K.N.Murugesan, Thiruvarur V. ACIT, Trichy

ITSSA 18/CHNY/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7699 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 14-03-2012
• Assessment Year: misc
• Appeal Filed On: 31-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N DEVANATHAN
• Keywords: Gift; Salary income; Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER IT(SS)A NO. 18/(MDS)/2011 BLOCK PERIOD : 1989-90 TO 31-01-2000 K.N.MURUGESAN, NO.124, MARKET STREET, THIRUVARUR 610101. VS. THE ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-II, TRICHY. PAN AIGPM 6853 M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.D EVANATHAN, ADVOCATE RESPONDENT BY : SHRI ANIRUDH RAI, IRS, COMMISSIONER OF INCOME-TAX DATE OF HEARING : 14 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 22 ND MARCH, 2012 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS IS A BLOCK ASSESSMENT APPEAL. IT IS FILED BY THE ASSESSEE. THE APPEAL IS FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) AT TIRUCHIRAPAL LI DATED IT(SS)A 18/11 :- 2 -: 23.2.2011 AND ARISES OUT OF THE ASSESSMENT UNDER S EC.158BC, READ WITH SEC. 143(3) OF THE INCOME-TAX ACT, 1961. 2. THERE WAS A SURVEY ON 19.1.2000 IN THE BUSINESS PREMISES OF THE ASSESSEE UNDER SEC.133A OF THE ACT. CONSE QUENT TO THE SURVEY, A SEARCH WAS CONDUCTED ON 31.1.2000 UNDER SEC.132 OF THE ACT. 3. IN THE COURSE OF SEARCH PROCEEDINGS, 3.532 KILOG RAMS OF GOLD JEWELLERY AND 74.268 KILOGRAMS OF SILVERWARE W ERE FOUND IN THE BUSINESS PREMISES. WHEN ASKED FOR THE SOURCES, IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE COULD NOT EXP LAIN THE SOURCES FOR ACQUIRING GOLD AND SILVER AND ACCORDING LY, THEY WERE SEIZED PHYSICALLY AND CONSTRUCTIVELY AND LATER ON S OME PART OF GOLD WAS RELEASED BY THE COMMISSIONER OF INCOME-TAX ON FURNISHING OF SECURITY. 4. IN THE LIGHT OF THE ABOVE DEVELOPMENTS, NOTICE U NDER SEC.158BC WAS ISSUED TO THE ASSESSE, IN RESPONSE TO WHICH THE ASSESSEE FILED A BLOCK RETURN OFFERING AN UNDISCLOS ED INCOME OF ` 2,73,473/-. IT(SS)A 18/11 :- 3 -: 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASS ESSING OFFICER FOUND THAT THE ASSESSEE WAS IN EMPLOYMENT W ITH A JEWELLERY FIRM, M/S S.P.S.JEWELLERY AT TIRUVARUR AN D HE WAS EARNING SALARY INCOME FOR THE YEARS 1990-91 TO 1994 -95. THE ASSESSING OFFICER ADOPTED ` 40,000/- FROM THE SALARY INCOME AS SAVINGS USED FOR INVESTMENT AND BALANCE WAS TREATED AS SPENT FOR ASESSEES PERSONAL EXPENSES. AS THE ASSESSEE HAS N OT MAINTAINED REGULAR BOOKS OF ACCOUNT, THE ASSESSING OFFICER WORKED OUT THE UNDISCLOSED INCOME IMPUTABLE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF INVESTMENTS. THE ASSESSIN G OFFICER LISTED OUT THE ITEMS OF INVESTMENTS AND ALSO AMOUNT OF DRAWINGS FOR PERSONAL EXPENSES AND PLACED THE SAME BEFORE TH E ASSESSEE, INVITING HIS EXPLANATION TO EXPLAIN THE SOURCES THE REOF. IN REPLY FILED BY THE ASSESSEE ALONG WITH EVIDENCES IN THE F ORM OF SOURCES AND APPLICATION OF FUNDS, HE EXPLAINED THE SOURCES IN A DETAILED MANNER. ACCORDING TO HIM, HE HAD OBTAINED A LOAN OF ` 2,57,000/- FROM HIS MOTHER AND LOANS OF ` 1,00,000/- EACH FROM THREE PERSONS VIZ., SHRI R. SUBRAMANIAM, SHRI V. RAJU AN D SMT. KOUSALYA. HE ALSO EXPLAINED THAT HE HAD AVAILED 22 20.540 GRAMS OF GOLD JEWELLERY FROM M/S. SUMANGALI JEWELLERS ON SALE OR RETURN BASIS/CREDIT BASIS AND 44,995 KGS. OF SILVER FROM M /S. RAMESH IT(SS)A 18/11 :- 4 -: JEWELLERS ON CREDIT BASIS. THE ASSESSING OFFICER F OUND CERTAIN DISCREPANCIES WITH REGARD TO THE QUANTITY OF GOLD A ND SILVER ON THE DAY OF SEARCH AND INVESTMENT IN THE XEROX MACHINE. THE ASSESSEE ALSO EXPLAINED THAT HE NEED NOT EXPLAIN TH E SOURCES NECESSARY FOR XEROX MACHINE OF ` 1,00,000/-, AS THE SAME WAS ACQUIRED BY HIS WIFE. 6. REGARDING THE LOANS STATED TO BE OBTAINED BY THE ASSESSEE, THE SOURCE OF THE CREDITORS WAS EXPLAINED MAINLY TO BE AGRICULTURAL INCOME. THESE LOANS WERE NOT ACCEPTED BY THE ASSES SING AUTHORITY, STATING THAT THE CREDITORS HAVE NOT PROV ED ANYTHING TO SHOW GENERATING OF AGRICULTURAL INCOME IN THEIR HAN DS. HE ALSO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE REGARDING ACQUISITION OF GOLD AND SILVER ON SALE OR RETURN BASIS/CREDIT BASI S FOR THE REASON THAT THOSE PARTIES WERE NOT PRODUCED BEFORE THE ASS ESSING OFFICER. THE ASSESSING AUTHORITY ALSO DID NOT ACCE PT THE CONTENTION OF THE ASSESSEE THAT HIS PAWN BROKING BU SINESS ARE REFINANCED WITH M/S. M.V.N. & SONS. 7. WHILE THE DETAILS FURNISHED BY THE ASSESSEE WERE BEING CONFRONTED WITH THE INVESTMENTS, THE UNDISCLOSED IN COME ESTIMATED BY THE ASSESSING OFFICER TOOK A DIFFERENT TURN. THE IT(SS)A 18/11 :- 5 -: ASSESSING OFFICER HAS STATED IN HIS ORDER THAT THE ASSESSEE HAD FILED ANOTHER STATEMENT OF SOURCES AND APPLICATIO N OF FUNDS AND ARRIVED AT AN UNDISCLOSED INCOME OF ` 2,73,473/-. THIS REVISED STATEMENT WAS ACCEPTED BY THE ASSESSING OFFICER AND ACCORDINGLY, HE DETERMINED THE UNDISCLOSED INCOME A T ` 19,56,012/-. 8. THIS ASSESSMENT WAS TAKEN IN FIRST APPEAL. THE COMMISSIONER OF INCOME-TAX(APPEALS) DISPOSED OF THE APPEAL IN A VERY SHORT ORDER STATING THAT THE UNDISCLOSED INCOM E WAS DETERMINED BY THE ASSESSING AUTHORITY, ON THE BASIS OF THE FINDINGS DURING THE COURSE OF SURVEY ACTION AS WELL AS SEARCH ACTION AND ALSO ON THE BASIS OF THE ADMISSION MADE BY THE ASSESSEE. THE FIRST APPEAL WAS DISMISSED. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS BEFORE THE TRIBUNAL : THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW , MASS OF EVIDENCE ON RECORD, OPPOSED TO PRINCIPLES OF NAT URAL JUSTICE & LEGITIMATE EXPECTATION AND HAD NOT PASSED A SPEAKING ORDER AND HENCE THE ORDER PER SE IS NU LLITY IN LAW. IT(SS)A 18/11 :- 6 -: 2. THE LEARNED CIT(A) FUNDAMENTALLY FAILED TO APPRE CIATE THAT THE BLOCK ASST. IS A SEPARATE CODE BY ITSELF AND THE LEARNED AO OUGHT TO HAVE MADE ASST. STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND ASST. CANNOT BE FRAMED ON ALLEGED ADMISSION DE HORS THE PROVISIONS OF THE ACT WHICH ADMISSION WAS NOT MADE BY THE APPELLANT AND IN AVET THE SAME IS NOT BINDING O N THE AO OR THE APPELLANT ON APPLICATION OF WELL SETTLED PRINCIPLES OF LAW THAT THERE EXISTS NO FISCAL ESTOPPELS(SEE K. NALLIAPPANS CASE & OTHERS-VIDE ANNEXURE) AND ALSO IN TERMS OF ARTICLE 265 OF THE CONSTITUTION. 3. THE LEARNED AO/CIT(A) FUNDAMENTALLY FAILED TO APPRECIATE THAT THE APPELLANT HAS JUST STARTED THE BUSINESS FROM SCRATCH AND IT IS WELL NIGH IMPOSSIBL E TO CREDIT WITH ALLEGED UNDISCLOSED INCOME ON THE APPEL LANT. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ASSESSING OFFICER DETERMINED THE ALLEGED UNDISCLOSE D INCOME ON THE FOLLOWING ITEMS : IT(SS)A 18/11 :- 7 -: A. INITIAL INVESTMENT ON STOCK B. COST OF PURCHASE OF OLD BUILDING AND COST OF CONSTRUCTION OF PROPERTY C. STOCK OF GOLD AND SILVER D. DRAWINGS E. INVESTMENT OF XEROX MACHINE PURCHASED BY ASSESSEES WIFE F. INVESTMENT IN PAWN BROKING BUSINESS THE ASSESSEE HAS EXPLAINED THE SOURCES FOR THE ABOV E BY HIS LETTER DATED 16-01-2002 STATING THAT HE HAD EFFECTED BORROWALS FROM FRIENDS AND RELATIVES AND A LSO EXPLAINED THE NATURE AND SOURCE OF ACQUISITION IN R ESPECT OF GOLD AND SILVER BY WAY OF CREDIT PURCHASE FROM M /S. SUMANGALI JEWELLERS AND M/S. RAMESH JEWELLERS AND ALSO RENTAL ADVANCE USED FOR CONSTRUCTION OF THE PR OPERTY AND ALSO THE CASH FLOW STATEMENT EXPLAINING THE NAT URE AND SOURCE FOR THE INVESTMENTS. THE ASSESSEE IN SUPPORT OF THE ABOVE SOURCES HAD FILED NECESSARY EVIDENCE IN THE SHAPE OF IT(SS)A 18/11 :- 8 -: A. LEDGER EXTRACTS FOR REFINANCE FROM MVN & SONS FO R CARRYING ON PAWN BROKING BUSINESS B. NOTARISED AFFIDAVIT BACKED BY AGRICULTURAL SOURC ES IN RESPECT OF SOURCE FOR MAKING GIFT BY HIS FATHER AND FROM MOTHER AND RELATIVES AND ALSO EXTRACT COPY OF THE B ANK PASS BOOK TOE EVIDENCE LOAN FROM COUSIN SISTER, MRS . KOUSALYA. C. INVOICE FROM M/S. RAMESH JEWELLERY, SALEM TOWARD S SILVER PURCHASE ON CREDIT D. RENTAL AGREEMENTS IN RESPECT OF RENTAL ADVANCE I N RESPECT OF PROPERTY NAMED AT KAMALALAYAM TOWERS E. A STATEMENT OF CASH FLOW TOGETHER WITH PROFIT AN D LOSS ACCOUNT OF JEWELLERY AND ESTIMATED PROFIT FROM PAWN BROKING / HITS/JEWELLERY CHIT SCHEME F. INVOICE COPY AND ACKNOWLEDGEMENT OF ENTRUSTMENT OF JEWELLERY BY M/S. SUMANGAL JEWELLERS AS WELL AS PURCHASED FROM THEM. IT IS SUBMITTED THAT ALL THE ASSETS AND LIABILITIES WERE DECLARED IN THE SURVEY PROCEED INGS. 5. THE LEARNED CIT(A) FUNDAMENTALLY FAILED TO APPRE CIATE THAT THE LEARNED ASSESSING OFFICER HAD COMPLETED TH E IT(SS)A 18/11 :- 9 -: ASSESSMENT WITHOUT CONSIDERING THE MATERIAL ON RECO RD (SEARCH DOCUMENTS) AND MATERIALS FILED BY THE ASSES SEE AND ASSESSMENT HAS BEEN COMPLETED WITHOUT CONSIDERING THE EVIDENCE AND MATERIALS SEIZED BY TH E DEPARTMENT. 6. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT MAT ERIALS GATHERED DURING THE SURVEY CANNOT PARTAKE THE CHARA CTER OF EVIDENCE FOR THE PURPOSE OF THE SECTION 158 BC O F THE ACT AND RELIANCE PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF G.K.SENNIA PPAN REPORTED IN 203 ITR 447 AND THE LD. AO ERRED IN CHA RGING THE INTEREST U/S. 158 BFA(1) OF THE INCOME-TAX ACT 1961. 9. SHRI N. DEVANATHAN, THE LEARNED COUNSEL APPEARIN G FOR THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME- TAX(APPEALS) HAS NOT AT ALL CONSIDERED ANY OF THE L EGAL CONTENTIONS RAISED BY THE ASSESSEE BEFORE HIM. IN THE LIGHT OF THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V S. G.K.SENNIAPPAN (284 ITR 220), THE ASSESSEE HAS PLEA DED BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS) THAT THE MA TERIALS GATHERED IN THE COURSE OF SURVEY UNDER SEC.133A CAN NOT BE IT(SS)A 18/11 :- 10 -: REGARDED AS RELEVANT MATERIAL FOR THE PURPOSE OF CO MPUTATION OF UNDISCLOSED INCOME UNDER SEC.158BB. THE LEARNED CO UNSEL SUBMITTED THAT IN VIEW OF THE ABOVE ARGUMENT, THE C OMMISSIONER OF INCOME-TAX(APPEALS) HAS UPHELD THE UNDISCLOSED I NCOME DETERMINED BY THE ASSESSING AUTHORITY, AMONG OTHER THINGS, ON THE BASIS OF THE MATERIALS GATHERED IN THE COURSE O F SURVEY UNDER SEC.133A. 10. THE LEARNED COUNSEL FURTHER CONTENDED THAT THE ASSESSEE HAS VERY MUCH CONTENDED BEFORE THE COMMISSIONER OF INCOME- TAX(APPEALS) THAT THE ADDITION CANNOT BE MADE ON TH E BASIS OF AN ADMISSION MADE BY THE ASSESSE, AS HELD BY THE HONB LE ALLAHABAD HIGH COURT IN THE CASE OF ABDUL QAYUME V S. CIT (184 ITR 404). BUT AGAIN, THE COMMISSIONER OF INCOME-TA X(APPEALS) HAS CONFIRMED THE ADDITION ON THE GROUND THAT THE I NCOME PROPOSED BY THE ASSESSING OFFICER WAS ADMITTED BY T HE ASSESSEE. 11. THE LEARNED COUNSEL PRODUCED BEFORE US A COPY O F THE APPELLATE ORDER PASSED BY THE SAME COMMISSIONER OF INCOME- TAX(APPEALS) AT TIRUCHIRAPALLI DATED 14.5.2010 PASS ED IN THE CASE OF M/S. PERIYASAMY MOOPANAR & SONS IN ITA NO.336/08 -09. THE LEARNED COUNSEL INVITED OUR ATTENTION IN PARAGRAPH 5 OF HIS ORDER IT(SS)A 18/11 :- 11 -: WHERE HE HAS STATED THAT IT IS SETTLED LAW THAT, A N ADMISSION OR ACQUIESCENCE CANNOT BE FOUNDATION FOR ASSESSMENT, A S HAS BEEN HELD IN THE JUDGMENT OF THE ALLAHABAD HIGH COURT IN THE CASE OF ABDUL QAYUME V. CIT (184 ITR 404). THE LEARNED COU NSEL EXPLAINED BEFORE US THAT THIS IS A CLASSICAL EXAMPL E WHERE THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS BRUSHED ASI DE A VERY VALID LEGAL CONTENTION RAISED BY THE ASSESSEE, BEFO RE HIM AND DISMISSED THE APPEAL FILED BY THE ASSESSEE, WHEREAS THE VERY SAME COMMISSIONER OF INCOME-TAX(APPEALS) HAS ALLOWE D THE APPEAL OF ANOTHER ASSESSEE, RELYING ON THE SAME JUD ICIAL PRONOUNCEMENT. 12. THE LEARNED COUNSEL HAS ALSO FILED BEFORE US TH E DETAILS OF EVIDENCES SUBMITTED BY THE ASSESSEE BEFORE THE LOWE R AUTHORITIES TO SUPPORT THE SOURCES THAT HAD BEEN WITH THE ASSES SEE. 13. WE HEARD SHRI ANIRUDH RAI, THE LEARNED COMMISSI ONER OF INCOME-TAX WHO APPEARED FOR THE REVENUE IN DETAIL. HE EXPLAINED THAT IN THE ABSENCE OF BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS ADOPTED ANOTHER VALID METHOD TO WORK OU T THE UNDISCLOSED INCOME ACCOUNTABLE IN THE HANDS OF THE ASSESSEE. HE EXPLAINED THAT THE ASSESSING AUTHORITY HAS LISTE D OUT ALL THE IT(SS)A 18/11 :- 12 -: INVESTMENTS MADE BY THE ASSESSEE IN THE BLOCK PERIO D AND ALSO A REASONABLE AMOUNT OF PERSONAL EXPENDITURE INCURRED BY THE ASSESSEE DURING THAT PERIOD. WHEN THIS ACTION OF THE ASSESSING OFFICER WAS PLACED BEFORE THE ASSESSEE INVITING HIS EXPLANATION THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN THE S OURCES TO ACQUIRE THOSE ASSETS. EVEN THOUGH, THE ASSESSEE H AS EXPLAINED THAT HE HAS AVAILED LOANS FROM OTHERS, THOSE LOANS WERE NOT FOUND GENUINE, AS THE LENDERS DID NOT HAVE ANY SOURCE OF THEIR OWN TO EXPLAIN ADVANCING OF SUCH AMOUNTS TO THE ASSESSEE. HE ALSO OBSERVED THAT THE ASSESSEE COULD NOT PROVE HIS ARGU MENT THAT GOLD AND SILVER WERE OBTAINED ON CREDIT FROM OTHER JEWELLERS. IT IS IN THESE CIRCUMSTANCES THAT THE ASSESSEE HAS REVISE D HIS STATEMENT OF SOURCES AND APPLICATION OF FUNDS AN D ADMITTED AN UNDISCLOSED INCOME OF ` 19,56,012/- BEFORE THE ASSESSING AUTHORITY. THE SAME WAS ACCEPTED BY THE ASSESSING AUTHORITY AND, AS SUCH, THE ASSESSMENT HAS BEEN DONE IN A RIG HTFUL MANNER. 14. WE HEARD BOTH SIDES IN DETAIL AND EXAMINED THE CASE IN THE LIGHT OF THE RECORDS AVAILABLE BEFORE US. ON READI NG PARAGRAPH 2 OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-T AX(APPEALS), IT COULD BE SEEN THAT THE PRELIMINARY ASSESSMENT OF UNDISCLOSED IT(SS)A 18/11 :- 13 -: INCOME IN THE HANDS OF THE ASSESSEE WAS ` 4,46,452/- AS AGAINST THE RETURNED INCOME OF ` 2,73,473/-. 15. IT IS AFTER RECORDING THE ABOVE FINDINGS THAT T HE ASSESSING OFFICER HAS PROCEEDED FURTHER TO LIST OUT THE INVES TMENTS AND EXPENSES OF THE ASSESSEE AND WORKED OUT THE CORRESP ONDING SOURCES THAT SHOULD HAVE BEEN AVAILABLE WITH THE AS SESSEE. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSE SSING OFFICER HAS NOT TAKEN THIS EXERCISE TO A LOGICAL CONCLUSION . IT IS VERY PERTINENT TO GO THROUGH HIS ASSESSMENT ORDER ESPECI ALLY IN PAGE 4 UP TO THE LAST TWO PARAGRAPHS WHEREIN THE ASSESSING AUTHORITY HAS BEEN EXAMINING THE SOURCES EXPLAINED BY THE ASSESSE E. BUT THE LAST PARAGRAPH OF THE ORDER OF THE ASSESSING OFFICE R JUMPS INTO ANOTHER ALTOGETHER DIFFERENT PROPOSITION THAT THE A SSESSEE HAD FILED A REVISED STATEMENT WHEREBY THE UNDISCLOSED I NCOME WORKS OUT TO ` 19,56,012/-. IT IS TRUE THAT SUCH STATEMENT IS AV AILABLE AND THE ASSESSEE MIGHT HAVE ADMITTED THE SAME AMOUNT BE FORE THE ASSESSING OFFICER BY THE PRESSURE AND RIGOUR OF THE CIRCUMSTANCES. BUT, WE ARE NOT ABLE TO DIGEST THE LOGICAL SEQUENCE OF THE ASSESSMENT PROCEEDINGS, AS REFLECTE D IN THE IMPUGNED ASSESSMENT ORDER. THE ASSESSING OFFICER HAS IT(SS)A 18/11 :- 14 -: EXAMINED THE ISSUE IN A PIECEMEAL MANNER CHANGING T HE DIRECTIONS OFF AND ON WITHOUT ANY INTERLINKING NEXU S. AFTER DISCUSSING THE INVESTMENTS AND SOURCES AND OTHER AS PECTS OF THE CASE, THE ASSESSING OFFICER JUMPS INTO AN ANTI CLIM AX AND ACCEPTS IN HASTE A REVISED STATEMENT FILED BY THE ASSESSEE DISCLOSING THE UNDISCLOSED INCOME OF ` 19,56,012/-. 16. IN THESE CIRCUMSTANCES, WE FIND THAT THE ASSESS ING OFFICER HAS NOT CONSIDERED MANY OF THE RELEVANT OBJECTIONS RAISED BY THE ASSESSEE IN AN OBJECTIVE MANNER. THE ASSESSING OFF ICER WAS JUMPING INTO A CONCLUSION ON ALMOST A LAME EXCUSE O F A REVISED STATEMENT FILED BY THE ASSESSEE. 17. COMING TO THE MERITS OF VARIOUS ISSUES, IT IS T O BE SEEN THAT WHILE WORKING OUT THE VALUE OF THE GOLD STOCK, THE ASSESSING AUTHORITY HAS NOT ADOPTED THE PURCHASE PRICE WHEN T HE VALUE OF GOLD WAS INCREASED. AFTER THE PURCHASE MADE BY THE ASSESSEE, THE INCREMENTAL VALUE BECAUSE OF MARKET RATE CANNOT BE CONSIDERED AS UNDISCLOSED INCOME. THE GOLD SHOULD BE VALUED AT ITS COST. EVEN THOUGH THE ASSESSEE COULD NOT PRODU CE M/S. RAMESH JEWELLERS AND SUMANGALI JEWELLERS, BEFORE T HE ASSESSING AUTHORITY, TO SUPPORT HIS ARGUMENT ON CRE DIT PURCHASE OF IT(SS)A 18/11 :- 15 -: GOLD AND SILVER, THE ASSESSEE HAD PRODUCED COPIES O F CREDIT INVOICES FOUND IN THE COURSE OF SEARCH OPERATION CO NDUCTED UNDER SEC.132. IN THE CASE OF LOANS FROM HIS COUSIN SIS TERS, THE ASSESSEE HAD FILED AN AFFIDAVIT ALONG WITH THE PASS BOOK. NON CONSIDERATION OF THE ABOVE MATERIALS ALSO HAVE IMPA IRED THE VALIDITY OF THE ASSESSMENT TO A GREAT EXTENT. 18. AS ARGUED BY THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE, IN THE CASE OF M/S. PERIYASAMY MOOPANAR & SONS, IN HIS ORDER DATED 14.5.2010 THE VERY SAME COMMISSIONE R OF INCOME-TAX(APPEALS) HAS ACCEPTED, IN GIVING RELIEF TO THE ASSESSEE, THE PROPOSITION LAID DOWN BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ABDUL QAYUME VS. CIT (18 4 ITR 404) THAT ADMISSION OR ACQUIESCENCE CANNOT BE FOUNDATIO N FOR ASSESSMENT. BUT IN THE PRESENT CASE, THE COMMISSIO NER OF INCOME-TAX(APPEALS) UPHELD THE ADDITIONS MADE BY TH E ASSESSING OFFICER ON THE BASIS OF AMONG OTHER THINGS, ON THE ADMISSION MADE BY THE ASSESSEE WITHOUT LOOKING INTO OTHER REL EVANT MATERIALS PLACED BEFORE HIM.THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. G.K.SENNIAPPAN (284 ITR 220) H AS HELD THAT A BLOCK ASSESSMENT CANNOT BE MADE IN THE LIGHT OF M ATERIALS IT(SS)A 18/11 :- 16 -: GATHERED IN THE COURSE OF SURVEY MADE UNDER SEC.133 A. BUT IN HIS ORDER, THE COMMISSIONER OF INCOME-TAX(APPEALS) UPHOLDS THE ASSESSMENT ORDER AMONG OTHER THINGS, ALSO ON THE GR OUND THAT THE ASSESSMENT WAS MADE ON THE BASIS OF DETAILS COLLECT ED IN THE COURSE OF SURVEY CONDUCTED UNDER SEC.133A. AT THE SAME TIME, THE COMMISSIONER OF INCOME-TAX(APPEALS) OMITTED TO CONSIDER THE EVIDENCES FOUND IN THE COURSE OF SURVEY WHICH WILL SUPPORT THE ARGUMENTS OF THE ASSESSEE THAT SILVER AND GOLD WERE BROUGHT ON CREDIT BASIS FROM SUMANGALI JEWELLERS AND M/S. RAM ESH JEWELLERS. ON THE ONE SIDE, THE LOWER AUTHORITIES ALSO RELIED ON THE SURVEY MATERIALS FOR WORKING OUT THE UNDISCLOSE D INCOME, BUT AT THE SAME TIME, REFUSED TO ACCEPT THE EVIDENCES A VAILABLE IN FAVOUR OF THE ASSESSEE FOUND IN THE COURSE OF SURVE Y. THIS IS A CLEAR CASE OF DOUBLE STANDARD. 19. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, WE FIND THAT THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) SUFFER FROM FAC TUAL AND LEGAL INFIRMITIES AND THE UNDISCLOSED INCOME HAS BE EN WORKED OUT WITHOUT ANALYZING OBJECTIVELY THE MATERIALS AVAILAB LE ON RECORD IT(SS)A 18/11 :- 17 -: AND ALSO IGNORING MANY OF THE VALID CONTENTIONS RAI SED BY THE ASSESSEE BOTH IN LAW AND IN FACTS. 20. BUT AS THE MATERIALS BRING OUT A CASE OF REASON ABLE AMOUNT OF UNDISCLOSED INCOME ATTRIBUTABLE TO THE ASSESSEE, WE ARE ALSO NOT INCLINED TO SET ASIDE THE ORDERS OF THE LOWER A UTHORITIES. WHEN THE FACTS ARE SPEAKING FOR THEMSELVES, THE ASSESSEE CANNOT BE ALLOWED TO BE BENEFITTED OUT OF THE MISTAKES IF AT ALL COMMITTED BY THE LOWER AUTHORITIES. WE, THEREFORE, PROCEED TO R EFIX THE UNDISCLOSED INCOME TAXABLE IN THE HANDS OF THE ASSE SSEE IN A FAIR MANNER. 21. IN THE LIGHT OF THE INITIAL AMOUNT POINTED OUT BY THE ASSESSING OFFICER AT ` 4,46,452/- AND ALSO IN THE LIGHT OF THE UNDISCLOSE D INCOME RETURNED BY THE ASSESSEE AT ` 2,73,473/-, WE REFIX THE UNDISCLOSED INCOME AT ` 7 LAKHS. 22. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. IT(SS)A 18/11 :- 18 -: ORDER PRONOUNCED ON THURSDAY, THE 22 ND OF MARCH , 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR.O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 22 ND MARCH , 2012 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR