Sh. Jagdish Rai, Malerkotla V. ACIT, Patiala

ITSSA 1225/CHANDI/1996

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8583 (ITAT-CHANDIGARH)
• Duration Of Justice: 16 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-12-2012
• Assessment Year: misc
• Appeal Filed On: 21-11-1996
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Loose papers; Document seized; Additional evidence; Valuation report; Documents seized
• Section: 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M IT(SS)A NO. 1225/CHD/1996 BLOCK PERIOD: 1.4.1985 TO 5.10.1995 SMT. VEENA GOEL V A.C.I.T. L/H OF JAGDISH RAI INVESTIGATION CIRCLE H NO. 307, NARENDRA COLONY PATIALA MALERKOTLA (APPELLANT) (RESPONDENT) APPELLANT BY SHRI TEJ MOHAN SINGH RESPONDENT BY: SMT. JYOTI KUMARI DATE OF HEARING 13.12.2012 DATE OF PRONOUNCEMENT 26.12.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ASSESSMENT ORDE R PASSED BY THE A.C.I.T. INVESTIGATION CIRCLE, PATIAL A DATED 29.10.1996. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT THE ASSESSING OFFICER HAS ERRED IN LAW AS W ELL AS ON FACTS IN COMPLETING THE ASSESSMENT U/S 158BC ON A TOTAL INCOME OF RS. 18,59,140/- FOR THE BLOCK PERIOD FROM 1.4.85 TO 5.10.95 WHICH IS ARBITRARY AND UNJUSTIFIED IN AS MU CH AS THE SAME IS BASED ON SUSPICION, CONJECTURES AND SURMISE S AND THERE IS ABSOLUTELY NO BASIS FOR THE ADDITIONS MADE . 2. THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 3,61,278/- ON ACCOUNT OF INCOME FOR WHICH NO REGULAR RETURNS WERE FIELD DURING THE YEARS OF T HE BLOCK PERIOD HOLDING THE SAME TO BE UNDISCLOSED INCOME WH ICH IS ARBITRARY AND UNJUSTIFIED. THE ASSESSEE DID NOT FI LE THE RETURNS FOR THESE ASSESSMENT YEARS AS THE SAME WERE BELOW THE TAXABLE LIMIT AFTER ADJUSTMENT OF THE ALLOWABLE DEDUCTIONS AND AS SUCH THE SAME CANNOT BE CONSIDERED TO BE UND ISCLOSED INCOME FOR THE PURPOSES OF ASSESSMENT U/S 158 BC OF THE ACT. 3. THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 59,380/- ON ACCOUNT OF COMMISSI ON AT A RATE OF 2% OF THE TRANSACTIONS OF RS. 29,69,000/- A LLEGEDLY NOT CONSIDERED BY THE ASSESSEE WHILE COMPUTING INCOME F ROM COMMISSION EARNED FROM PROPERTY TRANSACTIONS SHOWN AT RS. 2 1,15, 000/-. NO COMMISSION WHATSOEVER HAS BEEN EAR NED ON THE ALLEGED TRANSACTIONS AMOUNTING TO RS. 29,69,000 /- AS TRANSACTIONS WERE NOT COMPLETED THROUGH THE ASSESSE E. 4. THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 8,,75,960/- ON ACCOUNT OF COMMI SSION AT A RATE OF 2% ON THE TOTAL TRANSACTIONS OF RS. 4,37,98 ,047/- WHICH IS ARBITRARY AND UNJUSTIFIED IN AS MUCH AS THE AMOU NTS MENTIONED IN THE SEIZED DOCUMENTS WERE ONLY REFEREN CES FOR SALE OR PURCHASE OF PROPERTY AND NO TRANSACTIONS WH ATSOEVER MATERIALIZED TO YIELD ANY COMMISSION TO THE ASSESSE E AND AS SUCH THE ADDITION IS WHOLLY UNJUSTIFIED. 5 THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN M AKING AN ADDITION OF RS. 64,000/- ON ACCOUNT OF THE PROPE RTY DEALINGS ON THE BASIS OF PAGE 32 OF DOCUMENT NO. 3 WHICH IS AGAIN ARBITRARY AND UNJUSTIFIED, IN AS MUCH AS THE FIGURES ON THIS PAPER ARE ONLY ROUGH CALCULATIONS WHICH A RE N OT OF ANY TRANSACTIONS WHATSOEVER AND AS SUCH THE ADDITION IS WHOLLY UNJUSTIFIED. 6. THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 17,235/- ON ACCOUNT OF COMMISSIO N AT A RATE OF 2% OF THE PROPERTY TRANSACTIONS OF RS. 8,61,760/ - WHICH IS AGAIN ARBITRARY AND UNJUSTIFIED. THERE ARE NO COMP LETED PROPERTY TRANSACTIONS YIELDING ANY COMMISSION INCOM E TO THE ASSESSEE ON THIS ACCOUNT AND THE ADDITION IS WHOLLY UNWARRANTED. 7 THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN M AKING AN ADDITION OF RS. 51,566/- AS INCOME FROM PROPERTY DEALING ON THE BASIS OF AN ENTRY OF RS. 10,10,000/- APPEARI NG ON PAGE 32 OF DOCUMENT NO. 3 WHICH IS ARBITRARY AND UNJUSTI FIED. THERE HAS BEEN NO SUCH PROPERTY DEALING YIELDING AN Y INCOME TO THE ASSESSEE AND AS SUCH THE ADDITION IS WHOLLY UNWARRANTED. 8 THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN M AKING AN ADDITION OF RS. 3,25,548/- ON ACCOUNT OF ALLEGE D UNEXPLAINED INVESTMENT IN GOLD, IN UTTER DISREGARD OF THE EXPLANATIONS RENDERED DURING THE COURSE OF ASSESSME NT PROCEEDINGS WHICH IS ARBITRARY AND UNJUSTIFIED. IN ANY CASE THE GOLD ORNAMENTS BELONGED TO ASSESSEES WIFE AND NO ADDITION IN THE HANDS OF THE ASSESSEE IS CALLED FOR ON ACCOUNT OF SUCH UNEXPLAINED INVESTMENT. 9. THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 15,000/- AS ASSESSEES UNDISCLOS ED INCOME INSPITE OF THE FACT THAT IT WAS EXPLAINED THAT THE AMOUNT REPRESENTS THE LOAN RAISED AGAINST CTD ACCOUNT AND AS SUCH THE ADDITION IS WHOLLY UNJUSTIFIED. 10 THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 10,000/- ON ACCOUNT OF VALUE OF VCP ESTIMATED BY HIM WHICH IS AGAIN ARBITRARY AND UNJUS TIFIED, AS THE VCP WAS GIFTED TO THE WIFE OF THE ASSESSEE BY H ER BROTHER SHRI JAI PRAKASH WHICH WAS EXPLAINED DURING THE COU RSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HA S ARBITRARILY MADE THE ADDITION AND THAT TOO IN THE H ANDS OF THE ASSESSEE WHO HAS NO CONNECTION WITH THE VCP. 3 11 THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 55,000/- REJECTING THE EXPLANATI ON OF THE ASSESSEE THAT THE AMOUNTS FORM PART OF THE CASH AVA ILABLE AS INDICTED IN THE CASH FLOW STATEMENT. THUS, THE ADD ITION IS WHOLLY UNJUSTIFIED AND UNWARRANTED. 12. THAT THE ASSESSING OFFICER HAS FURTHER ERRED IN MAKING AN ADDITION OF RS. 24,072/- FOR THE ALLEGED DIFFERE NCE IN COST OF CONSTRUCTION AS SHOWN BY THE ASSESSEE AND AS ESTIMATED BY THE ASSTT. VALUATION OFFICER, PATIALA WHICH IS A RBITRARY AND UNJUSTIFIED. 13 THAT ALL THE ABOVE IMPUGNED ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER BY BRINGING NO COGENT MATE RIAL OR EVIDENCE ON RECORD TO JUSTIFY THE SAME AS IT WAS FO R THE ASSESSING OFFICER TO PROVE THAT THE ADDITIONS ARE I N THE NATURE OF EXPLAINED INCOME OF THE ASSESSEE WHICH ONUS THE ASSESSING OFFICER HAS FAILED TO DISCHARGE. 3 AT THE OUTSET THE LD. COUNSEL OF THE ASSESSEE SUB MITTED THAT THE ASSESSEE HAD FILED TWO ADDITIONAL GROUNDS WHICH LATER WERE WITHDRAWN. THE ASSESSEE HAD ALSO FILED APPLIC ATION DATED 6.3.2004 SEEKING ADMISSION OF ADDITIONAL EVIDENCE I N THE FORM OF VARIOUS AFFIDAVITS AT PAGES 191 TO 207 OF THE PA PER BOOK. IT WAS POINTED OUT THAT EARLIER THE BENCH VIDE ORDER D ATED 9.3.2010 HAD ALLOWED THE WITHDRAWAL OF ADDITIONAL G ROUND AND APPLICATION FOR ADDITIONAL EVIDENCE WAS ALSO ADMITT ED. WE HAVE GONE THROUGH THE RECORD AND FIND ON 9.3.2010, FOLLO WING ORDER WAS PASSED BY THE BENCH: PRESENT FOR ASSESSEE: S/SHRI D.K. GUPTA, TEJ MOHAN SINGH PRESENT FOR DEPARTMENT: SHRI SAAD KIDWAI PARTIES WERE HEARD W.R.T. THE APPLICATION OF THE AS SESSEE F OR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL DATED 15. 8.2001 AND 24.3.2004. THE LD. COUNSEL OF THE ASSESSEE SEEKS P ERMISSION TO WITHDRAWN THESE APPLICATIONS. REVENUE HAS NO OBJEC TION. CONSEQUENTLY THE TWO APPLICATIONS ARE ALLOWED TO BE WITHDRAWN. PARTIES WERE ALSO HEARD IN RELATION TO THE APPELLAN TS APPLICATION UNDER RULE 29 OF THE ITAT RULES, 1962 DATED 6.3.200 4 SEEKING ADMISSION OF ADDITIONAL EVIDENCE PLACED IN THE PAPE R BOOK DATED 5.7.2001 AT PAGES 1991 TO 207. THE LD. DR FOR THE REVENUE HAS NO OBJECTION TO THE ADMISSION OF SUCH ADDITIONAL EVIDE NCE. THE ADDITIONAL EVIDENCE PERTAIN TO THE GROUNDS NO. 3 TO 7 RAISED IN THE MEMO OF APPEAL. ACCORDINGLY THE ADDITIONAL EVIDEN CE IN QUESTION IS ADMITTED FOR ADJUDICATION, AS THE LD. DR FOR THE REVENUE HAS RAISED NO OBJECTION. PARTIES INFORMED THE COURT. MATTER IS ADJOURNED FOR FURTHER HEARING ON 9.4.2010. PARTIES INFORMED. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) THEREFORE, IT IS CLEAR THAT ADDITIONAL GROUNDS ALRE ADY STAND WITHDRAWN AND ADDITIONAL EVIDENCE ALSO STANDS ADMIT TED VIDE ORDER OF BENCH. 4 4 GROUND NO. 1 IS OF GENERAL NATURE AND DOES NOT REQUIRE ANY SEPARATE ADJUDICATION. 5 GROUND NO. 2 THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT THE INCOME FOR THE FIRST FIVE YEARS I.E. A SSESSMENT YEAR 1986-87 TO 1990-91 ONLY CONSIST OF SALARY WHICH WAS BELOW THE TAXABLE LIMIT, THEREFORE, THE SAME COULD NOT HAVE BEEN ADDED TO THE UNDISCLOSED INCOME IN THE BLOCK. IN THIS RE GARD HE RELIED ON THE DECISION OF HON'BLE PATNA HIGH COURT IN CASE OF CIT V. SMT. LILY TOBIAS, 266 ITR 401 (PAT) AND HON'BLE RAJ ASTHAN HIGH COURT IN CASE OF CHAIN SUKH RATHI V CIT, 270 I TR 368 (RAJ). 6 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RE FERRED TO THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF RAJESH SYAL V CIT, 344 ITR 482 WHEREIN IT WAS HELD THAT UNDISCLOSED INCOME CAN BE ASSESSED EVEN IF TIME FOR FILING OF RETURN HAD NOT EXPIRED. 7 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND THAT SECTION 158BB WHICH DEALS WITH THE COMPUTATIO N OF UNDISCLOSED INCOME, READS AS UNDER: 158BB. (1) THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHA LL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD COMPUTED, [IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR RE QUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND RELATA BLE TO SUCH EVIDENCE], AS REDUCED BY THE AGGREGATE OF THE TOTAL INCOME, OR AS THE CASE MAY BE, AS INCREASED BY THE AGGREGATE OF THE LOSSES OF SUCH PREVIOUS YEARS, DETERMINED, (A) WHERE ASSESSMENTS UNDER SECTION 143 OR SECTION 144 OR SECTION 147 HAVE BEEN CONCLUDED [PRIOR TO THE DATE OF COMMENCEM ENT OF THE SEARCH OR THE DATE OF REQUISITION], ON THE BASIS OF SUCH ASSE SSMENTS; (B) WHERE RETURNS OF INCOME HAVE BEEN FILED UNDER SECTION 139 [OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) O F SECTION 142 OR SECTION 5 148 ] BUT ASSESSMENTS HAVE NOT BEEN MADE TILL THE DATE OF SEARCH OR REQUISITION, ON THE BASIS OF THE INCOME DISCLOSED I N SUCH RETURNS; [(C) WHERE THE DUE DATE FOR FILING A RETURN OF IN COME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, (A) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOO KS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH ENTRIES RESULT IN COMPUTATION OF LOSS FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PER IOD; OR (B) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOO KS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH INCOME DOES NO T EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX FOR ANY PREVIO US YEAR FALLING IN THE BLOCK PERIOD. PLAIN READING OF SUB-CLAUSE (B) OF CLAUSE (C) MAKES IT CLEAR THAT IF THE INCOME DOES NOT EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE T O TAX THEN SUCH INCOME CAN NOT BE ASSESSED AS UNDISCLOSED INCOME. HON'BLE PATNA HIGH COURT HAS HELD IN THIS REGARDS AS UNDER: THE AMENDMENT MADE IN SECTION 158BC OF THE INCOME- TAX ACT, 1961 WITH EFFECT FROM JULY 1, 1995 CLEARLY PROVIDES THAT IF THE INCO ME OF THE PARTICULAR ASSESSMENT YEAR FALLING WITHIN THE BLOCK PERIOD IS NOT TAXABLE THE SAME SHALL NOT BE TREATED TO BE UNDISCLOSED INCOME. 8 THE DECISION RELID ON BY THE LD. DR FOR THE REVEN UE IN CASE OF RAJESH SYAL V. CIT (SUPRA) IS TOTALLY DISTI NGUISHABLE. IN THAT CASE SEARCH WAS CONDUCED IN THE PREMISE OF THE ASSESSEE WHICH RESULTED IN SEIZURE OF CASH, FIXED D EPOSIT AND OTHER DOCUMENTS. IN RESPONSE TO THE NOTICE U/S 158 BC THE ASSESSEE FILED RETURN OF INCOME IN ACCORDANCE WITH SECTION 44AD. IT WAS CLAIMED BEFORE THE TRIBUNAL IN VIEW O F THE RETURN FILED THAT THE INCOME SHOULD BE TREATED AS DISCLOSE D INCOME. HOWEVER, THE TRIBUNAL DISMISSED THIS ARGUMENT. ON APPEAL THE HON'BLE PUNJAB & HARYANA HIGH COURT CONFIRMED THE F INDINGS OF THE TRIBUNAL BY OBSERVING THAT EVEN IF THOUGH THE T IME FOR FILING OF THE RETURN HAD NOT EXPIRED THERE WAS NO DISCLOSU RE BY THE ASSESSEE IN ANY MANNER. THEREFORE, THE DISPUTE WAS WHETHER THE ITEMS FOUND DURING THE SEARCH CAN BE TREATED AS DISCLOSED 6 INCOME OR NOT? WHEREAS THE ISSUE BEFORE US IS WHET HER IF THE INCOME IS BELOW TAXABLE LIMIT THE SAME SHOULD BE TR EATED AS UNDISCLOSED INCOME OR NOT? BY THE PROCEDURE FOR CO MPUTATION OF UNDISCLOSED INCOME IN SECTION 158BB WHICH WE HAV E EXTRACTED ABOVE IT HAS BEEN CLARIFIED THAT IF INCOM E IS BELOW TAXABLE LIMIT THEN SAME CANNOT BE TREATED AS UNDISC LOSED INCOME. THEREFORE, WE HOLD THAT IN THE FIRST FIVE YEARS WHERE THE INCOME IS CLAIMED TO BE BELOW TAXABLE LIMIT, TH E SAME CANNOT BE TREATED AS UNDISCLOSED INCOME. HOWEVER, THE ASSESSING OFFICER SHOULD VERIFY WHETHER IN THESE YE ARS THE INCOME IS BELOW TAXABLE LIMIT AND THEN DECIDE THE I SSUE. 9 GROUNDS NO. 3 TO 7 THROUGH THESE GROUNDS THE COMMISSION EARNED ON VARIOUS SALES OR PURCHASE TRAN SACTIONS HAS BEEN ADDED TO THE UNDISCLOSED INCOME ON THE BAS IS OF DIARY FOUND DURING SEARCH. FURTHER IT HAS BEEN CLAIMED I N THE ADDITIONAL EVIDENCE THAT MOST OF THESE TRANSACTIONS NEVER ACTUALLY MATERIALIZED AND AFFIDAVITS HAVE BEEN FILE D. AS OBSERVED AT THE OUTSET OF THE ORDER, THIS ADDITIONA L EVIDENCE HAS BEEN ADMITTED. THEREFORE, AFTER CONSIDERING T HE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT THE MATTER SHOULD GO BACK TO THE FILE OF ASSESSING OFFICER WHO SHOULD VE RIFY AFTER CONSIDERING THE AFFIDAVITS FILED AT PAGES 191 TO 2 17 OF THE PAPER BOOK WHETHER SUCH TRANSACTIONS ACTUALLY MATER IALIZED OR NOT AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LA W. 10 GROUND NO. 8 DURING SEARCH CERTAIN LOOSE SLIPS WERE FOUND WHICH DEPICTED PURCHASE OF JEWELLERY. WHEN T HE ASSESSEE WAS CONFRONTED WITH THESE SLIPS DURING ASS ESSMENT PROCEEDINGS THAT SOME OF THE ITEMS WERE ONLY GOT EX CHANGED BY THE ASSESSEES WIFE AND MOTHER AND LOOSE PAPERS PER TAIN TO 7 THEM. IT WAS EXPLAINED THAT SOME OF THE SLIPS BELON G TO ASSESSEES BROTHER-IN-LAW, SHRI VIJAY PARKASH WHO H AD PURCHASED SOME ITEMS OF JEWELLERY FOR SOME MARRIAGE IN HIS FAMILY AND HIS AFFIDAVIT WAS ALSO FILED. THE EXPLA NATION OF THE ASSESSEE WAS NOT ACCEPTED BECAUSE THE PURCHASE OF G OLD WAS NOT IN ONE YEAR BUT SPREAD IN THREE YEARS. IN THIS BACK GROUND A SUM OF RS. 3,25,548/- WAS ADDED TO THE UNDISCLOSE D INCOME OF THE ASSESSEE. 11 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REFER RED TO THE REPLY FILED DURING THE ASSESSMENT PROCEEDINGS AS WE LL AS LOOSE PAPERS FOUND DURING SEARCH AND POINTED OUT THAT ON LY 69 GMS GOLD WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE. IN FACT LOOSE SLIPS RELATE TO GOLD WHICH WAS OWNED BY THE A SSESSEES FAMILY MEMBERS WHICH WAS CONVERTED BY GETTING ORNAM ENTS MADE. HE ALSO PLEADED THAT ASSESSEES BROTHER-IN-L AW HAD CELEBRATED THE MARRIAGE AND FEW OF THE SLIPS BELONG TO HIM AND IN THIS REGARD AFFIDAVIT FROM SHRI VIJAY PARKASH WA S FURNISHED BEFORE THE ASSESSING OFFICER. 12 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY RELIED ON THE ASSESSMENT ORDER. 13 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. WE HAVE PERUSED THE LOOSE SLIPS FOUND AT THE TIME OF SEARCH . IT CANNOT BE SAID THAT ALL THE LOOSE SLIPS RELATE TO REMAKING OF GOLD. THEREFORE, IT CANNOT BE DENIED THAT SOME FRESH GOLD WAS ALSO PURCHASED BY THE ASSESSEE DURING THE BLOCK PERIOD. AT THE SAME TIME IT CAN ALSO BE NOT DENIED THAT SOME ORNAM ENTS MIGHT HAVE GOT MADE BY GIVING OLD ORNAMENTS. WE HAVE TO REMEMBER THAT TOTAL GOLD FOUND DURING SEARCH WAS ONLY 69 GMS . 8 THEREFORE, CONSIDERING THE OVERALL CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT IF AN ADDITION OF RS. 75 ,000 IS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN GOLD, THE S AME WOULD MEET THE ENDS OF THE JUSTICE. THIS PROPOSAL WAS AC CEPTER BY THE LD. COUNSEL OF THE ASSESSEE. THEREFORE, WE SET ASIDE THE ORDER OF ASSESSING OFFICER AND DIRECT HIM TO MAKE A N ADDITION OF RS. 75,000 TOWARDS THE PURCHASE OF GOLD. 14 GROUND NO. 9 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT A DOCUMENT NO. 1 AT PAGE 65, THERE W ERE ENTRY OF RS. 15,000/-. WHEN THE ASSESSEE WAS CONFRONTED IT WAS STATED THAT THE SAME PERTAINED TO A LOAN AGAINST CTD ACCOU NT IN THE YEAR 1987. THIS EXPLANATION WAS FOUND TO BE UNTENA BLE BECAUSE THE DIARY IN WHICH ENTRY OF RS. 15,000/- AP PEARED, WAS STARTED IN 1990 THEN HOW CAN THE SAME PERTAIN TO 19 87. MOREOVER DURING THE STATEMENT RECORDED IN THE COURS E OF SEARCH, IT WAS STATED THAT A SUM OF RS. 20,000/- WA S SPENT ON PURCHASE OF PLOT AND THE SOURCE WAS GIVEN OUT OF WI THDRAWAL FROM GPF, LIC AND CTD LOAN, THEREFORE, THE SAME LO AN WAS NOT AVAILABLE AND ACCORDINGLY RS. 15,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 15 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND A LSO PAGE 20 OF THE PAPER BOOK WHICH CONTAINS STATEMENT RECOR DED DURING THE SEARCH. HE POINTED OUT TO THE ANSWERS AND QUES TIONS REGARDING THESE DOCUMENTS WHERE IT WAS STATED THAT ENTRY REGARDING THIS ITEM PERTAINED TO LOAN AGAINST CTD. ACCORDING TO HIM THE ASSESSEE HAD CONSISTENTLY MAINTAINED THA T THIS ITEM PERTAINED TO LOAN OF CTD ACCOUNT. 9 16 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER AND ALSO R EFERRED TO PAGE 90 OF THE DEPARTMENTAL PAPER BOOK WHICH IS A C OPY OF THE DOCUMENTS WHICH SHOWS THAT THIS ENTRY WAS MADE UNDE R THE HEAD INCOME. 17 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. THE ENTRY IN DOCUMENT NO. 1 AT PAGE 65 WHICH IS AVAILABLE AT PAGE 90 OF THE DEPARTMENTAL PAPER BOOK READS AS UNDER: INCOME EXPENDITURE TOTAL AMOUNT = 15,000 PETROL = 200.00 BREAKFAST = 32.00 ALCO TIMER & = 2000.00 NYCRAFT CLORIMETER = 3600.00 BRUSH = 35.00 MICRO SCOPE LAMPS 55.00 FROM THE ABOVE IT IS CLEAR THAT INCOME AND EXPENDIT URE HAS BEEN SEPARATELY RECORDED. ONCE THE ENTRY HAS BEEN M ADE UNDER THE HEAD INCOME SAME CANNOT BE TREATED AS LOAN AG AINST CTD. IN ANY CASE IT HAS BEEN POINTED OUT BY THE AS SESSING OFFICER THAT THIS DIARY WAS STARTED IN THE YEAR 199 0, THEREFORE, ENTRY OF 1987 CANNOT APPEAR IN THIS DIARY. ACCORDI NGLY WE FIND NOTHING WRONG WITH THE ORDER OF ASSESSING OFFICER A ND CONFIRM THE ADDITION OF RS. 15,000/-. 18 GROUND NO. 10 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASS ESSEE WAS ASKED TO EXPLAIN TO SHOW THE SOURCE OF ACQUISITION OF VCP OWNED BY HIM. IT WAS SUBMITTED THAT SAME WAS GIFTE D BY SHRI JAI PARKASH WHO WAS BROTHER OF ASSESSEES WIFE, IN 1990. THIS EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFIC ER BECAUSE 10 A LETTER BY SHRI JAI PARKASH SHOWED THAT HE HAD GIF TED THE OLD VCP WHICH WAS LYING WITH HIM AND NO CLOSE RELATIVE WOULD GIVE THE GIFT OF AN OLD ITEM. 19 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT BROTHER OF ASSESSEES WIFE HAD CATEGORICALLY STATED THAT HE HAD GIVEN THIS GIFT AND THEREFORE, THERE WAS NO REASON NOT TO BELIEVE THE SAME. 20 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RE LIED ON THE ORDER OF ASSESSING OFFICER. 21 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT IT IS VERY WELL POSSIBLE THAT ASSESSEES WIFES BROTHER C OULD HAVE EASILY GIFTED OLD VCP. THE ASSESSING OFFICER HAS N OT BROUGHT ANY MATERIAL ON RECORD TO DIS-BELIEVE THIS EXPLANAT ION. THEREFORE, IN OUR OPINION, THIS ADDITION IS NOT JUS TIFIED AND ACCORDINGLY THE SAME IS DELETED. 22 GROUND NO. 11 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSE SSING OFFICER ASKED ABOUT THE ENTRIES APPEARING AT PAGE 1 3 OF DOCUMENT NO. 2 WHICH INCORPORATED THE ACCOUNT OF ON E SHRI J.C. JINDAL CONTAINING FOLLOWING ITEMS: DATE AMOUNT (RS.) 30.3.94 10,000 2.4.94 4,000 7.4.94 6,000 17.9.94 5,000 13.4.94 5,000 9/94 10,000 22.3.95 10,000 25.3.95 5,000 TOTAL 55,000 11 IT WAS EXPLAINED THAT THE AMOUNT OF RS. 55,000/- WA S PART OF CASH FLOW CHART. FURTHER THE ASSESSING OFFICER DID NOT BELIEVE THE SAME BECAUSE IF THE EFFECT TO THESE ENTRIES WAS GIVEN IN THE CASH FLOW THEN HOUSEHOLD WITHDRAWALS OF THE ASSESSE E WOULD BECOME INADEQUATE IN CASH FLOW AND ACCORDINGLY THI S AMOUNT WAS ADDED AS ADDITIONAL INCOME OF THE ASSESSEE. 23. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REFE RRED TO PAGE 62 TO 65 OF PAPER BOOK WHICH IS A COPY OF THE CASH FLOW CHART. HE EXPLAINED THAT SOURCES HAVE BEEN SHOWN S EPARATELY AND WITHDRAWALS HAVE BEEN DULY RECORDED. THEREFORE , WITHOUT POINTING OUT HOW CASH WAS NOT AVAILABLE OR HOW THE WITHDRAWALS WERE INADEQUATE ADDITION COULD NOT HAVE BEEN MADE. 24 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE R ELIED ON THE ORDER OF THE ASSESSING OFFICER. 25 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND THAT THE ITEMS NARRATED BY THE ASSESSING OFFICER HA VE DEFINITELY BEEN INCORPORATED IN THE CASH FLOW CHART. IT IS FU RTHER NOTICED THAT WITHDRAWALS HAVE BEEN SEPARATELY SHOWN FOR VAR IOUS YEARS RANGING FROM RS. 10,000 TO RS. 90,800/- IN VARIOUS YEARS. THIS MEANS WITHDRAWALS HAVE BEEN SEPARATELY RECORDED. WITHDRAWALS COULD HAVE BEEN TREATED INADEQUATE IF S PECIFIC EVIDENCE REGARDING HIGHER WITHDRAWAL WAS AVAILABLE. OTHERWISE RECEIPT OF CASH SHOWN IN THE CASH FLOW CHART SHOULD HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER PARTICULARLY WHEN THE SOURCE OF SUCH CASH HAS NOT BEEN DISPUTED. ACCORDINGLY WE SET ASIDE THE ORDER OF ASSESSING OFFICER AND DELETE THE ADDIT ION OF RS. 55,000/-. 12 26 GROUND NO. 12 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT DURING ASSESSMENT PROCEEDINGS ESTIMATE OF VALUATION OF CONSTRUCTION WAS REFERRED TO THE VALUA TION OFFICER, PATIALA AND THE OFFICER POINTED OUT THAT EXPENDITUR E INCURRED BY THE ASSESSEE ON CONSTRUCTION AFTER REDUCING HIS DIS CLOSED INVESTMENT, WAS RS. 24,072/-. SINCE NO EXPLANATION WAS GIVEN IN RESPECT OF THIS VALUATION, A SUM OF RS. 24,072/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 27 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT VALUATION REPORT WAS NEVER CONFRONTED TO THE ASSESS EE AND THEREFORE, THIS ADDITION WAS NOT POSSIBLE. IN ANY CASE THE VALUATION IS A MATTER OF ESTIMATE AND THEREFORE, TH E ADDITION WAS ON A VERY HIGH SIDE. 28 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RE FERRED TO PAGE 117 OF THE DEPARTMENTAL PAPER BOOK WHICH IS A COPY OF THE VALUATION REPORT AND IT WAS DEFINITELY GIVEN TO THE ASSESSEE. 29 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT VALUATION REPORT WAS DULY GIVEN TO THE ASSESSEE AND THEREFORE, IT IS NOT CORRECT TO STATE THAT VALUATION REPORT WA S NOT GIVEN TO THE ASSESSEE. HOWEVER, AT THE SAME TIME VALUATION IS A MATTER OF ESTIMATE AND NO TWO EXPERT WOULD EVER REACH THE SAME ESTIMATE. MOREOVER THE ASSESSEE HAD STATED DURING ASSESSMENT PROCEEDINGS THAT HE HAS SPENT RS. 60,000 /- TO 70,000/- IN A SPAN OF 9 YEARS. THIS SHOWS THAT PRO PERTY WAS CONSTRUCTED OVER A PERIOD OF TIME AND THE PERIOD OF CONSTRUCTION WAS VERY OLD. CONSIDERING THE OVERALL CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT AN ADDITION OF RS. 7,500/- WOULD MEET THE ENDS OF THE JUSTICE. 13 THIS ADDITION WAS ACCEPTED BY THE LD. COUNSEL OF TH E ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER OF ASSESSING OFF ICER AND DIRECT HIM TO MAKE AN ADDITION OF RS. 7,500/- TOWAR DS UNEXPLAINED EXPENDITURE ON COST OF CONSTRUCTION. 30. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 26.12.2012. SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 26.12. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 14