Appeal details
Counselvise Citation
45425314 RSA 2009
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-04-2011
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
17-03-2011
Assessment Year
2001-2002
Appeal Filed On
09-09-2009
Judgement Text
ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 411 /VIZAG/ 20 09 ASSESSMENT YEAR : 2000 - 01 DCIT, CENTRAL CIRC LE RAJAHMUNDRY VS. SMT. GRANDHI ARAVINDAM (HUF) RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAN NO. AAEHG 1338K ITA NO.412/VIZAG/2009 ASSESSMENT YEAR : 2006 - 07 DCIT, CENTRAL CIRCLE RAJAHMUNDRY VS. SMT. GRANDHI LALITHA RAJAHMUNDRY (APPELLANT) (RESPONDEN T) PAN NO.ABQPG 1234M ITA NO.413/VIZAG/2009 ASSESSMENT YEAR : 2006 - 07 SMT. GRANDHI LALITHA RAJAHMUNDRY VS. ACIT CENTRAL CIRCLE RAJAHMUNDRY (APPELLANT) (RESPONDENT) ITA NO.453 TO 455/VIZAG/2009 ASSESSMENT YEAR : 2000 - 01 TO 2002 - 03 DCIT CENTR AL CIRCLE RAJAHMUNDRY VS. SRI GRANDHI ARAVINDAM RAJAHMUNDRY (APPELLANT) (RESPONDENT) ITA NO.16/VIZAG/2009 ASSESSMENT YEAR : 2005 - 06 ACIT CENTRAL CIRCLE RAJAHMUNDRY VS. SMT. GRANDHI LALITHA RAJAHMUNDRY (APPELLANT) (RESPONDENT) CO NO.9/VIZAG/200 9 ASSESSMENT YEAR : 2005 - 06 SMT. GRANDHI LALITHA RAJAHMUNDRY VS. ACIT CENTRAL CIRCLE RAJAHMUNDRY (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI TH.L. PETER, CIT(DR) RESPONDENT BY: SHRI G.V.N. HARI, CA ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 2 ORDER PER BENCH:- THESE APPEALS ARE PREFERRED BY THE REVENUE AND TH E ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE CIT(A). CO IN ITA NO. 16 OF 2009 IS ALSO FILED BY THE ASSESSEES. SINCE ALL THESE APPEALS AND THE C.O . WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDAT ED ORDER FOR THE SAKE OF CONVENIENCE. WE HOWEVER, PREFER TO ADJUDICATE THEM ONE AFTER THE OTHER. ITA NO.411 OF 2009: 2. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON A SOLITARY GROUND THAT CIT(A) OUGHT NOT TO HAVE BELIEVED THE CASH BOOK PRESENTED BY THE ASSESSEE WITHOUT CONSIDERING THE V IEW OF THE A.O. THAT THE SAME CASH BOOK WAS NEVER PRODUCED EITHER IN THE POS T SEARCH OPERATION OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE R EVENUE HAS ALSO CHALLENGED THE ADMISSION OF THE ADDITIONAL EVIDENCE IN CONTRAVENTION TO RULE 46A OF THE I.T. RULES, 1962. THE FACTS RELATING TO THE IMPUGNED ISSUE BORNE OUT FROM THE RECORD ARE THAT ONE DR. G. ARAVINDAM, THE KARTA OF THE ASSESSEE HUF AND A LEADING ORTHOPAEDIC SURGEON WAS SUBJECTED TO SEARCH & SEIZURE OPERATION ON 4.8.2005 AND CERTAIN BOOKS OF ACCOUNTS AND DOCUMENTS WERE SEIZED DURING THE SEARCH OPERATION. ONE OF THE SEI ZED DOCUMENT IS A RUNNING ACCOUNT OF THE ASSESSEE HUF IN CATHOLIC SYRIAN BANK WHICH CONTAINED THE CASH DEPOSITS ON VARIOUS DATES RANGING FROM 3.5.199 9 TO 13.11.1999 AGGREGATING TO RS.24,72,260/-. DURING THE COURSE O F HEARING, THE A.O. HAS EXAMINED THE MATERIAL AVAILABLE BEFORE HIM AND HE C ONCLUDED THAT ASSESSEE HUF DID NOT HAVE THE NECESSARY CASH BALANCE IN ITS REGULAR BOOKS OF ACCOUNTS ON THE DATE ON WHICH DIFFERENT CASH AMOUNTS WERE DE POSITED AND AS SUCH THE SOURCE OF THE DEPOSITS OF THE SAID BANK ACCOUNT COU LD NOT BE PROVED AND HE ACCORDINGLY MADE THE ADDITION OF ENTIRE DEPOSITS U/ S 69A OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER NOTICED THAT AN ERROR HAD CREPT IN TO THE EFFECT THAT THE QUANTUM OF CASH DEPOSITS REFLECTED AGAINST VARIOUS DATES AGGREGATING TO RS.24,72,260/- DID NOT TALLY WITH TH E QUANTUM OF EACH CASH DEPOSITS AS PER THE STATEMENT OBTAINED FROM THE SAI D BANK AND ON FURTHER EXAMINATION, HE QUANTIFIED THE CORRECT AGGREGATE OF CASH DEPOSITS AT ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 3 RS.16,69,100/- AND ACCORDINGLY HE INFORMED THE FIRS T APPELLATE AUTHORITY I.E. CIT(A) BEFORE WHOM THE APPEAL AGAINST THE ADDITION MADE U/S 69A WAS PENDING TO TREAT THE ADDITION IN RESPECT OF SAID IS SUE AT RS.16,69,100/- INSTEAD OF RS.24,72,260/-. 3. BEFORE THE CIT(A), IT WAS CONTENDED BY THE ASSES SEE THAT ASSESSEE HAS NOT PROVIDED SUFFICIENT OPPORTUNITY TO EXPLAIN THE SOURCE OF DEPOSITS AND THE AVAILABILITY OF FUNDS ON THE RELEVANT DATE OF DEPOS ITS. HE PLACED A CASH BOOK BEFORE THE CIT(A) TO DEMONSTRATE THE AVAILABILITY O F THE CASH WITH THE ASSESSEES ON THE DATE OF DEPOSITS. SINCE THE ADDIT IONAL EVIDENCE WAS FILED BEFORE HIM, HE CALLED A REMAND REPORT FROM THE ASSE SSING OFFICER. 4. VIDE REMAND REPORT DATED 7.11.2008, THE ASSESSIN G OFFICER IN A TABULAR CHART FURNISHED THE DETAILS OF CASH DEPOSITS INTO T HE SAID BANK ACCOUNT TOGETHER WITH THE INFORMATION REGARDING THE EXTENT OF CASH BALANCE AVAILABLE ON THE VARIOUS DATES OF DEPOSITS AS PER THE CASH BO OKS PRODUCED DURING THE REMAND PROCEEDINGS AND STATED THAT THE ASSESSEE DID HAVE SUFFICIENT CASH BALANCES ON THE VARIOUS DATES ON WHICH DIFFERENT AM OUNT OF CASH DEPOSITS WERE MADE INTO THE BANK ACCOUNT. THE ASSESSING OFF ICER HOWEVER, FURTHER SUBMITTED THAT CASH BOOK PRODUCED DURING THE REMAND PROCEEDINGS HAD NEVER EARLIER BEEN PRODUCED EITHER DURING THE SEARCH PROC EEDINGS OR DURING THE ASSESSMENT PROCEEDINGS FOR THE REASONS BEST KNOWN T O THE ASSESSEE. 5. RELYING UPON THE REMAND REPORT OF THE ASSESSING OFFICER, CIT(A) HAS DELETED THE ADDITIONS AFTER HAVING OBSERVED THAT AS SESSEE WAS HAVING A SUFFICIENT CASH BALANCE ON THE DATE OF DEPOSIT IN T HE BANK ACCOUNT, THEREFORE, NO ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT U/ S 69A IS CALLED FOR. 6. NOW THE REVENUE IS BEFORE US WITH THE SUBMISSION S THAT CIT(A) HAS WRONGLY PLACED A RELIANCE UPON THE CASH BOOK FURNIS HED BEFORE HIM WITHOUT REALIZING THE FACT THAT DURING THE COURSE OF SEARCH , THE SAID CASH BOOK WAS NOT FOUND BY THE SEARCH PARTY. THEREFORE, IT IS AN AFT ER THOUGHT STORY TO EXPLAIN THE SOURCE OF DEPOSITS. ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 4 7. THE LD. COUNSEL FOR THE ASSESSEES HAS CONTENDED THAT WHEN THE DEPOSITS IN THE BANK ACCOUNTS WERE NOTICED BY THE R EVENUE AND THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS, ASSESS EE HAS FURNISHED THE RELEVANT EVIDENCE ALONG WITH THE CASH BOOK TO EXPLA IN THE SOURCE OF DEPOSITS WHICH WERE DULY EXAMINED BY THE ASSESSING OFFICER I N REMAND PROCEEDINGS AND HE WAS CONVINCED WITH THE EXPLANATIONS FURNISHE D BY THE ASSESSEES WITH REGARD TO THE SOURCE OF DEPOSITS. THEREFORE, CIT(A ) WAS JUSTIFIED IN DELETING THE ADDITIONS. 8. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDER OF THE AUTHORITIES BELOW, WE FIND THAT REVENU ES GRIEVANCE IS THAT THE ASSESSEE HAS FILED A CASH BOOK BEFORE THE CIT(A) EX PLAINING THE SOURCE OF DEPOSITS AND THIS CASH BOOK WAS NOT FOUND DURING TH E COURSE OF SEARCH. THEREFORE, THE ADDITION IS CALLED FOR. WE DO NOT F IND ANY FORCE IN THE CONTENTION OF THE REVENUE BECAUSE ONCE THE DEPOSITS ARE FOUND IN THE BANK ACCOUNTS DURING THE COURSE OF SEARCH, THE ASSESSEE MAY BE ASKED TO EXPLAIN THE SOURCE OF DEPOSITS. IT IS IRRELEVANT WHETHER T HE CASH BOOK IS FOUND DURING THE COURSE OF SEARCH OR NOT. IN ANY CASE, THE ASSE SSEE IS REQUIRED TO EXPLAIN THE SOURCE OF DEPOSITS AND THE AVAILABILITY OF THE FUNDS ON THE DATE OF DEPOSITS. DURING THE COURSE OF REMAND PROCEEDINGS, ASSESSEE HAS FURNISHED THE EXPLANATIONS ALONG WITH THE CASH BOOKS ABOUT TH E SOURCE OF DEPOSITS WHICH WERE DULY EXAMINED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT RAISED ANY DOUBT WITH REGARD TO THE AVAILABILIT Y OF THE FUNDS ON THE DATE OF DEPOSITS. THEREFORE, WE ARE OF THE VIEW THAT AS SESSEE HAS DISCHARGED THE PRIMARY ONUS WHICH LAY UPON IT TO EXPLAIN THE SOURC E OF DEPOSITS ON THE DATE FIXED. THUS, NO ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT IS CALLED FOR. WE THEREFORE, FIND OURSELVE S IN AGREEMENT WITH THE FINDINGS OF CIT(A) AND WE CONFIRM HIS ORDER. ITA NO.16 OF 2009 & C.O. 9 OF 2009: 9. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS: 1. THAT THE CIT(A) HAS IN CONTRAVENTION OF RULE 46A OF IT RULES, 1962, AND ALSO AGAINST THE DOCTRINE OF NATURAL JUST ICE, HAD ADMITTED ADDITIONAL EVIDENCES AND INFORMATION WITHOUT GIVING AN OPPORTUNITY ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 5 OF THE ASSESSING OFFICER TO EXAMINE OR ARGUE UPON T HE ADDITIONAL EVIDENCES. 2. THAT THE CIT(A) HAD ERRED IN ALLOWING THE ASSESS EES CLAIM TO THE EXTENT OF RS.77,060/-, ALTHOUGH THE PAYMENT DETAILS CLEARLY INDICATED THE FACT OF PURCHASE OF JEWELLERY. 3. THAT THE CIT(A) OUGHT TO HAVE SUSTAINED THE ENTI RE ADDITION MADE BY THE ASSESSING OFFICER, WHICH IS BASED ON MA TERIAL EVIDENCES. 4. THE CIT(A) HAS ERRED IN ACCEPTING THE ASSESSEES CLAIM THAT THE `VADDANAM DISCLOSED UNDER VDIS WAS REMODELED AND R EDUCED ITS WEIGHT, WITHOUT ANY SUPPORTING EVIDENCES. 10. GROUND NO.1 BEING GENERAL IN NATURE WOULD BE AD JUDICATED ALONG WITH THE OTHER GROUNDS. GROUND NO.2 RELATE TO THE RELIE F OF RS.77,060/- GIVEN BY THE CIT(A) ON ACCOUNT OF PURCHASE OF JEWELLERY. TH E FACTS IN THIS REGARD BORNE OUT FROM THE ORDER OF THE LOWER AUTHORITIES A RE THAT THE A.O. HAD MADE AN ADDITION OF RS.2,17,060/- ON ACCOUNT OF PURCHASE OF JEWELLERY ON THE BASIS OF DOCUMENTS WHEREIN WEIGHT OF JEWELLERY AND THE CO RRESPONDING VALUE HAS BEEN MENTIONED. THE ASSESSEE EXPLAINED BEFORE THE A.O. THAT THE AMOUNTS MENTIONED IN THE SEIZED DOCUMENTS ARE ONLY AN ESTIM ATE AND NOT A COST OF PURCHASE OF JEWELLERY. THIS EXPLANATION WAS NOT AC CEPTED BY THE A.O. THE A.O. TAKES FURTHER SUPPORT FROM PAGE 5 OF THE SAID SEIZED DOCUMENT, WHEREIN VARIOUS AMOUNTS TOTALING TO RS.1,40,000/- HAS BEEN MENTIONED IN THE HANDWRITING OF THE ASSESSEES. ACCORDINGLY, THE A.O . CONCLUDED THAT THE ASSESSEE HAS PURCHASED GOLD JEWELLERY FOR AN AMOUNT OF RS.2,17,060/- EVIDENCED BY PAYMENT OF ATLEAST RS.1,40,000/- AS PE R THE SEIZED DOCUMENT, WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. 11. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WITH THE SUBMISSION THAT VARIOUS AMOUNTS MENTIONED INCLUDING WEIGHT OF JEWELLERY IS ONLY AN ESTIMATE AND NO AMOUNT HAS BEEN INVESTED BY THE ASSESSEES. THE CIT(A) EXAMINED THE WRITTEN SUBMISSIONS OF THE ASSE SSEES AND ALSO TOOK A NOTE OF THE SEIZED DOCUMENTS ON WHICH THE WORD `EST IMATE WAS PRINTED. THE SAID SEIZED DOCUMENTS SHOWS THE RECEIPT OF AN A MOUNT OF RS.55,000/- BY ONE MR. SHEETAL ON 23.12.2004. HOWEVER, MR. SHEETA L HAS CERTIFIED THAT ESTIMATES SEIZED BY THE DEPARTMENT HAVE NOT BEEN GI VEN BY HIM, WHICH ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 6 MEANS THE ESTIMATE FOR PURCHASE MAY HAVE BEEN MADE BY SOME OTHER JEWELLERS. THE CIT(A) FURTHER OBSERVED THAT WHEN T HE AMOUNT MENTIONED IN THE SEIZED DOCUMENT ARE UNDER THE HEAD ESTIMATES PRIMA FACIE IT SHOWS THAT FIGURES ARE ONLY ESTIMATES UNLESS MATERIAL CONTRARY TO THE SAME ARE RELIED UPON BY THE ASSESSING OFFICER. THE CIT(A) ACCORDIN GLY HELD THAT UNDER SUCH CIRCUMSTANCES IT CAN REASONABLY BE CONCLUDED THAT T HOUGH THE ESTIMATE HAS BEEN MADE FOR JEWELLERY VALUED AT RS.2,17,060/-, TH E ASSESSEE HAS INVESTED ONLY AN AMOUNT OF RS.1,40,000/- FOR PURCHASE OF JEW ELLERY, SOURCE OF WHICH REMAINS UNEXPLAINED. HE ACCORDINGLY REDUCED THE AD DITIONS FROM RS.2,17,060/- TO RS.1,40,000/- AFTER GIVING A RELIE F OF RS.77,060/-. 12. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L AND PLACED A HEAVY RELIANCE UPON THE ORDER OF THE A.O., WHEREAS THE AS SESSEE HAS HEAVILY RELIED UPON THE ORDER OF THE CIT(A). 13. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWE R AUTHORITIES, WE FIND THAT CIT(A) HAS PROPERLY EXAMINED THE ENTRIES IN TH E SEIZED DOCUMENT AND RESTRICTED THE ADDITIONS TO RS.1,40,000/- SINCE THE CIT(A) HAS PROPERLY APPRECIATED THE ENTRIES MENTIONED IN THE SEIZED DOC UMENT, WE FIND NO INFIRMITY IN HIS ORDER. WE THEREFORE CONFIRM HIS O RDER. 14. THE C.O. IS ALSO FILED BY THE ASSESSEE. THROUG H THIS C.O., THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS.1,40,000/- SUSTAI NED BY THE CIT(A) TOWARDS UNEXPLAINED INVESTMENT IN JEWELLERY. DURING THE CO URSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT FURNISH ANY EVID ENCE WITH REGARD TO THE SOURCE OF THIS INVESTMENT. WE THEREFORE, FIND NO I NFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, WE CONFIRM HIS ORDER IN THIS REGARD. ITA NOS.453 TO 455 OF 2009: 15. THROUGH THESE APPEALS REVENUE HAS ASSAILED THE ORDER OF THE CIT(A) ON VARIOUS COMMON GROUNDS WHICH ARE AS UNDER: 1. THAT THE CIT(A) HAS IN CONTRAVENTION OF RULE 46A OF IT RULES, 1962, AND ALSO AGAINST THE DOCTRINE OF NATURAL JUSTICE, H AD ADMITTED ADDITIONAL EVIDENCES AND INFORMATION WITHOUT GIVING AN OPPORTU NITY OF THE ASSESSING OFFICER TO EXAMINE OR ARGUE UPON THE ADDITIONAL EVI DENCES. ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 7 2. THAT THE CIT(A) OUGHT TO HAVE FOLLOWED THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF HM ESUFALI HM ABDUL AL I (1973) 90 ITR 27 (SC) AND AP HIGH COURT IN THE CASE OF RAJNIK & CO. (2001 ) 251 ITR 561 (AP) IN UPHOLDING THE ADDITIONS MADE ON ESTIMATE BASIS. 3. THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING TH E ADDITION OF ESTIMATED X-RAY AND THE LAB TEST CHARGES FOR ASSESSMENT YEARS 2000-2001, 2001-2002 AND 2002-2003 ON THE REASONING THAT NO INCRIMINATIN G MATERIAL, WHATSOEVER WAS FOUND DURING THE SEARCH OPERATION WHERE AS IN F ACT INCRIMINATING MATERIAL WAS FOUND AND SEIZED AND WAS DISCUSSED IN THE ASSES SMENT ORDER ITSELF. 4. THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING TH E ADDITIONS ON ACCOUNT OF ESTIMATED INCOMES FROM MEDICAL SHOP RUN AS A PRO PRIETARY CONCERN IN THE OSTENSIBLE NAME OF THE ASSESSEES FATHER WHERE AS F OR ALL PRACTICAL PURPOSES THE ASSESSEE WAS ENJOYING THE INCOME FROM MEDICAL S HOP. 5. THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING TH E ESTIMATED ADDITIONS ON ACCOUNT OF SUPPRESSED OF RECEIPTS ON TREATMENT O F IN-PATIENTS FOR ASSESSMENT YEARS 2000-2001 AND 2004-2005, ON THE GR OUND THAT THERE WAS NO INCRIMINATING MATERIAL FOR THESE YEARS WHERE IN FACT INCRIMINATING MATERIAL WAS FOUND SEIZED AND DISCUSSED IN THE ASSESSMENT OR DER. 6. THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING TH E ADDITIONS ON ACCOUNT OF BONUS ON INVESTMENT IN CHITS IN THE NAMES OF BEN AMIDARS OF THE ASSESSEE. 7. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING. 16. THOUGH THE REVENUE HAS RAISED THE VARIOUS GROUN DS IN THESE APPEALS BUT THEY ALL RELATE TO AN ISSUE WHETHER INCOME OF T HE ASSESSEE FROM X-RAY AND LAB TEST CHARGES CAN BE ESTIMATED ON THE BASIS OF T HE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH CONDUCTED ON 4.8.2005. IT IS ALSO IMPORTANT TO NOTE HERE THAT DURING THE COURSE OF SEARCH NO INCRI MINATING MATERIAL RELATING TO THE IMPUGNED ASSESSMENT YEARS I.E. 2000-2001 TO 2002-2003 WERE FOUND ON THE BASIS OF WHICH AN INFERENCE CAN BE DRAWN THA T UNDISCLOSED INCOME WAS RECEIVED BY THE ASSESSEES. THE ASSESSING OFFICER H AS USED SEIZED MATERIAL FOR ESTIMATING THE INCOME OF THE ASSESSEES ON ACCOUNT O F X-RAY AND LABORATORY TEST AND IN-PATIENT CHARGES. THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSION THAT ADDITION CAN ONLY B E MADE IN THOSE ASSESSMENT YEARS FOR WHICH INCRIMINATING MATERIAL W AS FOUND DURING THE COURSE OF SEARCH. THE SEIZED MATERIAL CANNOT BE IN TERPOLATED FOR OTHER ASSESSMENT YEARS TO WHICH IT DOES NOT RELATE. THE CIT(A) RE-EXAMINED THE ISSUE IN THE LIGHT OF VARIOUS JUDGEMENTS AND HAS DE LETED THE ADDITIONS MADE ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 8 BY THE A.O. THE RELEVANT OBSERVATIONS OF THE CIT(A ) ARE EXTRACTED HEREUNDER: 1. IT IS WELL SETTLED POSITION OF LAW THAT INCRIMINATI NG MATERIALS CONSTITUTE THE SINE QUA NON FOR DETERMINATION OF UN DISCLOSED INCOME CONSEQUENT TO SEARCH OPERATION IN A PARTICUL AR CASE. HOWEVER, IF COMPLETE INFORMATION IS UNAVAILABLE FOR THE WHOLE PERIOD (ACCOUNTING YEAR) WITH REFERENCE TO WHICH IN CRIMINATING MATERIAL IS DETECTED, IN THAT SITUATION THE ASSESSI NG OFFICER COULD DETERMINE ANY UNDISCLOSED INCOME FOR THE WHOLE PERI OD ON ESTIMATE BASIS. [CIT VS. C.J. SHAH AND CO. (2000) (246 ITR 671) (BOMBAY HIGH COURT)]. ESTIMATION NORMALLY INVOLVES A CERTAIN DEGREE OF LATITUDE TO THE ASSESSING OFFICER. HOWEV ER, THE COURTS HAVE GENERALLY HELD THAT POST SEARCH ASSESSMENTS SH OULD BE MADE WITH REFERENCE TO THE SEIZED ASSETS AND MATERIALS G ATHERED DURING THE SEARCH, AND THAT IT MAY POSSIBLY INCLUDE THE RE SULT OF FURTHER POST SEARCH ENQUIRY WITH REFERENCE TO SUCH MATERIAL S, BUT IT CANNOT PROVIDE AN OCCASION TO THE ASSESSING OFFICER TO REA PPRAISE THE MATERIALS ALREADY AVAILABLE ON RECORD AND REVIEW TH E ASSESSMENTS ALREADY MADE. IN OTHER WORDS, THE ESTIMATION OF IN COME IN SEARCH CASES IS NOT TO BE LIGHTLY MADE EXCEPT ON A CLEAR F INDING INDICATING JUSTIFICATION FOR THE SAME WITH REFERENCE TO RETURN FILED ON THE ONE HAND AND THE MATERIALS FOUND ON THE OTHER, AND ALSO SUCH ESTIMATE HAS TO BE BASED ON SOME PLAUSIBLE AND SCIENTIFIC ME THODOLOGY AND, AS SUCH, CANNOT BE ARBITRARY. IN THE CASE OF CIT V S. SMT. USHA TRIPATHI (249 ITR 4) (ALLAHABAD HIGH COURT) IT WAS HELD THAT ESTIMATE OF INCOME WITHOUT REFERENCE TO SEIZED INCR IMINATING DOCUMENTS COULD NOT BE UPHELD. FURTHERMORE, THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DR. M.K.E. MENON (248 ITR 310) HELD THAT WHERE IN THE CASE OF THE PROFESSIONAL SOU RCE OF INCOME, AN ESTIMATE WAS MADE BY MERELY PROJECTING THE PRESE NT INCOME TO THE PAST, SUCH ESTIMATE HAS TO BE TREATED AS ARTIFI CIAL AND, AS SUCH, WOULD NOT BE JUSTIFIED. 2. IN THE APPELLANTS CASE, DESPITE HIS PIOUS DECLARAT ION TO THE EFFECT THAT HE MAINTAINED TWO SETS OF BILL BOOKS IN RESPEC T OF THE RECEIPTS FROM X-RAY & LABORATORY TESTS FOR A BRIEF PERIOD TO TIDE OVER THE TEMPORARY SHORTAGE OF NAME BOOKS WITHOUT ANY FRAUDU LENT INTENTION, THE FACT REMAINS IS THAT NO EXPLANATION, WHATSOEVER, HAS BEEN FURNISHED FOR RECORDING IN THE CASH BOOK ONLY THE LIMITED RECEIPTS AS PER THE NAME BOOKS CONTAINING THE NAME OF THE APPELLANT DOCTOR TO THE EXCLUSION OF MORE AND HIGHE R QUANTUM OF RECEIPTS AS RECORDED IN THE RECEIPT BOOKS WITHOUT T HE NAME OF THE APPELLANT DOCTOR. THE FACTS ELOQUENTLY SPEAK F OR THEMSELVES SO AS TO INDICATE THAT FULL RECEIPTS FOR THE PERIOD 2. 4.2005 TO 23.7.2005 HAD NOT BEEN ACCOUNTED FOR IN THE CASH BOOK. THUS, THE RECEIPT BOOKS FOR THE ASSESSMENT YEAR 2006-07. IT MAY ALSO BE MENTIONED THAT INCRIMINATING MATERIAL RELATING TO S UPPRESSED UNDISCLOSED RECEIPTS WERE UNEARTHED DURING THE POST SEARCH INVESTIGATION PROCEEDINGS. ON EXAMINING ONE PATIEN T NAMELY, SHRI N. JOHN RAJU, HE PRODUCED COPIES OF RECEIPTS FROM R ECEIPT BOOKS ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 9 PERTAINING TO THE PERIOD 13.2.2003 TO 10.5.2004 COV ERING ASSESSMENT YEARS 2003-04 TO 2005-06 THAT WERE NOT R ECORDED IN THE REGULAR BOOKS OF ACCOUNTS. HENCE, IN THE APPEL LANTS CASE INCRIMINATING MATERIAL DO EXISTS FOR THE ASSESSMENT YEARS 2003-04 TO 2006-07 (THE DETAILS HAVE BEEN ENUMERATED IN TAB LE NO.1(5) AND TABLE NO.1(6) OF THE ASSESSMENT ORDER) SO AS TO JUSTIFY THE ESTIMATION OF DISCLOSED INCOME FOR SUCH FOUR ASSESS MENT YEARS. HOWEVER, THERE IS NO SCOPE FOR ESTIMATING ANY UNDIS CLOSED INCOME ON ACCOUNT OF X-RAY & LABORATORY TESTS RECEIPTS FOR THE EARLIER ASSESSMENT YEARS 2000-01, 2001-02 AND 2002-03 ON TH E REASONING THAT NO INCRIMINATING MATERIAL, WHATSOEVER, WAS FOU ND DURING THE SEARCH OPERATION OR UNEARTHED DURING THE POST SEARC H INVESTIGATION IN RELATION TO THOSE ASSESSMENT YEARS. HENCE, THE ADDITIONS OF NET UNACCOUNTED INCOME FOR THOSE YEARS ARE LIABLE TO BE DELETED WHICH ARE, HEREBY, DELETED. HOWEVER, SO FAR AS THE ESTIM ATION OF ANY SUPPRESSED INCOME FOR THE ASSESSMENT YEARS 2003-04 TO 2006-07 IS CONCERNED, THEY HAVE TO BE ESTIMATED ON REALISTIC B ASIS AFTER GIVING CREDIT FOR THE NORMAL PERCENTAGE OF WASTAGE OF X-RA Y FILMS IN THE LINE OF ORTHOPAEDIC TREATMENT AND ALSO AFTER GIVING REDUCTION OF THE NUMBER OF X-RAY EXPOSURES ATTRIBUTABLE TO ONGC, BSN L, AND IN- PATIENT SURGERY CASES ON THE REASONING THAT THE REC EIPTS FROM SUCH CATEGORY OF PATIENTS STAND ALREADY DISCLOSED VIDE S EPARATE LEDGER HEAD ACCOUNTS. IT IS UNFORTUNATE THAT BEFORE FORMU LATING THE ADDITIONS ON THIS ISSUE, THE ASSESSING OFFICER HAD NOT GIVEN AN OPPORTUNITY TO THE APPELLANT TO EXPLAIN HIS CASE, A S A CONSEQUENCE OF WHICH, THE APPELLANT WAS CONSTRAINED TO EXPLAIN DURING THE CONSEQUENCE OF WHICH, THE APPELLANT WAS CONSTRAINED TO EXPLAIN DURING THE APPELLANT PROCEEDINGS HIS VIEW POINT ABO UT THE MODALITIES OF THE ESTIMATION ON THE BASIS OF THE CO NSUMPTION OF X- RAY FILMS RELATABLE ONLY TO OUT-PATIENTS AND OTHER IN-PATIENTS. THE APPELLANT HAS ALSO NOT DISPUTED THE FORMULA ADOPTED FOR COMPUTATION OF THE ESTIMATED INCOME PER YEAR WORKS OUT TO RS.16,75,750/-. AFTER REDUCING THE EXPENDITURE DEB ITED UNDER THE HEAD LABORATORY MAINTENANCE OF RS.4,53,046/-, THE NET ESTIMATED INCOME FOR THE PART-PERIOD FALLING UNDER THE ASSESS MENT YEAR 2006- 07 WOULD WORK OUT TO RS.4,07,568/-. HOWEVER, WHILE GIVING EFFECT TO THIS APPELLATE ORDER, THE ASSESSING OFFICER WOUL D DO WELL TO ALLOW FURTHER SET OFF OF THE DECLARED PROFITS IN THE RETU RNS OF THE RESPECTIVE ASSESSMENT YEARS FROM ASSESSMENT YEAR 20 03-04 TO 2006-07 AND, THEREAFTER, COMPUTE THE NET ASSESSMENT YEAR-WISE ADDITIONS. ACCORDINGLY, THE BALANCE ASSESSMENT YEA R-WISE ADDITIONS SHALL STAND DELETED. 17. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND PLACED A RELIANCE UPON THE JUDGEMENTS OF THE AP EX COURT IN THE CASE OF HM ESUFALI HM ABDUL ALI 90 ITR 27 (SC) AND RAJNIK & CO. 251 ITR 561 WITH THE SUBMISSIONS THAT ASSESSING OFFICER HAS RIGHTLY ESTIMATED THE INCOME UNDER THE HEAD X-RAY, LAB TEST CHARGES AND IN-PATIENT CHA RGES. ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 10 18. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER H AND HAS SUBMITTED THAT THE SEIZED MATERIAL CANNOT BE INTERPOLATED TO THOSE ASSESSMENT YEARS TO WHICH IT DOES NOT RELATE. IT CAN ONLY BE USED FOR THOSE YEARS TO WHICH IT RELATES. THE LD. COUNSEL FOR THE ASSESSEE HAS PLAC ED A COPY OF THE JUDGEMENT OF THE A.P. HIGH COURT IN THE CASE OF RAJ NIK & CO. VS. ACIT 251 ITR 561 WITH THE SUBMISSIONS THAT IN THAT CASE THE MATERIAL WAS FOUND WITH REGARD TO THE SUPPRESSION OF INCOME AND WITH REGARD TO THE EARLIER YEARS, THERE WAS AN ADMISSION OF THE PARTNERS WITH REGARD TO THE SUPPRESSION OF INCOME AND ON THE BASIS OF THAT THE INCOME WAS ESTI MATED. BUT IN THE INSTANT CASE, THERE IS NO EVIDENCE AVAILABLE WHICH CAN SUGG EST THAT IN EARLIER YEARS THE INCOME WAS SUPPRESSED. HE HAS ALSO PLACED A RE LIANCE UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. AMBICA FOOD IN DUSTRIES LTD. 110 TTJ 680 IN WHICH IT HAS BEEN HELD THAT IN THE ABSENCE O F RECOVERY OF ANY MATERIAL AT THE TIME OF SEARCH OR ANY ADMISSION REGARDING SU PPRESSION OF SALES IN THE EARLIER YEARS, ADDITION OF NOTIONAL INCOME COULD NO T BE MADE IN THE BLOCK ASSESSMENT. THE SIMILAR VIEW WAS ALSO EXPRESSED BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF C. NARAYANA SWAMY ENTERPRIS ES VS. DCIT IN ITA 11 OF 2004. 19. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A C AREFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES AND THE JUDGEMENTS REFERRED TO, WE FIND THAT UNDISPUTEDLY THERE IS NO REFLECTION IN THE SEIZED M ATERIALS ABOUT THE SUPPRESSED INCOME OF THE EARLIER YEARS. THE SEIZED MATERIAL RELATE TO THE ASSESSMENT YEARS IN WHICH THE SEARCH WAS CONDUCTED. THE ISSUE WHETHER THE ADDITION CAN BE MADE IN EARLIER YEARS ON THE BASIS OF THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH WAS EXAMINED BY U S IN THE CASE OF SRI NARAYANA SWAMY ENTERPRISES VS. DCIT IN THE LIGHT OF JUDGEMENT OF THE A.P. HIGH COURT IN THE CASE OF RAJNIK & CO. VS. ACIT (SU PRA) AND THE TRIBUNAL HAS CATEGORICALLY HELD THAT ON THE BASIS OF THE SEIZED MATERIAL, ADDITION CANNOT BE MADE IN EARLIER YEARS. THE RELEVANT OBSERVATION OF THE TRIBUNAL ARE EXTRACTED HEREUNDER: ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 11 6. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A C AREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE JUDGEMENTS REFERRED TO BEFORE US, WE FIND THAT UNDISPUTEDLY SO ME LOOSE SHEETS WERE FOUND DURING THE COURSE OF THE SEARCH, BUT THA T LOOSE SHEETS RELATES TO A PARTICULAR PERIOD I.E. 1.2.99 TO 28.2. 99 I.E. ONLY FOR A PERIOD OF ONE MONTH. SIMILARLY, THE INFLATION IN E XPENSES WAS ALSO NOTED BY THE A.O. FOR THE SAME PERIOD. NO INCRIMIN ATING EVIDENCE WAS EITHER FOUND DURING THE COURSE OF SEARCH OR ANY STATEMENT WAS RECORDED BY THE SEARCH PARTY OF ANY MEMBER OF THE A SSESSEE FIRM, WHEREFROM IT CAN BE INFERRED THAT THROUGH OUT THE B LOCK PERIOD, ASSESSEE HAS RECEIVED THE EXCESS RECEIPTS AND SUPPR ESSED THE INCOME AND ALSO INFLATED THE EXPENDITURE. WHATEVER EVIDENCE WAS FOUND IT REFLECT THE SUPPRESSION OF RECEIPTS AND IN FLATION OF EXPENSES ONLY FOR THE PERIOD OF 1.2.99 TO 28.2.99. THE SEIZED MATERIAL DOES NOT REFLECT OR GIVES ANY INDICATION T HAT ASSESSEE HAS EVER SUPPRESSED ITS RECEIPTS AND CLAIMED THE EXCESS EXPENDITURE. IN THE ABSENCE OF COGENT MATERIAL, IT IS NOT PROPER ON THE PART OF THE A.O. TO ESTIMATE THE INCOME ON ACCOUNT OF SUPPR ESSION OF RECEIPTS AND INFLATION OF EXPENSES FOR THE WHOLE BL OCK PERIOD. 7. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE TRIB UNAL IN THE CASE OF ACIT VS. AMBIKA FOOD INDUSTRIES LIMITED (SU PRA) AND WE FIND THAT THE TRIBUNAL HAS CATEGORICALLY HELD THAT IN THE ABSENCE OF RECOVERY OF ANY MATERIAL AT THE TIME OF SEARCH OR A NY ADMISSION REGARDING SUPPRESSION OF SALES IN THE EARLIER YEARS , ADDITION OF NOTIONAL INCOME COULD NOT BE MADE IN THE BLOCK ASSE SSMENT ON THE ASSUMPTION THAT SINCE THERE WAS SUPPRESSION OF TURN OVER IN A SPECIFIC PERIOD, THERE WAS SUPPRESSION OF TURNOVER/ INCOME IN THE EARLIER YEARS AND SUBSEQUENT YEARS/PERIOD ALSO. TH E RELEVANT OBSERVATIONS OF THE TRIBUNAL ALONG WITH THE FACTS A RE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: THERE IS NO DISPUTE ON THE FACT THAT WHATEVER INC OME FROM UNACCOUNTED TURNOVER THROUGH BANK ACCOUNT HAS BEEN CALCULATED WAS OFFERED BY THE ASSESSEE HIMSELF WHIL E FILING THE RETURN OF INCOME OF THE BLOCK PERIOD. THE INCO ME ON TURNOVER AS WELL AS INVESTMENT IN RUNNING UNACCOUNT ED BUSINESS WAS ALSO DECLARED BY THE ASSESSEE. IT IS AN ADMITTED FACT THAT THERE WAS NO MATERIAL FOUND FOR THE EARLIER YEARS. THE BANK ACCOUNT THROUGH WHICH THE UNACCOUNTED TURNOVER WAS MADE PERTAINED TO THE PERI OD 4 TH DEC., 2002 TO 23 RD JAN., 2003. THE ASSESSEE HAS OFFERED FOR TAXATION THE INCOME WHICH WAS CALCULATED FROM THE A BOVE BANK ACCOUNT RELATED TO THE ACCOUNTING YEAR I.E. 1 ST APRIL, 2002 TO 4 TH DEC., 2002. THE REVENUE HAS NOT CONTROVERTED THE FACT THAT NO MATERIAL WAS FOUND FOR EARLIER YEA RS. THERE IS NO ADMISSION BY THE ASSESSEE THAT THERE WAS SUPP RESSION OF SALES OR DOING UNDISCLOSED BUSINESS THROUGH BANK ACCOUNT IN EARLIER YEAR ALSO. NEITHER ANY MATERIAL WAS FOU ND AT THE TIME OF SEARCH NOR ANY ADMISSION WAS MADE REGARDING SUPPRESSION OF SALES FOR THE EARLIER YEARS. SEC. 1 58BB(1) ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 12 REQUIRES THAT THE UNDISCLOSED INCOME OF THE BLOCK P ERIOD SHALL BE THE AGGREGATE OF THE TOTAL INCOME OF THE P REVIOUS YEAR FALLING WITHIN THE BLOCK PERIOD COMPUTED IN AC CORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF EV IDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFO RMATION AS ARE AVAILABLE WITH THE AO AND RELATABLE TO SUCH EVIDENCE. IF THERE IS NO MATERIAL FOUND AS A RESULT OF SEARCH , THE ARBITRARY ESTIMATE CANNOT BE MADE FOR THE PURPOSE O F COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PERI OD. THE LEGISLATURE IN ITS WISDOM HAS RIGHTLY INSERTED SUCH CLAUSES FOR COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PERI OD AND ONLY THE UNDISCLOSED INCOME WHICH IS TO BE COMPUTED ON THE BASIS OF EVIDENCE AND MATERIAL FOUND AS A RESULT OF SEARCH. IT IS CATEGORICALLY DENIED WHILE REPLYING TO QUESTI ON NOS.23 AND 24 IN THE STATEMENT RECORDED THAT THERE WAS NO SUPPRESSION OF INCOME IN THE EARLIER YEARS OR SUBSE QUENT YEARS/PERIOD. IN THE LIGHT OF THE ABOVE DISCUSSION , THE ACTION OF THE AO IS ARBITRARY AND NOT BASED ON MATERIAL FO UND AT THE TIME OF SEARCH NOR IT IS BASED ON THE STATEMENT REC ORDED AT THE TIME OF SEARCH. SUCH ADDITION MERELY ON THE BA SIS OF ARBITRARY OR NOTIONAL INCOME ON THE ASSUMPTION THAT SINCE THERE WAS SUPPRESSION OF TURNOVER FOR THE PERIOD 1 ST APRIL, 2002 TO 21 ST JAN., 2003 AND THEREFORE, BY SAME PROPORTION THERE WAS SUPPRESSION OF TURNOVER/INCOME FOR THE EA RLIER YEARS AND SUBSEQUENT YEAR/PERIOD, IS NOT SUSTAINABL E. THERE IS NO SUPPRESSION OF TURNOVER OR SALES OR UNACCOUNT ED BUSINESS OF EARLIER YEARS, THERE IS NO QUESTION OF MAKING ANY ADDITION ON ACCOUNT OF INVESTMENT FOR RUNNING THE UNACCOUNTED BUSINESS FOR EARLIER YEARS/SUBSEQUENT P ERIOD TO SEARCH. THEREFORE, THE ADDITION OF RS.84,07,790 SU STAINED BY THE CIT(A) ON ACCOUNT OF SUPPRESSION OF TURNOVER AND RS.14,86,218 ENHANCED BY THE CIT(A) ON ACCOUNT OF C APITAL EMPLOYED FOR RUNNING THE UNACCOUNTED BUSINESS ARE DELETED. 8. WE HAVE ALSO CAREFULLY EXAMINED THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF RAJNIK & C O. VS. ACIT (SUPRA) AND WE FIND THAT IN THAT CASE SEARCH RESULT ED IN THE SEIZURE OF UNACCOUNTED CASH SALES, DISCLOSURE OF UNACCOUNTE D TRANSACTION IN RESPECT OF VARIOUS INVESTMENTS. DURING THE COURSE OF INVESTIGATION, ASSESSEE FIRM ADMITTED UNDISCLOSED INCOME. THERE W AS ALSO ABUNDANT MATERIAL ON RECORD NOT ONLY IN THE FORM OF LOOSE SLIPS/SHEETS SHOWING SUPPRESSED TURNOVER, BUT ALSO BY WAY OF ADMISSION IN A SWORN STATEMENT OF A PARTNER OF THE FIRM, SHOWING THAT THE SUPPRESSION WERE CARRIED ON THROUGH OUT TH E ENTIRE BLOCK PERIOD. ON THIS EVIDENCE, THE TRIBUNAL ESTIMATED T HE REASONABLE AND PROPER INCOME OF THE ASSESSEES BASED ON MATERIA L ON RECORD. THE HIGH COURT APPROVED THE ORDER OF THE TRIBUNAL B Y HOLDING THAT SINCE ESTIMATION OF UNDISCLOSED INCOME, DETECTED AS A RESULT OF ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 13 SEARCH, MADE BY THE TRIBUNAL BEING REASONABLE AND P ROPER AND BASED ON MATERIAL ON RECORDS, NO SUBSTANTIAL QUESTI ON OF LAW ARISES. 9. IF WE EXAMINE THE FACTS OF THE PRESENT CASE IN T HE LIGHT OF THE AFORESAID JUDGEMENTS, WE WOULD FIND THAT IN THE INSTANT CASE, SOME LOOSE SHEETS WERE FOUND DURING THE COURSE OF S EARCH WHICH RELATES TO A PARTICULAR PERIOD SHOWING THAT THERE W AS A SUPPRESSION OF RECEIPT TO THE EXTENT OF RS.1,76,540/- COVERING A PERIOD OF ONE MONTH. SIMILAR WAS THE POSITION FOR THE INFLATION OF EXPENDITURE TO THE EXTENT OF RS.17,504/-. NO OTHER EVIDENCE WAS F OUND TO INDICATE THAT THE SIMILAR TYPE OF SUPPRESSION OF RECEIPTS AN D INFLATION OF EXPENSES WERE MADE BY THE ASSESSEE DURING THE ENTIR E BLOCK PERIOD. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT REVENUE HAS WRONGLY APPLIED THE JUDGEMENT OF THE JURISDICTI ONAL HIGH COURT BY ESTIMATING THE INCOME OF THE ASSESSEES ON ACCOUN T OF SUPPRESSION OF RECEIPTS AND INFLATION OF EXPENSES F OR THE ASSESSMENT YEAR 2000-01 AND 2001-02. WHATEVER INCO ME HAS TO BE ESTIMATED ON THE BASIS OF THE SEIZED MATERIAL, I T CAN ONLY BE FOR THE PERIOD FROM 1.2.1999 TO 28.2.1999 PERTAINING TO THE ASSESSMENT YEAR 1999-2000, A PART OF THE BLOCK PERI OD. WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DI RECT THE A.O. TO RESTRICT THE ADDITIONS ON ACCOUNT OF SUPPRESSION OF RECEIPTS TO THE EXTENT OF RS.1,76,540/- AND ON ACCOUNT OF INFLATION OF EXPENSES AT RS.17,504/-. ACCORDINGLY, THE ORDER OF THE CIT(A) IS MODIFIED. 20. SINCE WE HAVE TAKEN A PARTICULAR VIEW IN A SIMI LAR SET OF FACTS, WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THIS APPEAL. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS PROPER LY ADJUDICATED THE ISSUE IN RIGHT PERSPECTIVE. WE ACCORDINGLY CONFIRM HIS ORDE R. ITA 412 OF 2009 & 413 OF 2009: 21. THIS APPEAL IS PREFERRED BY THE REVENUE ON FOLL OWING GROUNDS: 1. THE CIT(A) HAS IN CONTRAVENTION OF RULE 46A OF IT R ULES, 1962, AND ALSO AGAINST THE DOCTRINE OF NATURAL JUSTICE, HAD A DMITTED ADDITIONAL EVIDENCES AND INFORMATION WITHOUT GIVING AN OPPORTU NITY OF THE ASSESSING OFFICER TO EXAMINE OR ARGUE UPON THE ADDI TIONAL EVIDENCES. 2. THE CIT(A) HAD ERRED IN COMING TO THE CONCLUSION TH AT THE ASSESSING OFFICER HAD OPINED IN THE REMAND REPORT, UPON INQUIRY THROUGH THE CENTRAL CIRCLE INSPECTOR THAT CREDIT CO ULD ALSO BE GIVEN IN RESPECT OF THE OWNERSHIP OF JEWELLERY TO THE EXT ENT OF 1007 GRAMS IN THE NAME OF SMT. K. SARASWATI AND 175 GRAM S IN THE NAME OF SMT. G.N. KALYANI, THE MOTHER AND MOTHER-IN -LAW OF THE ASSESSE RESPECTIVELY. WHEN, IN FACT, NO SUCH OPINI ON WAS GIVEN BY THE ASSESSING OFFICER IN THE REMAND REPORT. ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 14 3. THAT THE CIT(A) OUGHT TO HAVE SUSTAINED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER, WHICH IS BASED ON MATERIA L EVIDENCES. 4. THE CIT(A) OUGHT NOT TO HAVE BELIEVED SELF SERVING LETTERS ISSUED IN POST-SEARCH PROCEEDINGS BY THE MOTHER AND MOTHER-IN -LAW OF THE ASSESSEE THAT HUGE AMOUNT OF THEIR GOLD AND JEWELLE RY IS KEPT IN THE LOCKER OF THE ASSESSEE, ESPECIALLY WHEN THEY WE RE NOT ORDINARILY RESIDENTS OF THE HOUSE IN WHICH SEARCH WAS CONDUCTE D AND THEIR HOUSES WERE NOT SEARCHED SIMULTANEOUSLY. 22. THOUGH VARIOUS GROUNDS ARE RAISED BY THE REVENU E BUT THEY ALL RELATE TO THE ADDITION OF RS.17,04,875/- ON ACCOUNT OF UNE XPLAINED INVESTMENT IN GOLD JEWELLERY AND IN THIS REGARD THE FACTS BORNE O UT FROM THE RECORD ARE THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A T THE RESIDENTIAL AND BUSINESS PREMISES OF DR. G. ARAVINDAM, HUSBAND OF T HE ASSESSEE ON 4.8.2005 THE SEARCH PARTY CAME ACROSS GOLD JEWELLERY WEIGHIN G 6078 GMS. AND ACCORDINGLY SOLICITED EXPLANATION REGARDING THE SOU RCE OF INVESTMENT IN SUCH JEWELLERY. IN DEPOSITION RECORDED U/S 132(4) OF TH E ACT, ASSESSEES HUSBAND DR. G. ARAVINDAM STATED INTERALIA THAT THE JEWELLER Y FOUND AT HIS RESIDENCE BELONG TO HIS WIFE (ASSESSEE) AND SHE HAS ALREADY D ECLARED THE JEWELLERY OF THE WEIGHT OF 1671 GMS. UNDER THE VOLUNTARY DISCLOS URE SCHEME (HEREINAFTER CALLED VDIS) IN 1997. THE DECLARATION CERTIFICATE WAS ALSO PRODUCED BEFORE THE SEARCH PARTY. WITH REGARD TO THE REMAINING JEW ELLERY 4407 GMS. IT WAS STATED BY HER HUSBAND THAT HE WAS NOT IN A POSITION TO EXPLAIN THE BALANCE JEWELLERY AT THAT POINT OF TIME BUT HE WOULD EXPLAI N THEIR SOURCE IN DUE COURSE OF TIME. VIDE LETTER DATED 5.12.2005 ADDRESSED TO THE DDIT THE ASSESSEE FURNISHED THE DETAILS OF OWNERSHIP OF ENTIRE JEWELL ERY FOUND DURING THE COURSE OF SEARCH OPERATION WEIGHING 6078 GMS. WHEN THE DD IT ASKED THE ASSESSEE TO FURNISH THE SUPPORTING EVIDENCE THERE WAS NO COM PLIANCE FROM THE SIDE OF THE ASSESSEE. SUBSEQUENTLY ON 28.11.2007, THE HUSBA ND OF THE ASSESSEE FILED GOLD JEWELLERY RECONCILIATION STATEMENT FURNISHING THEREIN THE DETAILS OF THE JEWELLERY HELD BY EACH MEMBER OF THE NUCLEAR AS WEL L AS THE LARGER FAMILY TOGETHER WITH THE INFORMATION REGARDING THEIR MODE OF ACQUISITION AND FURTHER CLARIFICATION THAT SOME ITEM OF JEWELLERY STOOD DEC LARED IN THE RESPECTIVE WEALTH TAX RETURN OF SOME MEMBERS. THE EXPLANATION S WERE NOT ACCEPTED BY THE A.O. AND HE PROCEEDED TO TREAT THE VALUE OF BAL ANCE UNEXPLAINED JEWELLERY AMOUNTING TO RS.25,21,935/- AS INVESTMENT BY THE ASSESSEE FROM UNEXPLAINED SOURCES AND AFTER ALLOWING DEDUCTION OF UNEXPLAINED VALUE ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 15 PERTAINING TO THE PRECEDING ASSESSMENT YEAR 2005-06 OF RS.8,17,060/- THE ASSESSING OFFICER TREATED THE NET ADDITION OF RS.17 ,04,875/-. 23. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WITH THE SUBMISSION THAT THE A.O. HAS ARBITRARILY REJECTED T HE INFORMATION AND JEWELLERY RECONCILIATION STATEMENT WITHOUT UNDERTAKING ANY VE RIFICATION OF SUCH CLAIM THEREFORE, THE PRINCIPLE OF NATURAL JUSTICE HAS BEE N GROSSLY VIOLATED. IT WAS FURTHER CONTENDED THAT HUSBAND OF THE ASSESSEE HAS TENDERED CLARIFICATION ONLY TO THE EXTENT OF JEWELLERY DECLARED UNDER VDIS WHICH FACT HE WAS AWARE OF AND SINCE HE WAS NOT HAVING READY INFORMATION RE GARDING OWNERSHIP OF THE JEWELLERY BY OTHER MEMBER OF THE NUCLEAR AS WELL AS THE LARGER FAMILY HE SINCERELY DEPOSED THAT HE WOULD FURNISH SUITABLE EX PLANATION REGARDING BALANCE JEWELLERY OVER AND ABOVE THE QUANTITY DECLA RED BY THE ASSESSEE AT A LATER STAGE. 24. THE CIT(A) CALLED THE REMAND REPORT ON THE EVID ENCE FILED BY THE ASSESSEES AND VIDE REMAND REPORT DATED 20.11.2008 T HE ASSESSING OFFICER INTERALIA HAS SUBMITTED THAT QUANTUM OF JEWELLERY C LAIMED TO BE OWNED BY THE VARIOUS MEMBERS OF THE ASSESSEES FAMILY VARIED FROM TIME TO TIME BEFORE DIFFERENT AUTHORITIES AND THERE BEING NO CONSISTENC Y IN THE QUANTITY OF JEWELLERY OF EACH SUCH FAMILY MEMBERS, THE EXPLANAT ION OF THE ASSESSEE REGARDING BALANCE QUANTITY JEWELLERY IS REQUIRED TO BE VIEWED WITH CIRCUMSPECTION. REGARDING THE CLAIM OF CONVERSION OF DIAMONDS INTO GOLD JEWELLERY THROUGH M/S. SUGAL AND DAMANI DIAMONDS PV T. LTD., CHENNAI NO CREDENCE COULD BE GIVEN TO SUCH CLAIM FOR THE REASO N THAT IT IS THE STAND OF THE ASSESSEE THAT SUCH CONVERSION HAD TAKEN PLACE F EW DAYS BEFORE THE SEARCH OPERATION. THE NECESSARY BILL OUGHT TO HAVE BEEN FOUND IN THE SEARCH PREMISES AND THE ASSESSE OUGHT TO HAVE FURNISHED SU CH INFORMATION DURING SEARCH OPERATION OR AT MOST DURING THE POST SEARCH PROCEEDINGS BUT THE ASSESSEE FOR THE REASONS BEST KNOWN TO HER HAS NOT FURNISHED ANY EXPLANATION ABOUT ANY PURPORTED CONVERSION OF DIAMONDS INTO JEW ELLERY TILL AFTER A LAPSE OF 4 MONTHS. COPY OF THE REPORT WAS CONFRONTED TO T HE ASSESSEE AND THE ASSESSEE HAS SUBMITTED HIS EXPLANATIONS BEFORE THE CIT(A) IN DETAIL. THE CIT(A) EXAMINED THESE EXPLANATIONS OF THE ASSESSEES IN THE LIGHT OF REMAND ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 16 REPORT AND BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEES THE CIT(A) HAS PARTLY DELETED THE ADDITIONS AFTER HAVING OBSER VED THAT TOTAL CREDIT WHICH THE ASSESSEE AND HER FAMILY MEMBERS ENTITLED TO WOR K OUT TO 3253 GMS. OF JEWELLERY THEREBY LEAVING 2825 GMS. OF JEWELLERY UN EXPLAINED. HENCE, THE VALUE OF 2825 GMS. OF JEWELLERY IS LIABLE FOR ASSES SMENT IN THE HANDS OF THE ASSESSEE AS INVESTED IN GOLD JEWELLERY FROM UNEXPLA INED SOURCES. THE RELEVANT OBSERVATION OF THE CIT(A) ARE EXTRACTED HE REUNDER: DESPITE THE CLAIMS AND COUNTER CLAIMS MADE BY THE ASSESSING OFFICER AND THE APPELLANT REGARDING THE A CCEPTABILITY OR OTHERWISE OF THE REASONS AND EXPLANATIONS FURNISHED WITH REGARD TO THE SOURCES OF INVESTMENT IN JEWELLERY TO THE EXTEN T OF 4407 GRMS, IT NEEDS TO BE STATED IN NO UNCERTAIN TERMS THAT NE ITHER THE FINDINGS AND OBSERVATIONS OF THE ASSESSING OFFICER IN THE BO DY OF THE ASSESSMENT ORDER INDICATES ANY FAIR AND JUST APPROA CH TO THE ISSUE OF DETERMINATION OF THE QUANTUM OF UNEXPLAINED JEWE LLERY, NOR THE ATTEMPT ON BEHALF OF THE APPELLANT TO EXPLAIN AWAY THE SOURCES OF THE INVESTMENT OF THE BALANCE JEWELLERY OF 4407 GRA MS BY VARIOUS EXPLANATIONS WITHOUT ADDUCING FULL SUPPORTING EVIDE NCES AND WITHOUT EXPLAINING THE REASONS FOR INORDINATE DELAY IN FURNISHING OF EXPLANATIONS WITHIN REASONABLE TIME SUBSEQUENT TO T HE SEARCH OPERATION, INSPIRE ANY CONVICTION REGARDING A FAIR ATTEMPT TO ARRIVE AT THE TRUTH. IT IS NOT UNDERSTANDABLE AS TO WHY T HE SEARCH PARTY DID NOT OBTAIN A SWORN DEPOSITION FROM THE APPELLAN T DURING THE SEARCH PROCEEDINGS OR DURING THE POST SEARCH PROCEE DINGS, WHEN THE DIFFERENTIAL QUANTUM OF JEWELLERY OVER AND ABOV E THAT DECLARED UNDER THE VDIS WAS SOUGHT TO BE ASSESSED IN THE HAN DS OF THE APPELLANT. AN EXERCISE TO OBTAIN A SWORN STATEMENT FROM THE APPELLANT DURING THE SEARCH OPERATION WOULD CERTAIN LY HAVE THROWN UP ADDITIONAL INFORMATION AT THE SEARCH TIME ITSELF , AND WOULD HAVE HELPED IN BETTER APPRECIATION OF THE FACTS RELATING TO THE ISSUE DURING THE ASSESSMENT PROCEEDINGS. PRIMA FACIE, TH E OBSERVATIONS OF THE ASSESSING OFFICER, IN ATTRIBUTING MOTIVE TO DR. GRANDHI ARAVINDAM, HUSBAND OF THE APPELLANT, ON THE BASIS O F THE ASSESSING OFFICERS PERCEIVED CONTRADICTION IN THE STATEMENT OF DR. GRANDHI ARAVINDAM TAKEN DURING THE TIME OF SEARCH APPEAR TO BE RECKLESS AND IRRESPONSIBLE, IN AS MUCH AS DR. GRANDHI ARAVIN DAM IN HIS STATEMENT DURING THE SEARCH HAD MERELY EXPRESSED HI S LACK OF DETAILED KNOWLEDGE REGARDING THE BALANCE JEWELLERY OF 4407 GRAMS. ON THE OTHER HAND, THE APPELLANT HAS FRENETICALLY S OUGHT TO EXPLAIN AWAY THE OWNERSHIP OF SUCH DIFFERENTIAL QUANTUM OF JEWELLERY BY ROPING IN MINOR MEMBERS AND EVEN STATING THAT SHE H AD CONVERTED HER DIAMONDS INTO GOLD JEWELLERY THROUGH M/S. SUGAL AND DAMANI DIAMONDS PVT. LTD., CHENNAI WITHOUT, AT THE OUTSET, ABLE TO IDENTIFY AND EXPLAIN THE SOURCES OF THE PURPORTED LOOSE DIAM ONDS OVER AND ABOVE THE TOTAL QUANTITY OF JEWELLERY FOUND DURING THE SEARCH OPERATION. THE APPELLANT HAVING NOT EXPLAINED THE SOURCES OF LOOSE DIAMONDS, SUCH CONVERSION EXPLANATION IS, PRIMA FAC IE, UNTENABLE. ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 17 HENCE, IT IS IMPERATIVE THAT THE ISSUE BE VIEWED F ROM THE RIGHT PERSPECTIVE AND BE CONSIDERED PURELY ON THE B ASIS OF SUPPORTING EVIDENCES. THERE IS NO DISPUTE ABOUT TH E QUANTUM OF JEWELLERY DECLARED UNDER THE VDIS OF 1671 GRAMS, WH ICH FIRST OF ALL NEEDS TO BE GIVEN CREDIT. THE ASSESING OFFICER, UP ON INQUIRY THROUGH THE CENTRAL CIRCLE INSPECTOR, HAS OPINED TH AT CREDIT COULD ALSO BE GIVEN IN RESPECT OF THE OWNERSHIP OF JEWELL ERY TO THE EXTENT OF 1007 GRAMS IN THE NAME OF SMT. K. SARASWATHI AND 175 GRAMS IN THE NAME OF SMT. G.N. KALYANI, THE MOTHER AND THE M OTHER-IN-LAW, RESPECTIVELY, OF THE APPELLANT. A PERUSAL OF THE C OPY OF THE WEALTH- TAX ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1987-8 8 CLEARLY INDICATES THAT THE APPELLANT HAD DECLARED 400 GRAMS OF GOLD JEWELLERY (50 SOVEREIGNS) WHICH FACT HAS BEEN ACKNO WLEDGED BY THE THEN WEALTH-TAX OFFICER, WARD-3, GUNTUR VIDE HIS OR DER U/S 16(1) DATED 18.7.1991. SINCE IT IS ABUNDANTLY CLEAR FROM THE PAST WEALTH- TAX RECORD THAT THE APPELLANT HAD OWNED GOLD JEWELL ERY TO THE EXTENT OF 400 GRAMS AS EARLY AS THE ASSESSMENT YEAR 1987-88 MUCH PRIOR TO THE DECLARATION OF ADDITIONAL JEWELLERY UN DER THE VDIS, FURTHER CREDIT OF OWNERSHIP OF THE JEWELLERY TO THE EXTENT OF 400 GRAMS NEEDS TO BE GIVEN. ACCORDINGLY, THE TOTAL CR EDIT WHICH THE APPELLANT AND HER OTHER FAMILY MEMBERS ENTITLED TO WORKS OUT TO 3253 GRAMS OF JEWELLERY, THEREBY LEAVING 2825 GRAMS OF JEWELLERY UNEXPLAINED. HENCE, THE VALUE OF 2825 GRAMS OF JEW ELLERY IS LIABLE FOR ASSESSMENT IN THE HANDS OF THE APPELLANT AS INV ESTMENT IN GOLD JEWELLERY FROM UNEXPLAINED SOURCES. WHILE GIVING E FFECT TO THIS APPELLATE ORDER, THE ASSESSING OFFICER WOULD DO WEL L TO, FIRST OF ALL, COMPUTE THE VALUE OF 2825 GRAMS OF UNEXPLAINED GOLD JEWELLERY, THEN, REDUCE THE VALUE OF THE UNEXPLAINED JEWELLERY PERTAINING TO THE PRECEDING ASSESSMENT YEAR 2005-06, AND, THEREAF TER, WORK OUT THE NET VALUE OF UNEXPLAINED JEWELLERY FOR ADDITION U/S 69A OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR 2006-07. 25. THE CIT(A) DID NOT ACCEPT THE EXPLANATION OF TH E ASSESSEES WITH REGARD TO THE CONVERSION OF THE LOOSE DIAMONDS IN G OLD JEWELLERY AND RESTRICTED THE ADDITIONS OF THE VALUE OF 2825 GMS. OF UNEXPLAINED JEWELLERY. 26. THIS ADDITION WAS CHALLENGED BY THE ASSESSEE T HROUGH ITS APPEAL NO.413 OF 2009 AND DURING THE COURSE OF HEARING OF THE APPEAL HE HAS INVITED OUR ATTENTION TO THE PURCHASE BILLS ISSUED BY M/S. SUGAL AND DAMANI DIAMONDS PVT. LTD. WITH REGARD TO THE SALE OF LOOSE DIAMONDS AND PURCHASED THE GOLD ORNAMENTS. THE LD. COUNSEL FOR THE ASSESS EE HAS SUBMITTED THAT THE ASSESSEE HAS DECLARED THE LOOSE DIAMONDS IN VDIS AN D DURING THE COURSE OF SEARCH THESE LOOSE DIAMONDS WERE NOT FOUND BY THE S EARCH PARTY. THEREFORE, THESE DIAMONDS WERE SOLD BY THE ASSESSEES AND GOLD ORNAMENTS WERE PURCHASED. SINCE THE ASSESSEE HAS FILED THE DOCUME NTARY EVIDENCE WITH ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 18 REGARD TO THE SALE OF LOOSE DIAMONDS AND PURCHASE O F GOLD ORNAMENTS, THE CONTENTION OF THE ASSESSEES CANNOT OUTRIGHTLY BE RE JECTED ON THE BASIS OF CONJUNCTIONS AND SURMICES. WITH REGARD TO THE OTHE R GOLD ORNAMENTS BELONGING TO THE OTHER FAMILY MEMBERS, HE PLACED HE AVY RELIANCE UPON THE ORDER OF THE CIT(A). 27. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A C AREFUL PERUSAL OF THE ORDER OF THE AUTHORITIES BELOW, WE FIND THAT DURING THE COURSE OF SEARCH, HUSBAND OF THE ASSESSEE WAS EXAMINED WITH REGARD TO THE GOLD JEWELLERY FOUND DURING THE COURSE OF SEARCH AND HE HAS EXPLAI NED THAT DECLARATION WAS MADE UNDER THE VDIS WITH REGARD TO THE CERTAIN JEWE LLERY AND THE SOURCE OF THE REMAINING JEWELLERY WOULD BE EXPLAINED IN DUE C OURSE OF TIME. THEREAFTER IT WAS STATED THAT THIS REMAINING JEWELLERY BELONGS TO OTHER FAMILY MEMBERS AND NONE OF THE FAMILY MEMBERS HAVE DENIED THESE FA CTS. THE CIT(A) EXAMINED THIS ISSUE IN HIS ORDER AND HE HAS GIVEN A REASONABLE CREDIT OF THE GOLD JEWELLERY BELONGING TO OTHER FAMILY MEMBERS OF THE ASSESSEES. HE HOWEVER HAS NOT ACCEPTED THE CONTENTION OF THE ASSE SSEE WITH REGARD TO THE CONVERSION OF THE DIAMONDS DECLARED IN VDIS IN ACQU ISITION OF GOLD JEWELLERY THOUGH THE ASSESSEE HAS FILED THE PURCHASE AND SALE INVOICE OF M/S. SUGAL AND DAMANI DIAMONDS PVT. LTD., CHENNAI. THOUGH THE LD. D.R. HAS DOUBTED THE GENUINENESS OF THE BILLS BUT NO EVIDENCE WAS PLACED ON RECORD. IT WAS CONTENDED BY THE LD. D.R. THAT THESE BILLS WERE NOT FOUND DURING THE COURSE OF SEARCH. BUT THAT DOES NOT MEAN THAT ASSESSEE HA S NOT SOLD THE DIAMONDS WHICH WERE DECLARED UNDER THE VDIS. ADMITTEDLY THE LOOSE DIAMONDS WERE NOT FOUND DURING THE COURSE OF SEARCH. MEANING THE REBY IT MUST HAVE BEEN SOLD BY THE ASSESSEES IN ACQUISITION OF SOME ASSET. 28. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THAT WITH REGARD TO THE GOLD JEWELLERY RELATING TO OTHER FAMILY MEMBERS, THE CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE AND HAS GIVEN A REASONABLE CREDIT OF THE JEWELLERY. WITH REGARD TO THE FINDING OF CIT(A) ON CONVERSION OF DIAMOND INTO JEWELLERY WE DO NOT AGRE E WITH THIS VIEW BECAUSE WHEN THE DOCUMENTARY EVIDENCE WAS FILED TO JUSTIFY THE SALE OF DIAMOND FOR ACQUIRING THE GOLD JEWELLERY THE CONTENTION OF THE ASSESSEE SHOULD NOT ITA 412,413,453,454,455,16,411 OF 09 & CO 9 OF 09 GRANDHI LALITA/ARAVINDAM, RJY 19 OUTRIGHTLY BE REJECTED WITHOUT MAKING A NECESSARY V ERIFICATION. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE OF CONVERSION OF DIAMONDS IN GOLD JEWELLERY BY MAKING A NECESSARY VE RIFICATION FROM THE CONCERNED JEWELER/TRADER SUGAL AND DAMANI DIAMONDS PVT. LTD. ACCORDINGLY, THE REVENUE APPEALS ARE DISMISSED AND ASSESSEES AP PEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 29. IN THE RESULT, THE REVENUES APPEALS ARE DISMISSED AND THE ASSESSEES APPEAL IS ALLOWED AND THE C.O. OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 1.4.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 1 ST APRIL, 2011 COPY TO 1 DCIT, CENTRAL CIRCLE, RAJAHMUNDRY 2 SRI (DR.) GRANDHI ARAVINDAM (HUF), D.NO.6 - 18 - 3, KOKKONDA VARI STREET, RAJAHMUNDRY 3 SRI GRANDHI ARAVINDAM, ARAVINDAM ORTHOPEDIC AN D PHYSIO THERAPY CENTRE, D.NO.6-18-3, RAJAHMUNDRY 4 SMT. GRANDHI LALITHA, W/O SRI GRANDHI ARAVINDAM, D. NO.6 - 18 - 3, KOKKONDA VARI STREET, RAJAHMUNDRY 5 SMT. GRANDHI LALITHA, W/O DR. GRANDHI ARAVINDAM, D. NO.6 - 14 - 3, ACHANTAVARI STREET, RAJAHMUNDRY 6 ACIT, C ENTRAL CIRCLE, RAJAHMUNDRY 7 THE CI T, RAJAHMUNDRY 8 THE CIT (A) , RAJAHMUNDRY 9 THE DR, ITAT, VISAKHAPATNAM. 10 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM
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