V.K.PURI., Kolkata V. ACIT Cir - 26,kolkata., Kolkata

ITA 1904/KOL/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3243 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 26-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALAK NAG JCIT SRDR
• Assessee Lawyers: P K MIMMATSINGHKA
• Keywords: Gift; Document seized; Source of fund; Corroborative evidences; Documents seized
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1904 - 1905 / KOL / 2012 ASSESSMENT YEARS :2002-03 & 1997-98 V.K.PURI P.K.HIMMATSINGHKA, AA-4, SALT LAKE, KOLKATA 700 064 [ PAN NO. AFSPP 9547 C ] V/S . ACIT, CIRCLE-26, 169, AJC BOSE ROAD, KOLKATA - 14 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI P.K.MIMMATSINGHKA, AR /BY RESPONDENT SHRI ALAK NAG, JCIT, SR-DR /DATE OF HEARING 09-12-2015 /DATE OF PRONOUNCEMENT 05-02-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEALS BY THE ASSESSEE ARE ARISING OUT OF OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA IN APPEAL NO.2 &3 REST/CIT(A)- XIV/KOL/10-11 DATED 19.11.2012. ASSESSMENTS WERE FR AMED BY ITO WARD- 3(2), KOLKATA U/S 144 / 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 31.03.2005 FO R ASSESSMENT YEARS 2002-03 AND 1997-98 RESPECTIVELY. ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 2 2. BOTH APPEALS ARE FILED BY SAME ASSESSEE, THEREFO RE THEY ARE CLUBBED AND HEARD TOGETHER AND PASSING A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. FIRST WE TAKE UP ITA NO. 1904/KOL/2012 FOR A.Y 02-0 3. 3. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - (1) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CA SE, THE INTIMATION OF PRECEDING U/S. 147 READ WITH SEC. 148 OF THE I.T. A CT IS VAGUE, ARBITRARY, BAD IN LAW AND BEYOND THE PROVISION OF LAW AND THER EFORE REOPENING PROCEEDING IS LIABLE TO BE QUASHED. (2) THAT UNDER THE FATS CIRCUMSTANCES OF THE CASE, THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.49,50,127/- OF THO SE INVESTMENTS / DEPOSITS IN BANKS ETC. HOLDING THAT NO EVIDENCE WAS PRODUCED TO ESTABLISH THE NEXUS OR IMMEDIATE CONNECTION BETWEEN MATURITY VALUES OF EARLIER INVESTMENTS TO PURCHASE THE LISTED ALLEGED INVESTMENTS, ALTHOUGH THE AO IN THE REMAND REPORT DATED 14/02/2011 AT PAR A 5 CONDUCTED DETAILED EXAMINATION OF VARIOUS DOCUMENTS, EVIDENCE & CONSEQUENTLY RECOMMENDED FOR DELETION OF THE ADDITION OF RS.49,5 0,127/-. (3) THE LD CIT(A) DID NOT CONSIDER THE REPEATED & MULTIPLE ADDITIONS, ONCE IN THE RELEVANT ASST. YEAR WHEN SUCH INVESTMEN TS WERE PURCHASED AND AGAIN IN THE YEAR OF MATURITY WHEN MATURED AMOU NTS WERE BEING DEPOSITED IN THE BANK ACCOUNTS. (4) THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE LD AO WHICH WAS BASED ON SURMISES, SUSPICION & CONJECTURE AS EVIDENT FROM PARA 14 OF THE ASST. ORDER. (5) THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION THE LD AO (A) ON THE BASIS OF NON EXISTENT INVESTMENTS ON THE BASIS OF INVESTMENTS LISTED TWICE IN THE ASS T. ORDER. (6) THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE LD AO AT THE HANDS OF THE APPELLANT BEING INCOME DECLARED BY TWO MAJOR DAUGHTERS OF RS.3,63,470/- & RS.1,74,109/- BY NEHA PURI & DIVYA PURI, RESPECTIVELY (ORIGINALLY ASSESSED ON PROTECTIVE BAS IS IN DAUGHTERS HAND), DESPITE THESE INCOMES WERE ORDERED TO BE DET ERMINED BY THE APPELLATE AUTHORITIES ON SUBSTANTIVE BASIS AT THE H ANDS OF RESPECTIVE DAUGHTERS. (7) THE LD CIT(A) ERRED IN ADDING THE AMOUNTS OF R S.4,82,953/- AND RS.1,12,000/- ONCE AGAIN IN THE HANDS OF APPELLANT IN SPITE OF THE FACT THAT SIMILAR ADDITIONS WERE MADE IN THE HANDS OF MA JOR DAUGHTERS NEHA PURI & DIVYA PURI, RESPECTIVELY, WHO WERE SUBMITTIN G THEIR INCOME TAX ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 3 RETURNS INDEPENDENTLY AND WHOSE INCOME HAVE BEEN HE LD ON SUBSTANTIVE BASIS, AND THESE TWO ADDITIONS WERE DEL ETED BY THEIR APPELLATE AUTHORITIES FOR REASON THAT THE INVESTMEN TS WERE EITHER EXPLAINED OR WERE NON EXISTENT. (8) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E, THE LD CIT(A) WAS WRONG IN CONFIRMING THE INTEREST INCOME RS.1,61 ,638/- BEING 10% OF INVESTMENT RS.16,16,386/- STANDS IN THE NAME OF WIF E AMITA PURI DESPITE INCOME WAS ORDERED TO BE DETERMINED BY THE ITAT, MUMBAI ON MATURITY OF DEPOSITS AT THE HAND OF MRS. AMITA PURI WHERE CORRESPONDING INVESTMENTS WERE REFLECTED. MOREOVER FURTHER ADDITI ON OF INTEREST INCOME AT THE HAND OF THE APPELLANT WILL TANTAMOUNT TO DOU BLE TAXATION. (9) THE LD CIT(A) ERRED IN ENHANCING THE ASSESSMEN T BY FURTHER ADDING INTEREST INCOMES OF RS.4,6,048/- AND RS.64,552/- WH ICH IS UNJUSTIFIED, ARBITRARY AND BEYOND THE PROVISION OF LAW, SINCE TH E SAME HAS ALREADY BEEN TAXED IN THE HANDS OF AMITRA PURI, THE WIFE. (10) THE LD CIT(A) WAS WRONG IN RELYING UPON THE 2 ND REMAND REPORT DATED 12/09/2012, WHICH WAS FRAMED WITHOUT ANY DETA ILED EXAMINATION OF THE VARIOUS DOCUMENTS & SUBMISSIONS AND THEREFOR E SUFFERS FROM INJURY, ILLEGALITY AND IRRELEVANCE. (11) THE LD CIT(A) ERRED IN OBSERVING THAT ADDITIO NAL EVIDENCE IS NOT ADMISSIBLE DESPITE PAPER BOOKS CONTAINING VARIOUS D OCUMENTARY EVIDENCE WERE REFERRED TO THE AO BY HIM FOR EXAMINA TION IN TERMS OF THE ITAT, KOLKATA ORDER DATED 25/06/2010, THUS RULE 46A WAS COMPLIED WITH. BEFORE COMING TO THE SPECIFIC ISSUE OF THE CASE, LE T US UNDERSTAND THE HISTORY OF THE CASE. THE ASSESSEE IS AN INDIVIDUAL AND SERV ING AS CENTRAL GOVERNMENT EMPLOYEE IN CENTRAL EXCISE DEPARTMENT. THERE WAS A SEARCH OPERATION CONDUCTED AT THE RESIDENCE OF ASSESSEE IN MUMBAI BY THE CENTRAL BUREAU OF INVESTIGATION (CBI FOR SHORT) ON DATED 20-02-2002. AS A RESULT OF SEARCH, VARIOUS DOCUMENTS SUCH AS FDRS, TDRS, BANK PASSBOOK WERE SEIZED BY THE SEARCH PARTY WHICH WERE HANDED OVER TO THE DEPARTME NT OF INCOME TAX. THE AO EXAMINED THE SEIZED DOCUMENTS AND FOUND VARIOUS DEPOSITS, INVESTMENTS IN THE NAME OF ASSESSEE, HIS WIFE, AMITA PURI, HIS DAUGHTERS DIVYA PURI AND NEHA PURI AND DETAILS OF SUCH INVESTMENT / DEPOSITS ARE TABULATED AND REPRODUCED BELOW:- ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 4 SL NO. DESCRIPTION V.K.PURI AMITA PURI DIVYA PURI NEHA PUR I 1 D-141 PAGE 1521 UTI BANK LTD. PUNE, 30.06.01 31.03.02 65,995 65,995 65,995 2 PAGE 220 SYNDICATE BANK INTT. 112/-, 9,399/-, 145, 65,286/-, 58,727/-, 19,586/-, 42,630/-, 8/-, FROM 09.07.01 TO 21.03.02 1,95,893 3 D-299 SYNDICATE VCCC NO.45546 01.12.01 42,000 4 D-331 DHFC BANK 01.04.01 TO 31.03.02 5,27,489 5 D-38, PAGE 1560 STOCK HOLDING CORPN. 09.10.01 60,000 6 05.10.01 1561 PAGE DO- 3,00,000 7 D-178 PAGE 1485 GTBL 10.09.01 22005113386, 87, 88 40,000 40,000 40,000 40,000 8 D-139 PAGE 1359 INDUSIND BANK 12.09.01 TDR NO. 504340002 / 287625 1360 / 287626 42,000 42,000 9 D-169 A/C NO. 0018910 HDFC 09.04.01 59,652 10 -DO- 19368 59,652 11 D-206 LIC 04.06.01 P-1805 TO 1812 DT. 15.06.01 61,907 12 D-419 DD.NO. 36323, 316398 NIFT 28.06.01 09.01.02 D-395 31652 DT. 08.05.01 D-418/4 DD RS.500 25,000 55,000 30,000 13 D-151 04.03.2002 ICICI BANK 62,852 62,852 65,381 14 D-88 PAGE 1371 TE RATNAKAR BANK LD. A/C NO. 1858 VKP, AMITA, DIVYA & NEHA 8,17,171 15 PAGE 1395 & 1393 & 1392, 1390 BONDS & DIVIDEND D-52 20,079 20,079 16 D-154 SHCL RELIEF BOND 85451 20.10.01 3,00,000 17 D-209 ICICI BANK 1038162, 163 DT. 02.05.01 42,000 42,000 42,000 42,000 18 D-209 ICICI BANK 1038162, 163 DT. 02.05.01 55,000 55,000 19 PAGE 1214, 1215 CASH ICIC BANK 01.05.01 78,417 78,417 20 D-156 PAGE 1573 UTI BANK LTD. 984263, 984270, 08.09.01 42,000 40,000 21 D-70 / D-71 PAGE-1511 CBI C 250310, 309 TDR 40,000 40,000 ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 5 30.04.01 22 PAGE 1321 SYNDICATE BANK 07.03.02 2,02,392 23 PAGE 1285 SBI STATEMENT 01.04.01 TO 31.03.02 A/C NO. 031142, 140 42,892 5,91,401 42,892 24 D-187 THE COSMOS COOP B. LTD. PAGE 1279 10.06.01 42,000 25 D-436 TO 446, 448, 449 AND DEPOSITS UNION BANK OF INDIA 03.05.01 TO 09.02.02 1,57,343 26 D-168 10.04.02 HDFC 1264 65,381 TOTAL 49,50,127 27,38,788 16,16,386 1,12,000 4,82,953 THE AO FOUND THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME DECLARING INCOME OF RS.4,52,166/- FOR THE RELEVANT PREVIOUS Y EAR. THE AO OBSERVED HUGE DIFFERENCE BETWEEN THE INCOME OF ASSESSEE DECL ARED IN THE RETURN AND THE INVESTMENT / FD REVEALED FROM THE SEIZED DOCUME NTS. THE AO ALSO OBSERVED THAT THE ASSESSEE DID NOT ATTEND THE INCOM E TAX PROCEEDINGS AT ALL AND KEPT THE MATTER LINGERING ON ONE OR THE OTHER P RETEXT. SINCE THE ASSESSEE IN THE PRESENT CASE IS A CENTRAL GOVERNMENT EMPLOYE E AND WAS TRANSFERRED FROM ONE PLACE TO ANOTHER DURING THE PROCEEDINGS OF INCOME TAX THEREFORE THE ASSESSEE FAILED TO ATTEND THE HEARING. HOWEVER THE AO SOUGHT THE CLARIFICATION ON THE FACTS REVEALED FROM THE SEIZED DOCUMENTS. TH E ASSESSEE SUBMITTED A REPLY VIDE LETTER DATED 10.03.2005 BUT NO CORROBORA TIVE EVIDENCE WAS FURNISHED IN SUPPORT OF HIS CLAIM. THE ASSESSEE BEI NG A CENTRAL GOVT. EMPLOYEE WAS POSTED AT RAIPUR AT THE TIME OF ASSESS MENT SO HE COULD NOT ATTEND THE ASSESSMENT PROCEEDINGS PERSONALLY TO DEF END HIS CASE. AT THE SAME TIME, ASSESSMENT WAS GETTING TIME BARRED SO AO HAD NO ALTERNATE BUT TO FRAME THE ASSESSMENT U/S 144 OF THE ACT TO THE BEST OF HIS JUDGMENT. ACCORDINGLY, AO FRAMED THE ASSESSMENT UNDER SECTION 144 OF THE ACT AS UNDER : I) INCOME AS PER RETURN : 4,52,166.00 ADDITION MADE IN THE ASSESSMENT II) UNDISCLOSED INVESTMENT 49,50,127.00 III) INCOME DECLARED BY KUM. NEHA PURI 3,63,470.0 0 ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 6 IV) INCOME DECLARED BY KUM. DIVYA PURI 1,74,109. 00 V) ESTIMATED INTEREST INCOME OF AMITA PURI 1,61,63 8.00 THE LD. CIT(A) HAS ENHANCED THE INCOME OF THE ASSES SEE AS DETAILED BELOW : VI) INCOME FROM INTEREST 4,36,048.00 VII) INCOME FROM INTEREST 64,552.00 NOW LET US TAKE THE SPECIFIC GROUNDS OF APPEAL RAIS ED BY THE ASSESSEE 4. FIRST GROUND RAISED BY ASSESSEE IN THIS IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER BY MAKIN G AN ADDITION OF 49,50,127/- ON ACCOUNT OF UNDISCLOSED INVESTMENTS / DEPOSITS IN HIS BANK. THE AO DURING THE COURSE OF ASSESSMENT FOUND THAT T HE INCOME DECLARED BY THE ASSESSEE IS OF RS.4,52,166/- FOR THE RELEVANT P REVIOUS YEAR BUT THERE WERE LOT OF INVESTMENT IN THE NAME OF ASSESSEE, HIS WIFE AND HIS TWO DAUGHTERS FOR THE AMOUNT OF RS. 49,50,127/-. THE AO SOUGHT THE CL ARIFICATION FROM THE ASSESSEE FOR THE SOURCE OF INVESTMENT. THE ASSESSEE FAILED TO ATTEND THE HEARING BUT MADE A REPLY OF THE SHOW CAUSE NOTICE. HOWEVER THE REPLY WAS NOT SUBSTANTIATED WITH THE SUPPORTING EVIDENCE. IN THE PRESENT CASE THE ASSESSMENT WAS GETTING THE TIME BARRED, SO THE AO H AD NO ALTERNATE BUT TO FRAME THE ASSESSMENT U/S 144 OF THE ACT TO THE BEST OF HIS JUDGMENT. ACCORDINGLY, AO TREATED THE ENTIRE INVESTMENT / DEP OSIT AS UNEXPLAINED INCOME OF THE ASSESSEE AND ADDED THE AMOUNT OF 49,50,127/- TO THE INCOME OF ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHERE THE ASSESSEE SUBMITTED THAT THE INVESTMENTS AND FIXED D EPOSITS WHICH HAVE ADDED IN THE ASSESSMENT YEAR 2002-03 ARE FROM THE P ROCEEDS OF THE EARLIER YEAR INVESTMENTS WHICH WERE ORIGINALLY INVESTED DUR ING THE PERIOD SEPTEMBER 1992 TO JANUARY 1995. IT WAS FURTHER SUBMITTED BY T HE LD. AR THAT THE SOURCE OF MAKING THE INVESTMENT DURING THE PERIOD FROM SEPTEM BER 1992 TO JANUARY 1995 WAS THE SALE PROCEEDS OF 20 KG GOLD AND 197 KG . SILVER. THE WIFE OF THE ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 7 ASSESSEE, MRS. AMITA PURI RECEIVED THE GOLD AND SIL VER FROM HER FATHER MR. INDER SAIN PURI. HOWEVER THE LD. CIT(A) DISREGARDED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER : 1) NO EVIDENCE WAS PRODUCED BEFORE THE AO TO ESTABL ISH THE NEXUS OR IMMEDIATE CONNECTION BETWEEN MATURITY VALUE AND PRI MARY/ ORIGINAL INVESTMENT. 2) THE APPELLANT FAILED TO SUBSTANTIATE THE SOURCES OF FUNDS WHEREFROM THE ORIGINAL INVESTMENT WAS MADE OR INVESTMENT MADE FRO M HIS DISCLOSED SOURCES OF INCOME. 3) NO EVIDENCE THAT THE FATHER OF MRS. AMITA PURI W AS THE MAN OF MEANS. NO GIFT DEED WAS FILED. THE JEWELLERY WAS NEVER DIS CLOSED IN THE RETURN OF INCOME OR WEALTH TAX RETURN. 4) NO DECLARATION WAS FILED UNDER GOLD CONTROL ACT. 5) THE ASSESSEE SHRI V.K. PURI NEVER DECLARED THE S AID ASSETS AS PER THE CCS (CONDUCT) RULES, 1964. 6) SHREE AMIBIKA JEWELLERS WAS VERY SMALL FIRM DE ALING IN ARTIFICIAL JEWELLERY AND NO SUCH PURCHASE OF JEWELLERY FROM SM T. AMITA PURI WAS RECORDED IN ITS BOOKS OF ACCOUNTS OR ITS SALES TAX AND INCOME TAX RETURN. 7) THE CBIS INVESTIGATION LED TO THE FINDING THAT SHRI VINESH VYASH, PROP. OF SHREE AMBIKA JEWELLERS, HAD FRAUDULENTLY PREPARE D THE PURCHASE BILLS WITH THE HELP OF SHRI GIRISH JAIN, HIS EMPLOYEE AND SHRI DINESH VYAS IN JUNE-JULY, 2002, I.E., AFTER THE REGISTRATION OF R. C. AGAINST THE ASSESSEE, HIS WIFE SMT. AMITA PURI, AND SHRI VINESH VYAS U/S. 120B, 104, 193 OF IPC R.W.S. 13(2), 13(10)(E) OF PREVENTION OF CORRUP TION ACT, 1988, WITH THE COURT OF SPECIAL JUDGE, PATIALA HOUSE COURTS, N EW DELHI ON 30.01.2004. 8) DURING THE FIRST ROUND OF APPEAL THE THEN LD. C IT(A) HAD ISSUED SUMMONS TO THE PRINCIPAL OFFICER OF SHREE AMBIKA JE WELLERS. HOWEVER, THE SUMMONS WAS NOT COMPLIED WITH. THE APPELLANT WA S ALSO ASKED TO PRODUCE HIM, HOWEVER, HE COULD NOT PRODUCE THE PRIN CIPAL OFFICER BEFORE THE THEN CIT(A). ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 8 IN VIEW OF THE ABOVE FINDINGS LD. CIT(A) UPHELD THE ACTION OF AO BY OBSERVING AS UNDER:- .. I AM OF THE CONSIDERED VIEW THAT THIS IS A CAS E WHERE THE APPELLANT HAS FLOATED THE STORY OF SALE OF JEWELLERY AND SILV ER UTENSILS TO EXPLAIN THE INVESTMENTS IN HIS HANDS IN THE DISGUISE OF WIF ES INCOME FROM BOGUS SALE OF JEWERLLERY. I ABSOLUTELY AGREE WITH T HE VIEW OF THE ASSESSING OFFICER THAT THE STORY OF SALE OF JEWERLL ERY IS ONLY A CONCOCTED STORY AND ONLY AN AFTERTHOUGHT. THE STORY OF SALE O F JEWELLERY HAS BEEN FLOATED BY THE APPELLANT ONLY TO SAVE HIMSELF FROM THE PROVISIONS OF ANTI CORRUPTION LAW AFTER DETECTION OF HIS UNDISCLOSED A SSETS BY THE CBI. HE HAS BEEN A SENIOR OFFICER OF CUSTOM AND CENTRAL EXC ISE SERVICE, GOVT. OF INDIA. THE GOLD AND SILVER ITEMS AS CLAIMED TO H AVE BEEN SOLD WERE NEVER DISCLOSED, EITHER BEFORE THE INCOME TAX DEPAR TMENT OR BEFORE THE EMPLOYER DEPARTMENT. THE FAILURE ON THE PART OF THE APPELLANT AND HIS WIFE IN NOT DISCLOSING THE INVESTMENT TO CONCERNED AUTHORITIES SHOWS BOGUS NATURE OF SALE OF JEWERLLERY. THE FRAUDULENT NATURE OF THE BILLS FABRICATED FOR THE ALLEGED SALE OF JEWELLERY HAS AL SO BEEN ESTABLISHED. THE ALLEGED SALE OF GOLD AND SILVER ITEMS GOES TO T HE ROOT OF SOURCE OF INVESTMENT AND THE APPELLANT HAS NEVER BEEN ABLE TO SUBSTANTIATE IT. WHEN THE ROOT OF THE SOURCE OF THE FUNDS ITSELF IS UNEXPLAINED, ITS REINVESTMENT IN THE FORM OF CASH IN THE SEVERAL BAN KS AND COMPANIES IS FALSE AND UNREALIABLE. THE APPELLANT HAS ALSO TRIED TO SAVE HIMSELF BY CREATING A DESIGN TO SHIFT HIS INCOME IN THE HANDS OF HIS WIFE, SMT. AMITA PURI. IT IS WELL SETTLED PRINCIPLE OF LAW THAT IF I NCOME BELONGS TO A , IT OUGHT TO BE TAXED IN THE HANDS OF A , NOT IN THE HANDS OF B UNLESS A IS MINOR. INCOME MUST BE TAXED IN THE HANDS OF THE PERSON TO WHOM IT HAS ACCRUED AND TO WHOM IT REALLY BELONGINGS. THERE FORE, THE APPELLANT CANNOT BE ALLOWED TO TAKE SHELTER BEHIND THE INCOME OF ANY OTHER PERSON. IN ABSENCE OF ANY DISCLOSURE OF ASSETS/INCO ME IN IT/WT RETURNS, THE CLAIM OF THE APPELLANT REGARDING SALE OF GOLD A ND SILVER ITEMS CANNOT E ACCEPTED. IF IT IS ACCEPTED THEN ANY PERSON CAN B E ABLE TO CONVERT HIS BLACK MONEY INTO WHITE BY JUST CLAIMING THAT HE HAS SOLD GOLD AND SILVER WITHOUT PRODUCING ANY DOCUMENTARY EVIDENCE IN THE F ORM OF INCOME TAX AND WEALTH TAX RETURNS. CONSIDERING ALL THE FACTS & CIRCUMSTANCES OF THE CASE I CONFIRM THE ADDITIONS ON ACCOUNT OF INVE STMENT OF RS. 26,84,104/- FOR ASSTT. YR. 1997-98 AND RS. 54,87,70 6/- FOR ASSTT. YR. 2002-03. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US. SHRI P.K.HIMMAT SINGHKA LD. AUTHORIZED REPRESENTATI VE APPEARING ON BEHALF OF ASSESSEE AND SHRI ALAK NAG, LD. DEPARTMENTAL REP RESENTATIVE APPEARING ON BEHALF OF REVENUE. ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 9 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. AR SUBMITTED TWO SETS OF PAPER BOOKS CONTAINING PAGES FROM 1 TO 318 AND ALSO SUBMITTED W RITTEN SUBMISSION WHICH RUNS FROM PAGES 1 TO 45. BEFORE US THE LD. AR ALSO SUBMITTED A CHART IN TABULAR FORM WHERE THE SOURCE OF EVERY FD AND INVESTMENT IN RESPECT OF ALL THE FOUR PERSONS I.E. ASSESSEE, HIS WIFE AND TWO DAUGHTERS W AS EXPLAINED. FOR INSTANCE THE AO ADDED A SUM OF RS. 65,995.00X3= 1,9 7,985.00 IN THE HANDS OF THE ASSESSEE AS UNDISCLOSED INCOME. BUT ACTUALLY THESE ARE 3 FDS IN THE NAME OF THE ASSESSEE, HIS WIFE AND ONE DAUGHTER N EHA PURI. THE LD. AR DREW OUR ATTENTION TO PAGES 115 TO 117 OF THE PAPER BOOK WHERE IT WAS SEEN FROM THE BANK STATEMENT THAT A SUM OF RS. 48,000.00 EACH WERE DEPOSITED IN FD ACCOUNT IN THE ABOVE THREE NAMES ON DATED 26.3.1 999. THESE FD GOT MATURED ON 27.03.2002 FOR GROSS AMOUNT OF RS. 68,45 9/- (NET AFTER TDS RS. 65,995/-) THIS FD WAS DISCLOSED TO THE INCOME TAX DEPARTMENT IN THE STATEMENT OF AFFAIRS OF AMITA PURI AS ON 31.3.2001 AT PAGE 31 OF THE PAPER BOOK S. NOS. 70 TO 71. 70 UTI JM RD PUNE 48000 27.3.99 27.3.02 68469 S. NO. 1 71 UTI JM RD PUNE 48000 27.3.99 27.3.02 68489 S. NO.1 THE AO OF AMITA PURI HAS ALREADY ACCEPTED THE INVES TMENTS OF RS.48,000/- EACH IN THE NAMES OF AMITA PURI AND V.K. PURI AS BE LONGING TO AMITA PURI AND HAS CHARGED INTEREST IN BOTH CASES IN THE HANDS OF AMITA PURI, WHICH HAS BEEN CONFIRMED BY LD. CIT(A) AND THE TRIBUNAL AND IMPLEM ENTED BY THE DEPARTMENT. REFER SERIAL NOS. 66 AND 67 AT PAGE 27 IN WHICH INTEREST ON TWO FDS IN THE NAME OF V.K. PURI & MRS. AMITA PURI WERE INCLUDED ON CASH BASIS BY AMITA PURI AND INCLUDED IN COMPUTATION OF INCOME AT PAGE 23 AND SAME REFERRED TO ORDER OF ACIT AT PAGES 50 TO 52 OF ASSE SSEES PAPER BOOK. THIS AMOUNT IN THE NAME OF NEHA PURI HAS BEEN HELD BY TH E LD. CIT(A) RAIPUR AS BELONGING TO HER AND THE INTEREST INCOME ON THIS IN VESTMENT OF RS.48,000/- HAS BEEN TAXED IN HER HANDS ON SUBSTANTIVE BASIS, WHICH HAS BEEN UPHELD BY THE APPELLATE AUTHORITY. THIS AMOUNT WAS ALSO ADDED BY AO TO THE INCOME OF NEHA ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 10 PURI FOR AY 2002-03 AS INVESTMENT BEING FROM UNDISC LOSED SOURCE. SUCH ADDITION WAS DELETED BY LD. CIT(A), RAIPUR VIDE ORD ER DATED 05.11.2007. SAME REFERRED TO PAGES117 AND 118 OF DEPOSIT STATEM ENT AND PAGES 55 TO 66 OF THE ASSESSEES PAPER BOOK. 6.1 SIMILARLY THE AMOUNT OF RS.1,95,893/- ( 112 + 9 399 + 145 + 65266 + 59727 + 19586 + 42630 + 8) IS SUM TOTAL OF VARIOUS CREDITS IN THE BANK STATEMENT OF SB A/C NO. 36516 IN SYNDICATE BANK, SU PER BAZAR, DELHI WHICH IS PLACED ON PAGE 119 OF THE PAPER BOOK. THE AMOUNT OF RS.112/-, 145/- & 8/- ARE INTEREST RECEIVED IN SB A/C AND TAX HAS BEEN PA ID BY AMITA PURI AS A PART OF INTEREST OF RS.3705/- WHICH IS PLACED AT PAGE 28 OF THE PAPER BOOK. AS SEEN FROM BANK STATEMENT, RS.9,399/- RELATES TO VIKAS CASH CERTIFICATE (FOR SHORT VCC) OF SYNDICATE BANK 45546, VCC 45546 WAS I NVESTED FOR RS.35,000/- ON 21.08.1998 WHICH MATURED ON 21.11.20 01FOR RS.51,399/- WHICH IS PLACED AT PAGE 120 OF THE PAPER BOOK. THIS FD WAS RENEWED ON 21.11.2001 FOR RS.42,000/- AS VCC 56068 AND BALANCE OF RS.9,399/- WAS CREDITED IN SB A/C NO.36516 ON 01.12.2001.AS SEEN F ROM BANK STATEMENT RS.65,266/- TO VCC 47971, VCC 47071 WAS INVESTED FO R RS.50,000/- ON 06.05.1999 WHICH IS PLACED AT PAGE 121 OF THE PAPER BOOK AND PRE-MATURELY CASHED ON 11.03.2002 FOR RS.65,286/- OF AMOUNT CRED ITED IN SB A/C.AS SEEN FROM BANK STATEMENT OF RS.58,727/- TO VCC 47977, VC C 47977 WAS INVESTED FOR RS.45,000/- ON 08.05.1999 WHICH IS PLACED AT PA GE 122 AND PRE-MATURELY CASHED ON 11.03.2002 FOR RS.58,727/- AMOUNT CREDITE D IN SB A/C. AS SEEN FROM BANK STATEMENT, RS.19,586/- RELATES TO VCC 479 72, VCC 47972 WAS INVESTED FOR RS.15,000/- ON 06.05.1999 WHICH IS PLA CED AT PAGE 123 OF PAPER BOOK AND PRE-MATURELY CASHED ON 11.03.2002 FOR RS.1 9,586/- AMOUNT CREDITED IN SB A/C. AS SEEN FROM BANK STATEMENT RS.42,630/- TO VCC 56068,VCC 56068 FOR RS.42,000/- WAS INVESTED ON 21.11.2001 WH ICH IS PLACED AT PAGE 124 OF THE PAPER BOOK BY RENEWAL AND OUT OF MATURIT Y AMOUNT OF VCC 45646. IT WAS PRE-MATURELY CASHED ON 11.03.2002 FOR RS.42,630 /- AMOUNT CREDITED IN SB A/C. VCC 45546, VCC 47971 AND VCC 47972 ARE FIGU RING IN THE STATEMENT ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 11 OF AFFAIRS OF AMITA PURI (AS ON 31.03.2001) AT SL. NO. 9, 40 & 41 AT PAGES 30- 31. INTEREST AMOUNT OF RS.16,399/- RELATING TO VCC 45546, RS.15,286/- RELATING TO VCC 47971, RS.4,586/- RELATING TO VCC 47972 AND RS.630/- RELATING TO VCC 56068, WERE OFFERED TO TAX BY AMITA PURI AND ASSESS ED IN HER HANDS. REFER PAGES 22TO 27 & 50 TO 53 ( SEE SL. NO. 10, 63 TO 63 AT PAGE 26-27.INTEREST AMOUNT OF RS.13,727/- FROM VCC NO. 47977 (WHICH WAS IN THE NAME OF NEHA PURI WAS OFFERED TO TAX BY NEHA PURI AT SL. NO.2 PA GE 55, IN THE COMPUTATION OF INCOME AND WAS ASSESSED IN HER HANDS, INTEREST INCO ME OF RS.3,03,470/- WAS HELD BY THE LD. CIT(A), RAIPUR AS ASSESSABLE ON SUB STANTIVE BASIS IN THE HANDS OF NEHA PURI REFER AT PAGE 63 OF LD. CIT(A) O RDER. SIMILARLY THE DETAILS OF ALL THE INVESTMENT WERE DULY EXPLAINED IN THE SU BMISSION OF THE ASSESSEE WHICH IS PLACED ON RECORD. ON THE OTHER HAND THE LD . DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 7. FROM THE AFORESAID DISCUSSION WE FIND THAT THE A O HAS MADE VARIOUS ADDITIONS OF UNDISCLOSED FD IN THE HAND OF THE ASSE SSEE BY FRAMING THE ASSESSMENT UNDER SECTION 144 OF THE ACT. THE AO GOT THE INFORMATION OF UNDISCLOSED FD/INVESTMENT AS A RESULT OF SEARCH OF CBI AT THE PREMISES OF THE ASSESSEE. ALL THE ADDITION WERE CONFIRMED BY THE LD . CIT(A). HOWEVER BEFORE US THE LD. AR HAS SUBMITTED ALL THE NECESSARY SUPPO RTING DOCUMENTS JUSTIFYING THE SOURCE OF THE INVESTMENT/ FD THAT THEY WERE CAR RIED FORWARD FROM THE EARLIER YEARS. IN VIEW OF ABOVE WE ARE INCLINED TO REVERSE THE ORDER OF THE LOWER AUTHORITIES AND ASSESSEES GROUND IS ALLOWED. 8. SECOND ISSUED RAISED BY ASSESSEE IS AS REGARDS T O LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF AO BY MAKING THE ADDITION OF RS. 3,63,470/- AND RS.1,74,109/- OF ASSESSEES TWO DAUGHTERS IN THE HA NDS OF ASSESSEE THOUGH THE INCOME WAS ORIGINALLY ASSESSED IN THE HANDS OF BOTH THE DAUGHTERS ON PROTECTIVE BASIS. ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 12 8.1 FOR THE YEAR UNDER CONSIDERATION, DAUGHTERS OF ASSESSEE NAMELY DIVYA PURI AND NEHA PURI HAVE DECLARED INCOME OF RS.3,63, 470/- AND RS.1,74,109/- RESPECTIVELY IN THEIR INDIVIDUAL HANDS WHICH WAS AS SESSED IN THEIR RESPECTIVE HANDS ON PROTECTIVE BASIS. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS OF MR. V.K. PURI THE AO FOUND SEVERAL INVESTMENTS/FDS IN THE NAME OF ASSESSEE, HIS WIFE AND HIS DAUGHTERS WHICH WERE NOT DISCLOSED FOR THE TAXATION PURPOSE. THE AO TREATED ALL THE UNDISCLOSED INVESTMENTS/ FDS AS THE INCOME OF THE ASSESSEE. ACCORDINGLY THE AO OPINED THAT THE INCOME SHOWN BY THE DAUGHTERS OF THE ASSESSEE IN ACTUALITY IS THE INCOME OF THE A SSESSEE AND IT HAS JUST BEEN ROUTED THROUGH THEIR ACCOUNTS TO AVOID THE TAX LIAB ILITY. THEREFORE THE AO ADDED THE INCOME DECLARED BY BOTH THE DAUGHTERS OF ASSESS EE TO THE TOTAL INCOME OF ASSESSEE ON SUBSTANTIVE BASIS. 9. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHO UPHELD THE ACTION OF AO. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US. WE HAVE HEARD RIVAL CONTENTIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. 10. THE LD. AR BEFORE US SUBMITTED THAT THE LD. CIT (A) RAIPUR IN THE CASE OF NEHA PURI HAS TREATED THE INCOME IN HER OWN HAND ON SUBSTANTIVE BASIS AND THE COPY OF THE ORDER IS PLACED AT PAGE 63 OF THE P APER BOOK. SIMILARLY THE HONBLE ITAT NAGPUR IN THE CASE OF DIVYA PURI HAS T REATED THE INCOME IN HER OWN HAND ON SUBSTANTIVE BASIS AND THE COPY OF THE O RDER IS PLACED AT PAGE 104 OF THE PAPER BOOK. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 11.1 FROM THE AFORESAID DISCUSSION WE FIND THAT INC OME DECLARED BY THE DAUGHTERS OF THE ASSESSEE IN THEIR RESPECTIVE HAND WERE TAXED IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. NOW FROM THE SUB MISSION OF THE ASSESSEE, ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 13 WE OBSERVE THAT THE SAME HAS BEEN TAXED IN THEIR IN DIVIDUAL NAMES ON SUBSTANTIVE BASIS. THE LD. DR HAS NOT BROUGHT ANYTH ING ON RECORD CONTRARY TO THE ARGUMENT OF LD. AR. AND SIMPLY RELIED ON THE OR DERS OF AUTHORITIES BELOW. IN VIEW OF ABOVE, WE ARE INCLINED TO REVERSE THE ORDER OF THE LOWER AUTHORITIES AND ASSESSEES GROUND IS ALLOWED. 12. THIRD ISSUE IN THIS APPEAL OF ASSESSEE IS AS RE GARDS TO LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN AD DING THE AMOUNTS OF RS.4,82,953/- AND RS.1,12,000.00 ONCE AGAIN IN THE HANDS OF ASSESSEE IN SPITE OF THE FACT THAT SIMILAR ADDITIONS WERE MADE IN THE HANDS OF BOTH THE DAUGHTERS OF ASSESSEE THOUGH THEIR (DAUGHTERS) RETU RNS FILED INDEPENDENTLY AND INCOME HAVE BEEN HELD ON SUBSTANTIVE BASIS. 13. AT THE OUTSET, THE LD. AR SUBMITTED THE ABOVE I NCOME BELONGING TO THE DAUGHTERS OF THE ASSESSEE HAS BEEN ASSESSED IN THEI R INDIVIDUAL HANDS ON SUSTENTATIVE BASIS AND OUR ATTENTION WAS INVITED ON PAGES 57-63 & 73-77 WHERE THE LD. CIT(A), RAIPUR ORDER COPIES ARE PLACE D. IN VIEW OF ABOVE WE ARE INCLINED TO REVERSE THE ORDER OF THE LOWER AUTHORIT IES AND GROUND OF ASSESSEE IS ALLOWED. 14. FORTH ISSUE RAISED BY ASSESSEE IN THIS APPEAL I S THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY MAKING THE ADDITION O F INTEREST INCOME OF RS.1,61,638/- BEING 10% OF INVESTMENT OF RS.16,16,3 86/- IN THE HANDS OF HIS WIFE I.E. AMITA PURI. 15. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO FOUND FROM THE SEIZED DOCUMENTS THAT A SUM OF RS.16,16,386/- WAS I NVESTED IN THE NAME OF AMITA PURI, WIFE OF ASSESSEE. THE ASSESSEE HAS DECL ARED INTEREST INCOME FOR AN AMOUNT OF RS.86,171/- IN HIS HANDS BUT PROVIDED NO INFORMATION OF ACCRUED INTEREST ON THE AMOUNT FOUND IN THE NAME OF HIS WIF E. AS THE ABOVE INVESTMENT HAS BEEN INCLUDED AS UNDISCLOSED INCOME OF THE ASSE SSEE, THEREFORE THE ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 14 INTEREST ACCRUED ON SUCH INVESTMENT ALSO NEEDS TO B E INCLUDED IN THE INCOME OF THE ASSESSEE BUT THERE WAS NO INFORMATION OF SUC H INCOME. SO IN THE ABSENCE OF ANY INFORMATION, IT WAS NOT POSSIBLE TO QUANTIFY THE INTEREST INCOME WITH ACCURACY. THEREFORE AO PRESUMED INTEREST RATE @ 10% AND WORKED OUT INTEREST INCOME OF RS.1,61,638/- AND ADDED TO THE T OTAL INCOME OF ASSESSEE. 16. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO UPHELD THE ACTION OF AO BY OBSERVING AS UNDER:- 12.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE REMAND REPORT. AS THE ADDITION OF UNDISCLOSED I NVESTMENTS HAVE BEEN UPHELD, IT IS CONCLUDED THAT ADDITION OF THE I NCOME EARNED ON SUCH INVESTMENTS IS JUSTIFIED IN LAW. HENCE THE ADDITION OF RS.2,68,410/- (FOR AY 97-98) AND RS.1,61,638/- (FOR AY 02-03) MADE BY ASSESSING OFFICER ARE CONFIRMED. FURTHER, ON THE BASIS OF SUBMISSIONS BEFORE ME, I AM INCLINED TO AGREE WITH THE VIEWS OF THE AO THAT IN ACCORDANCE WITH THE PROVISIONS OF LAW THREE FOURTH OF INTEREST RECEIVED FROM COMPANY DEPOSITS I.E. RS.4,86,480/- NEEDS TO BE ADDED IN TH E HANDS OF SHRI V.K.PURI ALONG WITH BANK FD INTEREST OF RS.6,70,567 /- ACCORDINGLY. SIMILARLY FOR THE SAME REASONS THE AO HAS SUGGESTED IN THE REMAND REPORT THAT ADDITIONS OF RS.4,36,048/- ON ACCOUNT O F BANK FD INTEREST, AND RS.64,552/- ON ACCOUNT OF INTEREST ON COMPANY D EPOSITS IS REQUIRED TO BE ADDED IN THE HANDS OF THE APPELLANT IN AY 200 2-03. HENCE, FOR THE SAME REASON FOR A.Y 2002-03, THE AO IS DIRECTED TO MAKE ADDITION OF RS.4,36,048/- BY WAY OF BANK FD INTEREST AND A SUM OF RS.64,552/- BY WAY OF INTEREST IN COMPANY DEPOSITS. WITH AFORESAI D DIRECTION THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE CONFIRM ED FOR BOTH THE YEARS. ACCORDINGLY, GROUND NO. (VIII) OF THE APPEAL OF BOTH YEARS ARE DISMISSED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US. 17. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE US THE LD. AR SUBMITTED THAT IN THE CHART DISCUSSED ABOVE, THE INVESTMENTS HAVE BEEN SHOWN AS AMOUNTING TO RS.16,1 6,386/- IN THE HANDS OF MITA PURI. THE AO HAS ADDED ESTIMATED INTEREST O N ACCRUAL BASIS @ 10% OF RS.1,61,638/-. IN THIS CONTEXT, IT IS FIRSTLY SUBMI TTED THAT THE ASSESSEE AND ALL THE MEMBERS OF HIS FAMILY MAINTAIN ACCOUNTS ON CASH BASIS AND DRAWN OUR ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 15 ATTENTION TO THE ORDER OF ITO 31(3), KOLKATA IN RES PECT OF AMITA PURI AT PAGES 50-53 OF PAPER BOOK-1 FOR A.Y 2002-03. SECONDLY, OU T OF THE TOTAL AMOUNT OF RS.26,84,104/- THE INVESTMENTS ARE ONLY TO THE EXTE NT OF RS.6,09,171/- THE REST ARE BEING RECEIPTS, EXPENDITURE AND INTEREST RECEIV ED. TAX HAS ALREADY BEEN PAID ON THE INTEREST INCOME RECEIVED ON THE MATURED INVESTMENTS AND THIS WAS OFFERED TO TAX IN THE YEAR SUCH INCOME WAS RECEIVED , THE DETAILS OF WHICH ARE GIVEN UNDER THE CHART FOR A/.Y. 2002-03 TITLED TAB ULAR EXPLANATION OF INTEREST REFCEIVDED AND OFFERED TO TAX WHICH MAY B E SEEN AT PAGES 296-301 OF PAPER BOOK-II FOR AY 2002-03. IN V IEW OF THIS, THERE IS NO QUESTION OF PAYMENT OF INTEREST OF RS.1,61,638//-. IT IS URGED THAT THIS ADDITION OF INTEREST MAY KINDLY BE DELETED. FROM THE ABOVE W E FIND THAT THE WIFE I.E. AMITA PURI OF ASSESSEE HAS DECLARED THE INCOME IN H ER HAND. THE NECESSARY DETAILS HAVE ALSO BEEN FURNISHED IN THE FORM OF PAP ER WHICH IS PLACED ON RECORD. IN VIEW OF ABOVE WE ARE INCLINED TO REVERSE THE ORDER OF THE LOWER AUTHORITIES AND GROUND OF ASSESSEE IS ALLOWED. 18. THE NEXT ISSUE RAISED BY ASSESSEE IN THIS APPEA L IS THAT LD. CIT(A) ERRED IN FURTHER ENHANCING THE INTEREST INCOME OF RS. 4,3 6,048.00 AND RS. 64,552.00 THOUGH THE SAME HAS ALREADY BEEN TAXED IN THE HANDS OF AMITA PURI WIFE OF THE ASSESSEE. 18.1 THE LD. CIT (A) HAS ENHANCED THE INTEREST INCO ME IN THE HANDS OF THE ASSESSEE FOR THE DEPOSITS MADE IN THE FD AND IN THE COMPANY DEPOSIT ON BASIS OF REMAND REPORT RECEIVED FROM THE AO. THIS I NTEREST INCOME WAS NOT DISPUTED BY THE AO AT THE TIME OF ASSESSMENT. HOWEV ER THE LD. AR OF THE ASSESSEE SUBMITTED BEFORE US THAT THE INTEREST INCO ME FOR RS. 5,00,600/- IS ACTUALLY THE INCOME OF THE WIFE (SMT. AMITA PURI) O F THE ASSESSEE WHICH IS THE PART OF THE INCOME DECLARED BY HER FOR THE AY 2002- 03 FOR AN AMOUNT OF RS. 16,01,520.00. OUR ATTENTION DREW TO THE PAGE NO. 50-52 OF THE PAPER BOOK WHERE THE COPY OF THE ASSESSMENT ORDER WAS PLACED. THE LD. DR AT THE TIME OF HEARING DID NOT BRING ANYTHING ON RECORD CONTRARY T O THE SUBMISSION OF THE ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 16 ASSESSEE. WE FIND THAT THE ADDITION OF THE INTEREST INCOME IN THE HANDS OF THE ASSESSEE WILL AMOUNT TO DOUBLE TAX. ACCORDINGLY WE REVERSE THE ORDER OF THE LD. CIT(A) AND THIS GROUND OF THE APPEAL OF THE ASS ESSEE IS ALLOWED. COMING TO ITA NO.1905/KOL/2012 FOR A.Y. 97-98. 19. ASSESSEE HAS RAISED FOLLOWING GROUNDS:- (1) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CA SE, THE INITIATION OF PROCEEDING U/S. 147 READ WITH SEC. 148 OF THE I.T A CT IS VAGUE, ARBITRARY, BAD IN LAW AND BEYOND THE PROVISION OF LAW AND THER EFORE REOPENING PROCEEDING IS LIABLE TO BE QUASHED. (2) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E, THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.26,84,104/- OF THOSE INVESTMENTS / DEPOSITS, ETC. IN BANKS ETC. HOLDING THAT NO EVIDEN CE WAS PRODUCED TO ESTABLISHED THE NEXUS OR IMMEDIATE CONNECTION BETWE EN MATURITY VALUES OF EARLIER INVESTMENTS TO PURCHASE THE LISTED ALLEG ED INVESTMENTS, ALTHOUGH THE AO HAS STATED IN THE REMAND REPORT DAT ED 14/02/2011, AT PARA 3 THEREOF, THAT HE CONDUCTED DETAILED EXAMINAT ION OF VARIOUS DOCUMENTS AND EVIDENCE CONTAINED IN THE PAPER BOOK & CONSEQUENTLY RECOMMENDED FOR DELETION OF THE ADDITION OF RS.26,8 4,104/- (3) THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADD ITION OF RS.63,860/-, RS.19,160/- & RS.26,547/- AGGREGATING RS.1,09,567/- (AND BEING PART OF RS.26,84,104/-) LISTED AT SERIAL 6 & 8 OF PART 2 OF TABULAR CHART MADE IN THE ASST. ORDER, DESPITE THE AO HAVING FOUND IN REM AND REPORT THAT THESE WERE NON EXISTENT BANK ACCOUNTS. (4) THAT THE LD CIT(A) ERRED IN IGNORING ADDITION MISTAKE RS.4,98,800/- IN THE ASST. ORDER, AS THE ADDITION SHOULD HAVE BEE N RS.21,85,304/- INSTEAD OF RS.26,84,104/- COMPRISING ALL ALLEGED IN VESTMENTS & BANK DEPOSITS LISTED IN THE 144 / 147 ORDER. (5) THAT THE LD CIT(A) WAS WRONG IN CONFIRMING THE ADDITION OF RS.10,23,864/- (BUT EXCLUDING SALARY), AS PART OF R S.26,84,104/- BEING MADE BY THE AO ON THE BASIS OF ENTIRE CREDIT SUMMAT ION IN THOSE ALLEGED BANK ACCOUNTS, DESPITE ALL CREDITS WERE EXP LAINED & FOUND CONSISTING OF TA, MATURITY OF BANK FD, LOAN FROM BA NK, GPF ADVANCE, TRANSFER FROM ONE BANK TO ANOTHER, ETC. (6) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E, THE LD AO WAS WRONG IN ESTIMATING INTEREST INCOME RS.2,68,410/- @ 10% ON THE ALLEGED INVESTMENT OF RS.26,84,104/- DESPITE THE FA CT THAT INCOME WAS ORDERED TO BE DETERMINED BY THE ITAT, MUMBAI ON MAT URITY OF DEPOSITS ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 17 IN THE HAND OF MRS. AMITA PURI WHERE CORRESPONDING INVESTMENTS WERE REFLECTED. MOREOVER, FURTHER ADDITION OF INTEREST I NCOME AT THE HAND OF THE APPELLANT WILL TANTAMOUNT TO DOUBLE TAXATION. (7) THAT THE LD CIT(A) ERRED IN ENHANCING THE ASSE SSMENT BY FURTHER ADDING INTEREST INCOMES OF RS.4,86,480/- AND RS.6,7 0,567/- WHICH IS UNJUSTIFIED, ARBITRARY AND BEYOND THE PROVISION OF LAW, SINCE THE SAME HAS ALREADY BEEN TAXED IN THE HANDS OF MRS. AMAITA PURI, THE WIFE OF THE APPELLANT. (8) THAT THE LD CIT(A) WAS WRONG IN RELYING UPON THE 2 ND REMAND REPORT DATED 12/-09/2012, WHICH WAS FRAMED WITHOUT ANY DET AILED EXAMINATION OF THE VARIOUS DOCUMENTS & SUBMISSIONS AND THEREFOR E SUFFERS FROM INJURY, ILLEGALITY AND IRRELEVANCE. (9) THAT THE LD CIT(A) ERRED IN OBSERVING THAT ADD ITIONAL EVIDENCE IS NOT ADMISSIBLE DESPITE PAPER BOOKS CONTAINING VARIOUS D OCUMENTARY EVIDENCE WERE REFERRED TO THE AO BY HIM FOR EXAMINA TION IN TERMS OF THE ITAT, KOLKATA ORDER DATED 25/06/2010, THUS RULE 46A WAS COMPLIED WITH. 20. AT THE TIME OF HEARING LD. AR OF ASSESSEE FAIRL Y CONCEDED THAT GROUNDS NO. 1 AND 3 TO 5 ARE NOT PRESSED. HENCE, THESE ARE DISMISSED AS NOT PRESSED. 21. SECOND GROUND OF ASSESSEES APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.26,84,104/- ON ACCOUN T OF THE FOLLOWING : THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SE ARCH OPERATION CONDUCTED AT THE RESIDENCE OF ASSESSEE IN MUMBAI BY THE CENTRAL BUREAU OF INVESTIGATION (CBI FOR SHORT) ON DATED 20-02-2002. AS A RESULT OF SEARCH, VARIOUS DOCUMENTS SUCH AS FDRS, TDRS, BANK PASSBOOK WERE SEIZED BY TH E SEARCH PARTY WHICH WERE HANDED OVER TO THE DEPARTMENT OF INCOME TAX. T HE AO EXAMINED THE SEIZED DOCUMENTS AND FOUND VARIOUS DEPOSITS, INVEST MENTS IN THE NAME OF ASSESSEE, HIS WIFE, AMITA PURI, HIS MINOR DAUGHTERS DIVYA PURI AND NEHA PURI AND DETAILS OF SUCH INVESTMENT / DEPOSITS ARE TABULATED REPRODUCED BELOW:- SL.NO. DESCRIPTION AM OUNT SHRI V.K. PURI SMT. AMITA PURI KUM. DIVYA PURI! KUM. NEHA PURI ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 18 1 D-434 ICICI BANKING CORPN. LTD. MUMBAI FD NO. 045123 & 24 DT. 26/04/1996 15,000 15,000 2. D-293 SYNDICATE BANK, CONNAUGHT CIRCLE N. DELHI FX 57212 & 23 DT. 06/05/1996 25,000 50,000 3. D-504 SAURASHTRA CEMENT LTD., MUMBAI 6000066, 67, 68, 69 DT. 24.07.96 11,000 11,000 11,000 11,000 4. D-582 MODERN TERRY THREADA LTD., JAIPUR FDTL 81000, 01, 02, 03 DATED 12.08.96 11,000 11,000 11,000 11,000 5. D-531 CROMPTION GREAVES MUMBAI 767074, 86, 98, & 767103 DDT. 21.08.96 1`1,000 11,000 11,000 11,000 6. D-598 VST INDUSTRIES LTD HYDERABAD MR NO. 133111, 12,13, 14 DATED 23.08.96 11,000 11,000 11,000 11,000 7. D-581 MODERN SYNIEX (I) LTD. JAIPUR FDSL 00652, 651, 653, 650 DT. 27.08.96 11,000 11,000 11,000 11,000 8. D-580 MODERN THREADE LTD., JAIPUR FD TL 810000 01, 02, & 03 DTD. 04.09.96 11,000 11,000 11,000 11,000 9. D-667/VIP INDUSTRIES LTD., M9UMBAI FD 11219, 217,218, & 178 DATED 07.09.96 11,000 11,000 11,000 11,000 10. D-562 DATA SOFT WARE (ESSAR) CHENNAI WRNT NO. 2488, 87, 86, 89 DT. 25.09.96 6,110 6,110 6,110 6,110 11, D-JUBIL ORAGANAYS LTD. FD 40505, 506, 507, 508 DATED 30.09.96 11,000 11,000 11,000 11,000 12, D-606 LARASON & TUBRO LTD. MUMBAI 111770, 71, 72 & 73 DATED 04.10.96 12,500 12,500 12,500 12,500 13. D-567 BPL LTD., BANGLORE FD 46624, 629, 630 & 631 DT. 09.10.96 11,000 11,000 11,000 11,000 14. D-5 10 PAL CREDIT & CAPITAL LTD. MUMBAI 7465, 66, 67 & 68 DT. 24.10.96 5,000 5,000 5,000 5,000 15. D-599 GODREJ SOAP LTD. FDR 551537 & 38 DT. 28.10.96 11,000 11,000 16. D-126 127 CANARA BANK TANNAND LANE BOMBAY FDR LME 0818038 & 37 DT. 23.10.96 50,000 50,000 ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 19 17. D-219 SYNDICATE BANK DEHRADUN VIKAS CASH CERTIFICATE 232119, 20 DTD. 29.10.96 50,000 50,000 18. D-586 BHARAT FORGTE LTD. PUNE 000279, 280, 281 & 282 DT. 30.10.96 11,000 11,000 11,000 11,000 19. D-542 CLARIANT INDIA LTD. MUMBAI CF 800100104, 101, & 800099 DT.31.10.96 11,000 11,000 11,000 11,000 20. D-541 KIRLOSKAR PNCUNATIC CO. LTD. A 64996, 97, 98 & 655020 DT. 11.11.96 11,000 11,000 11,000 11,000 21. D 308 PNB DEHRADUM FD 2559 DT. 14.03.97 50,000 22. D-557 ZEE TELEFILM LTD. FD 6000157, 156, 155, 154 DT. 25.03.97 11,000 11,000 11,000 11,000 23. D-621 IL & FS LTD. MUMBAI, FD 00144548, 459, 460, 461 DDT. 31.03.97 11,000 11,000 11,000 11,000 24. D-620 BHARAT PETROLEUM CORPN. LTD. MUMBAI TD NO. 636793, 795, 796 & 797 DT. 12.04.96 11,000 11,000 11,000 11,000 25. D-555 KRISHNA BHAGYA JALA NIGAM LTD., 640473, 74, 75, & 76 DT. 15.04.96 5,000 5,000 5,000 5,000 26. D-585 MAS SERVICE P. LTD., BOND CERTIFICATE NO.55984 DT. 21.03.97 10,000 TOTAL 16,60,240 521,810 786,810 215,810 215,810 THE AO FOUND THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME DECLARING INCOME OF RS.1,94,230/- FOR THE RELEVANT PREVIOUS Y EAR. THE AO OBSERVED HUGE DIFFERENCE BETWEEN THE INCOME OF ASSESSEE DECL ARED IN THE RETURN AND THE INVESTMENT / FD REVEALED FROM THE SEIZED DOCUME NTS. THE AO ALSO OBSERVED THAT THE ASSESSEE DID NOT ATTEND THE INCOM E TAX PROCEEDINGS AT ALL AND KEPT THE MATTER LINGERING ON ONE OR THE OTHER P RETEXT. SINCE THE ASSESSEE IN THE PRESENT CASE IS A CENTRAL GOVERNMENT EMPLOYE E AND WAS TRANSFERRED FROM ONE PLACE TO ANOTHER DURING THE PROCEEDINGS OF INCOME TAX THEREFORE THE ASSESSEE FAILED TO ATTEND THE HEARING. HOWEVER THE AO SOUGHT THE CLARIFICATION ON THE FACTS REVEALED FROM THE SEIZED DOCUMENTS. TH E ASSESSEE SUBMITTED A REPLY VIDE LETTER DATED 10.03.2005 BUT NO CORROBORA TIVE EVIDENCE WAS ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 20 FURNISHED IN SUPPORT OF HIS CLAIM. THE WIFE OF ASSE SSEE SMT. AMITA PURI ALSO SUBMITTED A REPLY ADMITTING PART OF THE INVESTMENT BUT NO EVIDENCE WAS FURNISHED IN SUPPORT OF HIS CLAIM. THE ASSESSEE BEI NG A CENTRAL GOVT. EMPLOYEE WAS POSTED AT RAIPUR AT THE TIME OF ASSESS MENT SO HE COULD NOT ATTEND THE ASSESSMENT PROCEEDINGS PERSONALLY TO DEF END HIS CASE. AT THE SAME TIME, ASSESSMENT WAS GETTING TIME BARRED SO AO HAD NO ALTERNATE BUT TO FRAME THE ASSESSMENT U/S 144 OF THE ACT TO THE BEST OF HIS JUDGMENT. ACCORDINGLY, AO FRAMED THE ASSESSMENT UNDER SECTION 144 OF THE ACT AS UNDER : I) INCOME AS PER RETURN : 1,94,230.00 ADDITION MADE IN THE ASSESSMENT II) UNDISCLOSED INVESTMENT 26,84,104.00 III) ACCRUED INTEREST INCOME 1,61,638.00 THE LD. CIT(A) HAS ENHANCED THE INCOME OF THE ASSES SEE AS DETAILED BELOW : I) INCOME FROM INTEREST 4,86,480.00 II) INCOME FROM INTEREST 6,70,567.00 ACCORDINGLY AND FINALLY, THE AO TREATED THE ENTIRE INVESTMENT / DEPOSIT AS UNEXPLAINED INCOME OF THE ASSESSEE AND ADDED TO THE AMOUNT OF 26,84,104/- TO THE INCOME OF ASSESSEE. 22. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHERE THE ASSESSEE SUBMITTED THAT THE INVESTMENTS AND FIXED D EPOSITS WHICH HAVE ADDED IN THE ASSESSMENT YEAR 1997-98 ARE FROM THE P ROCEEDS OF THE EARLIER YEAR INVESTMENTS WHICH WERE ORIGINALLY INVESTED DUR ING THE PERIOD SEPTEMBER 1992 TO JANUARY 1995. IT WAS FURTHER SUBMITTED BY T HE LD. AR THAT THE SOURCE OF MAKING THE INVESTMENT DURING THE PERIOD FROM SEPTEM BER 1992 TO JANUARY 1995 WAS THE SALE PROCEEDS OF 20 KG GOLD AND 197 KG . SILVER. THE WIFE OF THE ASSESSEE, MRS. AMITA PURI RECEIVED THE GOLD AND SIL VER FROM HER FATHER MR. INDER SAIN PURI. HOWEVER THE LD. CIT(A) DISREGARDED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER : ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 21 1) NO EVIDENCE WAS PRODUCED BEFORE THE AO TO ESTABL ISH THE NEXUS OR IMMEDIATE CONNECTION BETWEEN MATURITY VALUE AND PRI MARY/ ORIGINAL INVESTMENT. 2) THE APPELLANT FAILED TO SUBSTANTIATE THE SOURCES OF FUNDS WHEREFROM THE ORIGINAL INVESTMENT WAS MADE OR INVESTMENT MADE FRO M HIS DISCLOSED SOURCES OF INCOME. 3) NO EVIDENCE THAT THE FATHER OF MRS. AMITA PURI W AS THE MAN OF MEANS. NO GIFT DEED WAS FILED. THE JEWELLERY WAS NEVER DIS CLOSED IN THE RETURN OF INCOME OR WEALTH TAX RETURN. 4) NO DECLARATION WAS FILED UNDER GOLD CONTROL ACT. 5) THE ASSESSEE SHRI V.K. PURI NEVER DECLARED THE S AID ASSETS AS PER THE CCS (CONDUCT) RULES, 1964. 6) SHREE AMBIKA JEWELERS WAS VERY SMALL FIRM DEALI NG IN ARTIFICIAL JEWELLERY AND NO SUCH PURCHASE OF JEWELLERY FROM SMT. AMITA P URI WAS RECORDED IN ITS BOOKS OF ACCOUNTS OR ITS SALES TAX AND INCOM E TAX RETURN. 7) THE CIBS INVESTIGATION LED TO THE FINDING THAT SHRI VINESH VYASH PROP. OF SHREE AMBIKA JEWELLERS, HAD FRAUDULENTLY PREPARED T HE PURCHASE BILLS WITH THE HELP OF SHRI GIRISH JAI, HIS EMPLOYEE AND SHRI DINESH VYAS IN JUNE-JULY, 2002 I.E. AFTER THE REGISTRATION OF RC A GAINST THE ASSESSEE, HIS WIFE SMT. AMITA PURI, AND SHRI VINESH VYAS US/S 120B, 104, 193 OF IPC R.W.S 13(2), 13(10)(E) OF PREVENTION OF CORRUPT ION ACT, 1988, WITH THE COURT OF SPECIAL JUDGE, PATIALA HOUSE COURTS, N EW DELHI ON 30.01.2004 8) DURING THE FIRST ROUND OF APPEAL THE THEN LD. CI T(A) HAD ISSUED SUMMONS TO THE PRINCIPAL OFFICER OF SHREE AMBIKA JE WELLERS. HOWEVER THE SUMMONS WAS NOT COMPLIED WITH THE APPELLANT WAS ALSO ASKED TO PRODUCE HIM, HOWEVER, HE COULD NOT PRODUCE THE PRIN CIPAL OFFICER BEFORE THE THEN CIT(A). 22.1 IN VIEW OF THE ABOVE FINDINGS OF THE LD. CIT(A ) UPHELD THE ACTION OF AO BY OBSERVING AS UNDER :- ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 22 .. I AM OF THE CONSIDERED VIEW THAT THIS IS A CAS E WHERE THE APPELLANT HAS FLOATED THE STORY OF SALE OF JEWELLERY AND SILV ER UTENSILS TO EXPLAIN THE INVESTMENTS IN HIS HANDS IN THE DISGUISE OF WIF ES INCOME FROM BOGUS SALE OF JEWERLLERY. I ABSOLUTELY AGREE WITH T HE VIEW OF THE ASSESSING OFFICER THAT THE STORY OF SALE OF JEWERLL ERY IS ONLY A CONCOCTED STORY AND ONLY AN AFTERTHOUGHT. THE STORY OF SALE O F JEWELLERY HAS BEEN FLOATED BY THE APPELLANT ONLY TO SAVE HIMSELF FROM THE PROVISIONS OF ANTI CORRUPTION LAW AFTER DETECTION OF HIS UNDISCLOSED A SSETS BY THE CBI. HE HAS BEEN A SENIOR OFFICER OF CUSTOM AND CENTRAL EXC ISE SERVICE, GOVT. OF INDIA. THE GOLD AND SILVER ITEMS AS CLAIMED TO H AVE BEEN SOLD WERE NEVER DISCLOSED, EITHER BEFORE THE INCOME TAX DEPAR TMENT OR BEFORE THE EMPLOYER DEPARTMENT. THE FAILURE ON THE PART OF THE APPELLANT AND HIS WIFE IN NOT DISCLOSING THE INVESTMENT TO CONCERNED AUTHORITIES SHOWS BOGUS NATURE OF SALE OF JEWERLLERY. THE FRAUDULENT NATURE OF THE BILLS FABRICATED FOR THE ALLEGED SALE OF JEWELLERY HAS AL SO BEEN ESTABLISHED. THE ALLEGED SALE OF GOLD AND SILVER ITEMS GOES TO T HE ROOT OF SOURCE OF INVESTMENT AND THE APPELLANT HAS NEVER BEEN ABLE TO SUBSTANTIATE IT. WHEN THE ROOT OF THE SOURCE OF THE FUNDS ITSELF IS UNEXPLAINED, ITS REINVESTMENT IN THE FORM OF CASH IN THE SEVERAL BAN KS AND COMPANIES IS FALSE AND UNREALIABLE. THE APPELLANT HAS ALSO TRIED TO SAVE HIMSELF BY CREATING A DESIGN TO SHIFT HIS INCOME IN THE HANDS OF HIS WIFE, SMT. AMITA PURI. IT IS WELL SETTLED PRINCIPLE OF LAW THAT IF I NCOME BELONGS TO A , IT OUGHT TO BE TAXED IN THE HANDS OF A , NOT IN THE HANDS OF B UNLESS A IS MINOR. INCOME MUST BE TAXED IN THE HANDS OF THE PERSON TO WHOM IT HAS ACCRUED AND TO WHOM IT REALLY BELONGINGS. THERE FORE, THE APPELLANT CANNOT BE ALLOWED TO TAKE SHELTER BEHIND THE INCOME OF ANY OTHER PERSON. IN ABSENCE OF ANY DISCLOSURE OF ASSETS/INCO ME IN IT/WT RETURNS, THE CLAIM OF THE APPELLANT REGARDING SALE OF GOLD A ND SILVER ITEMS CANNOT E ACCEPTED. IF IT IS ACCEPTED THEN ANY PERSON CAN B E ABLE TO CONVERT HIS BLACK MONEY INTO WHITE BY JUST CLAIMING THAT HE HAS SOLD GOLD AND SILVER WITHOUT PRODUCING ANY DOCUMENTARY EVIDENCE IN THE F ORM OF INCOME TAX AND WEALTH TAX RETURNS. CONSIDERING ALL THE FACTS & CIRCUMSTANCES OF THE CASE I CONFIRM THE ADDITIONS ON ACCOUNT OF INVE STMENT OF RS. 26,84,104/- FOR ASSTT. YR. 1997-98 AND RS. 54,87,70 6/- FOR ASSTT. YR. 2002-03. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US. 23. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. AR SUBMITTED TWO SETS OF PAPER BOOKS CONTAINING PAGES FROM 1 TO 318 AND ALSO SUBMITTED W RITTEN SUBMISSION WHICH RUNS FROM PAGES 1 TO 45. BEFORE US THE LD. AR ALSO SUBMITTED A CHART IN TABULAR ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 23 FORM WHERE THE SOURCE OF EVERY FD AND INVESTMENT IN RESPECT OF ALL THE FOUR PERSONS I.E. ASSESSEE, HIS WIFE AND TWO DAUGHTERS W AS EXPLAINED. FOR INSTANCE THE AO ADDED A SUM OF RS. 15000.00X2= 30,0 00/- IN THE HANDS OF THE ASSESSEE AS UNDISCLOSED INCOME. BUT ACTUALLY THESE ARE 2 FDS IN THE NAME OF THE ASSESSEE, HIS WIFE. THE LD. AR DREW OUR ATTENTI ON TO PAGES 93 TO 94 OF THE PAPER BOOK WHERE IT WAS SEEN THAT THESE INVESTMENTS HAVE BEEN MADE OUT OF CASH WITHDRAWALS OF RS. 1.10 LAKH (RS. 35,000/- FRO M SB A/C NO. 6581 ON 26.04.1996 PAGE 299 OR RS.10,000/- AND RS.25,000/- FROM SB A/C NO. 6583 ON 20.04.1996 AND 26.04.1996 PAGE 303, RS.20,000/- FRO M SB A/C NO. 6663 ON 26.04.1996 PAGE 306 AND RS.20,000/- FROM SB A/C NO. 6664 ON 26.04.1996 PAGE 309, ALL OF UBI OF MUMBAI). THE CASH FLOW STAT EMENT MAY BE SEEN AT PAGE 283 OF THE PAPER BOOK. THE SOURCE OF CREDITS I N THESE FOUR SB ACCOUNTS OF UBI IS GIVEN AT PAGE 234 OF PAPER BOOK. THE TOTA L INVESTMENT MADE IN ICICI BANK ON 26.04.1996 WAS AT RS.1 LAKH, WHICH COMPRISE D THESE TWO FDS OF RS.15,000/- EACH AND TWO OTHER FDS OF RS.35,000/- E ACH, WHICH ARE NOT PART OF THE PRESENT PROCEEDINGS. SIMILARLY THE DETAILS OF ALL THE INVESTMENT WERE DU LY EXPLAINED IN THE SUBMISSION OF THE ASSESSEE WHICH IS PLACED ON RECOR D. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 24. FROM THE AFORESAID DISCUSSION WE FIND THAT THE AO HAS MADE VARIOUS ADDITIONS OF UNDISCLOSED FD IN THE HAND OF THE ASSE SSEE BY FRAMING THE ASSESSMENT UNDER SECTION 144 OF THE ACT. THE AO GOT THE INFORMATION OF UNDISCLOSED FD/INVESTMENT AS A RESULT OF SEARCH OF CBI AT THE PREMISES OF THE ASSESSEE. ALL THE ADDITION WERE CONFIRMED BY THE LD . CIT(A). HOWEVER BEFORE US THE LD. AR HAS SUBMITTED ALL THE NECESSARY SUPPO RTING DOCUMENTS JUSTIFYING THE SOURCE OF THE INVESTMENT/ FD THAT THEY WERE CAR RIED FORWARD FROM THE EARLIER YEARS. IT WAS ALSO SUBMITTED BY THE LD. AR THAT THE TOTAL OF ALL THE UNDISCLOSED INVESTMENT IS COMING FOR AN AMOUNT OF R S. 21,85,304/- AND NOT RS. 26,84,104/-. THE LD. AR ALSO PRAYED FOR THE REC TIFICATION OF THE MISTAKE ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 24 WHICH IS PLACED ON PAGE 352 TO 359 OF THE SECOND PA PER BOOK. IN VIEW OF ABOVE WE ARE INCLINED TO REVERSE THE ORDER OF THE L OWER AUTHORITIES AND ASSESSEES GROUND IS ALLOWED. 25. SIXTH ISSUE RAISED BY ASSESSEE IN THIS APPEAL I S THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY MAKING THE ADDITION O F INTEREST INCOME OF RS.2,68,410/- BEING 10% OF INVESTMENT OF RS.26,84,1 04/- IN THE HANDS OF HIS WIFE I.E. AMITA PURI. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO HAS ADDED A SUM OF RS. 26,84,104.00 AS UNDISCLOSED INVESTMENT BUT THE ASSE SSEE DID NOT OFFER ANY INTEREST INCOME IN THE YEAR UNDER CONSIDERATION. AS THE ABOVE INVESTMENT HAS BEEN INCLUDED AS UNDISCLOSED INCOME OF THE ASSESSEE , THEREFORE THE INTEREST ACCRUED ON SUCH INVESTMENT ALSO NEEDS TO BE INCLUDE D IN THE INCOME OF THE ASSESSEE BUT THERE WAS NO INFORMATION OF SUCH INCOM E. SO IN THE ABSENCE OF ANY INFORMATION, IT WAS NOT POSSIBLE TO QUANTIFY TH E INTEREST INCOME WITH ACCURACY. THEREFORE AO PRESUMED INTEREST RATE @ 10% AND WORKED OUT INTEREST INCOME OF RS.2,68,410/- AND ADDED TO THE T OTAL INCOME OF ASSESSEE. 26. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO UPHELD THE ACTION OF AO BY OBSERVING AS UNDER:- 12.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE REMAND REPORT. AS THE ADDITION OF UNDISCLOSED I NVESTMENTS HAVE BEEN UPHELD, IT IS CONCLUDED THAT ADDITION OF THE I NCOME EARNED ON SUCH INVESTMENTS IS JUSTIFIED IN LAW. HENCE THE ADDITION OF RS.2,68,410/- (FOR AY 97-98) AND RS.1,61,638/- (FOR AY 02-03) MADE BY ASSESSING OFFICER ARE CONFIRMED. FURTHER, ON THE BASIS OF SUBMISSIONS BEFORE ME, I AM INCLINED TO AGREE WITH THE VIEWS OF THE AO THAT IN ACCORDANCE WITH THE PROVISIONS OF LAW THREE FOURTH OF INTEREST RECEIVED FROM COMPANY DEPOSITS I.E. RS.4,86,480/- NEEDS TO BE ADDED IN TH E HANDS OF SHRI V.K.PURI ALONG WITH BANK FD INTEREST OF RS.6,70,567 /- ACCORDINGLY. SIMILARLY FOR THE SAME REASONS THE AO HAS SUGGESTED IN THE REMAND REPORT THAT ADDITIONS OF RS.4,36,048/- ON ACCOUNT O F BANK FD INTEREST, AND RS.64,552/- ON ACCOUNT OF INTEREST ON COMPANY D EPOSITS IS REQUIRED TO BE ADDED IN THE HANDS OF THE APPELLANT IN AY 200 2-03. HENCE, FOR THE SAME REASON FOR A.Y 2002-03, THE AO IS DIRECTED TO MAKE ADDITION OF ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 25 RS.4,36,048/- BY WAY OF BANK FD INTEREST AND A SUM OF RS.64,552/- BY WAY OF INTEREST IN COMPANY DEPOSITS. WITH AFORESAI D DIRECTION THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE CONFIRM ED FOR BOTH THE YEARS. ACCORDINGLY, GROUND NO. (VIII) OF THE APPEAL OF BOTH YEARS ARE DISMISSED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US. 27. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE US THE LD. AR SUBMITTED THAT THE ASS ESSEE AND ALL THE MEMBERS OF HIS FAMILY MAINTAIN ACCOUNTS ON CASH BASIS. OUT OF THE TOTAL AMOUNT OF RS.26,84,104/- THE INVESTMENTS ARE ONLY TO THE EXTE NT OF RS.11,37,000/- THE REST ARE BEING RECEIPTS, EXPENDITURE AND INTEREST R ECEIVED. TAX HAS ALREADY BEEN PAID ON THE INTEREST INCOME RECEIVED ON THE MA TURED INVESTMENTS AND THIS WAS OFFERED TO TAX IN THE YEAR SUCH INCOME WAS RECEIVED, THE DETAILS OF WHICH ARE GIVEN UNDER THE CHART FOR A/.Y. 1997-98 T ITLED TABULAR EXPLANATION OF INTEREST REFCEIVDED AND OFFERED TO T AX WHICH MAY BE SEEN AT PAGES 336-343 OF PAPER BOOK-II FOR AY 1997-98. IN VIEW OF THIS, THERE IS NO QUESTION OF PAYMENT OF INTERES T OF RS.2,68,410/-. IT IS URGED THAT THIS ADDITION OF INTEREST MAY KINDLY BE DELETE D. FROM THE ABOVE WE FIND THAT THE ADDITION OF THE ABOVE SAID AMOUNT OF RS. 2 6,84,104.00 HAS BEEN DELETED IN THE FIRST ISSUE RAISED BY THE ASSESSEE. SIMILARLY AND IN VIEW OF ABOVE WE ARE INCLINED TO REVERSE THE ORDER OF THE L OWER AUTHORITIES AND GROUND OF ASSESSEE IS ALLOWED. 28. THE SEVENTH ISSUE RAISED BY ASSESSEE IN THIS AP PEAL IS THAT LD. CIT(A) ERRED IN FURTHER ENHANCING THE INTEREST INCOME OF R S. 4,86,480/- AND RS. 6,70,567/- THOUGH THE SAME HAS ALREADY BEEN TAXED I N THE HANDS OF AMITA PURI WIFE OF THE ASSESSEE. 28.1 THE LD. CIT (A) HAS ENHANCED THE INTEREST INCO ME IN THE HANDS OF THE ASSESSEE FOR THE DEPOSITS MADE IN THE FD AND IN THE COMPANY DEPOSIT ON ITA NO.1904-1905/KOL/2012 A.YS. 2002-03 & 1997-98 V.K.PURI V. ACIT CIR-26,KOL. PAGE 26 BASIS OF REMAND REPORT RECEIVED FROM THE AO. THIS I NTEREST INCOME WAS NOT DISPUTED BY THE AO AT THE TIME OF ASSESSMENT. HOWEV ER THE LD. AR OF THE ASSESSEE SUBMITTED BEFORE US THAT THE INTEREST INCO ME FOR RS. 11,57,047/- IS ACTUALLY THE INCOME OF THE WIFE (SMT. AMITA PURI) O F THE ASSESSEE WHICH IS THE PART OF THE INCOME DECLARED BY HER FOR THE AY 1997- 98 FOR AN AMOUNT OF RS. 15,00,200.00. OUR ATTENTION WAS ALSO DRAWN TO THE P AGE NO. 89-90 OF THE 1 ST PAPER BOOK WHERE THE COPY OF THE ASSESSMENT ORDER W AS PLACED. THE LD. DR AT THE TIME OF HEARING DID NOT BRING ANYTHING ON RE CORD CONTRARY TO THE SUBMISSION OF THE ASSESSEE. WE FIND THAT THE ADDITI ON OF THE INTEREST INCOME IN THE HANDS OF THE ASSESSEE WILL AMOUNT TO DOUBLE TAX . ACCORDINGLY WE REVERSE THE ORDER OF THE LD. CIT(A) AND THIS GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 29. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT 05/ 02/2016 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 05 / 02 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-V.K.PURI, P.K.HIMMATSINGHKA, AA-4, SALT LAKE, KOLKATA-64 2. /RESPONDENT- ACIT, CIRCLE-26, 169 A.J.C.BOSE ROAD, KOLKATA-14 3. ) *+ , , - / CONCERNED CIT KOLKATA 4. , , -- / CIT (A) KOLKATA 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,