ACIT, Jabalpur V. Shri Jairam Soni, Jabalpur

ITSSA 16/JAB/2006

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0934 (ITAT-JABALPUR)
• Duration Of Justice: 13 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 05-06-2012
• Assessment Year: misc
• Appeal Filed On: 25-04-2006
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Assessee Lawyers: A P SHRIVASTAVA
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Block assessment; Documents seized
• Section: 40A(3); 132

Judgement Text

1 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 1 OF 28 IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI JOGINDER SINGH(JM) AND SHRI R.C. SHARM A (AM) I.T.(SS) A NO14./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 SHRI JAIRAM SONI, 718, SARAFA BAZAR, JABALPUR VS. ACIT, CIRCLE 1(1), JABALPUR PAN/GIR NO. : APPELLANT ) .. RESPONDENT ) I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 ACIT, CIRCLE 1(1), JABALPUR VS. SHRI JAIRAM SONI, 718, SARAFA BAZAR, JABALPUR PAN/GIR NO. : APPELLANT ) .. RESPONDENT ) ASSESSEE BY : SHRI A.P.SHRIVASTAVA & SAPAN USRETHE REVENUE BY : SHRI ABHISHEK SHUKLA DATE OF HEARING : 16/ 9/2013 DATE OF PRONOUNCEMENT : 31/10/2 013 2 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 2 OF 28 O R D E R PER R.C.SHARMA, AM: THE CROSS APPEALS FILED BY THE REVENUE AND THE ASS ESSEE ARE DIRECTED AGAINST THE ORDER DATED 15.2.2006 OF LD CO MMISSIONER OF INCOME TAX (APPEALS), IN THE MATTER OF BLOCK ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER FOR THE PERIOD 1.4. 1996 TO 21.11.2002 UNDER SECTION 158BC OF THE I.T.ACT, 1961 . 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A GOLD S MITH MAINLY DOING JOB WORK AND ALSO ENGAGED IN SELLING ORNAMENT S. THERE WAS SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT ON 21.11.2002. DURING THE COURSE OF SEARCH, VARIOUS D OCUMENTS WERE SEIZED. WHILE FRAMING ASSESSMENT U/S.158 BC, THE AS SESSING OFFICER MADE ADDITION ON ACCOUNT OF OPENING CAPITAL, LOW HO USEHOLD WITHDRAWALS, UNEXPLAINED GOLD ORNAMENTS, SILVER ORN AMENTS AND PRECIOUS STONES. THE DISALLOWANCE WAS ALSO MADE UN DER SECTION 40A(3) AS WELL AS ON ACCOUNT OF GROSS PROFIT ON UNA CCOUNTED SALES. ADDITION WAS ALSO MADE ON ACCOUNT OF INVESTMENT IN CIRCULATING CAPITAL OUTSIDE THE BOOKS. BY THE IMPUGNED ORDER, LD COMMISSIONER 3 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 3 OF 28 OF INCOME TAX (APPEALS), INTER ALIA, DELETED VARIOU S ADDITIONS AND CONFIRMED THE ADDITION OF RS.15,00,250/- ON ACCOUNT OF CIRCULATING CAPITAL ON THE BASIS OF LOOSE PAPERS. AGGRIEVED BY THE ORDER OF LD COMMISSIONER OF INCOME TAX (APPEALS), DEPARTMENT AN D ASSESSEE ARE IN APPEAL BEFORE THE TRIBUNAL. 3. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE DEPARTM ENT: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION OF : I) RS.1,81,715/- MADE ON ACCOUNT OF CAPITAL ACCOUNT; II) RS.1,40,018/- MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS; III) RS.1,26,625/- MADE ON ACCOUNT OF UNEXPLAINED GOLD ORNAMENTS; IV) RS. 22,800/- MADE ON ACCOUNT OF SILVER ORNAMENTS; V) RS.1,39,600/- MADE ON A/C OF UNEXPLAINED PRECIOUS ORNAMENTS; VI) RS.9,54,500/- MADE ON A/C OF TRADING IN GOLD BULLIO N; VII) RS.8,06,360/- MADE ON A/C OF CASH PURCHASE U/S.40A( 3); VIII) RS.2,04,000/- MADE ON A/C OF G.P ON UNACCOUNTED SAL ES; IX) RS.11,26,260/- MADE ON A/C OF INVESTMENT IN CIRCULA TING CAPITAL OUTSIDE THE BOOKS; X) RS.1,14,013/- MADE ON ACCOUNT OF INTEREST ON CIRCUL ATING CAPITAL OUTSIDE THE BOOKS. 4. THE ASSESSEE IS AGGRIEVED IN HIS APPEAL AGAINST THE ACTION OF LD COMMISSIONER OF INCOME TAX (APPEALS) IN ENHANCING T HE INCOME OF 4 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 4 OF 28 ASSESSMENT YEAR 2003-04 TO RS.15,00,250/- AGAINST T HE ADDITION OF RS.12,83,786/-. 5. RIVAL CONTENTIONS OF BOTH THE PARTIES HAVE BEEN CONSIDERED AND RECORDS PERUSED. THE ASSESSING OFFICER MADE AN ADD ITION OF RS.1,81,715/- BEING THE OPENING CAPITAL BALANCE AS ON 1.4.1996. THE CONTENTION OF THE ASSESSEE WAS THAT THE OPENING BALANCE OF CAPITAL WAS ON ACCOUNT OF JOB WORK CHARGES RECEIPTS AND SALES SHOWN BY THE ASSESSEE SINCE THE YEAR 1994. THIS BA LANCE WAS COMPRISED OF BANK BALANCE OF RS.52,900/- + RS.2,800 /- , SUNDRY DEBTORS OF RS.33,536/- AND CASH IN HAND OF RS.92,85 3/-. HOWEVER, ASSESSING OFFICER REGARD THE SAME AS UNEXPLAINED IN VESTMENT. 6. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY OBSERVING THAT TH IS AMOUNT IS RELATED TO THE INCOME OF SUCH ASSESSMENT YEARS WHIC H DO NOT FALL IN THE BLOCK PERIOD. 7. WE FOUND FROM THE RECORD THAT THIS BALANCE RELAT ED TO THE INCOME OF THE PERIOD PRIOR TO BOCK PERIOD, WHICH IS SUPPORTED BY BANK BALANCE AND DEBTORS DULY DECLARED AS ASSETS. CASH IN HAND HAS BEEN WORKED OUT ON THE BASIS OF SEIZED POCKET D IARIES, THUS 5 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 5 OF 28 REPRESENT UNDISCLOSED INCOME PRIOR TO BLOCK PERIOD, WHICH HAS BEEN CARRIED FORWARD AND SHOWN AS OPENING BALANCE A S ON 1.4.1996. ACCORDINGLY, WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF LD COMMISSIONER OF INCOME TAX (APPEALS) FOR DELETIN G THE ADDITION ON ACCOUNT OF OPENING CAPITAL BALANCE OF RS. 1,81,7 15/-. 8. ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS. 3,73,990/- ON ACCOUNT OF INVESTMENT IN MONEY LENDING BUSINESS. A DDITION OF RS. 11,26,260/- WAS ALSO MADE ON ACCOUNT OF CIRCULATING CAPITAL ALLEGED TO BE LYING INVESTED IN THE MONEY LENDING BUSINESS. 9. THE RELEVANT FACTS ON THESE ISSUES ARE THAT DURI NG THE COURSE OF SEARCH, A LOOSE PAPER D-4/42 PAGE 10 CONTAINING THE CALCULATION OF INTEREST WAS FOUND AS UNDER: WRITING ON LOOSE PAPER INTERPRETATION 4,50,000 = 45 20,250 4.5 LAKHS FOR 45 DAYS @ 0.1% INT.=RS.20,250 5,00,000 = 42 21,000 5 LAKHS FOR 42 DAYS @ 0.1% IN T.=RS.21,000 3 P 21.9 = 46 6,900 3 LAKHS FOR 46 DAYS @ 0.05% INT.=RS.6,900 2 P 13.10 = 21 DAYS 2,100 2 LAKHS FOR 21 DAYS @ 0.05% INT =RS.2,100 50,250 TOTAL INT. FOR THE PERIOD 20.9. TO 13.10 -50,250/- 6 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 6 OF 28 WHEN THIS DOCUMENT WAS CONFRONTED TO THE ASSESSEE, HE FEIGNED IGNORANCE BY STATING IT TO BE NOT BELONGING TO HIM. ENTRIES IN ANOTHER SET OF SMALL DIARIES WERE FOUND TO BE LYING OBLITERATED BY OVER WRITING WITH A SKETCH PEN OF BLACK COLOUR INK. ON THESE OBLITERATED ENTRIES, THE ASSESSEE STATED THAT THOSE WERE NOT IN RESPECT OF ANY MATERIAL TRANSACTION AND THOSE WERE MERE JOTTINGS ONLY. THOSE PAPERS THEN WERE SENT TO CENTRAL FOREN SIC INSTITUTE FOR DECIPHERING AND FROM THE REPORT SO RECEIVED, IT CAM E TO NOTICE THAT ONE OF SUCH ENTRIES WAS CONTAINING THE SAME NOTING AS THAT ON THE LOOSE PAPER D-4/42 I.E. IT WAS IN RESPECT OF THE IN TEREST EARNED OF RS.50,250/- ON A TOTAL LOAN AMOUNT OF RS.14.50 LAKH S ADVANCED DURING THE PERIOD 20.9.2002 TO 13.10.2002. THE ASS ESSING OFFICER IN THE ORDER HAS HELD THAT THIS EVIDENCE POSITIVELY SHOWS THAT THE ASSESSEE WAS ENGAGED IN THE MONEY LENDING BUSINESS AND THE AMOUNT OF RS.14.50 LACS IS THE ACCUMULATED AMOUNT O F THE SOME INITIAL INVESTMENT AVAILABLE AS ON 1.4.1996 AND THE INTEREST EARNED ON IT IN THE BLOCK PERIOD. THIS INITIAL INVESTMEN T WAS WORKED OUT BY A BACKWARD CALCULATION BY TAKING THE RATE OF INTERE ST OF 18%. THIS AMOUNT THUS CAME TO RS.3,73,990/-. IN THE ASSESSME NT ORDER, BOTH 7 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 7 OF 28 THE INITIAL AMOUNT AND THE INTEREST EARNED @ 18% IN EACH OF THE YEARS, THE TOTAL OF WHICH CAME TO RS.11,26,860/- HA VE BEEN BROUGHT TO TAX. FURTHER, ASSESSING OFFICER HAS AGAIN TAXED A SUM OF RS.11,26,816/- AS BEING CIRCULATING CAPITAL INVESTE D IN THE MONEY LENDING BUSINESS. THUS, IN ALL, A TOTAL ADDITION O F RS.26,27,110/- HAS BEEN MADE. 10. IN THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) REDUCED THE ADDITION BY RS.13,54,220/- AF TER HAVING THE FOLLOWING OBSERVATION: I HAVE CONSIDERED THE FACTS ON RECORD AND THE SUBM ISSION MADE BY THE ASSESSEE'S COUNSEL. THE BASIS OF ALL TH ESE ADDITIONS AMOUNTING TO RS.26,27,110/- IS THE NOTING S OF LOANS AMOUNTING TO RS.14.50 LACS ADVANCED IN SEPT./OCT.2002. THE ASSESSEE'S STAND THAT THIS DOCU MENT DOES NOT BELONG TO HIM HOWEVER, IS NOT TENABLE AT A LL FOR THE REASON THAT THIS DOCUMENT HAS BEEN FOUND FROM H IS POSSESSION AND IF HE CLAIMS IT TO BE NOT BELONGING TO HIM, THEN THE ONUS IS UPON HIM TO EXPLAIN AND ESTABLISH AS TO WHOM DOES IT BELONG. ON THE OTHER HAND, THIS TRANSA CTION 8 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 8 OF 28 HAS EVEN BEEN CONFIRMED BY AN OBLITERATED ENTRY OF THE SEIZED DIARIES. THESE OBLITERATED ENTRIES WERE RATH ER CLAIMED TO MERE JOTTINGS, BUT, ON EXAMINATION BY TH E FORENSIC LAB THE CONTENTS OF ONE OF SUCH OBLITERATI NG NOTING WAS FOUND TO BE MATCHING WITH THE IMPUGNED TRANSACT ION. IT SHOWS THAT THE ASSESSEE WAS TRYING TO MISLEAD TH E DEPARTMENT. I AM HOWEVER IN AGREEMENT WITH THE ASSE SSEE THAT IN A BLOCK ASSESSMENT CASE ADDITION CANNOT BE MADE ON THE BASIS OF MERE ASSUMPTION. IT WAS THUS NOT CO RRECT ON THE PART OF THE AO TO ASSUME THE AVAILABILITY OF AN INITIAL INVESTMENT OF RS.3.27 LACS AND ALSO OF EARN ING INTEREST @ 18% AND BRINGING THOSE TO TAX. BUT IN AN Y CASE THIS INVESTMENT OF RS.14,50 LACS IN LOANS HAS REMAI NED UNEXPLAINED AND THUS CONSTITUTES TO BE UNEXPLAINED INVESTMENT WHICH IS ASSESSABLE AS 'UNDISCLOSED- INC OME 1 OF THE BLOCK PERIOD. THE AO ON THE OTHER HAND HAS T AXED THIS AMOUNT TO THE EXTENT OF RS. 11,26,860/- BUT AS THE CIRCULATING CAPITAL IN THE MONEY LENDING BUSINESS. THIS AMOUNT HAS BEEN TAXED IN THE ASSESSMENT YEAR 2003-0 4 OF 9 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 9 OF 28 THE BLOCK PERIOD. FURTHER THE INTEREST EARNED DURIN G THE PERIOD, RELEVANT TO ASSESSMENT YEAR 2003-04 OF RS. 1,57,526/- HAS ALSO BEEN TAXED. IN OTHER WORDS, IT CAN BE SAID THAT ON ACCOUNT OF THIS DOCUMENT, TOTAL ADDITI ON OF RS.12,84,386/- IN THE ASSESSMENT YEAR 2003-04 OF TH E BLOCK PERIOD HAS BEEN MADE. BUT THE ADDITION CALLED FOR ON TREATING IT TO BE AN UNEXPLAINED INVESTMENT COMES T O RS.14,50,000/- + INTEREST EARNED AT RS.50,250/-. TH US ON THE BASIS OF THIS DOCUMENT ADDITION TO THE EXTENT O F RS.15,,00,250/- CAN ONLY BE MADE AND REST OF THE ADDITIONS ARE NOT SUSTAINABLE. ASESSEE HOWEVER RAIS ED A TECHNICAL POINT THAT THIS ADDITION ON THE BASIS DOC UMENT MADE IN THE ASSESSMENT YEAR 2003-04 OF THE BLOCK PE RIOD IS TO THE EXTENT OF RS.12,84,386/- AND NOW ASSESSIN G IT AT RS.15,00,250/- IS TENTAMOUNT TO ENHANCEMENT. THIS CONTENTION HOWEVER, IS NOT FOUND TO BE AS THE TOTAL ADDITION MADE IS MORE THAN THE AMOUNT HELD TO BE STAINABLE. IN ANY CASE, THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO RAIS E ANY OBJECTION, IF ANY, IN CASE IT IS REGARDED TO BE A C ASE OF 10 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 10 OF 28 ENHANCEMENT OF UNDISCLOSED INCOME ASSESSABLE IN THE A.Y. 2003-04 OF THE BLOCK PERIOD (NOTE SHEET ENTRY DATED 18.01.2006). ON THIS ISSUE, THE ASSESSEE ONLY REITE RATED THAT NO ADDITION ON THE BASIS OF THIS DOCUMENT CAN BE MADE AS IT DOES NOT PERTAIN TO HIM. SUCH A REPLY HA S ALREADY HELD TO BE NOT TENABLE. IN NUTSHELL, THE AS SESSEE GETS A RELIEF OF RS.11,26,860/-. ADDITION OF RS. 15 ,00,250/- IS HEREBY CONFIRMED. 11. THE ASSESSEE IN THE ALTERNATIVE MADE THE SUBMISSION THAT IN CASE IT IS REGARDED TO BE UNEXPL AINED INVESTMENT, THEN THE ASSESSEE MAY BE GIVEN THE BENE FIT OF THE INCOME DECLARED IN THE BLOCK RETURN OF RS. 2,27,360 /-. THIS INCOME REPRESENTS THE UNDISCLOSED INCOME EARNED DUR ING THE BLOCK PERIOD. SINCE THE STATED DATE OF ADVANCING O F LOANS IS JUST ABOUT TWO MONTHS PRIOR TO THE DATE OF SEARCH, THUS, IT HAS TO BE PRESUMED THAT WHOLE OF THIS MONEY DECLARE D IN THE BLOCK RETURN WAS AVAILABLE FOR LENDING TO OTHERS. THIS CONTENTION OF THE ASSESSEE IS ACCEPTABLE. THE AMOU NT OF 11 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 11 OF 28 ADDITION THUS IS REDUCED BY RS.2,27,360/-. THE NET ADDITION THUS COMES TO RS.12,72,890/-. THE ASSESSEE THUS GET S A RELIEF OF RS. 13,54,220/-. 12. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECO RDS PERUSED. ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE B ASIS OF NOTINGS ON THE DOCUMENTS FOUND DURING COURSE OF SEARCH. SIN CE THE DOCUMENT WAS FOUND FROM HIS POSSESSION, IT PRESUMED THAT THE ASSESSEE IS TO EXPLAIN THE ENTRIES FOUND RECORDED O N THE SEIZED DOCUMENTS. EVEN THOUGH IT WAS CLAIMED THAT ENTRIES WERE MERE JOTTINGS, BUT EXAMINATION BY THE FORENSIC LAB, THE CONTENTS OF ONE OF SUCH OBLITERATING NOTINGS WAS FOUND TO BE MATCHING WITH THE IMPUGNED TRANSACTION. AFTER CONSIDERING THE NOTINGS , THE LD. CIT(A) RECORDED THE ABOVE FINDING AND CAME TO THE CONCLUSI ON THAT ADDITION OF RS. 1,72,890/- IS LIABLE TO BE SUSTAINED. THE AB OVE FINDING RECORDED BY THE LD.CIT(A) HAS NOT BEEN CONTROVERTED , ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THIS PART OF ORDER OF CIT(A)/ 13. AN ADDITION OF RS.1,40,018/- WAS ALSO MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL. BY THE IMPUGNED 12 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 12 OF 28 ORDER, LD COMMISSIONER OF INCOME TAX (APPEALS) DELE TED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATION: ON CAREFUL CONSIDERATION OF THE FACTS, IT IS TO HO LD THAT SUCH AN ADDITION IN THE BLOCK ASSESSMENT CANNOT BE MADE UNLESS THERE ARE EVIDENCE FOUND DURING SEARCH TO SH OW THAT THE ASSESSEES EXPENSES ON HOUSE HOLD WERE MUC H MORE THAN THE WITHDRAWALS. FINDING OF LOW HOUSEHOLD WITHDRAWALS IS NOT BASED ON ANY EVIDENCE FOUND DURI NG THE SEARCH. IT IS MERELY AN ESTIMATE AND HENCE THI S ADDITION IS DIRECTED TO BE DELETED. THE ASSESSEE T HUS GETS A RELIEF OF RS. 1,40,080/-. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE RECORD. WE FOUND THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER BY ESTIMATING HOUSEHOLD EXPENSES. NO INCRI MINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO S UGGEST THAT THE EXPENSES HAVE NOT BEEN INCURRED OUT OF BOOKS. ACCO RDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD COMMISSIO NER OF INCOME TAX (APPEALS) FOR DELETING THE ESTIMATED ADDITION MADE BY THE ASSESSING 13 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 13 OF 28 OFFICER IN BLOCK ASSESSMENT ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWAL. HENCE, WE UPHOLD THE ORDER OF LD COMMI SSIONER OF INCOME TAX (APPEALS) WITH RESPECT TO DELETION OF AD DITION OF RS.1,40,018/-. 15. AN ADDITION OF RS. 1,26,625/- WAS ALSO MADE ON ACCOUNT OF UNEXPLAINED GOLD ORNAMENTS FOUND DURING THE COURSE OF SEARCH. DURING SEARCH, GOLD ORNAMENTS WHICH IS STOCK IN TRA DE OF 249.250 GMS OF VALUE RS. 1,26,650/- WAS FOUND. THE WHOLE O F THE STOCK WAS HELD BY THE ASSESSING OFFICER TO BE UNEXPLAINED FOR THE REASON THAT NO BOOKS OF ACCOUNT FOR THE CURRENT YEARS WERE FOUN D DURING SEARCH AND THUS THE TRANSACTIONS CLAIMED TO HAVE BEEN CARR IED OUT BETWEEN 1.4.2002 TO 21.11.2002 WERE NOT VERIFIABLE. 16. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) DELETED THE ADDITION AFTER ACCEPTING THE ASSESSEES CONTENTION THAT THE ASSESSEE IN THE RETURN OF INCOM E IS REGULARLY SHOWING STOCK OF GOLD ORNAMENTS AND IN THE RETURN O F INCOME FOR THE ASSESSMENT YEAR 2002-03 FILED ON 12.7.2002 I.E PRIO R TO THE SEARCH ACTION, A STOCK OF 501.560 GMS OF VALUE RS.1,69,797 /- HAS BEEN SHOWN. THIS FACT SHOWS THAT THE ASSESSEE OUGHT TO BE HAVING SOME 14 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 14 OF 28 STOCK AND THE STOCK FOUND OF 249.250 GMS IS TOO NOM INAL TO GIVE A FINDING THAT THE SAME IS NOT AN EXPLAINED ONE. 17. KEEPING IN VIEW THE FACT THAT ASSESSEE IS REGUL ARLY SHOWING GOLD ORNAMENTS IN HIS STOCK-IN-TRADE AND EVEN IN T HE RETURN OF INCOME FILED PRIOR TO THE DATE OF SEARCH THE STOCK OF 501.560 GMS OF VALUE OF RS. 1,69,797/-, WAS SHOWN, WE SEE NO INFIR MITY IN THE ORDER OF LD COMMISSIONER OF INCOME TAX (APPEALS) FOR ACCE PTING THE STOCK DURING THE COURSE OF SEARCH OF 249.250 GMS OF VALUE OF RS. 1,26,650/-,WHICH IS LOWER THAN THE VALUE OF STOCK S HOWN IN THE RETURN FILED ON 12.7.2002 PRIOR TO THE DATE OF SEAR CH FOR THE ASSESSMENT YEAR 2003-04. HENCE, WE UPHOLD THE ORDE R OF LD COMMISSIONER OF INCOME TAX (APPEALS) FOR DELETING T HE ADDITION OF RS. 1,26,625/-. 18. ADDITION OF RS. 22,800/- WAS MADE BY THE AO AS BEING THE VALUE OF UNEXPLAINED STOCK OF SILVER WEIGHING 3 KGS FOUND DURING THE SEARCH. THE STOCK WAS CLAIMED BY THE ASSESSEE TO B E AN EXPLAINED ONE AS PER THE BOOKS OF ACCOUNT BUT WHICH WAS NOT A CCEPTED FOR THE REASON THAT THE CURRENT YEARS BOOKS OF ACCOUNT WER E NOT FOUND DURING SEARCH. BY THE IMPUGNED ORDER, LD COMMISSIO NER OF INCOME 15 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 15 OF 28 TAX (APPEALS) DELETED THE ADDITION OBSERVING THAT F ACTS ARE SIMILAR TO THAT OF GOLD ORNAMENTS. 19. WE HAVE CONSIDERED THE RIVAL CONTENTIONS FOLLOW ING THE SAME REASONING AS GIVEN IN CASE OF GOLD ORNAMENTS, WE CO NFIRM THE ACTION OF CIT(A) DELETING ADDITION OF RS. 22,800/-. 20. ADDITION OF RS. 1,39,600/- WAS MADE BY THE ASS ESSING OFFICER AS BEING THE VALUE OF UNEXPLAINED STOCK OF PRECIOUS STONES FOUND DURING SEARCH. THE ASSESSEE ALL ALONG HAS CLAIMED THE PRECIOUS STONES TO BE BELONGING TO MAULANA NURI AND FURTHER THAT THESE ARE OF VERY CHEAP QUALITY. IN SUPPORT OF THIS CONTENTI ON, ASSESSEE ALSO REFERRED TO THE SEIZED DIARY D-1/1 BEARING THE NAME MAULANA NURI WRITTEN ON THE COVER PAGE WHICH CONTAINS DETAILS OF SO CALLED PRECIOUS STONES OF MAULANA NURI. ASSESSING OFFICER IN PARA 15 OF THE ASSESSMENT ORDER HAS MENTIONED THAT THIS DIARY DOES NARRATE SOME DEALINGS IN STONES WITH MAULANA NURI AND ALSO THAT THIS DIARY DOES BEAR THE NAME OF MAULANA NURI WRITTEN ON THE C OVER PAGE. ASSESSING OFFICER ALSO NOTED THAT THE ENTRIES OF ST ONES ARE SCORED OUT AFTER DELIVERY THE ORNAMENTS MADE ON ORDER AND STUDDED WITH THE PRECIOUS STONES. STATEMENT OF MAULANA NURI WAS ALSO RECORDED 16 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 16 OF 28 AND ON WHICH THE ASSESSING OFFICER HAS OBSERVED THA T HE COULD NOT WITH ANY REASONABLE ACCURACY REMEMBER WHETHER ON TH E DATE OF SEARCH ANY STONES BELONGING TO HIM WERE WITH THE AS SESSEE. FOR THESE REASONS, THIS WAS HELD TO BE AN UNEXPLAINED S TOCK OF THE ASSESSEE. 21. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) DELETED THE ADDITION AFTER HAVING THE FO LLOWING OBSERVATION: 2 ON CAREFUL CONSIDERATION OF FACTS, IT IS SEEN THAT THE AO HAS ACCEPTED THE CONTENTION THAT THE STONES ARE SUPPLIED BY MAULANA NURI BUT BECAUSE OF THE INCOMPL ETE RECORD AND ALSO THAT MAULANA NURI IN HIS STATEMENT COULD NOT GIVE DETAILS WITH ACCURACY OF THE STOCK OF STON ES LYING WITH THE ASSESSEE, HAS HELD IT TO AN UNEXPLAINED ST OCK. THE AVAILABLE EVIDENCE DOES NOT SUGGEST IT TO BE TH E STOCK OF THE ASSESSEE AND IN CASE A PART HAS REMAINED UNEXPLAINED, THEN IT CAME FOR TAKING ACTION IN THE CASE OF MAULANA NURI. THE ADDITION, THEREFORE IN THE ASSESS EES CASE IS HEREBY DELETED. 17 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 17 OF 28 22. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PE RUSED THE RECORD. WE FOUND THAT ASSESSEE WAS BASICALLY DEALI NG IN GOLD ORNAMENTS AND DOES NOT DEAL IN PRECIOUS STONES. SU CH STONES WERE MADE AVAILABLE TO HIM BY ESTABLISHED JEWELERS. THE SEIZED DIARY IN THE NAME OF MAULANA NURI INDICATED THAT THOSE STONE S WERE NOT OF THE ASSESSEE BUT SUPPLIED BY MAULANA NURI. THE DET AILED FINDINGS OF LD CIT (A) AT PARA 8.1 HAVE NOT BEEN CONTROVERTE D BY THE DEPARTMENT BY BRINGING ANY PLAUSIBLE MATERIAL ON RE CORD. ACCORDINGLY, WE DO NOT SEE ANY JUSTIFICATION TO INT ERFERE IN THE FINDINGS OF LD COMMISSIONER OF INCOME TAX (APPEALS) , WHICH HAS RESULTED IN DELETING THE ADDITION OF RS.1,39,600/-. HENCE, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 23. ADDITION OF RS. 9,54,000/- WAS MADE BY THE ASSE SSING OFFICER AS BEING THE PEAK UNEXPLAINED INVESTMENT IN THE TRA DING OF GOLD BISCUITS/BULLION. THE FACTS ARE THAT A LARGE NUMBER OF OBLITERATED ENTRIES ON BEING DECIPHERED WERE FOUND TO BE IN RES PECT OF THE SALE AND PURCHASE OF GOLD BISCUITS. IN SOME OF SUCH ENTR IES THE SALES AND PURCHASES AMOUNT HAVE ALSO BEEN MENTIONED BY STATIN G AGAINST IT A 18 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 18 OF 28 DIGIT QUALIFIED WITH 'P' INDICATING IT TO BE NUMBER OF PIECES. THE AO IN THE ORDER HAS ESTABLISHED THAT 'P' REPRESENTS A GOLD BISCUIT OF 10 TOLAS. THE ASSESSEE HOWEVER, CLAIMED IT TO REPRESEN T A PIECE AND NOT A GOLD BISCUIT. HOWEVER, INITIALLY THE ASSESSEE FE IGNED IGNORANCE ABOUT THE NATURE OF THESE ENTRIES LYING OBLITERATED . BUT THE REPORT RECEIVED FROM THE CENTRAL FORENSIC LAB. REVEALED TH AT A LARGE NUMBER OF THESE ENTRIES WERE IN RESPECT OF SALE AND PURCHASE OF GOLD BISCUITS/BULLION. THE ASSESSEE THEN CAME FORWARD WI TH THE EXPLANATION THAT THOSE WERE THOUGH IN RESPECT OF PU RCHASE AND SALE OF BULLION BUT IN WHICH HE HAD ONLY ACTED AS A DALA I, FOR WHICH HE RECEIVED A DALALI @ RS.20/- PER PIECE. THAT THIS DA LALI HAD BEEN DULY INCLUDED IN THE 'UNDISCLOSED INCOME' OFFERED T O TAX IN THE BLOCK PERIOD. HE HOWEVER CONTESTED THAT THE 'P' DID NOT R EPRESENT THE GOLD BISCUIT OF 10 TOLAS BUT MERELY REPRESENTED A GOLD P IECE. THE AO IN HIS ORDER HAS GIVEN THE FINDING THAT THE 'P' REPRES ENTS A GOLD BISCUIT OF 10 TOLAS. FURTHER THAT THE PEAK OF THE NUMBER OF PIECES PURCHASED IN A YEAR COMES TO 18 AND, THEREFORE, BY TAKING THE PRICE OF ONE GOLD BISCUIT AT RS.53,050/-, HE HAS WORKED O UT THE PEAK 19 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 19 OF 28 UNEXPLAINED INVESTMENT IN TRADING OF GOLD BISCUITS AT RS.9,54,000/- , WHICH HAS BEEN BROUGHT TO TAX. 24. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) CONFIRMED THE ABOVE ADDITION AFTER HAVING FOLLOWING OBSERVATION: I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AN D THE SUBMISSIONS MADE BY THE ASSESSEE'S COUNSEL. FIRST O F ALL, IT IS NOTED THAT THERE WAS AN ALL OUT EFFORT ON THE PA RT OF THE ASSESSEE TO MISLEAD THE DEPARTMENT ON THE NATURE O F TRANSACTIONS REPRESENTED BY OBLITERATED ENTRIES. IT IS ONLY WHEN THOSE ENTRIES WERE UNVEILED BY THE FORENSIC LA B. THAT HE ADMITTED THOSE TO BE IN RESPECT OF SALE AND PURCHASE OF GOLD BISCUITS, BUT BY CLAIMING THAT HE HAD ONLY ACTED AS DALAI IN RESPECT OF THOSE TRANSACTIONS. TH E QUESTION ARISES THAT IF HE HAD ACTED MERELY AS A DA LAI AND HAD INCLUDED THE DALALI SO RECEIVED IN THE 'UNDISCL OSED INCOME' OF THE BLOCK PERIOD THEN WHAT WAS THE COMPU LSION TO NOT TO STATE THE TRUTH. THE ANSWER IS OBVIOUS TH AT HE 20 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 20 OF 28 WANTED TO AVOID THE CONSEQUENCES OF THOSE TRANSACTI ONS COMING TO LIGHT. THIS VERY CONDUCT BY ITSELF ESTABL ISHES THAT THOSE TRANSACTIONS HAD BEEN CARRIED OUT BY HIM. THI S INFERENCE ALSO GETS SUPPORTED FROM THE FACT THAT IN RESPECT OF CERTAIN ENTRIES DETAILED CALCULATION OF THE PURC HASE PRICE HAS ALSO BEEN GIVEN. IF HE HAD MERELY ACTED AS A DA LAI, THEN HE WOULD NOT HAVE NOT PRESERVED THOSE PAPERS W ITH HIM AND FURTHER UNDER NO CIRCUMSTANCES HE WOULD HA VE TRIED TO OBLITERATE THOSE ENTRIES AND THAT TOO IN S UCH A MANNER SO AS TO MAKE IT TOTALLY ILLEGIBLE. THE ASSE SSEE'S CONTENTIONS THUS ARE NOT PLAUSIBLE. THE AO'S FINDIN G THAT HE ACTUALLY CARRIED OUT THOSE TRANSACTIONS BY INVES TING HIS MONEY IS THEREFORE CONFIRMED. 25. BEFORE LD COMMISSIONER OF INCOME TAX (APPEALS), ASSESSEE HAS TAKEN ALTERNATIVE CONTENTION THAT IN CASE THE DOCUM ENT D-4/42/10 IS CONSIDERED TO BE IN RESPECT OF LOANS OF RS.14.50 LACS ADVANCED BY THE ASSESSEE AND IS HELD TO BE TAXABLE AS UNEXPLAIN ED INVESTMENT, THEN NO SEPARATE ADDITION ON ACCOUNT OF THIS PEAK U NEXPLAINED 21 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 21 OF 28 INVESTMENT OF RS.9,54,000/- CAN BE MADE FOR THE REA SON THAT THIS AMOUNT HAS TO BE REGARDED AS PART OF THE CASH WHICH HAD BEEN UTILIZED IN SEPT./OCTOBER 2002 IN ADVANCING LOANS O F RS.14.50 LACS. 26. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) ACCEPTED THE ASSESSEES CONTENTION THAT S INCE IT HAS TO BE VIEWED THAT THE ASSESSEE WAS REGULARLY INVESTING UN ACCOUNTED FUND IN THE SALE AND PURCHASE OF GOLD BISCUITS AND AT TI MES IN ADVANCING LOANS TO OTHERS. THE PEAK AMOUNT OF THESE INVESTMEN TS, BOTH IN LOANS AND IN THE PURCHASE OF GOLD BISCUITS IS THUS TO BE CONSIDERED TOGETHER AND WHICH COMES TO RS.14.50 LACS. SINCE TH E ADDITION ON ACCOUNT OF UNEXPLAINED LOANS HAS BEEN CONFIRMED, TH EN IT IS HELD THAT THE PEAK UNEXPLAINED INVESTMENT IN THE TRADING IN BULLION OF RS.9,54,000/- IS COVERED BY THIS ADDITION AND THUS THIS ADDITION SEPARATELY CANNOT BE CONFIRMED. THEREFORE, LD COM MISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION. 27. LD COMMISSIONER OF INCOME TAX (APPEALS) ALSO DE LETED THE ADDITION MADE IN RESPECT OF TRANSACTION CARRIED OUT ON BEHALF OF SHRI RAJARAM SONKAR, BY OBSERVING THAT THE PEAK AMOUNT OF INVESTMENT 22 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 22 OF 28 OF THE TRANSACTIONS ATTRIBUTED TO SHRI RAJARAM SONK AR WOULD THUS BECOME ASSESSABLE IN ASSESSEES HANDS BUT NO SEPARA TE ADDITION ON THIS ACCOUNT CAN BE MADE AS THIS ADDITION IS COVERE D BY THE OVERALL PEAK OF RS.14.50 LAKHS. 28. AN ADDITION OF RS.8,06,360 WAS MADE BY THE ASSE SSING OFFICER U/S.40A(3) , WHICH WAS DELETED BY LD COMMISSIONER O F INCOME TAX (APPEALS) BY FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT REPORTED IN 270 ITR 314. ASSESSING OFFICER H AS MADE THIS ADDITION ON THE PLEA THAT PURCHASE PRICE OF ALL THO SE GOLD BISCUITS OUGHT TO HAVE BEEN PAID IN CASH, ACCORDINGLY DISALL OWANCE WAS MADE UNDER THE PROVISIONS OF SECTION 40A(3) OF THE ACT. THE PLEA OF THE ASSESSEE WAS THAT NO CLAIM OF EXPENSES WAS MADE IN RESPECT OF SUCH PURCHASE IN HIS BOOKS OF ACCOUNT. WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION AF TER FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT REPORTED IN 2 70 ITR 314. 29. AN ADDITION OF RS.2,04,000/- WAS ALSO MADE BY T HE ASSESSING OFFICER. THE FACTS ARE THAT IN THE SEIZED DIARIES T HERE ARE CERTAIN ENTRIES OF SALES AND PURCHASES OF GOLD ORNAMENTS WH ICH ARE NOT 23 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 23 OF 28 REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. THE ASSE SSEE HAS WORKED OUT SUCH 'SALES AT RS.9,82,000/- AND BY APPLYING A RATE OF PROFIT OF 5% OFFERED THE SAME AS PART OF HIS UNDISCLOSED INCO ME. THE AO HOWEVER, HAS ESTIMATED THESE SALES AT RS.50 LACS. 30. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) DELETED THE ADDITION BY ACCEPTING THE ASS ESSEES CONTENTION THAT ASSESSING OFFICER HAS NOT POINTED O UT ANY FIGURE OF SALE WHICH HAS REMAINED TO BE INCLUDED IN THE WORKI NG OF SALE FIGURE OF RS.9,80,000/-. LD COMMISSIONER OF INCOME TAX (A PPEALS) ALSO OBSERVED THAT ANY ADDITION MADE ON THIS ACCOUNT WIL L NOT MAKE ANY MATERIAL DIFFERENCE TO THE OVERALL ASSESSABILITY OF UNDISCLOSED INCOME FOR THE REASON THAT THIS ADDITION CORRESPOND INGLY WILL REDUCE THE PEAK UNEXPLAINED INVESTMENT IN CASH AND BULLION OF RS.14.50 LAKHS. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 31. AN ADDITION OF RS.1,31,855/- WAS ALSO MADE BY T HE ASSESSING OFFICER AS BEING PEAK AMOUNT OF INVESTMENT MADE IN THE BUSINESS OF SALE OF ORNAMENTS CARRIED OUT OUTSIDE THE BOOKS OF ACCOUNT. THE 24 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 24 OF 28 ASSESSING OFFICER HAS DETERMINED THIS FIGURE BY TAK ING ALL THE ENTRIES OF CASH SALES. 32. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) DELETED THE ADDITION BY OBSERVING THAT AS PER AS PER THE COMPUTERIZED CASH FLOW STATEMENT PREPARED ON THE BA SIS OF THE ENTRIES CONTAINING THE SEIZED POCKET DIARIES CONTAI NING THE TOTAL RECORD OF THE JOB-CHARGES RECEIPTS/SALES CARRIED OU T SINCE 1994, THE CASH AVAILABILITY COMES TO RS.4,06,125/-. ACCORDIN GLY, LD COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT IT C AN BE ASSUMED THAT THIS CASH WAS UTILIZED FOR CARRYING ON THE BUS INESS. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 33. AN ADDITION OF RS.6,96,314/- WAS MADE ON ACCOUN T OF UNEXPLAINED CASH. DURING THE COURSE OF SEARCH, TO TAL CASH OF RS.8,52,900/- WAS FOUND, OUT OF WHICH, CASH OF RS.2 ,63,862/- WAS STATED TO BE BELONGING TO THE ASSESSEE AS PER HIS C ASH BOOK. FURTHER A SUM OF RS.5,24,933/- WAS CLAIMED TO BE BELONGING TO HIS WIFE, SMT. GEETA DEVI SONI AS PER HER CASH BOOK. THE RES T OF THE AMOUNT WAS OFFERED TO TAX. IN THE ASSESSMENT ORDER THE AO GAVE THE CREDIT 25 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 25 OF 28 FOR THE CASH BELONGING TO HIM BUT TO THE EXTENT OF RS.94,481/- AND ALSO OF THE CASH OFFERED TO TAX OF RS.64,105/- AND HELD THE BALANCE TO BE THE UNEXPLAINED CASH. THE AO HOWEVER DID NOT ACCEPT THE CASH BOOK BALANCE OF RS.2,63,862/- FOR THE REASON T HAT NO SUCH CASH BOOK FOR THE CURRENT PERIOD WAS FOUND DURING SEARCH AND EVEN LATER ON, NO SUCH CASH BOOK HAD BEEN PRODUCED BEFORE THE ADL. THE AO THEREFORE, BY REJECTING THE BOOKS HELD THAT ACCOUNTED CASH AVAILABLE WITH HIM AS ON THE DATE OF SEARCH CO ULD BE MORE THAN RS.92,481/- AND HENCE HELD THE BALANCE TO BE AN UNE XPLAINED ONE. HE ALSO DID NOT ACCEPT THE CASH CLAIMED TO BE BELON GING TO HIS WIFE OF RS.5,24,933/- FOR THE REASON THAT NO SUCH CLAIM WAS MADE AT THE TIME OF SEARCH AND ALSO THAT NO BOOKS OF ACCOUNT PE RTAINING TO THE MONEY LENDING BUSINESS OF HIS WIFE WERE FOUND. THIS AMOUNT TOO WAS HELD TO BE AN UNEXPLAINED CASH. 34. BY THE IMPUGNED ORDER, LD COMMISSIONER OF INCOM E TAX (APPEALS) DELETED THE ADDITION AFTER HAVING THE FO LLOWING OBSERVATION: 26 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 26 OF 28 THE LEARNED COUNSEL HAS STATED THAT THE CASH BOOK OF SMT. GEETA DEVI SONI HAS BEEN PREPARED ON THE BASIS OF T HE DIARY RELATING TO HER MONEY LENDING BUSINESS WHICH HAD BEEN SEIZED DURING SEARCH. THIS ISSUE WAS REFERRED TO THE AO FOR RE-EXAMINATION AND WHO, IN HIS REPORT DATED 24.11.2002 HAS STATED THIS CLAIM TO BE TRUE. IN VIE W OF THIS FACT, THIS ADDITION TO THE EXTENT OF RS.5,24,933/- IS HEREBY DELETED. AS REGARDS THE BALANCE CASH, THE SAME HAS BEEN HELD TO BE UNEXPLAINED FOR THE REASON THAT THE CASH BOOK IS NOT RELIABLE AS THE SAME WAS NOT FOUND DURING SEARCH. S UFFICE IT TO SAY THAT IT IS NO BASIS TO HOLD THAT THE BOOK S ARE NOT RELIABLE UNLESS IT IS PROVED THAT IT IS A MADE UP A FFAIR. IN ABSENCE OF ANY SUCH FINDING THIS CASH IS ALSO HELD TO BE AN EXPLAINED ONE. MOREOVER, NO SEPARATE ADDITION ON AC COUNT OF THIS CASH IS EVEN FEASIBLE FOR THE REASON THAT I T WOULD GET COVERED BY THE OVERALL ADDITION OF RS.14.50 LAC S ON ACCOUNT OF UNEXPLAINED INVESTMENT IN LOANS WHICH, A S PER THE DOCUMENTS SEIZED, HAD BEEN RECEIVED BACK BY THE ASSESSEE IN THE MONTH OF OCTOBER. IN THAT EVENTUALI TY THIS CASH WILL GET LINKED TO THE RECEIVED BACK LOAN AMOU NT. THIS ADDITION OF RS.6,96,314/- THEREFORE IS ALSO DELETED . 35. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FO UND THAT THE ADDITION MADE IN RESPECT OF CASH BELONGING TO SMT. GEETA DEVI SONI 27 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 27 OF 28 AMOUNTING TO RS. 5,24,933/- WAS DELETED B Y CIT(A) AFTER CALLING A REMAND REPORT FROM ASSESSING OFFICER. THE LD. CIT(A ) HAS REFERRED THE MATTER TO ASSESSING OFFICER FOR RE-EXAMINATION OF THE CASH BOOK PREPARED ON THE BASIS OF DIARY RELATING TO HER MONE YLENDING BUSINESS, WHICH HAD BEEN SEIZED DURING SEARCH. AFTE R EXAMINING THE CASH BOOK, THE ASSESSING OFFICER REPORTED ON 24.11. 2002 THAT CLAIM OF THE ASSESSEE WAS CORRECT. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING ADDIT ION TO THE EXTENT OF RS. 5,24,933/-. THE BALANCE ADDITION OF RS. 6,96,31 4/- WAS DELETED BY THE LD.CIT(A) AFTER RECORDING THE ABOVE FINDING WHICH HAS NOT BEEN CONTROVERTED. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.CIT(A) . 36. IT IS CLEAR FROM THE ABOVE ORDER OF LD COMMISSI ONER OF INCOME TAX (APPEALS), THAT ADDITION TO THE EXTENT OF RS.12 ,72,890/- WAS CONFIRMED OVER AND ABOVE THE RETURNED INCOME AND TH E BALANCE ADDITIONS WERE DELETED. DETAILED FINDINGS RECORDED BY CIT(A) AS DISCUSSED ABOVE HAS NOT BEEN CONTROVERTED, ACCORDIN GLY, WE UPHOLD THE ORDER PASSED BY CIT(A). 28 I.T.(SS) A NO14./JAB/2006 I.T.(SS) A NO16./JAB/2006 BLOCK PERIOD: 1.4.1996 TO 21.11.2002 PAGE 28 OF 28 37. IN THE RESULT, THE APPEAL OF THE ASSESSES AND R EVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON _____________OCTOBER, 2013 . (JOGINDER SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED / 10/2013 CPU* 3110