEMBERS. 13. SO FAR AS THE ARGUMENT OF THE LD. COUNSEL FOR T HE ASSESSEE THAT DUE CREDIT OF 500 GMS OF JEWELLERY SHOULD BE GIVEN IN C ASE OF THE DAUGHTER-IN- LAW OF THE ASSESSEE MRS. JASMIT KAUR CHABRA THE LD. DEPARTMENTAL REPRESENTATIVE REFERRED TO THE ORDER OF THE CIT(A) WHERE HE HAD GIVEN THE REASONS FOR REJECTING THE CLAIM. 14 14. SO FAR AS THE RELIEF GIVEN BY THE LD. CIT(A) ON ACCOUNT OF INVESTMENT IN CONSTRUCTION OF THE HOUSE PROPERTY IS CONCERNED HE SUBMITTED THAT WHERE THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT TOWARDS CONSTRUCTION/INVESTMENT IN HOUSE PROPERTY/BUNGALOW ETC. ADDITION CAN BE MADE ON THE BASIS OF ESTIMATION EVEN IN CASE OF BLO CK ASSESSMENT. HE SUBMITTED THAT IN THE INSTANT CASE THE LD. CIT(A) I GNORED THE VALUATION REPORT OF THE VALUER APPOINTED BY THE DEPARTMENT WH O VALUED THE PROPERTY INCLUDING FURNITURE AND FIXTURES AT RS.65.25 LAKHS. THEREFORE, HE IS NOT CORRECT IN DIRECTING THE ASSESSING OFFICER TO DETER MINE THE COST OF CONSTRUCTION AT RS.40 LAKHS. FURTHER, HE ALSO ERRE D IN DIRECTING THE ASSESSING OFFICER TO TAKE THE AREA OF CONSTRUCTION OF 4573 SQ.FT. IN PLACE OF 5474 SQ.FT. MEASURED BY THE DVO AND FURTHER DIRECTI NG THE ASSESSING OFFICER TO TAKE THE COST OF CONSTRUCTION AT 500 PER SQ.FT. IN PLACE OF 595 PER SQ.FT. 15. SO FAR AS THE ISSUE RELATING TO CHARGING OF SUR CHARGE ON THE TAX ON UNDISCLOSED INCOME IS CONCERNED HE SUBMITTED THAT T HE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE BY THE DECISION OF HON BLE SUPREME COURT AND THEREFORE THE GROUND OF THE ASSESSEE HAS TO BE DISM ISSED. 16. AS REGARDS THE ADDITION OF RS.8,32,000/- IS CON CERNED HE SUBMITTED THAT THE LD. COUNSEL FOR THE ASSESSEE HAS ALREADY A CCEPTED ADDITION OF RS.6 LAKHS. SO FAR AS THE BALANCE ADDITION OF RS.2,32,0 00/- IS CONCERNED HE SUBMITTED THAT CIT(A) HAS ALREADY GIVEN APPROPRIATE RELIEF ON ACCOUNT OF ADDITIONAL INCOME. THEREFORE, NO RELIEF IS PERMISS IBLE ON THIS ISSUE. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. 15 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. SO FAR AS THE GROUNDS O F APPEAL NO.1 AND 2 OF THE ASSESSEE IS CONCERNED CHALLENGING THE ADDITION OF R S.8,32,000/- ON ACCOUNT OF INVESTMENT IN PLOT ETC. WE FIND THE SAME CONSIST S OF 3 ADDITIONS NAMELY, RS.6 LAKHS ON ACCOUNT OF LAND PURCHASED FROM MR. P. B. KADAM, RS.22,000/- ON ACCOUNT OF LAND PURCHASED AT KATRAJ AND RS.1,22, 000/- FOR LAND PURCHASED FROM M.B. KADAM. SO FAR AS THE AMOUNT OF ADDITION OF RS.6 LAKHS IS CONCERNED THE LD. COUNSEL FOR THE ASSESSEE HAS CONC EDED THE SAME. THEREFORE, ADDITION TO THE EXTENT OF RS.6 LAKHS IS CONFIRMED. SO FAR AS THE BALANCE ADDITION OF RS.2,32,000/- IS CONCERNED IT I S THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAD DECLARED UNDISCLOSED INCOME OF RS.12 LAKHS AND THEREFORE DUE SET OFF SHO ULD BE GIVEN. SINCE THE ASSESSEE HAS NO EXPLANATION FOR THE ADDITION OF RS. 2,32,000/- ON ACCOUNT OF UNEXPLAINED PAYMENT, THEREFORE, THE SAME IS SUSTAIN ED. HOWEVER, ADDITION, IF ANY, CAN BE CONSIDERED ONLY IF THE ASSESSEE GETS SOME SURPLUS OUT OF THE UNDISCLOSED INCOME OF RS.12 LAKHS WHICH ARE CONSIDE RED IN THE FOLLOWING PARAGRAPHS. 18. NOW COMING TO GROUND OF APPEAL NO.5 OF THE ASSE SSEE WHICH RELATES TO ADDITION ON ACCOUNT OF JEWELLERY WE FIND OUT OF THE JEWELLERY FOUND AT 7115.50 GMS THE ASSESSEE EXPLAINED 5678.50 GMS WHIC H INCLUDED 500 GMS OF JEWELLERY BELONGING TO JASMITKAUR CHABRA AND 300 GMS OF JEWELLERY BELONGING TO 3 MALE MEMBERS OF THE FAMILY. WE FIND THE ASSESSING OFFICER REJECTED 300 GMS OF JEWELLERY AND MADE ADDITION ON ACCOUNT OF JEWELLERY WEIGHING 1736.95 GMS VALUED AT RS.10,22,976/-. IN APPEAL, THE LD.CIT(A) 16 ENHANCED THE INCOME OF THE ASSESSEE ON ACCOUNT OF J EWELLERY ON THE GROUND THAT THE ASSESSING OFFICER HAD WRONGLY CONSIDERED T HE SAME. HE NOTED THAT MRS. JASMITKAUR CHABRA IS NOT A WEALTH TAX ASSESSEE AND IT WAS EXPLAINED THAT THE JEWELLERY WAS LEFT BY MOTHER-IN-LAW WHO EX PIRED 14 YEARS BACK. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE THE LD. CIT(A) ISSUED AN ENHANCEMENT NOTICE AND AFTER CONSIDERING THE REPLY GIVEN BY THE ASSESSEE ENHANCED THE ADDITION TO THE EXTENT OF 500 GMS BY M AKING THE FOLLOWING OBSERVATION : 3.3 I HAVE GONE THROUGH THE SUBMISSIONS OF THE APP ELLANT AND ALSO THE FACT THAT THE APPELLANT HAD MADE A DISCLOSURE OF RS.12 L ACS AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD IN THE LETTER DATED 26.02.2002 INC LUDING VALUE OF JEWELLEY AT RS.12 LACAS (PLEASE REFER TO PARA 2 OF PAGE 5 OF AS SESSMENT ORDER). THE ENHANCEMENT OF 500 GMS OF JEWELLERY BELONGING TO JA SMITKAUR CHABRA IS, THEREFORE, DIRECTED TO BE MADE AS THE SAME REMAINS UNEXPLAINED AND NO BENEFIT OF CIRCULAR COULD BE GIVEN AT THE ASSESSMENT STAGE. I T MAY ALSO BE STATED HERE THAT IN PARA 2 OF PAGE 5, THE ASSESSING OFFICER HAS OVER LOOKED THE FACT THAT DISCLOSURE WAS OF JEWELLERY WORTH RS.12 LACS AND NOT RS.10.22 LACS. AS THE SEIZED JEWELLERY WEIGHING 4085.480 GRAMS HAS BEEN VALUED AT RS.17,29 ,015/-, THE ENHANCEMENT IS DIRECTED TO BE MADE AT RS.2,11,630/- FOR THE 500 GR AMS JEWELLERY STATED TO BE BELONGING TO JASMITKAUR CHABRA. 19. FROM THE STATEMENT RECORDED OF THE ASSESSEE ON 15-03-2000 WE FIND THE ASSESSEE IN REPLY TO QUESTION NO.15 HAS STATED THAT SOME OF THE JEWELLERY HAVE BEEN RECEIVED FROM DAUGHTER-IN-LAWS PARENT SI DE. THEREFORE, WE FIND SOME FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SOME CREDIT SHOULD BE GIVEN ON ACCOUNT OF JEWELLERY BELO NGING TO THE DAUGHTER-IN- LAW OF THE ASSESSEE. SINCE THE ASSESSEE HAS DECLAR ED ADDITIONAL INCOME OF RS. 14,27,650/- WHICH INCLUDES RS. 12LAKHS ON ACCOU NT OF JEWELLERY AND SINCE THE ASSESSING OFFICER HAS ALREADY MADE ADDITI ON OF RS.10,22,976/-, THEREFORE, JEWELLERY TO THE TUNE OF RS.1,77,024/- S HOULD BE GIVEN CREDIT. WE, THEREFORE, ARE OF THE CONSIDERED OPINION THAT NO AD DITION ON ACCOUNT OF JEWELLERY HAS TO BE MADE OVER AND ABOVE RS.12 LAKHS WHICH THE ASSESSEE HAS 17 DECLARED. THE ASSESSING OFFICER HAS TO RECOMPUTE TH E ADDITION ON THIS ACCOUNT INCLUDING THE ADDITION, IF ANY, ON ACCOUNT OF ADDITION OF RS.2,32,000/- ON ACCOUNT OF PURCHASE OF LAND. THE GROUND APPEAL NO.5 BY THE ASSESSEE IS ACCORDINGLY PARTLY-ALLOWED. 20. SO FAR AS THE GROUND RELATING TO CHARGING OF SU RCHARGE @10% ON TAX COMPUTED FOR THE BLOCK PERIOD WE FIND THE SAME IS D ECIDED AGAINST THE ASSESSEE BY THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF RAJIV BHATARA (SUPRA). HOWEVER, IN CASE THE SAME IS REVE RSED BY THE LARGER BENCH OF THE HONBLE SUPREME COURT AT A LATER DATE THE AS SESSEE MAY MOVE APPROPRIATE APPLICATION BEFORE THE AUTHORITIES AS P ER LAW. HOWEVER, AS ON TODAY THE ASSESSEE IS LIABLE TO PAY SURCHARGE ON TH E TAX COMPUTED. THEREFORE, THIS GROUND BY THE ASSESSEE IS DISMISSED . 21. SO FAR AS GROUND OF APPEAL NO.3 OF THE ASSESSEE AND THE GROUNDS OF APPEAL BY THE REVENUE ARE CONCERNED WE FIND THE SAM E RELATES TO THE PART RELIEF GRANTED BY THE CIT(A) ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER TOWARDS UNDISCLOSED INVESTMENT IN HOUSE PRO PERTY. SINCE THE ASSESSEE DOES NOT MAINTAIN REGULAR BOOKS OF ACCOUNT S TOWARDS CONSTRUCTION OF THE HOUSE PROPERTY THE ASSESSING OFFICER ON THE BASIS OF THE VALUATION REPORT OF THE REGISTERED VALUER APPOINTED BY THE DE PARTMENT DURING THE COURSE OF SEARCH TOOK THE VALUE OF THE PROPERTY AT RS.65,24,646/-. AFTER DEDUCTING THE AMOUNT OF RS.29,43,600/- DECLARED BY THE ASSESSEE IN THE BALANCE SHEET TOWARDS INVESTMENT THE ASSESSING OFFI CER TREATED THE BALANCE AMOUNT OF RS.35,81,046/- AS UNEXPLAINED INVESTMENT BY THE ASSESSEE IN CONSTRUCTION OF THE PROPERTY, FURNITURE AND INTERIO RS AT 83, EMPRESS VIEW SOCIETY, SOPAN BAUG, PUNE FOR THE BLOCK PERIOD. 18 22. WE FIND THE LD.CIT(A) DETERMINED THE VALUE OF T HE PROPERTY AT RS.40 LAKHS. AFTER DEDUCTING THE AMOUNTS DISCLOSED BY TH E ASSESSEE AT RS.29,43,600/- HE SUSTAINED ADDITION OF RS.10,56,40 0/-. WHILE DOING SO, THE LD. CIT(A) CONSIDERED BOTH THE VALUATION REPORTS, I .E. ONE FILED BY THE REGISTERED VALUER APPOINTED BY THE REVENUE AND THE OTHER ONE FILED BY THE REGISTERED VALUER APPOINTED BY THE ASSESSEE. HE HA S CONSIDERED THE OBJECTIONS OF THE ASSESSEE REGARDING THE VALUATION MADE BY THE VALUER APPOINTED BY THE REVENUE AND ALSO CONSIDERED THE OB JECTIONS OF THE ASSESSING OFFICER. HE HAD EXAMINED BOTH THE VALUER S. HE FURTHER TOOK INTO ACCOUNT THE REPLY GIVEN BY THE ASSESSEE IN HIS STAT EMENT RECORDED U/S.132(4) ON 15-03-2000 WHEREIN HE HAD STATED THAT THE PLOT A T 83, EMPRESS VIE SOCIETY, SOPAN BAUG, PUNE WAS PURCHASED BY HIM IN 1 992 AND THE CONSTRUCTED AREA OF 4400 SQ.FT. WAS STARTED IN 1994 AND THE ESTIMATED COST OF CONSTRUCTION AS WELL AS THAT OF INTERIORS WAS AT RS .24.50,000/- AND THAT HE HAS MOVED INTO THE PROPERTY IN 1999 ITSELF. HE HAD FURTHER CONSIDERED THE REPLY THAT PART OF THE AMOUNTS RECORDED IN THE DIAR IES HAVE BEEN PAID IN CASH AND PART OF THE PAYMENTS MADE BY CHEQUES. THE ASSE SSEE HAD ALSO STATED IN RESPONSE TO QUESTION NO.18 THAT ONE MR. VIJU PATIL TOOK CARE OF THE INTERIOR CONSTRUCTION AND THE CIT(A) OBSERVED THAT THE ASSES SING OFFICER DID NOT MAKE ANY ENQUIRIES ON THE INTERIOR CONSTRUCTION AND RELIED UPON BASICALLY ON THE REPORT OF MR. N.M. LELE, REGISTERED VALUER WHO WAS TAKEN BY THE SEARCH PARTY DURING SEARCH ITSELF. 23. WE FIND THE LD.CIT(A) DECIDED THE ISSUE CONSIDE RING THE AREA OF THE BUILDING, RATE OF CONSTRUCTION AND PERIOD OF CONSTR UCTION ETC. AND NOTED THAT THE DEPARTMENTAL VALUER HAD CONSIDERED THE AREA AT 5474 SQ.FT. WHEREAS THE 19 VALUER APPOINTED BY THE ASSESSEE HAS ARRIVED AT THE AREA AT 4573 SQ.FT. HE HAD FURTHER OBSERVED THAT THE DEPARTMENTAL VALUER W AS NOT ABLE TO JUSTIFY THE AREA TAKEN BY HIM AND AS PER HIS OWN ADMISSION HE D ID NOT HAVE THE APPROVED PLAN WHICH ALSO GOES TO SHOW THAT THE FIGU RES OF AREA TAKEN BY HIM ARE NOT RELIABLE. 24. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT C ONVERT THE ABOVE FINDINGS GIVEN BY THE LD. CIT(A). HE ALSO COULD NO T CONTROVERT THE OBSERVATION GIVEN BY THE LD. CIT(A) THAT THE ANNEXU RE O-1 HAS NOT BEEN PREPARED BY THE DEPARTMENTAL VALUER ALTHOUGH AS PER RULE 8D IT IS REQUIRED TO BE PREPARED BY HIM. 25. SO FAR AS THE RATE OF CONSTRUCTION IS CONCERNED WE FIND THE LD.CIT(A) HAS TAKEN THE RATE PER SQ.FT. AT RS.500/- AS AGAINS T RS.595 PER SQ.FT. TAKEN BY THE DVO AND RS.425 PER SQ.FT. TAKEN BY THE VALUER A PPOINTED BY THE ASSESSEE. HE HAD GIVEN THE OBSERVATION THAT MR. LE LE HAS DETERMINED HIS VALUE AS PER CBDT CIRCULAR WHEREAS THE VALUER APPOI NTED BY THE ASSESSEE HAS TAKEN THE RATE ON THE BASIS OF THE SEIZED PAPER S AS WELL AS THE MARKET CONDITIONS. SO FAR AS THE PERIOD OF CONSTRUCTION I S CONCERNED WE FIND THE LD. CIT(A) HAS CONSIDERED THE TWO TECHNICAL REPORTS AND ALSO CONSIDERED THE FACT THAT THE ASSESSEE HAS MOVED INTO THE BUNGALOW IN 1999. HE HAS TAKEN INTO ACCOUNT THE REPORT OF THE DVO THAT THE MAJOR C ONSTRUCTION IS DURING THE PERIOD 1998-99 AND 1999-2000 AS WELL AS THE REPORT OF THE VALUER APPOINTED BY THE ASSESSEE THAT MAJOR CONSTRUCTION HAS TAKEN P LACE DURING THE PERIOD 1993 TO 1995 WE FIND THE LD.CIT(A) AFTER CONSIDERIN G THE ADMISSION OF THE ASSESSEE THAT THE COST OF CONSTRUCTION IS AROUND 31 .29 LAKHS HAS ESTIMATED THE VALUE OF THE BUILDING AT RS.40 LAKHS. THERE IS NO DISPUTE TO THE FACT THAT 20 THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACC OUNTS TOWARDS CONSTRUCTION OF THE BUNGALOW. THEREFORE, WE DO NOT FIND ANY FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT NO ADDITION CAN BE MADE IN A BLOCK ASSESSMENT ON ESTIMATE BASIS. WE F IND THE ORDER OF THE LD. CIT(A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E IS JUST AND REASONABLE WHO HAS CONSIDERED ALL THE ASPECTS INCLUDING THE AR EA OF THE BUNGALOW, THE PERIOD OF CONSTRUCTION AND THE RATE PER SQ.FT. OF C ONSTRUCTION CONSIDERING THE MARKET CONDITION AS WELL AS THE DOCUMENTS SEIZED DU RING THE COURSE OF SEARCH. WE THEREFORE UPHOLD THE ORDER OF THE LD. C IT(A) ON THIS ISSUE. THE GROUNDS RAISED BY THE ASSESSEE AS WELL AS THE GROUN DS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 26. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH OF APRIL, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED THE 30 TH APRIL 2013. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // PRIVATE SECRETARY, INCOME TAX APPELLATE T RIBUNAL, PUNE. 21