Shri Yudhvir Ramlal Mani, Ahmedabad V. The ACIT., Cent.Circle-1(2), Ahmedabad

ITSSA 201/AHD/2005

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9522 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-02-2010
• Assessment Year: misc
• Appeal Filed On: 15-07-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: ASEEM THAKKER
• Keywords: Unexplained investment; Gift; Loose papers; Document seized; Valuation report; Block assessment; Tax effect; Documents seized
• Section: 44AD; 143(3); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER IT(SS)A NO.201 & 214/AHD/2005 BLOCK PERIOD FROM 1/4/96 TO 04/09/2002 DATE OF HEARING:23.2.10 DRAFTED:24.2.10 YUDHVIR RAMLAL MENI, B- 3, SAMARATHESWAR FLATS, NR. DOCTOR HOUSE, AHMEDABAD PAN NO.ACCPM8662L ACIT, CENTRAL CIRCLE- 1(2), ROOM NO.305, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD V/S . V/S . DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), AHMEDABAD, GUJARAT SHRI YUDHVIR R MENI, PROP. KUNAL CONSTRUCTON B-3, SAMARTHESHWAR FLATS, NR. DOCTOR HOUSE, AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI ASEEM THAKKER, AR REVENUE BY:- SHRI SHELLEY JINDAL, CIT-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE CROSS APPEALS ONE BY THE ASSESSEE AND OTHE R BY THE REVENUE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME- TAX (APPEALS)-III, AHMEDABAD IN APPEAL NO. CIT(A)-I/CC.1(2)/45/04-05 DATED 27-05-20 05. THE BLOCK ASSESSMENT WAS FRAMED BY THE DY. COMMISSIONER OF INCOME-TAX, CENTR AL CIRCLE-1(2), AHMEDABAD U/S.158BC R.W.S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30-09-2004 FOR THE BLOCK PERIOD FROM -01-04-1996 TO 04-09- 2002. FIRST WE WILL TAKE ASSESSEES APPEAL IN IT(SS)A NO. 201/AHD/2005. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF CASH FOUND DURING THE COURSE SEARCH BY TREATING THE SAME AS UN EXPLAINED CASH AMOUNTING TO RS.61,249/-. FOR THIS, THE ASSESSEE HAS RAISED THE EFFECTIVE FOLLOWING GROUND :- IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 2 1. RS.61,249/- ON ACCOUNT OF UNEXPLAINED CASH FOUND THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN-LAW IN CONFIRMING ADDITION ON ACCOUNT OF CASH OF RS.61,249/- FOUND AT THE TIME OF SEARCH BY TREATING THE SAME FROM UNEXPLAINED SOURCES. IT WAS EXPLAINED THAT CASH FOUND AND SEIZED FROM RE SIDENCE IS OUT OF EXPLAINED SOURCES I.E. BUSINESS, FAMILY WITHDRAWALS , AND RECEIVED BY SMT. SONIA AT THE TIME OF MARRIAGE FROM HER PARENTS. IT IS THEREFORE PRAYED THAT THE CASH FOUND IS EXPLA INED THEREFORE, THE ADDITION SO MADE MAY KINDLY BE DELETED. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT HE WAS INSTRUCTED BY THE ASSESSEE THAT HE IS NOT INTERESTED IN PROSECUTI NG THIS ISSUE DUE TO SMALLNESS OF AMOUNT AS THE TAX EFFECT WILL BE VERY SMALL. ACCORD INGLY, THE SAME IS DISMISSED AS NOT PRESSED. COMING TO REVENUES APPEAL IN IT(SS)A NO.214/AHD/20 05. 4. THE FIRST ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS. FOR THIS, REVENUE HAS RAISED TH E FOLLOWING GROUND NO.1 :- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.6,71,020/- MADE ON ACCOUNT OF UNEXPLAINED INV ESTMENT IN FDRS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED TH E CASE RECORDS INCLUDING THE ORDER OF CIT(A) AS WELL AS THE ASSESSMENT ORDER. T HE BRIEF FACTS ARE THAT A SEARCH WAS CONDUCTED ON THE BUSINESS AND RESIDENTIAL PREMI SES OF THE ASSESSEE U/S.132 OF THE ACT BY THE INCOME-TAX DEPARTMENT ON 04-09-2002. DURING THE COURSE OF SEARCH CERTAIN INCRIMINATING DOCUMENTS, LOOSE PAPERS, FDRS , JEWELLERY AND UNACCOUNTED CASH WERE FOUND AND SEIZED. THE ASSESSEE IS A DIREC TOR IN A GROUP CONCERN OF HAVMOR FOODS PVT. LTD., SPACE COLD STORAGE PVT. LTD AND ALSO RELATIVE OF THE PERSONS, WHO RUNS CONCERNS IN THE NAME OF KUNAL RES TAURANT, KAVERI PARLOUR AND KUNAL CONSTRUCTION. THE ASSESSEE FILED HIS BLOCK RE TURN FOR THE BLOCK PERIOD FROM 01- 04-1996 TO 04-09-2002 DECLARING NIL UNDISCLOSED I NCOME ON 25-03-2003 IN RESPONSE TO NOTICE ISSUED U/S.158BC OF THE ACT. SUB SEQUENTLY, NOTICE U/S.143(2) OF THE ACT WAS ISSUED DATED 26-03-2003 AND THE BLOCK A SSESSMENT WAS COMPLETED. THE ASSESSING OFFICER FROM THE SEIZED MATERIALS NOT ED THAT DURING THE COURSE OF SURVEY PROCEEDINGS ON THE BUSINESS PREMISES OF M/S. KUNAL RESTAURANT A LOOSE IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 3 PAPER FILE INVENTORIZED AS ANNEXURE-BF/1 WAS IMPOUN DED AND PAGES NO.23 TO 57 OF THIS ANNEXURE CONTAINS COPIES OF FIXED DEPOSITS REC EIPTS, IN THE KALUPUR COMMERCIAL CO-OP. BANK LTD. PANCHVATI BRANCH, IN THE NAME OF V ARIOUS FAMILY MEMBERS OF SHRI Y.R. MENI. ACCORDING TO THE ASSESSING OFFICER, THES E FIXED DEPOSITS WERE IN MULTIPLE DENOMINATIONS OF THE AMOUNT OF RS.10,000/- TO 20,00 0/-. THESE FIXED DEPOSITS WERE EN-CASHED AND THE AO WITHOUT GIVING ANY FINDING AND DETAILS, TREATED THESE FDRS AS AN UNACCOUNTED TOTALING, TO RS.6,71,020/- BY STATIN G THAT FIXED DEPOSITS ARE NOT REFLECTED IN THE RETURN OF INCOME OR BOOKS OF ACCOU NT. AGGRIEVED AGAINST THE ACTION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEA L BEFORE CIT(A). THE CIT(A) DELETED THE ADDITION AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE VIDE PARA-4.4 OF HIS APPELLATE ORDER AS UNDER:- 4.4 I HAVE GONE THROUGH THE ASSESSMENT ORDER, ARGU MENTS OF THE APPELLANT AND WRITTEN SUBMISSIONS BY THE APPELLANT BEFORE A.O . AND BEFORE ME. I AM OF THE OPINION THAT FDRS IN THE NAME OF DEEPALI MENI O F RS.2,38,520/- ARE KEPT OUT OF HER INCOME AS ARCHITECT, SALARY AND OTHER FU NDS FROM HER BANK ACCOUNT ARE FROM EXPLAINED SOURCES, MATURITY OF RS.2,65,699 /- ALONG WITH OTHER MATURITIES TOTALING TO RS.2,86,451/- IS DEPOSITED I N BANK OF BARODA SB A/C. 14070 AND THIS AMOUNT IS FURTHER RE-INVESTED IN THE IDBI TAX FREE BONDS OF RS.3,00,000/-. SIMILARLY FDRS IN THE NAME OF VISHAL MENI AND KUNAL MENI OF RS.3,60,000/- (RS.1,80,000/- + RS.1,80,000/-) ARE K EPT OUT OF SALE PROCEEDS OF SHOPS OF RS.4,50,000/- BY THE APPELLANT ARE FROM EX PLAINED SOURCES MATURITY OF RS.1,92,736/- IS DEPOSITED BY SHRI VISHAL MENI W ITH CENTRAL BANK OF INDIA, SB A/C. 3110 AND THIS AMOUNT IS FURTHER RE-INVESTED IN THE IDBI TAX FREE BONDS OF RS.2,00,000/- ALONG WITH OTHER MATURITIES AND MA TURITY OF RS.1,92,736/- IS DEPOSITED BY SHRI KUNAL MENI WITH DENA BANK, SB A/C . 464 AND THIS AMOUNT IS FURTHER RE-INVESTED IN THE IDBI TAX FREE BONDS OF R S.2,00,000/-. SIMILARLY FDRS IN THE NAME OF VISHAL MENI OF RS.4,80,000/-, FDRS O F RS.2,80,000/- ARE KEPT OUT OF MATURITY OF FDRS KEPT IN 1995 I.E. PRIOR TO BLOCK PERIOD AND FDRS OF RS.2,00,000/- ARE KEPT OUT OF SALE PROCEEDS OF SHOP S BY THE APPELLANT ARE FROM EXPLAINED SOURCES, MATURITY OF RS.5,01,038/- ALONG WITH OTHER MATURITY OF RS.1,92,736/- ABOVE ARE DEPOSITED IN CENTRAL BANK O F INDIA, SB A/C.3110 AND THIS AMOUNT IS FURTHER RE-INVESTED IN THE IDBI TAX FREE BONDS OF RS.7,00,000/-. SIMILARLY FDRS IN THE NAME OF YUDHVIR MENI OF RS.1, 62,000/-, FDRS OF RS.62,000/- ARE KEPT OUT OF MATURITY OF FDRS KEPT I N 1995 I.E. PRIOR TO BLOCK PERIOD AND FDRS OF RS.1,00,000/- ARE KEPT OUT OF FU NDS FROM PROPRIETARY CONCERN M/S. KAVERI PARLOUR ARE FROM EXPLAINED SOUR CES, MATURITY OF RS.1,69,490/- IS DEPOSITED IN CENTRAL BANK OF INDIA , SB A/C. 3008 AND THIS AMOUNT IS FURTHER RE-INVESTED IN THE IDBI TAX FREE BONDS OF RS.2,00,000/-. SIMILARLY FDRS OF DAUGHTER SHIVANI MENI OF RS.9,500 /-, ARE KEPT BY HER OUT OF MISC. GIFTS, PIN MONEY AND SAVINGS, IS NATURAL IN I NDIAN CULTURE WHERE THE DAUGHTER ARE KEEPING SOME MONEY / HER SAVINGS AT PA RENTAL HOME SO THAT IT WILL HELP HER IN NEEDS THUS SUCH AMOU9NT IS RELATED TO DAUGHTER OF APPELLANT AND IS TREATED AS FROM EXPLAINED SOURCES, MATURITY OF RS.14,104/- IS RE- DEPOSITED AS FDR WITH CENTRAL BANK OF INDIA. SIMILA RLY FDRS OF DAUGHTER HEMA MENI OF RS.76,000/- ARE KEPT BY HER OUT OF MIS C. GIFTS, PIN MONEY, IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 4 SAVINGS AND MATURITY OF LIC POLICY OF RS.34,275/-, IS NATURAL IN INDIA CULTURE WHERE THE DAUGHTER ARE KEEPING SOME MONEY / HER SAV INGS AT PARENTAL HOME SO THAT IT WILL HELP HER IN NEEDS THUS SUCH AMOUNT IS RELATED TO DAUGHTER OF APPELLANT AND IS TREATED AS FROM EXPLAINED SOURCES, MATURITY OF RS.1,14,810/- IS RE-DEPOSITED AS FDR WITH CENTRAL BANK OF INDIA. SIMILARLY, FDRS OF GRAND DAUGHTER AANYA GUJARAT DAUGHTER OF HEMA MENI OF RS. 5,000/- ARE KEPT BY HER DAUGHTER OUT OF MISC. GIFTS RECEIVED TO AANYA, IS N ATURAL IN INDIAN CULTURE WHERE THE DAUGHTER ARE KEEPING SOME MONEY / HER SAV INGS AT PARENTAL HOME SO THAT IT WILL HELP HER IN NEEDS THUS SUCH AMOUNT IS RELATED TO GRAND DAUGHTER / DAUGHTER OF APPELLANT AND IS TREATED AS FROM EXPL AINED SOURCES, MATURITY OF RS.5,403/- IS RE-DEPOSITED AS FDR WITH CENTRAL BANK OF INDIA. IN VIEW OF THIS, THE FDRS OF RS.6,71,020/- IN THE N AME OF FAMILY MEMBERS ARE KEPT FROM EXPLAINED SOURCES, INTEREST INCOME IS SHO WN IN INCOME TAX RETURNS, FDRS OF DAUGHTERS AND GRAND DAUGHTER ARE OUT OF THE IR SAVINGS, FDRS WERE EN-CASHED DUE TO CO-OP. BANKS PROBLEM. ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE US. 6. BEFORE US, LD. CIT-DR SHRI SHELLEY JINDAL STATED THAT THESE FDRS ARE NOT REFLECTED NEITHER IN RETURN OF INCOME NOR IN THE BO OKS OF ACCOUNT OF THE ASSESSEE. HE STATED THAT THESE FDRS WERE EN-CASHED PREMATURELY A S NOTED BY THE ASSESSING OFFICER AND THERE IS NO SOURCE OF THESE FRDS, IN TH E NAME OF VARIOUS FAMILY MEMBERS OF SHRI Y.R.MENI, I.E. THE ASSESSEE. HE STATED THAT THE INVESTIGATION WING OF THE DEPARTMENT DURING THE COURSE OF SEARCH FOUND X-EROX COPIES OF FIXED DEPOSITS INVENTORIZED AS ANNEXURE-BF/1 AT PAGES 23-57 AND TH ESE FDRS WERE MADE WITH THE KALUPUR COMMERCIAL CO-OP. BANK, PANCVATI BRANCH, AH MEDABAD. HE STATED THAT SINCE THE FDRS WERE UNDISCLOSED, THE AO HAS RIGHTLY TREATED THE SAME AS MADE OUT OF UNDISCLOSED INCOME OF THE ASSESSEE. 7. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE, SHRI ASEEM THAKKER SUPPORTED THE ORDER OF CIT(A) AND STATED THAT THESE FDRS ARE DISCLOSED IN THE INCOME-TAX RETURNS AND THE INCOME RECEIVED AS INCOM E FROM THIS FDRS ARE REFLECTED IN THE STATEMENT OF INCOME OF THE OWNER OF EACH OF SUCH DEPOSITS. ACCORDING TO HIM, THESE FDRS ARE INTER-CONNECTED / INTER-MINGLED WITH THE DEPOSITS OF RS.29,92,466/-, WHICH WERE SEIZED AT THE TIME OF SEARCH AND MADE PA RT OF ANNEXURE-O. HE FURTHER CLARIFIED THAT THE PHOTO-COPIES OF TOTAL FDRS WERE TO THE TUNE OF RS.13,31,020/- AND NOT AS STATED BY THE ASSESSING OFFICER AT RS.6,71,0 20/-. HE FURTHER STATED THAT ON 13- IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 5 03-2001 THE MENTIONED PARTIES HAVE TAKEN THE FDRS E N-CASHED PREMATURE AT AN AMOUNT OF RS.14,56,016/- AND ARE INVESTED IN TAX FR EE BONDS AND THEREAFTER DEPOSITED AS FDRS WITH NATIONALIZED BANK DUE TO FEA R OF SCAM BROKE OUT IN MADHUPURA CO-OP. BANK FOR THE FIRST WEEK OF MARCH, I.E. POPULARLY AS KETAN PARIKH SCAM. THE LD. COUNSEL FOR THE ASSESSEE PROVIDED THE COMPLETE DETAILS OF FDRS WHICH READS AS UNDER:- NAME OF HOLDER AMOUNT OF FDR MATURITY AMOUNT PAPER BOOK PN DEEPALI MENI 238520 265699 7 TO 15 VISHAL MENI 180000 192736 16 TO 22 KUNAL MENI 180000 192736 16 TO 22 SHIVANI MENI 9500 14104 23 HEMA MENI 76000 114810 24 TO 28 AANYA GUJARAL 5000 5403 24 TO 28 YUDHVIR MENI 162000 160490 29 TO 32 VISHAL MENI 480000 501038 33 TO 36 TOTAL 1331020 11456016 HE STATED THAT THE FDRS ARE MADE OUT OF EXPLAINED S OURCES OF HIS SON, DAUGHTER-IN- LAW, DAUGHTER AND OTHER FAMILY MEMBERS OUT OF THEIR INDIVIDUAL SAVINGS OUT OF GIFT MONEY, OUT OF PIN MONEY ETC. ETC. THE LD. COUNSEL FOR THE ASSESSEE ALSO STATED THAT THE FDRS KEPT BY THE ASSESSEE, WERE EN-CASHED AS TH EY WERE HAVING MISCELLANEOUS GIFTS, INDIVIDUAL SAVINGS ETC. HE ALSO TABULATED IN TEREST OF THESE FDRS IN THE NAME OF VARIOUS FAMILY MEMBERS AS UNDER:- NAME OF MEMBER INTEREST AMOUNT YUDHVIR R MENI 328026 KUNAL Y MENI 221387 DEEPALI K MENI 87573 VISHAL Y MENI 268124 TOTAL 905110 THE LD. COUNSEL FOR THE ASSESSEE TAKEN US THE ASSES SEES PAPER BOOK AND STATED THAT THESE FDRS WERE EXPLAINED AS CLEARLY BROUGHT O UT BY THE CIT(A). FROM THESE DOCUMENTS, HE STATED THAT THE CIT(A) HAS CONSIDERED THE DOCUMENTS AND ARGUMENTS IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 6 OF ASSESSEE AND EVIDENCES YEAR-WISE BY HIM AND THER EAFTER DELETED THE ADDITION. ACCORDINGLY, HE URGED THE BENCH TO CONFIRM THE ORDE R OF CIT(A), DELETING THE ADDITION. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE ASSESSE ES PAPER BOOK, WHEREIN IN THE STATEMENTS OF INCOME THE DEPOSITORS HAVE DECLARED T HIS INTEREST INCOME FROM FDRS AS WELL AS THE COPIES OF RETURNS INCOME, IT IS CLEA R THAT THE INTEREST RECEIVED ON ACCOUNT OF THESE FDRS WERE DECLARED IN THE RETURNS INCOME PRIOR TO DATE OF SEARCH. SIMILARLY, WE FIND THAT THE CIT(A) HAS CONSIDERED T HE INDIVIDUAL SOURCE OF EACH PERSON IN WHOSE NAMES FDRS ARE KEPT. WE ARE IN FULL AGREEMENT WITH THE FINDING OF THE CIT(A) AS REPRODUCED ABOVE IN PARA-4.4 OF HIS APPELLATE ORDER BUT DEPARTMENT COULD NOT POINT OUT ANYTHING THAT THESE SOURCES ARE NOT TRUE. ACCORDINGLY, WE ACCEPT THE EXPLANATION SUBMITTED BY THE ASSESSEE AS WELL A S ACCEPTED BY THE CIT(A) AS TRUE. ACCORDINGLY, THIS ISSUE OF THE REVENUES APPE AL IS DISMISSED. 9. THE NEXT INTER-CONNECTED ISSUES IN THIS APPEAL O F THE REVENUE IS AS REGARDS TO UNACCOUNTED SALES OF 24 SHOPS IN KUNAL COMPLEX AND UNACCOUNTED INVESTMENT IN CONSTRUCTION OF 3 RD FLOOR IN KUNAL COMPLEX ADDED BY THE ASSESSING OFFI CER AS UNDISCLOSED INCOME AND DELETED BY THE CIT(A). FOR T HIS, THE REVENUE HAS RAISED THE FOLLOWING GROUND NO2 & 3 :- 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.85,18,776/- MADE ON ACCOUNT OF UNACCOUNTED SA LES CONSIDERATION OF RS.24 SHOPS IN KUNAL COMPLEX. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO DELETE THE ADDITION OF RS.7,53,186/- MADE ON ACCOUNT OF UNEXPLAINED INV ESTMENT IN CONSTRUCTION OF THE THIRD FLOOR OF KUNAL COMPLEX. 10. WE HAVE HEARD THE RIVAL CONTENTION AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THAT THE ASSESSING OFFICER NOTED IN HIS ASSESSMENT ORDER THAT THE ASSESSEE HAS DISCLOSED NE T PROFIT @ 8% OF GROSS RECEIPTS IN VIEW OF THE PROVISIONS OF SECTION 44AD OF THE AC T. DURING THE COURSE OF SEARCH SALE DEEDS / BANAKHAT OF SALE OF 24 SHOPS HAVE BEEN SEIZ ED, WHICH CONTAINS PARTICULARLY REGARDING COST OF CONSTRUCTION AND THE SAME IS INV ENTORIES AS BF-4, SEIZED FROM THE PREMISES OF KUNAL COMPLEX AND IT SHOWS COST OF CONS TRUCTION AT RS.40.55 LAKH, ACCORDING TO ASSESSING OFFICER, WHICH IS OUT OF UND ISCLOSED SOURCE. THE SEIZED IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 7 PAPER ALSO SHOWED THE SALE OF 24 SHOPS IN BLOCK PER IOD AT RS.26,64,600/- WHICH IS ONLY THE AGREEMENT PRICE AND THE SALE PROFITS WERE DEPOSITED IN THE BANK ACCOUNT NOS.3431, 3008 & 3110 OF CENTRAL BANK OF INDIA. AC CORDING TO THE ASSESSING OFFICER, THE TOTAL DEPOSIT IN THESE BANK ACCOUNTS F OR THE BLOCK PERIOD COMPUTED AT RS.85,18,776/- AND TREATED THE SAME AS NOT ACCOUNTE D IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND TREATED AS UNDISCLOSED INCOME OF THE B LOCK PERIOD. THE AO ALSO ESTIMATED THE COST OF CONSTRUCTION OF THE 3 RD FLOOR AT RS.14,68,229/-AND TAKEN THE SAME AS UNDISCLOSED INVESTMENT. THE AO TREATED THE 3 RD FLOOR CONSTRUCTION AS UNAUTHORIZED AND NO DEDUCTION U/S.37(1) OF THE ACT WAS ALLOWED IN RESPECT OF THIS EXPENDITURE. THE AO NOTED THAT THE EXPENDITURE OF R S.7,35,043/- IS SPENT OUT OF BOOKS OF ACCOUNT AND THE SAME WAS TREATED AS EXPLAI NED AND THE BALANCE WAS TREATED AS UNEXPLAINED INVESTMENT IN THE 3 RD FLOOR IN KUNAL COMPLEX AT RS.7,23,186/-. THE AO THEREBY TREATED THESE TWO ADDITIONS, I.E. TH E DEPOSITING IN THE BANK ACCOUNTS ON ACCOUNT OF 24 SHOPS AND UNACCOUNTED COST OF CONS TRUCTION AT RS.85,18,776/- AND RS.7,23,186/- AS INVESTED IN 3 RD FLOOR IN KUNAL COMPLEX UNEXPLAINED FOR THE BLOCK PERIOD. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BE FORE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION. 11. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THE C OMPLETE EXPLANATION OF FACTS AND EVEN NOW BEFORE US THE SAME SUBMISSIONS WERE SU BMITTED. IT WAS STATED THAT KUNAL COMPLEX WAS CONSTRUCTED IN MIRAZPUR AREA BEHI ND G.P.O. AHMEDABAD AND THIS PLOT WAS PURCHASED IN THE YEAR 1982 FOR A SUM OF RS.48,000/- INCLUDING REGISTRATION CHARGES AT RS.6,000/-. HE STATED THAT THE CONSTRUCTION WORK WAS STARTED IN THE YEAR 1991 AFTER RECEIVING PERMISSION FROM AH MEDABAD MUNICIPAL CORPORATION (AMC IN SHORT). IT WAS STATED THAT THERE WAS SOME C HANGES IN PLAN AND THEREFORE REVISED PLAN WAS FILED FOR CONSTRUCTION OF GROUND, FIRST AND SECOND FLOORS, WHICH WAS GRANTED. SUBSEQUENTLY, THE BUILDING WAS COMPLETED IN 1993 AND PART OF IT WAS SOLD OUT TO SOME PARTIES BUT THE AMC ISSUED NOTICE ON 08 -09-1993 U/S.268 OF BOMBAY PROVINCIAL CORPORATION ACT, 1949 BY STATING THAT TH E APPLICATION FOR BUILDING USES PERMISSION (BU IN SHORT) IS NOT MADE WITHIN ONE MON TH OF CONSTRUCTION OF THE SAID BUILDING. HE STATED THAT THE BUILDING WAS COMPLETED IN 1993 BEFORE MARCH, 1993 AFTER GETTING BU PERMISSION ON 09-10-1998. THE ASSESSEE C ONSTRUCTED 3 RD FLOOR SHOP NO.2 TO 10 HAVING FSI AREA 208.69 SQ.MT. FOR CONSTRUCTI ON OF 3 RD FLOOR AND RENOVATION OF OLD CONSTRUCTION EXPENDITURE OF RS.7,35,034/- WAS I NCURRED AND FURTHER AMOUNT OF IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 8 RS.2,17,500/- WAS PAID ON 29-04-2002 OUT OF BOOKS O F ACCOUNT AND THE ASSESSEE EXPLAINED THAT TILL DATE OF SEARCH THE ASSESSEE SOL D OUT SHOPS AND OFFICE AS UNDER:- SHOPS OFFICES SOLE OUT UNSOLD FLOOR NO. NO. AREA AMT. NO. GROUND 14 8 1048 870000 6 FIRST 17 8 1357 873600 9 SECOND 17 11 1830 825000 6 THIRD 9 0 0 0 9 TOTAL 57 27 4235 2568600 30 HE ALSO NARRATED THE YEAR-WISE BREAK UP THE SALES O F SHOP & OFFICE IN TERMS OF AMOUNTS AS UNDER:- FINANCIAL YEARS AMT. (RS) 1998-1999 400000 1999-2000 174600 2000-2001 869000 2001-2002 1125000 TOTAL 2568600 THE ASSESSING OFFICER OFFERED THE INCOME @ 8% IN VI EW OF THE SECTION 44AD OF THE ACT. TO EXPLAIN THE NOTE PAD ANNEXURE BF-4 IMPOUNDE D FROM THE PREMISES OF KUNAL COMPLEX, WHICH CONTAINS THE NOTINGS IN THE HANDWRIT ING OF THE ASSESSEES SON MR. KUNAL MENI, WHO IS AN ARCHITECT WORKED OUT THE ESTI MATE OF THE COMPLEX AT RS.40.55LAKH AFTER COMPLETION OF HIS STUDY IN JULY, 1996, IN ORDER TO ASCERTAIN AND ESTABLISH A BASIC CUT OFF PRICE FOR SELLING OF SHOP S. THE ASSESSEE EXPLAINED THE NOTING IN A NOTE AS UNDER:- PG. NO. PARTICULARS COST OF CONSTRUCTION 25 & 26 EXCAVATION 4000 SQ.FT. X 25 FT =100000 (COS NOT QUANTIFIED IN THE NOTE PAD. BUT MARKET SOURCES REVEAL THAT THE COST OF EXCAVATION PER CUB. FT. IS RS.1) 100000 27 & 28 FOUNDATION 35 COLUMNS @ RS.10,000 PER COLUMN 350000 IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 9 27 & 28 SLAB OF BASEMENT (FOR BEAM, COLUMNS, SLAB 4000 SQ. FT. @ RS.150 PER SQ.FT. 600000 29 & 30 SLAB OF GROUND FLOOR (COST OF MATERIAL, LABOUR, BRICK, WORK, PLASTER, SHUTTER, COLOUR, FLOORING) 4000 SQ.FT.@RS.200 PER SQ.FT. 800000 31 & 32 SLAB OF FIRST FLOOR 3500 SQ.FT. @ RS.320 PER SQ.FT., 805000 33 & 34 SLAB OF SECOND FLOOR 3500 SQ.FT. @ RS.250 PER SQ.FT. 875000 3 & 35 SLAB OF TERRACE FLOOR 3500 3500 SQ.FT. @ 150 PER SQ.FT. 525000 TOTAL 4055000 12. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT TH IS IS ONLY A NOTINGS ON ESTIMATE BASIS AND THE ACTUAL SALE PROFITS HAVE BEE N OFFERED TO TAX IN VARIOUS YEARS BY ESTIMATING THE NET PROFIT @ 8% AS NARRATED ABOVE . THE ASSESSEE STATED THAT THE ADDITION MADE BY THE ASSESSING OFFICER OF DEPOSITS IN THE FOUR BANK ACCOUNTS BY TREATING THE DEPOSITS IN THESE BANK ACCOUNTS AS SAL E CONSIDERATION. THE ASSESSEE HAS WORKED OUT SALE PROFITS OF SHOPS AND OFFICE ON THE BASIS OF SEIZED DOCUMENTS / INCOME-TAX RETURNS AT RS.25,68,600/- AND THE SALE P ROFITS DEPOSITED IN THE BANK ACCOUNTS NO.3008, CENTRAL BANK OF INDIA IN THE NAME OF ASSESSEE. THE ASSESSEE EXPLAINED THE DEPOSITS IN THE BANK ACCOUNT AS UNDER :- A/C. NO. NAME OF BANK A/C. IN THE NAME OF DEPOSIT 3431 CENTRAL BANK OF INDIA Y.R. MENI 2092960 3008 CENTRAL BANK OF INDIA Y.R.MENI 5078664 3110 CENTRAL BANK OF INDIA YUDHVIR R MENI & VISHAL MENI 1344618 3089 CENTRAL BANK OF INDIA SANTOSH MENI & YUDHVIR R MENI 2534 TOTAL DEPOSITS IN BANK ACCOUNTS 8518776 IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 10 (B) THE DETAILS OF BANK ACCOUNTS WERE NEVER CALLED FOR BY THE A.O, IN THE BLOCK ASSESSMENT PROCEEDINGS. SIMILARLY, THE COST OF CONS TRUCTION WAS NEVER CALLED FOR BY THE ASSESSING OFFICER, ON THE CONTRARY HE HAS SHOW CAUSED AS TO WHY THE COST AS NOTED IN ANNEXURE BF-4 IS TREATED AS THE ACTUAL COS T. UNDER THESE CIRCUMSTANCES, THE AO JUST TO MAKE ADDITIONS ADDED TOTAL DEPOSITS IN BANK ACCOUNTS IN BLOCK PERIOD. THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THE DEPO SITS AND THE SUMMARY OF WHICH IS AS UNDER:- THE DEPOSIT IN BANK ACCOUNTS ARE IN THE NATURE OF INTEREST AND DIVIDEND INCOME, MATURITY OF FDRS INTER TRANSFER FROM GROUP CONCERNS AND GROUP MEMBERS BY CHEQUES, OTHER DEPOSITS IN THE NATURE OF LOANS, SAVINGS ETC. WHEREAS THE SALE PROCEEDS ARE DEPOSITED IN CBI S.B. A/C. NO.3008, WHICH IS MAIN BANK ACCOUNT OF THE ASSESSEE. THE SUMMARIES OF FOUR BANK ACCOUNTS ARE ENCLOSED WITH BANK PASS BOOK PHOTOCOPIES. (D) CBI A/C. NO.3431 YUDHVIR R MENI THE AO HAS WORKED OUT DEPOSITS OF RS.20,92,960/- AND THE SAME ARE ADDED AS SALES CONS IDERATION. A SUMMARY OF BANK ACCOUNT ALONG WITH PHOTOCOPY OF BANK PASSBOOK IS ENCLOSED AMOUNT NATURE OF DEPOSIT 19626 INTEREST & DIVIDEND 2269415 FDR MATURITY 1041370 INTER GROUP TRANSFER 10000 OTHER DEPOSITS 3340411 TOTAL DEPOSITS -3431 THEREFORE, THERE IS NOT A SINGLE RUPEE DEPOSIT OUT OF SALE PROCEEDS. THE DEPOSITS ARE PART OF REGULAR TRANSACTIONS. CBI A/C.NO.3008 YUDHVIR R MENI THE AO HAS WORKED OUT DEPOSITS OF RS.50,78,664/- AND THE SAME ARE ADDED AS SALES CONS IDERATION. A SUMMARY OF BANK ACCOUNT ALONG WITH PHOTOCOPY OF BANK PASSBOOK IS ENCLOSED. AMOUNT NATURE OF DEPOSIT 68104 INTEREST & DIVIDEND 816484 FDR MATURITY 200000 819661 INTER GROUP TRANSFER 787219 OTHER DEPOSITS & ADVANCE IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 11 2528600 SALE PROCEEDS OF SHOPS 5220068 TOTAL DEPOSITS -3008 THEREFORE, IN THIS BANK ACCOUNT SALE PROCEEDS OF RS .25,23,600/- IS DEPOSITED WHICH IS PART OF TOTAL SALE PROCEEDS OF RS.25,68,60 0/-. THE OTHER DEPOSITS ARE PART OF REGULAR TRANSACTIONS. (F) CBI A/C./ NO.3110 VISHAL Y. MENI & YUDHVIR R MENI THE AO HAS WORKED OUT DEPOSITS OF RS.13,44,518/- AND THE SAME ARE ADDED AS SALES CONSIDERATION. A SUMMARY OF BANK ACCOUNT ALONG WIT H PHOTOCOPY OF BANK PASSBOOK IS ENCLOSED AMOUNT NATURE OF DEPOSIT 96801 INTEREST & DIVIDEND 820119 FDR MATURITY 70000 LOAN RETURNED 101000 INTER GROUP TRANSFER 357595 OTHER DEPOSITS 1445515 TOTAL DEPOSITS -3110 THEREFORE, THERE IS NOT A SINGLE RUPEE DEPOSIT OUT OF SALE PROCEEDS; THE OTHER DEPOSITS ARE PART OF REGULAR TRANSACTIONS. IT IS FU RTHER SUBMITTED THAT THE SAID BANK ACCOUNT IS IN THE NAME OF VISHAL Y MENI SON OF ASSESSEE, THE ASSESSEES NAME IS FOR THE PURPOSE OF JOINT NAME ON LY OTHERWISE ALL TRANSACTIONS ARE RELATED TO VISHAL Y MENI AND DISCL OSED PROPERLY IN HIS HANDS. (G) CBI-A/C. NO.3089 SANTOSH MENI & YUDHVIR R MEN I THE AO HAS WORKED OUT DEPOSITS OF RS.2,534/- AND THE SAME ARE ADDED A S SALES CONSIDERATION. THESE TRANSACTIONS ARE IN THE NATURE OF INTEREST AN D DIVIDEND RECEIVED BY SMT. SANTOSH Y MENI. AS SMT. SANTOSH MENI IS EXPIRED ON 21-11-1994. THE ASSESSEE IN HIS REGULAR INCOME-TAX RETURNS OFFERED THESE INCOMES UNDER INTEREST AND DIVIDEND AS HE IS THE ONLY BENEFICIARY OF THIS ACCOUNT. ACCORDINGLY, LD. COUNSEL FOR THE ASSESSEE FAIRLY ST ATED THAT THE ASSESSING OFFICER HAS ADDED IN ENTERITY THE AMOUNT OF RS.85,18,776/- ON ACCOUNT OF UNDISCLOSED INCOME FROM SALE OF KUNAL COMPLEX ON THE BASIS OF T OTAL CREDIT SIDE OF 4 BANK ACCOUNTS RELATED TO THE ASSESSEE AND HIS FAMILY-MEM BERS ARE NOT ACCORDING TO LAW AS THE BANK ACCOUNTS ARE REFLECTED IN THE BOOKS OF ACCOUNT AND DECLARED TO THE INCOME-TAX DEPARTMENT. IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 12 13. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, W E FIND THAT THE ASSESSEE HAS CONSTRUCTED THE TWO FLOORS OF KUNAL COMPLEX IN THE YEAR 1993 AS CONFIRMED BY THE DEPUTY ASSISTANT OFFICER OF AHMEDABAD MUNICIPAL COR PORATION, WHICH IS ENDORSED BY THE A.O IN SUB-PARA (E) OF PARA 4.4 OF THE BLOCK AS SESSMENT ORDER, ACCORDINGLY WE ARE OF THE VIEW THAT THE COST IS INCURRED MUCH BEFO RE THE BLOCK PERIOD. MOREOVER, THE ASSESSEE HAS OFFERED 8% INCOME ON SALE PROCEEDS OF SHOPS IN REGULAR INCOME-TAX RETURNS, THE AVERAGE SELLING PRICE IS 605 PER SQ. F T. WHEREAS THE AVERAGE ON CONSTRUCTION COST IS 650 SQ.FT. WE FIND THAT THE AS SESSEE HAS OFFERED PROFIT @ 8% ON SALE PROCEEDS OF RS.25,68,600/- UNDER THE PROVISION S OF SECTION 40AD IN REGULAR RETURNS THEREFORE PROFIT ON SALE OF SHOPS CANNOT BE TAXED AGAIN IN BLOCK ASSESSMENT. THE A.O HAS CONSIDERED DEPOSITS IN BANK ACCOUNT NO. 3431, 3008 & 3089 OF CENTRAL BANK OF INDIA FOR BLOCK PERIOD AND TREATED THE DEPO SITS IN THESE THREE BANK ACCOUNTS AS SALES CONSIDERATION AND ALSO NOT ACCOUNTED IN BO OKS OF ACCOUNT. THE SUMMARIES AND ANALYSIS OF BANK ACCOUNTS SHOWS THAT IN BANK AC COUNT NO.3431, 3110 * 3089 OF CENTRAL BANK OF INDIA, THE SALE PROCEEDS FROM SHOPS ARE NOT DEPOSITED, BANK ACCOUNT NO.3110 IS BELONGING TO THE ASSESSEES SON SHRI VISHAL V MENI, WHICH IS HIS REGULAR BANK ACCOUNT AND ACCOUNTED FOR IN THE REGUL AR RETURNS. THE SALES PROCEEDS OF SHOPS RECEIVED IN CHEQUES OF RS.25,28,600/- WAS DEP OSITED IN BANK ACCOUNT NO.3008, OTHER DEPOSITS IN THIS BANK ACCOUNTS ARE M AINLY INTEREST & DIVIDEND, MATURITY OF FDRS INTER-GROUP TRANSFERS, LOAN REFUNDS OTHER D EPOSITS AND ADVANCES WHICH ARE NOT IN THE NATURE OF SALE PROCEEDS OF SHOPS AS CONS IDERED BY THE A.O IN ABSENCE OF ANY SEIZED MATERIAL OR CONFRONTATION BY ASSESSEE. T HE PRESUMPTION THAT ALL DEPOSITS IN BANK ACCOUNTS ARE SALE PROCEEDS OF SHOPS IS BASE D ON CONJECTURE AND SURMISES OF THE ASSESSING OFFICER. FURTHER ON ONE HAND, A.O IS ESTIMATING CONSTRUCTION COST AT NIL AND ON THE OTHER HAND ESTIMATING COST OF THIRD FLOOR ON THE BASIS OF COST OF CONSTRUCTION AS NOTED IN SEIZED MATERIAL ANN. BF-4, WHEN THE COMPLEX IS BUILT IN THE BLOCK PERIOD, IT IS FOR THE A.O TO GIVE SET OFF OF COST OF CONSTRUCTION, WHICH IS DULY COMPUTED BY HIM IN PARA NO.4.2 & SUB-PARA (H) OF PA RA NO.4.4 ON PAGE NO.7 OF THE BLOCK ASSESSMENT ORDER. CONSIDERING THIS COST WORKI NG, THERE ARE LOSSES IN SALE OF SHOPS, THOUGH THE ASSESSEE HAS OFFERED INCOMES @ 8% ON SALES PROCEEDS, THERE ARE NO UNDISCLOSED SALES PROCEEDS THEREFORE, THE DE POSITS IN BANK ACCOUNTS CANNOT BE TREATED AS UNDISCLOSED INCOME ON ACCOUNT OF UNDI SCLOSED SALE PROCEEDS. WE FURTHER FIND THAT THE COST OF CONSTRUCTION OF THIRD FLOOR IS ESTIMATED ON THE AVERAGE COST OF CONSTRUCTION UP TO 2 ND FLOOR AT RS.6987.54 PER SQ. MT. I.E. RS.650/- PER SQ.FT. IS NOT IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 13 AT ALL CORRECT. IN THE SEIZED PAGE NO.33 & 34 OF AN NEXURE BF-4, THE COST OF CONSTRUCTION OF 2 ND FLOOR IS AT RS.250 PER SQ.FT. SLAB OF TERRACE FLOO R IS AT RS.150/- PER SQ.FT. UNDER SUCH CIRCUMSTANCES, THE COST OF CONSTR UCTION OF THIRD FLOOR CANNOT BE MORE THAN RS.300/- PER SQ.FT, WHICH IS PART OF COST I.E. RS.150/-, IS ALREADY INCURRED IN THE YEAR 1993, THE COST OF CONSTRUCTION OF THIRD FL OOR IS APPROXIMATELY RS.3,37,000/- AS WORKED OUT BY THE ASSESSEE IN HIS ABOVE SUBMISSI ON IS FACTUALLY CORRECT AND BASED ON SEIZED MATERIALS, IS ACCEPTABLE THAT THE S AID COST IS INCURRED FROM THE EXPLAINED DEPOSITS OF BANK ACCOUNTS, WHICH IS PART OF EXPLAINED EXPENDITURE OF RS.7,35,043/-. IN VIEW OF THIS, THE DEPOSITS IN BAN K ACCOUNTS ARE PART OF REGULAR TRANSACTION, DISCLOSE SALES PROCEEDS OF SHOPS ON WH ICH THE ASSESSEE HAS OFFERED PROFIT IN REGULAR RETURNS FILED, THERE IS NO UNDISC LOSED SALES PROCEEDS OF SHOPS AS AVAILABLE FROM ANY SEIZED MATERIAL. THEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY A.O OF BANK DEPOSITS OF RS.85,18,7 76/-. WE CONFIRM THE DELETION. 14. AS REGARDS TO THE COST OF CONSTRUCTION ESTIMATE D BY A.O, THE CORRECT & FACTUAL COST OF CONSTRUCTION OF THIRD FLOOR IS APPROXIMATEL Y OF RS.3,37,000/- WHICH IS INCURRED OUT OF EXPLAINED BANK ACCOUNTS AND PART OF TOTAL EX PLAINED EXPENDITURE OF RS.7,35,043/-. ACCORDINGLY, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY A.O OF UNEXPLAINED INVESTMENT OF RS.7,23,186/-. WE CON FIRM THE DELETION. 15. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AS REGARDS TO THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF UNACCOUNTED INVESTMENT IN JEWELLERY. FOR THIS, REVENUE HAS RAIS ED FOLLOWING GROUND NO.4 :- 4. THE CIT(A) HAS ERRED IN LAW AND IN FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.71,26,000/- MADE ON ACCOUNT OF UNACCOUNTED IN VESTMENT IN JEWELLERY. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSI NG OFFICER NOTED IN HIS ASSESSMENT ORDER FROM THE LOOSE PAPERS INVENTORIZED AT PAGE 36 AND 38 I.E. LOOSE PAPER FILED ANNEURE-A/4, WHICH CONTENTS NOTINGS FOR PURCHASING OF JEWELLERY IN GMS. AND VALUE WRITTEN ON PAGE-36 AND 38 AND VALUE WRITT EN, THE RELEVANT PAGES AS TRANSLATED IN ENGLISH READS AS UNDER:- JIGNESH PANCHAL 5890 GRAM GOLD + 540 GRAM LESS JIGNESH PANCHAL 5890 GRAM GOLD + 540 GRAM LESS IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 14 6630 GRAM TOTAL + 95 CARAT 6300 GRAM FINE + 5090 RATE OF 10GM. 3206 RS. OF GOLD + 300 RS. LABOUR 3506 RS. IN TOTAL 6630 GRAM TOTAL + 95 CARAT 6300 GRAM FINE + 5090 RATE OF 10GM. 3206 RS. OF GOLD + 300 RS. LABOUR 3506 RS. IN TOTAL THE ASSESSING OFFICER READ THE FIGURES 3506 AS 35,0 6,000/- AND ON PAGE 38 THE FIGURE OF RS.3620 WAS READ AS RS.36.20 LAKH AND ACC ORDINGLY, THE PURCHASE CONSIDERATION ON JEWELLERY NOT REFLECTED IN THE BOO KS OF ACCOUNT WAS TREATED AT RS.71.26 LAKH AND IN THE ABSENCE OF CONTEMPORARY EV IDENCES THE ASSESSING OFFICER READ THE FIGURES AS GMS. AND ACCORDINGLY THE AO ADD ED THIS AMOUNT OF RS.71.26 LAKH AS UNACCOUNTED INVESTMENT IN PURCHASES OF JEWELLERY FOR THE BLOCK PERIOD. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND CIT (A) DELETED THE ADDITION BY GIVING FOLLOWING FINDING IN PARA-7.4 OF HIS APPELLATE ORDER:- 7.4 I HAVE GONE THROUGH THE ASSESSMENT ORDER, ARGU MENTS OF THE APPELLANT AND WRITTEN SUBMISSIONS BY THE APPELLANT BEFORE A.O BEFORE ME AND ALSO THE REMAND REPORT SUBMITTED BY THE AO IN THIS REGARD. I AM OF THE OPINION THAT THE NOTINGS ON CHIT ARE IN GRAMS BUT THE DECIMAL POINT WAS NOT MENTIONED, HOWEVER, THE LEARNED A.R PRODUCED VARIOUS CONTEMPOR ARY EVIDENCES WHICH PROVES THAT THE GOLD WEIGHT IS ALWAYS WRITTEN IN 0. 000 GRAMS THE WEIGHT ON CHITS ARE 5.890 GMS. AND 6.110 GMS. THE VALUE OF GO LD ITEMS ARE CORRECTLY MENTIONED ON THE CHITS, WHICH IS RS.3,506/- & RS.3, 620/- ONLY. THE LEARNED A.R FURTHER EXPLAINED THAT THERE CANNOT BE A SINGLE JEWELLERY HAVING WEIGHT OF 5890 GMS. AND 6110 GMS. NO HUMAN BEING CAN WEAR SUC H JEWELLERY HAVING WEIGHT OF 6 KGS. THE CASE LAW RELIED UPON BY THE AP PELLANT IS VERY RELEVANT IN THE CONTEXT OF THIS CASE. IN THE PRESENT CASE ALSO, THE AO HAS NOT BEEN ABLE TO BRING ANY CORROBORATIVE EVIDENCE IN HIS SUPPORT AND THE PERSON WHOSE NAME IS WRITTEN ON THE CHIT, WHO HAPPENED TO BE THE AUTH OR OF THE CHIT HAS SUPPORTED THE CLAIM OF THE APPELLANT AND THE AO HAS NOT BEEN ABLE TO DISPROVE THE VERSION OF THE AUTHOR OF THE CHIT. IN FACT, THE AUT HOR IS A MAN OF SMALL MEANS AND CANNOT BE BELIEVED TO HAVE HANDLED SUCH A HUGE AMOUNT OF GOLD AS HAS BEEN THE CONTENTION OF THE AO. MOREOVER, SUCH QUAN TITY OF GOLD ORNAMENTS WAS NOWHERE FOUND IN THE PREMISES OF THE APPELLANT IN SEARCH PROCEEDINGS. 17. WE FIND FROM THE ABOVE FACTS AND ARGUMENTS OF B OTH THE SIDES THAT THE ASSESSEE HAS EXPLAINED THAT FOR WRITING THE GOLD WE IGHT NORMALLY IT IS WRITTEN IN 0.000 I.E. IF 1 GM. IS TO BE WRITTEN, IT WILL BE WRITTEN AS 1.000 FOR THIS, THE ASSESSEE HAS PRODUCED THE VALUATION REPORT OF NIKUNJ ARUNBHAI JH AVERI DATED 10-10-2001, WHICH IS PART OF SEIZED MATERIAL OF HAVMOR GROUP OF CASES. HE ALSO REFERRED BILL OF ARUNBHAI MANIKLAL JHAVERI & SONS DATED 29-11-2001, AGAIN WHI CH IS PART OF SEIZED PAPERS OF IT(SS)A NO.201 & 214/AHD/2005 B.P. ENDING ON 4/9/02 YUDHVIR R MENI V. DCIT CC-1(2) ABD PAGE 15 HAVMOR GROUP OF CASES, WHERE GOLD WEIGHT IS WRITTEN AS 25.300 GMS. HE ALSO REFERRED TO INCOME-TAX READY RECKNOR, WHERE 1 TOLA IS WRITTEN AS 11.664 GMS. ACCORDING TO HIM, SHRI JIGNESH J PANCHANAL HAS ALSO ADMITTED THAT THIS IS MILLIGRAM AND ON THIS VERY CHIT, THE NAME OF SHRI JIGNESH J P ANCHAL IS WRITTEN. HE ALSO NARRATED THAT THE WEIGHT OF 5890 GMS. AND 6110 GMS GOLD ORNAMENTS CANNOT BE USED FOR A SINGLE JEWELLERY, WHICH IS APPROXIMATELY AT 6 KG. HE ALSO PRODUCED VOUCHERS OF JEWELLERY WEIGHTING SCALES WHICH SHOWS THAT THE MAX IMUM WEIGHT OF JEWELLERY IS NEAR ABOUT 1000 GMS.TO 1200 GMS. WE FIND THAT FROM THE PREMISES OF THE ASSESSEE JEWELLERY SEIZED BY THE SEARCH PARTY OF INCOME-TAX DEPARTMENT WAS TO THE EXTENT OF RS.6,15,355/- AND THIS WAS NOT SEIZED AS IT BELONG TO SEVERAL FAMILY MEMBERS OF THE ASSESSEE. EVEN THE REVENUE COULD NOT PROVE THAT TH ESE JEWELLERY WERE ACQUIRED BY THE ASSESSEE AND COULD NOT RELATE THE SAME WITH ANY INVESTMENT. ACCORDINGLY, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. THIS ISSUE OF THE REVENUES APPEAL IS DISMIS SED. 18. I N THE RESULT, ASSESSEES APPEAL IS DISMISSED AS NOT PRESSED AND THAT OF REVENUE IS DISMISSED ON MERITS. ORDER PRONOUNCED IN OPEN COURT ON 05/03/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 05/03/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-III, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD