Sh. Vipan Jain, Chandigarh V. ACIT, Chandigarh

ITSSA 21/CHANDI/2009

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9643 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-07-2013
• Assessment Year: misc
• Appeal Filed On: 12-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Rejection of books of accounts; Gift; Income from undisclosed sources; Document seized; Principle of natural justice; Source of fund; Retrospective amendment; Additional evidence; Validity of assessment; Block assessment; Documents seized
• Section: 143(3); 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER IT(SS)A NO.21 /CHD/2009 BLOCK PERIOD 1.4.1988 TO 30.9.1998 SHRI VIPAN JAIN, VS. THE A.C.I.T., H.NO.2218, SECTOR 15-C, CIRCLE 2(1), CHANDIGARH. CHANDIGARH. PAN: AND IT(SS)A NO.17 /CHD/2009 BLOCK PERIOD 1.4.1988 TO 30.9.1998 THE A.C.I.T., VS. SH.VIPAN JAIN, CIRCLE 2(1), H.NO.2218, SECTOR 15-C, CHANDIGARH. CHANDIGARH. PAN: (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI KUMAR DEPARTMENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 18.09.2013 DATE OF PRONOUNCEMENT : 06.12.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REV ENUE ARE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S), CHANDIGARH DATED 31.3.2009 RELATING TO BLOCK PERIOD 1.4.1988 T O 30.9.1998 AGAINST THE ORDER PASSED UNDER SECTION 250(6)/143(3) OF THE INCOME TAX ACT, 1961. 2 2. THE CROSS APPEALS FILED BY THE ASSESSEE AND REVE NUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A NO.21/CHD/2008 :: ASSESSEE'S APPEAL 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER PASSED U/S 250(6) BY THE LD. CIT (A), CHANDIGARH IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH HE WAS NOT JUSTIFI ED TO UPHOLD THAT THE NOTICE ISSUED U/S 158BC DATED 11.06.1999 WAS VALID IN LAW. 2. THAT THE LD. CIT(A) FURTHER GRAVELY ERRED IN UPH OLDING THE ACTION OF THE LD. ASSESSING OFFICER IN MAKING THE FOLLOWING ADDITIONS . (A) A SUM OF RS. 1,48,400/- REPRESENTING THE ALLEG ED INVESTMENT IN JEWELLERY WEIGHING 387.6 GMS OUT OF TOTAL ADDITION OF RS. 2,00,000/- BY THE LD. ASSESSING OFFICER. (B) A SUM OF RS. 1,03,500/- OUT OF TOTAL ADDITION O F RS. 1,53,500/- MADE ON ACCOUNT OF ALLEGED INVESTMENT IN HOUSEHOLD GOODS. (C) A SUM OF RS.5,10,000/- ON ACCOUNT OF ALLEGED IN VESTMENT IN SCO-121, SECTOR-5,PANCHKULA. (D) A SUM OF RS. 5,70,000/- ON ACCOUNT OF ALLEGED I NVESTMENT IN PURCHASE OF PLOT AT BALTANA. (E) A SUM OF RS. 15,000/- ON ACCOUNT OF ALLEGED INV ESTMENT IN SCF 24, NOTOR MARKET, MANI MAJRA AND ALSO A SUM OF RS. 3,82 ,000/- FOR ALLEGED INVESTMENT MADE BY SH. VIJAY GOEL, THE OTHE R CO-OWNER. (F) A SUM OF RS. 1,32,500/- ON ACCOUNT OF ALLEGED I NVESTMENT MADE IN SCF 26,NOTOR MARKET, MANI MAJRA. (G) A SUM OF RS. 3,12,500/- ON ACCOUNT OF ALLEGED I NVESTMENT MADE IN THE PURCHASE OF SCO-7, SECTOR-5, PANCHKULA. (H) A SUM OF RS. 3,54,000/- OUT OF THE TOTAL ADDIT ION MADE AT RS. 7,08,000/- ON ACCOUNT OF ALLEGED INVESTMENT IN SCO- 117, SECTOR-5, PANCHKULA. (I) A SUM OF RS. 2,00,000/- ON ACCOUNT OF ALLEGED INVESTMENT IN PLOT NO. 49, INDUSTRIAL AREA, PHASE-II, CHANDIGARH. (J) A SUM OF RS. 4,05,5000/- ON ACCOUNT OF ALLEGE D INVESTMENT IN SCF-16, SECTOR-10, PANCHKULA. 3 (K) A SUM OF RS. 3,21,500/- (BEING 50% OF RS. 6,43 ,000/-) MADE ON ACCOUNT OF ALLEGED INVESTMENT IN LIMA ENGINEERING P . LTD. (1) A SUM OF RS. 6,50,000/- ON ACCOUNT OF ALLEGED INVESTMENT IN 259, INDUSTRIAL AREA, CHANDIGARH. (M) A SUM OF RS. 4,80,000/- (BEING 50% OF RS. 9,60 ,000/-) ON ACCOUNT OF ALLEGED INVESTMENT IN SURAJ THEATRE. (N) A SUM OF RS. 24,000/- MADE ON ACCOUNT OF ALLEG ED INVESTMENT IN SHARES. (O) A SUM OF RS. 13,35,000/- MADE ON ACCOUNT OF AL LEGED INVESTMENT IN FDRS. 3. THAT THE LD. CIT(A) WAS FURTHER NOT JUSTIFIED TO UPHOLD AN ADDITION OF RS. 7,50,000/- OUT OF TOTAL ADDITION OF RS.15,00,000/- MADE ON ACCOUNT OF ALLEGED LOW HOUSEHOLD EXPENSES. 4. THAT THE LD. CIT (A) WAS FURTHER NOT JUSTIFIED T O ARBITRARILY UPHOLD AN ADDITION OF RS.1,24,59,083/- ON ACCOUNT OF CREDITS IN THE BANK ACCOUNTS OF THE APPELLANT. 5. THAT THE LD. CIT(A) FURTHER ERRED IN PASSING THE ORDER BY IGNORING ALL PRINCIPLES OF NATURAL JUSTICE IN AS MUCH AS THE CAS H FLOW STATEMENT FILED BY THE APPELLANT WAS ARBITRARILY REJECTED AND THE REMAND R EPORT SENT BY THE LD. ASSESSING OFFICER ON THE DIRECTIONS OF HIS PREDECES SOR WAS SIMPLY IGNORED. 6. THAT THE LD. CIT (A) WAS FURTHER NOT JUSTIFIED T O UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN TREATING THE INCOME OF A/Y 199 8-99 AS UNDISCLOSED INCOME. IT(SS)A NO.17/CHD/2009 :: REVENUES APPEAL 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(APPEALS) IN APPEAL NO. 501/P/06-07, THROUGH ORDER DATED 31.03.2009, HAS ER RED IN DELETING THE FOLLOWING ADDITIONS:- 1. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 2, 18, 31 01- MADE BY THE A.O. ON ACCOUNT OF UNCOUNTED CASH. 2. THE LD.CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 5 1.600/- BY TREATING 100 GM OF JEWELLERY AS EXPLAINED. 3. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 3,000/- MADE ON ACCOUNT OF FIXED DEPOSITS. 4. THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 50,000/- IN THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN OTHER VALUABLES. 5. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS. 1,00,000/- MADE ON ACCOUNT OF INVESTMENT IN SCF-41, SEC-18-D, CHANDIGA RH. 6. THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 3,54,000/- TO THE ASSESSEE ON ACCOUNT OF INVESTMENT IN SCO- 117, SEC-5, PANCHKULA . 4 7. THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS .1,00,000/- MADE ON ACCOUNT OF INVESTMENT IN LAND AT VILLAGE RALLY. 5. THE ASSESSEE HAS RAISED ADDITIONAL GROUND OF APP EAL, WHICH READS AS UNDER : THAT ASSESSMENT FRAMED UNDER SECTION 158BC READ WI TH SECTION 143(3) OF THE INCOME TAX ACT, 1961 IS BARRE D BY LIMITATION AS PER PROVISIONS OF SECTION 158BE IN AS MUCH AS THE ORIGINAL ASSESSMENT WAS FRAMED VIDE ORDER DATED 31.10.2000 WHEREAS THE SEARCH IN THE CASE OF THE AP PELLANT HAD CONCLUDED ON 30.09.1998. 6. THE LD. AR FOR THE ASSESSEE STRESSED FOR THE ADM ISSION OF THE ADDITIONAL GROUND OF APPEAL. HOWEVER, IT WAS ADMITT ED THAT THIS PLEA WAS NOT EARLIER RAISED. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE SAID PLEA OF THE ASSESSMENT BEING BARRED BY LIMITAT ION CANNOT BE RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL I.E. AFTER T HE MATTER WAS FIRST SET ASIDE BY THE CIT(APPEALS) AND THE PRESENT APPEAL IS FILED AGAINST THE SECOND ROUND OF APPELLATE PROCEEDINGS. RELIANCE WA S PLACED ON ARAVALI ENGINEERS (P) LTD. VS CIT 335 ITR 508 (P&H ). 7. WE FIND NO MERIT IN THE STAND OF THE ASSESSEE IN VIEW OF THE FACT THAT NO SUCH PLEA WAS RAISED IN ANY EARLIER PROCEED INGS AND ALSO BECAUSE OF THE RATIO LAID DOWN BY THE JURISDICTIONA L HIGH COURT IN ARAVALI ENGINEERS (P) LTD. VS CIT (SUPRA), WHEREIN IT HAS BEEN HELD AS UNDER : NO DOUBT THAT AN APPELLATE AUTHORITY CAN ALLOW A Q UESTION TO BE RAISED FOR THE FIRST TIME EVEN IF SUCH A QUESTION WAS NOT RAIS ED AT A LOWER FORUM BUT THE DISCRETION TO DO SO HAS TO BE EXERCISED IN THE INTE REST OF JUSTICE IN THE FACTS AND CIRCUMSTANCES AND NOT MECHANICALLY. NORMALLY A QUESTION OF FACT MAY NOT BE ALLOWED TO BE RAISED FOR THE FIRST TIME AS I T MAY PREJUDICE THE OTHER SIDE. IF SUCH QUESTION IS RAISED AT THE EARLIEST OP PORTUNITY, THE OTHER SIDE CAN LEAD EVIDENCE WHICH IT MAY NOT BE ABLE TO DO IF SUCH A QUESTION IS RAISED FOR THE FIRST TIME BEFORE THE APPELLATE AUTHORITY. OF COURSE, THERE CAN BE NO TOTAL BAR ON SUCH QUESTION BEING ALLOWED, IF INTERE ST OF JUSTICE SO REQUIRES. QUESTION OF VALIDITY OF NOTICE MAY NOT BE ALLOWED T O BE RAISED FOR THE FIRST TIME IN APPEAL. SUBSEQUENT LEGISLATIVE AMENDMENT AD DING S. 292BB SUPPORTS THIS PRINCIPLE . THE QUESTION HAS, THUS, TO BE ANSWERED AGAINST TH E ASSESSEE. CIT VS. PREMIUM CAPITAL MARKET & INVESTMENT LTD. (2 005) 198 CTR (MP) 680 : (2005) 275 ITR 260 (MP) RELIED ON. (UNDERLINE PROVIDED BY US). 5 THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSES SEE IS THUS, DISMISSED. 8. THE LD. AR FOR THE ASSESSEE DID NOT ADDRESS THE ISSUE RAISED VIDE GROUND NO. 1 AND HENCE, THE SAME IS DISMISSED. 9. THE ASSESSEE IS AGGRIEVED BY VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER AND HAS RAISED GROUND NOS. 2(A) T O 2(O) IN RESPECT OF THE SAID ADDITIONS. 10. THE ISSUE IN GROUND NO. 2(A) IS IN RELATION TO ADDITION OF RS.1,48,400/- ON ACCOUNT OF JEWELLERY FOUND AT THE TIME OF SEARCH. THE BRIEF FACTS RELATING TO THE CASE ARE THAT SEARCH AT THE PREMISES OF THE ASSESSEE WAS CARRIED OUT ON 30.09.1998. THE ASSESS EE FILED RETURN OF INCOME FOR THE BLOCK PERIOD DECLARING TOTAL INCOME OF RS. 1,50,000/- ON 12.10.2000. THE BLOCK ASSESSMENT IN THE CASE WAS C OMPLETED ON 31.10.2000 WHICH WAS SET ASIDE BY CIT(APPEALS) VIDE ORDER DATED 19.03.2001. IN THE SET ASIDE PROCEEDINGS, THE ASSE SSEE SOUGHT ADJOURNMENT ON ONE PRETEXT OR THE OTHER AND ONLY ON 17.03.2003, THE ASSESSEE FILED THE REPLY CONTAINING EVIDENCES/DOCUM ENTS WHICH WERE NOT FILED AT THE TIME OF ORIGINAL ASSESSMENT. THE ASSESSEE HAD ALSO DISPUTED THE ASSESSMENT PROCEEDINGS BEING BAD IN LA W. 11. THE ASSESSING OFFICER NOTES THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT HAD IN ASSESSEE'S OWN CASE, SET ASIDE T HE ASSESSMENT ON THE WRIT PETITION FILED BY THE ASSESSEE. THE REVENUE F ILED AN APPEAL BEFORE THE HON'BLE SUPREME COURT AND VIDE ORDER DATED 23.1 .2003, IN APPEAL NO. 1093 OF 2002, THE OPERATION OF THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT WAS STAYED. THE OBJECTION OF THE ASSESSEE BEFORE THE HON'BLE COURTS WAS THAT THE ASSESSMENT W AS BEING FRAMED BY THE SAME PERSON WHO HAD CONDUCTED THE SEARCH ON THE PREMISES OF THE 6 ASSESSEE. BUT AS THE SAID ASSESSING OFFICER HAD BE EN TRANSFERRED, THE OBJECTION OF THE ASSESSEE WAS FOUND TO BE INFRUCTUO US AND THE CASE OF THE ASSESSEE WAS DECIDED ON THE MERITS AND AS PER T HE DIRECTIONS OF THE CIT(APPEALS), CHANDIGARH. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THAT SEARCH OPERATIONS UNDER SECTION 132(1) OF THE INCOME TAX ACT WERE CARRIED OUT AT THE PREMISES OF THE ASSESSEE AN D HIS BROTHER SHRI CHANDER DEEP JAIN. THE FACTS IN THE PRESENT CASE AR E SIMILAR TO THE FACTS RAISED IN THE CASE OF SHRI CHANDER DEEP JAIN. WE HAVE REFERRED TO THE FACTS OF THE CASE ELABORATELY IN THE CASE OF SH RI CHANDER DEEP JAIN IN ITSS NO. 20 & 18/CHD/2009 AND HAVE ELABORATELY C ONSIDERED THE FACTUAL ASPECTS OF THE CASE AND ALSO THE SEQUENCE O F EVENTS BEFORE THE ASSESSING OFFICER AND THE CIT(APPEALS) I.E. IN THE ORIGINAL ASSESSMENT PROCEEDINGS THEN IN THE APPEAL BEFORE THE CIT(APPEA LS) WHO REMANDED THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE SAME DENOVO, THEN IN THE SECOND ROUND OF PROCEEDINGS BEF ORE THE ASSESSING OFFICER AND THEREAFTER BEFORE THE CIT(APPEALS). EV EN THE CIT(APPEALS) HAS PASSED CONSOLIDATED ORDER IN THE HANDS OF THE A SSESSEE AND SHRI CHANDER DEEP JAIN WITH LEAD ORDER IN THE CASE OF SH RI CHANDER DEEP JAIN. THE FINDINGS OF THE CIT(APPEALS) IN THE CASE OF SHRI VIPIN JAIN ARE AT PAGES 76 TO 125 OF THE APPELLATE ORDER. 13. BEFORE ADJUDICATING THE ISSUE RAISED BY THE ASS ESSEE ON MERITS OF THE ADDITION MADE IN HIS HANDS, WE FIND THAT SINCE THE ISSUES ARE IDENTICAL, OUR OBSERVATIONS IN THE INITIAL PARAS OF OUR ORDER OF EVEN DATE AT PARA NOS. 16 TO 30 ARE SQUARELY APPLICABLE AND I N LINE WITH OUR ORDER OF EVEN DATE, WE REJECT THE RELIANCE OF CASH FLOW S TATEMENT FILED BY THE ASSESSEE BECAUSE OF SIMILAR FACTS IN BOT H THE CASES. RELEVANT 7 OBSERVATIONS IN PARAS 16 TO 30 ARE AS UNDER : 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. BEFORE ADJUDICATING THE MERITS OF THE ISSU E, IT IS NECESSARY TO REFER TO CERTAIN FACTS WHICH HAVE BEEN REFERRED TO BY THE CIT(APPEALS) IN PARAS 3 TO 20 AT PAGES 6 TO 22 OF THE APPELLATE ORDER. THE RELEVANT FACTS AND CIRCUMS TANCES OF THE CASE AND THE PROCEEDINGS BEFORETHE ASSESSING OF FICER THE CIT(APPEALS) WERE AS UNDER : A) SEARCH UNDER SECTION 132(1) OF THE ACT WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 30.09.1998. SIMULTANEO USLY, SEARCH WAS ALSO CARRIED OUT ON THE PREMISES OF HIS BROTHER SHRI VIPIN JAIN AND BOTH THE ASSESSEE AND HIS BROTHER WE RE PARTNERS IN M/S S.K. & COMPANY. B) NOTICE UNDER SECTION 158BC OF THE ACT WAS ISSUED O N 11.6.1999 ASKING THE ASSESSEE TO FILE RETURN OF INCOME FOR TH E BLOCK PERIOD. HOWEVER, NO RETURN OF INCOME FOR THE BLOCK PERIOD WAS FILED BY THE ASSESSEE AND ANOTHER SHOW CAUSE NOTICE WAS ISSUED ON 16.7.1999 AS TO WHY PROSECUTION PROCEEDINGS UNDE R SECTION 276CC SHOULD NOT BE INITIATED AGAINST THE ASSESSEE FOR FAILURE TO FILE THE RETURN OF INCOME. BUT NO REPLY TO THE SAME WAS RECEIVED BY THE ASSESSING OFFICER. A QUESTIONNAIRE WAS SENT TO THE ASSESSEE ON 22.5.2000 AND THEN ON 4/6.10.2000. RETURN OF INCOME WAS FILED ON 12.10.2000 AND THE ORIGINAL ASS ESSMENT IN THE CASE WAS COMPLETED ON 30.10.2000. THE CIT(APPE ALS) VIDE ORDER DATED 19.3.2001 SET ASIDE THE ASSESSMENT AND RESTORED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WITH D IRECTIONS TO DECIDE THE SAME DENOVO AFTER INVESTIGATING THE ADDI TIONAL EVIDENCE FILED BY THE ASSESSEE AT THE TIME OF APPEL LATE PROCEEDINGS. THE CIT(APPEALS) ALSO, IN THE FIRST ROUND OF APPEAL , ADDRESSED THE ISSUE OF VALIDITY OF ASSESSMENT, LACK OF OPPORTUNITY AND DENIAL OF PRINCIPLE OF NATURAL JUST ICE AND VIDE PARA 5 HELD THAT THE PROCEEDINGS INITIATED IN THE S EARCH CASE WERE VALIDLY INITIATED AND THE ASSESSING OFFICER WA S DIRECTED TO FRAME THE ASSESSMENT. C) THE ASSESSMENT IN THE CASE WAS FRAMED BY ASSESSING OFFICER VIDE ORDER DATED 31.3.2003 AGAINST WHICH THE ASSESS EE FILED AN APPEAL AND FILED WRITTEN SUBMISSIONS BEFORE THE CIT (APPEALS) VIDE LETTER DATED 23.4.2005. THE ASSESSEE AGAIN CHA LLENGED THE VALIDITY OF THE ASSESSMENT AND ALSO STRESSED THAT A DEQUATE OPPORTUNITY WAS NOT AFFORDED. D) THE CIT(APPEALS) NOTED THAT THE ASSESSEE HAD FAILED TO GIVE COMPLETE FACTS BEFORE THE CIT(APPEALS) IN THE FIRST ROUND OF APPEAL AND HENCE, THE FINDING OF CIT(APPEALS) THAT ADEQUATE OPPORTUNITY WAS NOT AFFORDED TO THE ASSESSEE WAS IN CORRECT. THE CIT(APPEALS) IN THE SECOND ROUND OF APPEAL, VIDE PA RA 14 OF THE APPELLATE ORDER, ON THE PERUSAL OF THE ASSESSME NT RECORD FOUND THAT THE ASSESSING OFFICER HAD GIVEN ATLEAST 2 YEARS TIME TO THE ASSESSEE TO EXPLAIN ITS CASE WHEREAS THE ASS ESSEE SIMPLY REMAINED SILENT ON THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER. THE CIT(APPEALS) FURTHER OBSERVED THAT T HE 8 ASSESSING OFFICER IN HIS ORDER AT PAGE 2 HAS CLEARL Y GIVEN FINDING THAT ASSESSEE WAS GIVEN PHOTO COPIES OF THE SEIZED DOCUMENTS BY THE ADIT (INVESTIGATION) AS EARLY AS 1 5.11.1998, 24.11.1998, 25.11.1998 AND 27.11.1998 WHEREAS THE P LEA OF THE ASSESSEE BEFORE THE CIT(APPEALS) IN THE FIRST ROUND OF APPELLATE PROCEEDINGS WAS THAT THE PHOTO COPIES OF THE SEIZED DOCUMENTS WERE GIVEN IN OCTOBER,2000. THE CIT(APPEALS) FURT HER NOTED THAT THE ASSESSEE NEVER MADE A REQUEST FOR TAKING T HE PHOTO COPIES OF THE SEIZED DOCUMENTS TILL 28.09.2000, WHI CH IN TURN WERE AGAIN GIVEN TO HIM IN OCTOBER,2000. THE CIT(A PPEALS) UNDER PARA 15 AT PAGES 10 TO 21 OF THE APPELLATE OR DER HAS TABULATED THE SEQUENCE OF EVENTS AND DETAILS OF OPP ORTUNITIES AFFORDED TO THE ASSESSEE ALONGWITH THE NARRATION/RE MARKS ON EACH DATE, STARTING FROM THE DATE OF CONDUCT OF SEA RCH AT THE PREMISES OF THE ASSESSEE, BOTH DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND ALSO DURING THE ASSESSMENT PROCEEDI NGS, RESTORED TO THE FILE OF ASSESSING OFFICER BY THE CI T(APPEALS). THE PERUSAL OF THE SAID TABULATED DETAILS REFLECT T HAT THE ASSESSEE FAILED TO FURNISH INFORMATION BEFORE THE A SSESSING OFFICER EVEN IN THE SECOND ROUND OF ASSESSMENT PROC EEDINGS AND THE CASE OF THE ASSESSEE WAS TAKEN UP FROM DATE TO DATE AND THE ASSESSEE ON ONE PRETEXT OR THE OTHER, SOUGHT ADJOUR NMENTS OR FURNISHED INSUFFICIENT EVIDENCE BEFORE THE ASSESSIN G OFFICER. THE ASSESSMENT ORDER WAS FRAMED ON 31.3.2003 AND TH E ASSESSEE ONLY FURNISHED PART INFORMATION IN THE MON TH OF MARCH,2003 WHEREAS SAID PROCEEDINGS WERE STARTED ON 19.09.2001. E) THE ASSESSEE, THEREAFTER APPEALED AGAINST THE SAID ASSESSMENT ORDER DATED 31.3.2003 AND EVEN BEFORE THE CIT(APPEA LS), SOUGHT ADJOURNMENTS ON ONE PRETEXT OR THE OTHER. T HE ASSESSEE WAS ASKED TO GIVE REASONS FOR WITHDRAWAL OF CASH AN D REASONS FOR RE-DEPOSITING THE SAME IN THE BANK ACCOUNT AND ALSO FURNISHING THE DETAILS OF SOURCE OF INVESTMENT. TH E CIT(APPEALS) VIDE ENTRY DATED 14.08.2008 NOTES THAT THE ASSESSEE SOUGHT PERMISSION TO PRODUCE BOOKS OF ACCO UNT WHICH ADMITTEDLY WERE PREPARED AFTER THE SEARCH, FOR THE PERIOD PRIOR TO SEARCH. THE ASSESSEE WAS AGAIN DIRECTED TO EXPL AIN SOURCE OF INVESTMENT AND IN REPLY THE SIMPLE STATEMENT OF WITHDRAWAL FROM THE BANK WAS FILED, WHICH AS PER CIT(APPEALS) WAS NOT SUFFICIENT TO EXPLAIN THE CREDIT IN THE BANK ACCOUN T. EVEN IN THE CASE OF TRANSFER OF BANK ENTRY, THE CIT(APPEALS ) OBSERVED THAT THE ASSESSEE HAD TO EXPLAIN THE SOURCE OF THE AMOUNT TRANSFERRED FROM ONE BANK TO THE OTHER. THE CIT(AP PEALS) VIDE PARA 20, GIVES THE FINDING THAT WHERE IT IS FOUND T HAT THE EVIDENCE HAD BEEN UNNECESSARILY DELAYED, THEN THE A SSESSING OFFICER WOULD BE JUSTIFIED IN IGNORING THESE EVIDEN CES WHICH HAVE BEEN GIVEN IN MARCH,2003 EVEN THOUGH THE ASSES SEE WAS ASKED TO ATTEND THE HEARING RIGHT FROM SEPTEMBER, 2 001. THE CIT(APPEALS) VIDE PARA 21 AT PAGE 23 OF THE APPELLA TE ORDER, OBSERVED THAT THE ASSESSEE WAS TRYING TO PROVE EVER YTHING THROUGH AFFIDAVITS, WHICH WERE SELF-SERVING DOCUMEN TS UNTIL AND UNLESS THEY ARE CORROBORATED BY CORRESPONDING E VIDENCE ON THE CONTENTS OF THE AFFIDAVIT AND ALSO THE INVESTIG ATION IS TO BE DONE BY THE ASSESSING OFFICER. MERE FILING OF AFF IDAVIT IS NOT A SUFFICIENT PROOF. THE CIT(APPEALS) NOTED THAT TH ERE WERE VARIOUS CASH CREDITS FOUND IN THE BANK ACCOUNT OF T HE ASSESSEE 9 AND BY WAY OF AN AFFIDAVIT PRODUCED IN THE MONTH OF MARCH,2003, THE ASSESSEE CLAIMS TO HAVE EXPLAINED T HE SOURCE OF THE SAID CASH CREDIT. THE CIT(APPEALS) FURTHER NOTES THAT THERE WAS NO SUCH CONTENT OF THE AFFIDAVIT, WHICH W OULD SHOW THAT THE SAME COULD NOT BE PRODUCED DURING THE ORIG INAL ASSESSMENT PROCEEDINGS AND THE PRODUCTION OF THE AF FIDAVITS IN THE MONTH OF MARCH,2003 COULD NOT BE ACCEPTED IN TH E ABSENCE OF THE ASSESSEE HAVING FAILED TO EXPLAIN THE CIRCUM STANCES FOR NOT PRODUCING THE SAME EARLIER. VIDE PARA 22 AT PAG ES 23 TO 25 OF THE APPELLATE ORDER, THE CIT(APPEALS) THEREAFTER TOOK NOTE OF THE VARIOUS EVIDENCES FILED BY THE ASSESSEE IN MARC H,2003 AND OBSERVED THAT ALL SAID THREE DOCUMENTS EXPLAINING T HE ENTRIES, COULD VERY WELL HAVE BEEN PRODUCED BY THE ASSESSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS ITSELF AS THE SAME WERE COPIES OF BANK ACCOUNT OR AFFIDAVITS OF VARIOUS PERSONS WI TH REGARD TO INVESTMENT IN DIFFERENT CONCERNS AND THEIR PRODUCTI ON AT SUCH A LATE STAGE PREVENTED CROSS VERIFICATION BY THE ASSE SSING OFFICER AND HENCE, THE SAME COULD NOT BE ADMITTED AT THE LA TE STAGE. F) THE CIT(APPEALS), BEFORE ADDRESSING THE ISSUE ON M ERITS OF EACH OF THE GROUNDS OF APPEAL, FIRST ADDRESSED THE LEGAL ISSUES, WHICH WE SHALL ADDRESS AT THE APPROPRIATE TIME, AND THERE AFTER NOTED THAT THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS O F ACCOUNT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S AND IT IS AN ADMITTED POSITION THAT NO BALANCE SHEETS WERE FILED ALONGWITH THE RETURN OF INCOME. HOWEVER, DURING THE COURSE OF APP ELLATE PROCEEDINGS, ASSESSEE PREPARED CASH FLOW STATEMENT AND THE ASSESSEE SOUGHT TO EXPLAIN THE VARIOUS INVESTMENTS THROUGH THE SAID CASH FLOW STATEMENT AND VARIOUS AFFIDAVITS. TH E SAID CASH FLOW STATEMENT, FOR THE FIRST TIME WAS PLACED BEFOR E THE CIT(APPEALS) IN THE MONTH OF APRIL,2005 TO EXPLAIN VARIOUS INVESTMENTS BY WAY OF INTRODUCTION OF THE AMOUNTS I N CASH, WHICH IN-TURN WERE NOT SUPPORTED BY ANY EVIDENCE. THE REL EVANT FINDINGS OF THE CIT(APPEALS) VIDE PARAS 38-39 OF THE APPELLA TE ORDER ARE AS UNDER : 38 THE ASSESSEE HAS MADE CASH FLOW STATEMEN T AS A PANACEA FOR EXPLAINING ALL KINDS OF INVESTMENTS. THE SCRUTINY O F CASH FLOW STATEMENT REVEALS THAT THE ASSESSEE IN ORDER TO EXPLAIN THE V ARIOUS INVESTMENTS IS ATTEMPTING TO INTRODUCE THE AMOUNTS THAT TOO IN CAS H AND UNSUPPORTED BY ANY EVIDENCE. IT MAY BE REMEMBERED THAT THE SAID CA SH FLOW STATEMENT IS NEVER PRODUCED BEFORE THE ASSESSING OFFICER FOR VER IFICATION. THIS HAS BEEN PLACED BEFORE THE CIT(A) THAT TOO IN APRIL, 20 05. THE ASSESSING OFFICER NEVER HAD A CHANCE TO MAKE VERIFICATION OF THE ENTRIES OR TO MAKE FURTHER INVESTIGATION. THE ENTRIES GIVEN IN THE CAS H FLOW STATEMENT ARE RELATING TO THE CASH RECEIPTS FROM VARIOUS SOURCES. FOR EXAMPLE, ON PAGE 385, THE ASSESSEE HAS SHOWN RECEIPTS FROM M/S S.K. & COMPANY, CHANDERDEEP JAIN (HUF), CHANDERDEEP JAIN (FFUF, SAL E OF TREES). THERE IS NO DOCUMENTARY EVIDENCE WHICH COULD BE BEL IEVED THAT THE ASSESSEE WAS REALLY IN RECEIPT OF CASH ON ACCOUNT O F SALE OF TREES. THE RECEIPTS FROM M/S S.K. & COMPANY ARE ALSO NOT VERIF IABLE. THE PERUSAL OF CAPITAL ACCOUNT OF THE ASSESSEE IN M/S S.K. & CO MPANY SHOWS THAT THERE IS CASH DEPOSIT OF RS.26000/-ON 6/5/93. THE G ENUINENESS OF THESE CASH AMOUNTS IN THE CAPITAL ACCOUNT OF M/S S.K. & C OMPANY COULD NOT BE VERIFIED AS THE ASSESSEE FAILED TO GIVE ALL SUCH IN FORMATION BEFORE THE ASSESSING OFFICER. THEREFORE, THE RELIANCE OF THE A SSESSEE ON THE CASH FLOW STATEMENT IS WITHOUT ANY MERIT. THERE IS NO CO GENT MATERIAL TO 10 EXPLAIN THE SOURCE. THE CASH FLOW STATEMENT PREPARE D BY THE ASSESSEE IS A SELF-SERVING DOCUMENT. IT IS SEEN THAT THE ASSESSEE HAS PREPARED A LIST OF DIFFERENT INVESTMENTS ON VARIOUS DATES AND THEN ATT EMPTED TO SHOW VARIOUS RECEIPTS THAT TOO IN CASH CORRESPONDING TO THESE DATES. AT SUCH A LATE STAGE I.E. IN 2005, SUCH DOCUMENTS CANNOT BE I N PRINCIPLE ADMITTED. IT WAS THE DUTY OF THE ASSESSEE TO PLACE ALL MATERI AL AT THE PROPER TIME BEFORE THE ASSESSING OFFICER. IN ITS APPROACH TO DE LAY THE INVESTIGATION, THE ASSESSEE CHOSE A WAY NOT TO PLACE ANY MATERIAL BEFORE THE ASSESSING OFFICER EVEN THOUGH THE ASSESSEE COULD HAVE DONE. T HE ASSESSEE HAS FAILED TO PROVE HIS BONAFIDES. 39 IT IS ALSO POINTED OUT THAT THE ASSESSEE IS NOT MAINTAINING REGULAR BOOKS OF ACCOUNTS. THERE IS NO DAY-TO-DAY CASH BOOK AND THE LEDGER OR ANY OTHER CORRESPONDING BOOK. THIS CASH FLOW STATEM ENT IS JUST PREPARED BY THE ASSESSEE TAKING THE SAME DATES WHERE THERE W AS NEED TO EXPLAIN THE SOURCE OF INVESTMENTS IN THE VARIOUS PROPERTIES OR TO EXPLAIN THE CASH AMOUNTS DEPOSITED IN VARIOUS BANKS. IF WE ACCEPT TH E THEORY PROPOUNDED BY THE ASSESSEE ON CASH FLOW STATEMENT, THEN THERE IS NO NEED FOR ANY PERSON TO MAINTAIN REGULAR BOOKS OF ACCOUNTS. THE A SSESSEE WOULD WAIT TILL THE DEPARTMENT TAKE SOME ACTION, THEN COME OUT WITH A THEORY OF CASH FLOW STATEMENT WHICH ABOUNDS IN ALL KINDS OF CASH R ECEIPTS WITHOUT ANY CORROBORATIVE EVIDENCE. IN OTHER WORDS, THE ASSESSE E COULD NOT PROVE THE SOURCE OF CASH RECEIPTS WITH DOCUMENTARY EVIDENCE. TO REPEAT, THE ASSESSEE HAS SHOWN THE RECEIPTS ON ACCOUNT OF SALE OF TREES IN THE ACCOUNT OF CHANDERDEEP JAIN (HUF) AT SUCH A LATE STAGE. HAD THE ASSESSEE FURNISHED THIS INFORMATION BEFORE THE ASSESSING OFF ICER, THE ASSESSING OFFICER WOULD HAVE MADE THE NECESSARY ENQUIRY AT TH AT POINT OF TIME TO FIND OUT THE VERACITY OF THE STATEMENT. IN THIS CAS E, THE ASSESSEE IS PLAYING SMART TO PUT UP THE INFORMATION AT SUCH A LATE STAG E AND MAKING SUBMISSIONS IN SUCH A MANNER AS IF EVERYTHING IS EX PLAINED. THE OTHER SOURCE WHICH IS GENERALLY SHOWN BY THE ASSESSEE IS WITHDRAWAL FROM M/S S.K. & COMPANY. THE ASSESSEE FAILED TO GIVE ANY EVI DENCE OF DEPOSITS IN M/S S.K. & COMPANY. THE ASSESSEE WANTS THE DEPARTME NT TO BELIEVE THAT IF SOME ENTRIES HAVE BEEN WRITTEN AS WITHDRAWAL FRO M M/S S.K. & COMPANY, THE SAME SHOULD BE TREATED AS EXPLAINED. T HE SAID ARGUMENTS OF THE ASSESSEE ARE ERRONEOUS AS THE ASSESSEE HAS TO F ULFILL ALL THE INGREDIENTS OF SECTION 68 I.E. IDENTITY, CAPACITY A ND CREDITWORTHINESS. THE BOOKS OF ACCOUNTS MAINTAINED BY M/S S.K. & COMPANY HAVE BEEN REJECTED BY THE ASSESSING OFFICER. THE ASSESSEE FAILED TO PR ODUCE BOOKS OF ACCOUNT. THE ASSESSING OFFICER IN THE ASSESSMENT OF M/S S.K. & COMPANY HAS REJECTED THE BOOKS OF ACCOUNTS MAINTAINED BY MS S.K . : & COMPANY.B Y REJECTION OF BOOKS OF ACCOUNTS, ANY RECEIPT STATED TO BE RECEIVED FROM M/S. S.K. & COMPANY CANNOT BE TREATED TO BE EXPLAINED. THE ASSESSEE IN ORDER TO EXPLAIN THE SOURCE OF INVESTMENT IS EMPHASIZING TIME AND AGAIN ON THE CASH FLOW STATEMENT. EVEN IN CASES WHERE THE ASSES SEES ARE MAINTAINING REGULAR BOOKS OF ACCOUNT AND THE ASSESSING OFFICER FIND CERTAIN DISCREPANCIES, THE BOOKS OF ACCOUNT ARE REJECTED. T HE CASE OF THE ASSESSEE IS WORSE WHERE THERE IS JUST CONSOLIDATION OF MANY ENTRIES ON THE RECEIPT AND PAYMENT SIDES IGNORING ALL THE PRINCIPLES OF AC COUNTANCY OF MAINTENANCE OF DAY-TO-DAY BOOKS OF ACCOUNT. THE AS SESSEE IS ATTEMPTING TO GIVE THE STATUS OF THIS CASH FLOW STATEMENT AS T HE REGULAR BOOKS OF ACCOUNT. THEREFORE, ANY RELIANCE BY THE ASSESSEE ON THE CASH FLOW STATEMENT IS WITHOUT ANY MERIT. G) THE CIT(APPEALS) VIDE PARA 40 HELD THAT CASH FLO W STATEMENT FILED BY THE ASSESSEE WAS AN AFTER THOUGH T AND AS 11 THE ASSESSEE HAD FAILED TO PRODUCE THE EVIDENCE BEF ORE THE ASSESSING OFFICER, AND EVEN DURING THE SECOND ROUND OF ASSESSMENT PROCEEDINGS, THE INVESTIGATIONS OR CONFI RMATIONS OF THE PLEAS RAISED BY THE ASSESSEE COULD NOT BE CA RRIED ON BY THE ASSESSING OFFICER AND IN VIEW THEREOF, THE CONSEQUENCES HAD TO BE BORNE BY THE ASSESSEE UNDER THE PROVISIONS OF THE ACT. THE CIT(APPEALS) VIDE PARA 43 CLEARLY OBSERVED THAT IT IS AN OBLIGATION ON THE DE PARTMENT TO ALLOW FAIR OPPORTUNITIES TO THE ASSESSEE. IN TH E PRESENT CASE, SUFFICIENT OPPORTUNITY WAS ALLOWED TO THE ASS ESSEE. HOWEVER, THE ASSESSEE PRODUCED THE MATERIAL ONLY IN OCTOBER,2000 OR MARCH,2003 SO THAT NO TIME WAS LEFT WITH THE ASSESSING OFFICER TO MAKE ANY FURTHER ENQUIRIES AND IN SUCH CIRCUMSTANCES, THE CASE HAD TO BE DECIDED BASE D ON THE SAID PECULIAR FACTS. H) THE ASSESSEE WAS FOUND TO BE MAINTAINING TEN B ANK ACCOUNTS AND MAJORITY OF THE TRANSACTIONS WERE IN CASH. THE CIT(APPEALS) VIDE PARA 47 HELD THAT SUCH STATE OF A FFAIRS DOES NOT INSPIRE CONFIDENCE AND CIRCUMSTANTIAL EVID ENCE WAS AGAINST THE ASSESSEE. FURTHER, THE ASSESSEE HAD FAILED TO SHOW ANY INCOME IN HIS PERSONAL RETURNS TO EXPLA IN THE LARGE AMOUNT OF CAPITAL IN M/S S.K. & COMPANY AND T HOUGH THE ASSESSEE WAS PRODUCING VARIOUS DOCUMENTS I.E. WITHDRAWALS FROM BANK ACCOUNTS ETC., BUT THE FACTS REVEALED THAT ULTIMATELY THE ORIGIN WAS OUT OF CASH INTRODUC ED BY THE ASSESSEE WHICH IN-TURN WAS WITHOUT ANY EXPLANATION. EVEN WHEN SOME EXPLANATION WAS GIVEN, IT WAS AS OF CASH GENERATION BY SALE OF TREES OR UNPROVED LOANS AND T HE REQUIREMENTS OF SECTION 68 BEING NOT SATISFIED, THE SAID AMOUNTS WERE TO BE TREATED AS INCOME OF THE ASSESSE E UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. I) THE CIT(APPEALS) THEREAFTER INDIVIDUALLY REFER RED TO THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER AND THE EXPLANATION OF THE ASSESSEE IN ORDER TO ADJUDICATE THE ISSUE ON MERITS OF THE ADDITION. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE RECORD. SEARCH UNDER SECTION 132(1) OF THE ACT WAS CONDUCT ED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 30.09.1998 ALONGWITH SEARCH CONDUCTED SIMULTANEOUSLY AT THE PREMISES OF HIS BROTHER SHRI VIPIN JAIN. BOTH THE ASSESSEE AND SHRI VIPIN JAIN WERE PARTNERS IN M/S S.K. & COMPANY, 90, INDUSTRIAL AREA , CHANDIGARH. DURING THE COURSE OF SEARCH, VARIOUS DOCUMENTS WERE FOUND AND SEIZED INCLUDING DOCUMENTS RELATING TO VARIOUS INVE STMENTS MADE BY THE ASSESSEE DURING THE BLOCK PERIOD. NOTICE UN DER SECTION 158BC(A) OF THE INCOME TAX ACT WAS ISSUED TO THE AS SESSEE ON 11.6.1999 AND SERVED UPON THE ASSESSEE ON 18.06.199 9. THE ASSESSEE FAILED TO FURNISH THE RETURN OF INCOME FOR THE BLOCK PERIOD BEFORE THE ASSESSING OFFICER DESPITE SHOW CAUSE NOT ICES ISSUED TO HIM AND IT WAS EVENTUALLY FILED ON 12.10.2000. IT IS TO BE NOTED THAT THE ORIGINAL ASSESSMENT WAS GETTING TIME BARRE D ON 30.10.2000 AND THE ASSESSEE HAD FURNISHED THE RETUR N FOR THE BLOCK PERIOD ON 12.10.2000. THE ORIGINAL ASSESSMENT COMP LETED IN THE CASE WAS SET ASIDE BY THE CIT(APPEALS) WITH THE DIR ECTION TO THE ASSESSING OFFICER TO FRAME THE ASSESSMENT DENOVO AF TER INVESTIGATING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE DURING 12 THE APPELLATE PROCEEDINGS. IN THE SECOND ROUND OF ASSESSMENT PROCEEDINGS ALSO THE ASSESSEE SOUGHT ADJOURNMENTS O N ONE PRETEXT OR THE OTHER AND IN THE REPLY DATED 11.03.2003 THE ASSESSEE DISPUTED THAT THE ASSESSMENT PROCEEDINGS WERE BAD I N LAW. THEN ON 17.03.2003, THE ASSESSEE FURNISHED THE REPLY CON TAINING EVIDENCE/DOCUMENTS WHICH WERE NOT FILED AT THE TIME OF ORIGINAL ASSESSMENT. THE INITIAL OBJECTION OF THE ASSESSEE V IS--VIS THE JURISDICTION OF THE OFFICER COMPLETING THE ASSESSME NT WERE REJECTED BY THE ASSESSING OFFICER AND THEREAFTER, THE ASSESS MENT WAS COMPLETED ON THE BASIS OF THE DOCUMENTS AVAILABLE V IDE ORDER DATED 31.03.2003, UNDER WHICH THE UNDISCLOSED INCOME OF T HE ASSESSEE UNDER DIFFERENT HEADS FOR DIFFERENT FINANCIAL YEARS WAS COMPUTED, RESULTING IN ADDITION OF RS. 1,89,19,124/-. THE YE AR-WISE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PE RIOD I.E. FROM 01.04.1988 TO 30.09.1988 IS TABULATED AT PAGE 15 OF THE ASSESSMENT ORDER DATED 18. THE CIT(APPEALS) AT PAGES 14 TO 17 OF THE APPELLATE ORDER HAS DATE-WISE TABULATED THE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND THE MATTER WAS RESTORED BACK TO THE ASS ESSING OFFICER BY THE CIT(APPEALS) WHEREIN THE ASSESSEE TIME AND A GAIN HAD SOUGHT ADJOURNMENT ON ONE PRETEXT OR THE OTHER. ON 17.03.2003, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE CERTAIN EVIDENCE AND ALSO TO PRODUCE CERTAIN PERSONS AND SO ME OF THE PERSONS WERE PRODUCED ON 17.03.2003. THEREAFTER, T HE ASSESSMENT ORDER WAS PASSED ON 31.03.2003. 19. DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT (APPEALS), IN THE SECOND ROUND OF APPEAL, THE APPEAL WAS FIXED FR OM OCTOBER,2003 ONWARDS AND VIDE PARA 16, THE CIT(APPE ALS) NOTES THAT HIS PREDECESSORS HAD GIVEN AS MANY AS 25 OPPOR TUNITIES AND THE ASSESSEE HAD ASKED FOR REPEATED ADJOURNMENTS. FURTHER, THE APPEAL WAS AGAIN FIXED BY THE INCUMBENT CIT(APPEALS ) AND THE DETAILS OF OPPORTUNITIES AND THE REMARKS AS PER THE NOTING-SHEET ARE TABULATED DATE-WISE UNDER PARA 17 AT PAGES 18 T O 21 OF THE APPELLATE ORDER. THE ASSESSEE WAS ASKED TO GIVE TH E DETAILS OF THE TOTAL INVESTMENT YEAR-WISE AND THEIR SOURCES AND AL SO EXPLAIN WITH THE CONDITIONS LAID DOWN UNDER RULE 46A OF IT RULES VIS--VIS THE ADDITIONAL EVIDENCES PRODUCED AND ALSO A CHART MENT IONING THE DETAILS OF EVIDENCES FILED TO EXPLAIN THE SOURCE OF EACH ITEM I.E. CONFIRMATION OF LOAN, AFFIDAVIT ETC. THE ASSESSEE ON 14.08.2008 FILED A CHART OF INVESTMENTS AND DURING THE COURSE OF HEARING ON THE SAID DATE, IT WAS ADMITTED BY THE LD. AR FOR TH E ASSESSEE THAT THE BOOKS OF ACCOUNT WERE STATED TO BE PREPARED, WE RE MADE AFTER THE SEARCH. THE PLEA OF THE ASSESSEE BEFORE CIT(AP PEALS) WAS THAT IT WAS NOT GIVEN SUFFICIENT OPPORTUNITY, WAS NOT AC CEPTED BY THE CIT(APPEALS) IN VIEW OF THE ISSUE SUMMARIZED UNDER PARA 19 OF THE APPELLATE ORDER. IT HAS BEEN NOTED BY THE CIT(APPE ALS) THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, ASSE SSEE DID NOT FURNISH ANY INFORMATION TILL OCTOBER,2000 AND THE C ASE WAS GETTING TIME BARRED IN OCTOBER,2000. FURTHER, AFTER THE AP PELLATE PROCEEDINGS WERE COMPLETED IN MARCH,2001 AND ASSESS MENT PROCEEDINGS WERE GETTING TIME BARRED ON 31.03.2003, THE ASSESSEE FURNISHED THE DETAILS IN MARCH,2003. THE DELAY ON BEHALF OF THE ASSESSEE WAS FOUND TO BE UNNECESSARY AND THE CIT(AP PEALS) HELD THAT THE ASSESSING OFFICER, IN SUCH CIRCUMSTANCES, WOULD BE JUSTIFIED IN IGNORING THE EVIDENCES, WHICH WERE GIV EN IN 13 MARCH,2003 EVEN WHEN THE ASSESSEE WAS ASKED TO ATTE ND THE PROCEEDINGS RIGHT FROM SEPTEMBER,2001. THE ASSESSE E FAILED TO PRODUCE THE BOOKS OF ACCOUNT DURING THE COURSE OF O RIGINAL ASSESSMENT PROCEEDINGS, NO BALANCE-SHEETS WERE FILE D ALONGWITH THE RETURN OF INCOME FILED FOR THE BLOCK PERIOD. TH E ASSESSEE, THOUGH GAVE AN EXPLANATION ABOUT SOME OF THE INVESTMENTS/INVENTORIES BUT COMPLETE INFORMATION WA S NOT FILED BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESS MENT PROCEEDINGS OR EVEN DURING THE SET ASIDE APPELLATE PROCEEDINGS. THE ASSESSEE, HOWEVER FURNISHED CASH FLOW STATEMENT DURING THE COURSE OF APPELLATE PROCEEDINGS IN THE SECOND ROUND VIDE WHICH THE ASSESSEE SOUGHT TO EXPLAIN VARIOUS INVESTMENTS THRO UGH THE SAID CASH FLOW STATEMENTS AND AFFIDAVITS. THE CIT(APPEA LS) VIDE PARA 38 AND 39, AFTER DELIBERATING UPON THE DOCUMENTS SU BMITTED BY THE ASSESSEE, VIDE PARA 40 TO 43 AT PAGE 36 OF THE APPE LLATE ORDER HELD AS UNDER : 40 THE CASH FLOW STATEMENT IS AN AFTER THOUGHT. THE AS SESSEE COULD HAVE GIVEN THIS INFORMATION DURING THE COURSE OF ORIGINA L ASSESSMENT PROCEEDINGS WHICH IS THE RIGHT STAGE AS PER PROVISIONS OF INCOM E TAX ACT. IT IS NOT THE SWEET WILL OF THE ASSESSEE TO PRODUCE INFORMATION W HENEVER IT WANTS TO DO. IT IS IMPORTANT TO DELINEATE THE SCHEME OF THE ACT. 41. THE ASSESSING OFFICER ISSUES NOTICES U/S 143( 2)/142(1). AS PER NOTICE UNDER SECTION 143(2), AN OPPORTUNITY IS GIVEN TO TH E ASSESSEE TO PRODUCE OR CAUSE TO BE PRODUCED ANY EVIDENCE ON WHICH THE ASSE SSEE MAY RELY IN SUPPORT OF THE RETURN. AS PER NOTICE U/S 142(1), TH E ASSESSING OFFICER MAY : (A) ASK FOR FILING THE RETURN. (B) ASK TO PRODUCE BOOKS OF ACCOUNT, DOCUMENTS, ETC. (C) ASK FOR INFORMATION ON CERTAIN POINTS. 42. THE POINT TO BE EMPHASIZED IS THAT THE ASSESS ING OFFICER CANNOT GO AHEAD WITHOUT THIS COMPLIANCE. IF THE ASSESSEE HAS SUCCEEDED IN NOT ALLOWING THE ASSESSING OFFICER TO PROCEED FURTHER, THEN THE CONSEQUENCES HAS TO BE BORNE BY THE ASSESSEE AS PER PROVISIONS O F THE ACT. 43. THE ONLY OBLIGATION OF THE DEPARTMENT IS TO A LLOW FAIR OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE SHOULD ALSO UNDERSTAND T HE WORKING OF THE DEPARTMENT IN AS MUCH AS THE ASSESSING OFFICER HAS TO GIVE FAIR OPPORTUNITY TO EACH ASSESSEE WHOSE CASES ARE BEING SCRUTINIZED. FOR THAT PURPOSE, SLOTS OF TIME ARE FILLED UP FOR VARIOUS ASSESSEES AND OTH ER WORKS RELATED TO OFFICE. IT IS QUITE POSSIBLE THAT ASSESSEE TAKES ADJOURNMEN T AND THE MATTER HAS TO BE ADJOURNED. THEN THE ASSESSEE CANNOT TAKE AS A MATTER OF RIGHT TO FILL THE SLOT ALLOTTED TO OTHER WORK OR ALLOTTED TO SOME OTHER ASSESSEES. THE ASSESSEE HAS MADE ATTEMPTS TO ENCROACH UPON THE TIM E ALLOTTED TO OTHER ASSESSEES. IF THE ASSESSING OFFICER DOES SO, THEN N ATURAL JUSTICE WOULD BE DENIED TO OTHER ASSESSEES OF HIS JURISDICTION. IN O THER WORDS, FOR THE SMOOTH FUNCTIONING OF THE OFFICE, THE ASSESSEE CANNOT ASK THE ASSESSING OFFICER TO DEVOTE TIME AS PER HIS SWEET WILL. IF SUCH A STATE OF AFFAIR IS ALLOWED TO HAPPEN, THEN NO ASSESSING AUTHORITY, NO CIT(A), OR HON'BLE ITAT OR HON'BLE COURTS CAN FUNCTION PROPERLY. THE ASSESSING OFFICER HAD TO DISPOSE OF MANY OTHER CASES APART FROM THE CASES OF THIS AS SESSEE. SUCH PERFORMANCE OF FUNCTIONS IS INHERENT IN THE SYSTEM. 14 20. IN VIEW OF THE CONDUCT OF THE ASSESSEE IN NO T FURNISHING THE INFORMATION IN TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND RELYING UPON THE CASH FLOW STATEMENT WHICH HAD MANY LATCHES, THE CIT(APPEALS) DECIDED THE APPEAL AFTER REJECTING THE SAME. 21. THE LD. AR FOR THE ASSESSEE, DURING THE COU RSE OF HEARING VEHEMENTLY PLACED RELIANCE ON THE SAID CASH FLOW ST ATEMENT PLACED AT PAGES 346 ONWARDS. THE PERUSAL OF THE STATEMENT REFLECTS THAT THERE IS AN OPENING CASH OF RS.68,500/- AS ON 01.04 .1988 AND THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN RESP ECT THEREOF. THEREAFTER, THE ASSESSEE HAS, ON VARIOUS DATES SHOW N INTRODUCTION OF VARIOUS AMOUNTS FROM THE PARTNERSHIP CONCERN S.K . & COMPANY AND LOANS RECEIVED IN CASH ON VARIOUS DATES FROM VA RIOUS PERSONS. THE ASSESSEE CLAIMS THAT IT HAS FURNISHED ON RECORD THE AFFIDAVITS OF ALL SUCH PERSONS WHO HAVE GIVEN THE AMOUNT IN CA SH TO THE ASSESSEE AND CONSEQUENTLY, THE SAME SHOULD HAVE BEE N ACCEPTED. ANOTHER SOURCE OF CASH INTRODUCTION IS OUT OF SALE OF TREES BY THE HUF OF THE ASSESSEE FOR WHICH THE ASSESSEE HAS FAIL ED TO PRODUCE ANY EVIDENCE. ON 15.03.1995 THE ASSESSEE HAS SHOWN A SUM OF RS. 85,000/- AS INCOME FROM OTHER SOURCES. THE ASSESSE E, ON THE OTHER HAND, HAS ALSO TABULATED HIS PAYMENTS MADE ON VARIO US DATES I.E. EXPLAINING THE SOURCE OF CASH DEPOSITS IN THE VARIO US BANK ACCOUNTS MAINTAINED BY THE ASSESSEE AND ALSO AMOUNTS UTILIZE D IN INVESTMENT IN VARIOUS PROPERTIES AND THE AMOUNTS ADVANCED TO T HE PARTNERSHIP CONCERN M/S S.K. & CO. THE ASSESSEE HAS ALSO PURCH ASED A CAR IN CASH ON 22.04.1993 FOR RS.1,82,000/- OUT OF THE SAI D CASH FLOW AND ALSO INVESTED A SUM OF RS. 6,00,000/- IN PLOT NO. 7 /5 ON 24.03.1995 BESIDES INVESTING VARIOUS AMOUNTS IN DIFFERENT BANK ACCOUNTS MAINTAINED BY THE ASSESSEE. 22. DURING THE COURSE OF HEARING, LD. AR FOR THE AS SESSEE WAS ASKED TO RECONCILE THE AMOUNTS SHOWN IN THE CASH FL OW STATEMENT WITH THE AFFIDAVITS FILED BY THE ASSESSEE AND ALSO WITH THE ENTRIES IN THE BANK ACCOUNT IN RESPECT OF THE SOURCE OF DEPOSI TS IN THE SAID BANK ACCOUNTS. THE ASSESSEE HAD SHOWN TO HAVE RECE IVED RS. 18,000/- IN CASH FROM ONE MS. NISHA JAIN ON 06.02.1 989 AND THE AFFIDAVIT OF MS. NISHA JAIN WAS REFERRED AT PAGE 40 5 OF THE PAPER BOOK. THE PERUSAL OF THE SAID AFFIDAVIT REFLECTS T HAT THE SAME IS NOT PREPARED ON STAMP PAPER AND IS FILED ON PLAIN P APER AND IS UN- DATED AND THE NAME OF THE PLACE OF ISSUE IS ALSO MI SSING. THERE IS NO ATTESTATION OF THE SAID AFFIDAVIT AND THE SAME B EING A BLANK DOCUMENT, CANNOT BE ACCEPTED AS AN EVIDENCE OF HAVI NG ACCEPTED THE AMOUNT IN CASH. IN THE SAID AFFIDAVIT, THE ASSE SSEE CLAIMS TO HAVE RECEIVED RS.18,000/- IN CASH ON 06.02.1989, RS . 10,000/- ON 04.01.1990 AND RS. 8,000/- ON 29.03.1990, IN ADDITI ON TO RS. 1,94,000/- RECEIVED BY CHEQUE ON 25.10.1989. 23. THE ASSESSEE HAS FURTHER CLAIMED TO HAVE RECE IVED VARIOUS AMOUNTS IN CASH AS LOAN FROM ONE MS. NIRMAL JAIN AN D THE AFFIDAVIT OF SMT. NIRMAL JAIN IS PLACED AT PAGES 403-404 OF T HE PAPER BOOK. THE SAID AFFIDAVIT IS EXECUTED ON A STAMP PAPER AND IS ALSO ATTESTED. IN THE SAID AFFIDAVIT, SMT. NIRMAL JAIN STATES TO HAVE GIVEN RS.18,000/- IN CASH ON 08.02.1989 AND RS. 8,0 00/- IN CASH ON 15.07.1989. IN ADDITION, A LOAN OF RS.1,94,000/-, PAID VIDE CHEQUE ON 25.10.1989. IN THE SAID AFFIDAVIT, SMT. NIRMAL JAIN HAS ALSO STATED TO HAVE RECEIVED BACK A SUM OF RS. 75,000/- ON 26.10.1989 AND RS. 2,70,000/- ON 22.06.1996 I.E. ON ACCOUNT OF PRINCIPAL AND 15 INTEREST OF RS. 144,453/- TILL 31.03.1997. IT FURT HER STATES THAT A SUM OF RS. 19,453/- WAS STILL OUTSTANDING. THE PER USAL OF THE CASH FLOW STATEMENT REFLECTS THAT IN ADDITION TO RECEIVI NG RS. 18,000/- IN CASH ON 8.2.1989 AND RS. 8000/- ON 15.07.1989, THE ASSESSEE HAS ALSO SHOWN RECEIPT OF RS. 8000/- IN CASH ON 29.03.1 990 WHICH HAS NOT BEEN ADMITTED TO HAVE BEEN PAID BY THE SAID SMT .NIRMAL JAIN.THE ASSESSEE HAS FAILED TO RECONCILE THE SAID RECEIPT OF RS. 8,000/- IN CASH ON 29.03.1990 FROM SMT. NIRMAL JAIN . 24. ANOTHER AFFIDAVIT REFERRED TO BY THE LD. AR FOR THE ASSESSEE IS PLACED AT PAGE 401 OF THE PAPER BOOK WHICH IS EX ECUTED BY SHRI VIRENDER KUMAR JAIN ON BEHALF OF THE HIS DAUGHTER M S. SHIKHA JAIN WHO HAD ADVANCED A LOAN OF RS. 55,000/- VIDE TWO DI FFERENT CHEQUES. THE SAID AFFIDAVIT IS DATED 06.03.2001 AN D THE SOURCE OF THE SAID AMOUNT IS NOT EXPLAINED. 25. THE ENTRIES IN THE CASH FLOW STATEMENT FURNISHE D BY THE ASSESSEE WERE ALSO TEST CHECKED WITH THE ENTRIES IN THE BANK ACCOUNTS, COPIES OF WHICH ARE PLACED BY THE ASSESSE E IN THE PAPER BOOK AT PAGES 420 ONWARDS. THE ASSESSEE AT PAGE 43 2 HAS PLACED ON RECORD COPY OF BANK ACCOUNT OF STATE BANK OF PAT IALA, HIGH COURT BRANCH, CHANDIGARH IN WHICH THERE ARE VARIOUS CASH ENTRIES. THE LD. AR FOR THE ASSESSEE WAS ASKED TO RECONCILE THE ENTRIES AND IT WAS POINTED OUT BY THE LD. AR FOR THE ASSESSEE T HAT ON 25.10.1989, THERE WAS A WITHDRAWAL OF RS. 5,82,000/ - WHICH WAS REFLECTED IN THE CASH FLOW STATEMENT OUT OF WHICH R S. 75,000/- WAS RE-DEPOSITED ON 26.10.1989. THE LD. AR FOR THE ASS ESSEE FURTHER POINTED OUT THAT ON 12.06.1991, THERE WAS A CASH WI THDRAWAL OF RS. 70,000/- AND THERE WAS RE-DEPOSIT ON 13.06.1991 OF RS.70,000/- WHICH WERE REFLECTED IN THE CASH FLOW STATEMENT. F URTHER REFERENCE WAS MADE TO TWO CHEQUE WITHDRAWALS WHICH WERE ACTUA LLY CASH WITHDRAWALS OF RS. 75,000/- EACH ON 11.11.1991 WHIC H WERE REFLECTED BOTH IN THE BANK STATEMENT AND CASH FLOW STATEMENT. DURING THE COURSE OF HEARING, IT WAS POINTED OUT TO THE LD. AR FOR THE ASSESSEE THAT FURTHER THERE WAS A SELF-WITHDRAW AL OF RS. 65,000/- ON 28.03.1992 WHICH IS NOT REFLECTED IN TH E CASH FLOW STATEMENT. THE LD. AR FOR THE ASSESSEE SOUGHT TIME TO RECONCILE BUT ON THE NEXT DATE OF HEARING ALSO, NO RECONCILIATION OF THE SAID CASH WITHDRAWAL OF RS. 65,000/- BEING NOT REFLECTED IN T HE CASH FLOW STATEMENT COULD BE FILED BY THE ASSESSEE. 26. THE ASSESSEE FURTHER CLAIMS TO HAVE RECEIVED LOAN FROM HIS HUF ON ACCOUNT OF SALE OF TREES, BUT THE ASSESSEE H AS FAILED TO FURNISH ON RECORD ANY EVIDENCE TO PROVE THE FACTUM OF SALE OF TREES AND IN THE ABSENCE OF THE SAME, THE EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED. IN ANY CASE, THE ASSESSEE IN H IS INDIVIDUAL CAPACITY RECEIVED CASH LOANS FROM HIS HUF AND THE S AME IS IN VIOLATION OF PROVISIONS OF THE ACT, WHICH PROHIBITS BOTH ACCEPTANCE AND REPAYMENT OF CASH LOANS OF RS. 20,000/- AND ABO VE. THE ASSESSEE HAVING FURNISHED THE EXPLANATION AFTER SUC H A LONG GAP OF TIME, WHICH FIRST IS WITHOUT ANY CORROBORATIVE EVID ENCE AND IF ACCEPTED AT FACE VALUE, IN TURN, WOULD NOT BE OPEN FOR FURTHER INVESTIGATION BY THE ASSESSING OFFICER AND ALSO VIO LATIONS, IF ANY, OF THE PROVISIONS OF THE ACT CANNOT BE BOOKED, BECA USE OF LAPSE OF TIME. 16 27. ANOTHER BANK ACCOUNT MAINTAINED BY THE ASSE SSEE WAS WITH THE UNION BANK OF INDIA, SECTOR 9-C, CHANDIGARH, CO PY OF WHICH IS PLACED AT PAGES 450 ONWARDS OF THE PAPER BOOK. THE ASSESSEE HAS SHOWN INTRODUCTION OF CASH OF RS. 40,000/- ON 27.07 .1994 FROM THE SAID BANK ACCOUNT I.E. BY WAY OF CASH WITHDRAWAL. HOWEVER, THE PERUSAL OF THE BANK STATEMENT PLACED AT PAGE 451 RE FLECTS THAT THE ENTRY ON 27.7.1994 IN RESPECT OF CHEQUE NO. 838 IS NOT IN CASH AS ANOTHER ENTRY ON THE SAID PAGE NO. 451 OF THE PAPER BOOK I.E. ON 26.04.1995 REFLECTS A CASH INTRODUCTION OF RS.4,50, 000/-, CASH WITHDRAWAL OF RS. 33,000/- ON 18.03.1996 AND THE EN TRIES MADE BY THE BANK WERE BY CASH/TO CASH RESPECTIVELY. HOWEVE R, IN RESPECT OF THE ENTRY IN JULY, 1994 I.E. RS. 40,000/-, THERE IS NO MENTION OF CASH WITHDRAWAL OF RS.40,000/-. 28. THE LD. AR FOR THE ASSESSEE DURING THE COUR SE OF HEARING WAS CONFRONTED WITH THE SAID NARRATIONS IN THE BANK STATEMENT FILED BY THE ASSESSEE AND NO PLAUSIBLE EXPLANATION COULD BE FILED IN THIS RESPECT. 29. ANOTHER ENTRY IN THE CASH FLOW STATEMENT IS OF INCOME FROM OTHER SOURCES OF RS. 85,000/- AS ON 15.03.1995 AND THE LD. AR FOR THE ASSESSEE WAS TIME AND AGAIN ASKED TO EXPLAIN HO W THE SAID AMOUNT HAS BEEN DECLARED BY THE ASSESSEE, IN THE RE TURN OF INCOME FILED FOR THE BLOCK PERIOD. THE PERUSAL OF THE ASS ESSMENT ORDER REFLECT THAT FOR THE FINANCIAL YEAR 1994-95, THE TO TAL RETURNED INCOME WAS RS. 59,990/- WHEREAS THE INCOME FROM OTH ER SOURCES HAS BEEN REFLECTED IN THE CASH FLOW STATEMENT OF RS . 85,000/- WHICH HAS NOT BEEN DECLARED BY THE ASSESSEE. THE SAID CA SH FLOW STATEMENT HAS ADMITTEDLY BEEN FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS IN THE MONTH OF AUG UST, 2005 AFTER GAP OF SEVERAL YEARS I.E. ON THE DATE WHEN NO ENQU IRIES COULD BE CONDUCTED BY THE ASSESSING OFFICER, EITHER DURING T HE ORIGINAL ASSESSMENT PROCEEDINGS OR EVEN DURING THE SET ASIDE ASSESSMENT PROCEEDINGS. 30. IN THE TOTALITY OF THE ABOVESAID FACTS AND CI RCUMSTANCES, THE SAID CASH FLOW STATEMENT FILED BY THE ASSESSEE DURI NG THE ASSESSMENT PROCEEDINGS IS CLEARLY AN AFTER THOUGHT AND CANNOT BE RELIED UPON. WE FIND NO MERIT IN THE STAND OF THE ASSESSEE THAT INVESTMENT MADE BY IT IN VARIOUS ASSETS INCLUDING T HE CASH DEPOSITS IN THE BANK STANDS EXPLAINED IN VIEW OF THE ENTRIES OF THE CASH FLOW STATEMENT. AS OBSERVED EARLIER, IF CASH FLOW STATE MENT IS ACCEPTED AT FACE VALUE, NO ENQUIRIES ARE FEASIBLE AFTER 15 Y EARS AS THE SEARCH WAS FOR THE BLOCK PERIOD 01.04.1988 TO 30.09 .1998 AND THE SAID CASH FLOW STATEMENT WAS FILED FOR THE FIRST TI ME IN AUGUST,2005. ADMITTEDLY THE BOOKS OF ACCOUNT HAVE BEEN PREPARED AFTER THE DATE OF SEARCH AND EVEN AFTER COMPLETION OF ORIGINAL ASSESSMENT PROCEEDINGS, THEREFORE, IN OUR OPINION, THE SAME HAVE NO SANCTITY AND CANNOT BE RELIED TO CORROBORATE THE FUND FLOW. IN THE ABOVESAID FACTS AND CIRCUMSTANCES, THERE IS NO MERIT IN THE CONTENTION THAT THE MATTER SHOULD BE SET ASIDE FOR EXAMINATION OF CASH FLOW STATEMENT, WHICH SUFFERS FROM MANY DEFECT S AS POINTED OUT BY US IN PARAS HEREIN ABOVE, AS WELL AS LIMITAT ION OF REVENUE FOR TAKING CORRESPONDING ACTIONS/VERIFICATIONS, FOR EXAMPLE, NO ACTION CAN BE TAKEN NOW FOR VIOLATION OF SECTION 26 9SS & 269T OF THE ACT, WHERE CASH LOANS ARE ACCEPTED. ACCORDINGL Y, WE REJECT THE 17 CASH FLOW STATEMENT FILED BY ASSESSEE. HOWEVER, WE PROCEED TO DECIDE THE ISSUE ON MERITS IN THE PARAS HEREIN AFTE R. 14. THE ASSESSEE VIDE GROUND NO. 2(A) HAS RAISED TH E ISSUE AGAINST ADDITION OF RS. 1,48,400/- ON ACCOUNT OF THE JEWELL ERY FOUND DURING THE COURSE OF SEARCH. THE JEWELLERY WEIGHING 524 GMS. WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE AND HIS WIFE AND 345.500 GMS. WAS FOUND FROM THE LOCKER IN UNION BANK OF INDIA. THE EXPLAN ATION OF THE ASSESSEE IN RESPECT OF THE SAID JEWELLERY WAS THAT PART OF IT BELONG TO HIS SISTER-IN-LAW AND PART OF THE JEWELLERY I.E. 26 9 GMS. WAS REFLECTED IN THE WEALTH TAX RETURN OF HIS WIFE SMT. SNEH JAIN AND THE BALANCE WAS RECEIVED AS GIFTS FROM CLOSE RELATIVES. THE AS SESSING OFFICER ACCEPTED THE CLAIM OF OWNERSHIP OF 218.800 GMS. JEW ELLERY BY THE SISTER-IN-LAW OF THE ASSESSEE. HOWEVER IN RESPECT OF THE BALANCE, THE EXPLANATION WAS REJECTED AND ADDITION WAS MADE. TH E CIT(APPEALS) IN THE SECOND ROUND OF APPELLATE PROCEEDINGS NOTED THA T RELIEF TO THE EXTENT OF 93.600 GMS. WAS GIVEN IN THE HANDS OF SMT . SNEH JAIN AND FURTHER RELIEF OF 100 GMS. OF JEWELLERY WAS GIVEN T O THE ASSESSEE BEING RECEIVED ON MARRIAGE AND OTHER FUNCTIONS. FURTHER, RELIANCE OF THE ASSESSEE UPON BOARDS CIRCULAR REGARDING SEIZURE OF JEWELLERY WAS REJECTED BY THE CIT(APPEALS). THE ASSESSEE IS IN A PPEAL AGAINST THE SAME. 15. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH ERE WAS NO MERIT IN THE AFORESAID ADDITION IN VIEW OF THE ASSESSEE HAVI NG RECEIVED 250 GMS. OF JEWELLERY AT HIS MARRIAGE AND THE BALANCE HAVING BEEN DECLARED IN THE HANDS OF HIS WIFE MRS. SNEH JAIN. 16. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDERS OF THE CIT(APPEALS). 18 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE ALONGWITH HIS WIFE WAS FOUND TO BE IN POSS ESSION OF JEWELLERY DURING THE COURSE OF SEARCH AT HIS RESIDENCE AND AL SO FROM HIS LOCKER. OUT OF THE TOTAL JEWELLERY OF 869.500 GMS. FOUND FR OM THE POSSESSION OF THE ASSESSEE, BENEFIT OF JEWELLERY OF 218.800 GMS. BELONGING TO HIS SISTER-IN-LAW, 93.600 GMS. BELONGING TO HIS WIFE AN D 100 GMS. RECEIVED BY THE ASSESSEE ON HIS MARRIAGE AND VARIOUS OCCASIO NS WAS ALLOWED TO THE ASSESSEE. HOWEVER, IN RESPECT OF THE BALANCE J EWELLERY, WE FIND MERIT IN THE CLAIM OF THE ASSESSEE IN VIEW OF RELIA NCE ON THE CBDT CIRCULAR. AS PER THE CIRCULAR CREDIT FOR JEWELLERY WEIGHING 500 GMS IS TO BE ALLOWED IN RESPECT OF MARRIED LADY AND 100 GR MS FOR THE MALE MEMBERS. THE JEWELLERY FOUND IN POSSESSION OF ASSES SEE FROM HIS RESIDENCE AND FROM HIS LOCKER TOTALED 869.500 GMS, OUT OF WHICH CREDIT FOR 218.800 GMS WAS ALLOWED TO THE ASSESSEE. THE BA LANCE JEWELLERY BEING LESS THAN PRESCRIBED LIMIT OF 500 GMS IN THE HAND OF MARRIED LADY AND 100 GMS IN THE HANDS OF MALE MEMBERS DOES NOT M ERIT ANY ADDITION ON ACCOUNT OF JEWELLERY AND THE ADDITION IS THUS DE LETED. THUS, GROUND NO. 2(A) RAISED BY THE ASSESSEE IS ALLOWED. 18. THE ISSUE IN GROUND NO. 2(B) RAISED BY THE ASSE SSEE IS AGAINST THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN HOUSEHOLD GOODS. WE FIND THAT IDENTICAL ISSUE WAS RAISED BEFORE THE TRIBUNAL IN THE CASE OF SHRI CHANDR DEEP JAIN AND VIDE PARAS 32 TO 43, THE ISSUE HAS BEEN DELIBERATED UPON AND IN THE ABSENCE OF ANY EVIDENCE BEING PRODUCED BY THE ASSESSEE, THE ADDITION HAS BEEN CONFIRMED. THE RELEVANT PARAS 32-34 READ AS UNDER : 19 32. THE ISSUE IN GROUND NO. 2(B) IS AGAINST THE AD DITION OF RS. 65,000/- MADE ON ACCOUNT OF ALLEGED INVESTMENT IN H OUSEHOLD GOODS. THE ASSESSING OFFICER NOTED THAT DURING THE COURSE OF SEARCH OPERATION AT THE PREMISES OF THE ASSESSEE, VARIOUS VALUABLE ASSETS WERE FOUND AT THE RESIDENCE OF THE ASSESSEE. THE LI ST OF THE ITEMS ALONGWITH THE YEAR OF MAKE ARE TABULATED UNDER PARA 2 AT PAGE 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER ESTIMAT ED THE VALUE OF THE SAID ASSETS ON THE BASIS OF MARKET VALUE OF THE ARTICLES IN THE YEAR OF MAKE/PURCHASE. THE ASSESSEE FAILED TO FURN ISH ANY EVIDENCE TO JUSTIFY ITS CLAIM OF HAVING ACQUIRED THE SAID AS SETS ON VARIOUS FUNCTIONS/CEREMONIES. THE SECOND CONTENTION OF THE ASSESSEE THAT CERTAIN UNDISCLOSED INCOMES HAD BEEN DECLARED IN TH E BLOCK ASSESSMENT, SHOULD BE ACCEPTED TO HAVE BEEN UTILIZE D FOR THE PURCHASE OF THE SAID ASSET, WAS ALSO NOT ACCEPTED B Y THE ASSESSING OFFICER AS THE DECLARED INCOME RELATED TO FINANCIAL YEAR 1997-98 FOR WHICH THE ASSESSEE HAD NOT FILED ANY RETURN OF INCO ME WHEREAS THE ASSETS WERE PURCHASED IN THE EARLIER FINANCIAL YEAR S. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 1,15,000/- AS UNDIS CLOSED INCOME OF THE ASSESSEE. 33. THE CIT(APPEALS) VIDE PARAS 54 TO 58 AT PAG ES 43 TO 45 OF THE APPELLATE ORDER DELIBERATED UPON THE SAID ISSUE AND NOTED THAT THE VALUE OF THE ASSETS ADOPTED BY THE ASSESSING OF FICER WERE VERY REASONABLE AND IN THE ABSENCE OF ANY EXPLANATION OF THE ASSESSEE, FAIR ESTIMATE HAD TO BE MADE BY THE ASSESSING OFFIC ER. FURTHER, THE ASSESSEE HAVING FAILED TO FURNISH ANY PROOF OF HAVI NG RECEIVED THE SAID ITEMS AT THE TIME OF VARIOUS CEREMONIES/MARRIA GE, EXPLANATION IN THIS REGARD COULD NOT BE ACCEPTED. FURTHER THE CIT(APPEALS) NOTED THAT THE HOUSEHOLD WITHDRAWALS OF THE ASSESSE E WERE VERY LOW AND IN THE ABSENCE OF ANY MATERIAL, FAIR ESTIMATE O F THE VALUE OF THE ASSETS HAD TO BE MADE. THE CIT(APPEALS) WAS OF THE VIEW THAT ADVANTAGE ON ESTIMATE OF GOODS WORTH RS. 50,000/- S HOULD BE ALLOWED TO THE ASSESSEE, HENCE THE ADDITION OF RS. 65,000/- WAS CONFIRMED BY THE CIT(APPEALS). 34. THE LD. AR FOR THE ASSESSEE BEFORE US HAS REITE RATED THE EARLIER SUBMISSION BUT HAS FAILED TO PRODUCE ANY EV IDENCE TO ESTABLISH ITS CLAIM OF HAVING RECEIVED THE SAID ITE MS ON OCCASION OF HIS MARRIAGE OR VARIOUS CEREMONIES. IN THE ABSENCE OF THE SAME AND KEEPING IN MIND THE ORDER OF CIT(APPEALS) IN REDUCI NG THE ADDITION TO RS. 65,000/- AS AGAINST RS.1,15,000/- MADE BY TH E ASSESSING OFFICER, WE FIND NO MERIT IN THE GROUND NO. 2(B) RA ISED BY THE ASSESSEE. UPHOLDING THE ADDITION OF RS. 65,000/-, WE DISMISS THE GROUND NO. 2(B) RAISED BY THE ASSESSEE. 19. FOLLOWING THE SAME PARITY OF REASONING, WE UPHO LD THE ADDITION OFRS.1,03,500/- IN THE HANDS OF THE ASSESSEE. GROU ND NO. 2(B) RAISED BY THE ASSESSEE IS THUS, DISMISSED. 20. THE ISSUE IN GROUND NOS. 2(C) TO 2(J) ARE AGAIN ST ADDITIONS MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF INVESTME NT IN VARIOUS 20 PROPERTIES, DOCUMENTS RELATING TO WHICH WERE FOUND DURING THE COURSE OF SEARCH. THE LIST OF PROPERTIES ALONGWITH THE VA LUE AND THE ISSUE RAISED VIDE RESPECTIVE GROUND IS AS UNDER : S.NO. GROUND PROPERTY AMOUNT NO. (RUPEES) 1. 2(C) PLOT NO. 121, SECTOR 5,PANCHKULA 5,10,0 00/- 2. 2(D) PROPERTY AT VILLAGE BALTANA 5,70,000/- 3. 2(E) SCF NO. 24,MANI MAJRA 15,000+3,82, 000/- 4. 2(F) SCF NO. 26,MANI MAJRA 1,32,000/- 5. 2(G) SCO 7, SECTOR 5, PANCHKULA 3,12,500/- 6. 2(H) PLOT NO. 117, SECTOR 5, PANCHKULA 3,54, 000/- 7. 2(I) 49, INDUSTRIAL AREA-II, CHANDIGARH 2,0 0,000/- 8. 2(J) SCF 16, SECTOR 10, PANCHKULA 4,05,500 /- 21. THE ASSESSING OFFICER, IN VIEW OF THE VARIOUS D OCUMENTS FOUND DURING THE COURSE OF SEARCH, WAS OF THE VIEW THAT T HE ASSESSEE HAD MADE INVESTMENT IN THE PURCHASE OF THE SAID PROPERTIES A ND THE EXPLANATION OF THE ASSESSEE OF HAVING PURCHASED THE SAID ASSETS FR OM VARIOUS WITHDRAWALS FROM THE BANK ACCOUNTS, WAS REJECTED AN D ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF INV ESTMENT IN THE RESPECTIVE PROPERTIES. 22. THE CIT(APPEALS) HAS UPHELD THE AFORESAID ADDIT ION IN THE HANDS OF THE ASSESSEE AGAINST WHICH THE ASSESSEE IS IN AP PEAL BEFORE US. 23. THE LD. AR FOR THE ASSESSEE IN RESPECT OF THE I NVESTMENT IN THE SAID PROPERTIES, PLACED RELIANCE ON THE CASH FLOW S TATEMENT AND/OR THROUGH LOANS RECEIVED THROUGH VARIOUS PARTIES AND SUBMITTED THAT THE ASSESSEE HAD EXPLAINED SOURCE OF FUNDS AND THERE WA S NO MERIT IN THE AFORESAID ADDITION. IN RESPECT OF PROPERTY AT VILL AGE BALTANA, WHICH IS SHOWN IN THE NAME OF THE ASSESSEE, IT WAS SUBMITTED THAT THE DEAL NEVER MATERIALIZED. NOTINGS ON ROUGH PAPER COULD NOT BE RELIED UPON TO MAKE 21 THE AFORESAID ADDITION. IN RESPECT OF PROPERTY NO. 49, INDUSTRIAL AREA II, CHANDIGARH, IT WAS POINTED OUT THAT THE SAID IN VESTMENT WAS NOT MADE BY THE ASSESSEE AND OUR ATTENTION WAS DRAWN TO PAGE NO. 295 OF THE PAPER BOOK. 24. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDERS OF THE AUTHORITIES BELOW AND POINTED OUT THAT THE CONTENTI ON OF THE ASSESSEE HAS BEEN ELABORATELY CONSIDERED BY THE ASSESSING OF FICER AND THE CIT(APPEALS) AND THE ASSESSEE HAVING FAILED TO FURN ISH ANY EVIDENCE IN THIS REGARD AND IN VIEW OF NON-ACCEPTANCE OF THE CA SH FLOW STATEMENT, THERE WAS NO MERIT IN THE CLAIM OF THE ASSESSEE. 25. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD MA DE INVESTMENTS IN VARIOUS PROPERTIES ALONGWITH VARIOUS PERSONS INCLUD ING HIS BROTHER SHRI CHANDER DEEP JAIN. AS POINTED BY US IN APPEAL RELA TING TO HIS BROTHER SHRI CHANDER DEEP JAIN, ASSESSEE FAILED TO APPEAR B EFORE THE ASSESSING OFFICER AND ALSO FAILED TO FURNISH COMPLETE INFORMA TION BEFORE THE ASSESSING OFFICER AND ONLY AT THE STAGE OF SECOND R OUND OF APPELLATE PROCEEDINGS, FILED CASH FLOW STATEMENT EXPLAINING T HE SOURCE OF INVESTMENT IN VARIOUS ASSETS INCLUDING PROPERTIES. WE HAVE ALREADY REJECTED THE STAND OF THE ASSESSEE IN PLACING RELIA NCE ON THE CASH FLOW STATEMENT. FURTHER, THE ASSESSEE CLAIMS THAT IT HA D RECEIVED LOANS FROM DIFFERENT PERSONS AND IN SOME CASES, THE ASSESSEE H AS FURNISHED ON RECORD AFFIDAVITS BUT THE EVIDENCE HAS BEEN FILED A T SUCH A LATE STAGE THAT NO VERIFICATION OF THE SAME IS POSSIBLE AND AS SUCH, THE SAME CANNOT BE RELIED UPON TO EXPLAIN THE SOURCE OF INVE STMENT IN THE SAID ASSET. FURTHER MERE FILING OF THE AFFIDAVIT DOES N OT DISCHARGE THE ONUS CAST UPON THE ASSESSEE WHERE THE CREDIT WORTHINESS OF THE LENDOR IS NOT PROVED. WE FIND THAT THE ASSESSEE ALONGWITH HIS BRO THER HAD MADE 22 INVESTMENT IN SCO 7, SECTOR 5, PANCHKULA AND VIDE P ARAS 37 TO 41, THE ISSUE HAS BEEN DELIBERATED UPON BY US AND THE ADDIT ION HAS BEEN UPHELD IN THE HANDS OF HIS BROTHER SHRI CHANDER DEEP JAIN. THE ASSESSEE IS CO- OWNER TO THE EXTENT OF 50%. THE RELEVANT FINDINGS IN PARAS 37 TO 41 OF THE SAID ORDER READ AS UNDER : 37. THE ISSUE IN GROUND NO. 2(D) RAISED BY THE ASSE SSEE IS AGAINST THE ADDITION OF RS. 4,07,000/- BEING INVEST MENT MADE FOR THE PURCHASE OF SCO 7, SECTOR 5, PANCHKULA. 38. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE ALONGWITH HIS BROTHER SHRI VIPIN KUMAR JAIN PURCHAS ED THE PROPERTY NO. 7, SECTOR 5, PANCHKULA IN OPEN AUCTION ON 24.03.1995. THE ASSESSEE PAID RS. 6,25,000/- BEING 10% OF THE B ID MONEY IN CASH AND BALANCE SUM OF RS. 9,37,500/- WAS DEPOSITE D ON 26.04.1995. THE ASSESSING OFFICER VIDE PARA 5 AT P AGE 7 OF THE ASSESSMENT ORDER CONSIDERED THE EXPLANATION OF THE ASSESSEE AND OBSERVED THAT AMOUNT OF RS. 9,37,500/- SPENT BY THE ASSESSEE HAD ALREADY BEEN ACCEPTED IN THE ORIGINAL ASSESSMENT AN D INVESTMENT OF RS. 10,30,000/- IS REDUCED BY SUM OF RS. 5,30,000/- WITHDRAWN FROM THE BANKS. THE BALANCE INVESTMENT WAS EXPLAINED TO BE MADE OUT OF SALE OF CAR AND WITHDRAWAL FROM M/S S.K. & CO., AND RS. 80,000/- OUT OF UNDISCLOSED INCOME DECLARED BY THE ASSESSEE. THE ADDITION IN THE CASE WAS RESTRICTED TO RS. 4,07,000/-. 39. THE CIT(APPEALS) OBSERVED THAT OUT OF INVESTMEN T OF RS. 15,62,500/-, RS. 5,32,500/- WAS PAID BY SHRI VIPIN JAIN AND RS. 10,30,000/- WAS PAID BY THE ASSESSEE. BEFORE THE CI T(APPEALS), THE ASSESSEE EXPLAINED THAT OUT OF TOTAL INVESTMENT OF RS. 10,30,000/-, SUM OF RS. 6,00,000/- WAS REFLECTED IN THE BALANCE SHEET ENDING ON 31.3.1995 AND THE SAME WAS DULY EXPLAINED IN THE CA SH FLOW STATEMENT. AS REGARDS THE BALANCE PAYMENT OF RS. 4 ,30,000/-, THE ASSESSEE EXPLAINED THAT THE SAME WAS MADE BY WAY OF BANK DRAFT FROM UBI SAVING BANK ACCOUNT NO. 5092 ON 26.04.1995 . THE CIT(APPEALS) REJECTED THE EXPLANATION OF THE ASSESS EE WITH REGARD TO THE INVESTMENT THROUGH CASH FLOW STATEMENT. IN RESPECT OF THE CAR CLAIMED TO BE SOLD BY THE ASSESSEE, THE ASSESSEE FA ILED TO FURNISH ANY EVIDENCE OF OWNERSHIP OF CAR AND FURTHER, THE S AID CAR WAS SOLD ON 15.10.1994 WHEREAS THE INVESTMENT WAS MADE BY TH E ASSESSEE ON 23.04.2005. IN RESPECT OF THE WITHDRAWAL FROM THE C ENTRAL BANK OF INDIA AND FROM THE CAPITAL ACCOUNT BY WAY OF ENTRIE S THROUGH THE CASH FLOW STATEMENT, BOTH WERE REJECTED BY THE CIT( APPEALS) AND ADDITION OF RS. 4,07,000/- WAS UPHELD. 40. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ADDI TION AND THE EXPLANATION OF THE ASSESSEE WAS AS BEFORE THE AUTHO RITIES BELOW. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH ON RECO RD ANY EVIDENCE TO REBUT THE FINDINGS OF CIT(APPEALS) IN THIS REGAR D. THE CIT(APPEALS) VIDE PARA 78 AT PAGES 52 AND 53 HAS OB SERVED AS UNDER : 23 78. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS, ME ASSESSEE HAS ATTEMPTED TO EXPLAIN THE INVE S TMENT THROUGH CASH FLOW STATEMENT. MY OBSERVATIONS ON OTH ER EVIDENCES ARE GIVEN BELOW : DELIVERY RECEIPT / UNDERTAKING DATED 15/10/94 FRO M SH. HARPAL SINGH. HOUSE NO. 1035, SECTOR 44-B, CHANDIGARH REGA RDING SALE OF AMBASSADOR CAR. HOWEVER, THE ASSESSEE EXP LAINED IT FOR RS.257000/- AS PER HIS SUBMISSIONS DATED 23/4/05. REMARKS : THE DELIVERY RECEIPT/UNDERTAKING IS DATED 15/10/9 4. THE ASSESSEE COULD HAVE PRODUCED THE RECEIPT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS AS THE RECEIPT IS DATED 15/10/94. THE AMOUNT SAID TO BE RECEIVED IN C ASH. NO VERIFICATION IS POSSIBLE IN MARCH, 2003, EVEN IF IT WAS POSSIBLE, THE MATTER IS OLD AND NO ENQUIRY COULD BE TAKEN AGAINST SH, HARPAL SINGH REGARDING HIS SOURCE OF MO NEY, THE EXPLANATION IS FOR RS.257000/- WHEREAS THE RECEIPT OF SALE OF CAR IS R S.237000/-. THERE IS A DIFFERENCE OF RS.20000/-. NO CORRESPONDING EVIDENCE IS GIVEN AS H OW SH. HARPAL SINGH SHOWS THE CAR IN HIS RETURN OF INCOME. AFFIDAVIT OF SH. CHANDERDEEP JAIN WHICH IS UNDATE D REGARDING NO OBJECTION FOR SALE OF CAR TO SH. HARPAL SINGH. REMARKS : NO EVIDENCE FILED IN RETURN OF INCOME REGARDING O WNERSHIP OF CAR BY THE ASSESSEE. WITHDRAWAL FROM CENTRAL BANK, SECTION 18, CHANDIG ARH ACCOUNT NO. 1567. REMARKS : THERE IS CREDIT ON 17/10/94. WHAT IS THE EXPLANAT ION OF THIS CREDIT. NO EXPLANATION REGARDING CREDIT OF RS. 1 LAC WAS GIVEN. HENCE SOUR CE IS UNEXPLAINED. WITHDRAWAL OF RS.150000/- FROM CAPITAL ACCOUNT OF M/S S.K, & COMPANY REMARKS : WHY THERE IS A GAP IN PAYMENT I.E. FROM OCTOBER' 94 TO MARCH' 95. TO FIND OUT THE AUTHENTICITY OF THE CREDITED AMOUNT IN M/S S.K. & COMPANY. WHAT IS THE SOURCE OF CREDIT IN M/S S.K. & COMPANY. THE CREDIT SHOWN AS ON 1/4/94 IS RS. 572747/- WHEREAS T HE INCOME SHOWN IN THE RETURN OF INCOME FOR ALL THE YEARS IS ABOUT RS.150000/-. WHAT IS THE SOURCE OF CREDIT OF M/S S.K. & COMPANY. BOOKS OF ACCOUNT OF M/S S.K. & COMPANY N OT PRODUCED BEFORE THE ASSESSING OFFICER IN THE BLOCK ASSESSMENT PROCEEDINGS OF M/S S.K. & COMPANY. VIDE EXPLANATION DATED 23/3/95, NO EVIDENCE OF RS.8 000/- WAS GIVEN. BANK STATEMENT IN RESPECT OF ACCOUNT NO. 5092 WITH OMAN BANK, WITHDRAWAL OF RS. 430000/- ON 26/4/95. REMARKS : THERE IS A CREDIT OF RS.430000/- BY CASH ON 26/4/ 95. NO EXPLANATION OF SOURCE OF CREDIT IS GIVEN. IN MY OPINION, THE ASSESSEE IS UNABLE TO EXPLAIN TH E SOURCE AND THUS THIS GROUND IS DISMISSED. 41. THE ASSESSEE HAVING FAILED TO CONTROVERT THE FI NDINGS OF CIT(APPEALS) VIS--VIS THE SOURCE OF INVESTMENT IN THE PURCHASE OF THE SAID SCO NO. 7 SECTOR 5, PANCHKULA, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE AND THE ADDITION OF RS. 4,07,0 00/- IS UPHELD. 26. FOLLOWING THE ABOVE PARITY OF REASONING, WE FIN D NO MERIT IN THE CLAIM OF THE ASSESSEE IN RESPECT OF INVESTMENT IN V ARIOUS PROPERTIES 24 MADE DURING THE BLOCK PERIOD. HOWEVER, WE ADDRESS T HE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE PARAS HEREBELO W. 27. THE GROUND NO. 2(C) IS IN RESPECT OF PROPERTY N O. 121 SECTOR 5, PANCHKULA AND SOURCE OF INVESTMENT WAS EXPLAINED TH ROUGH CASH FLOW STATEMENT, WHICH IS REJECTED AND HENCE, THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 28. THE GROUND NO. 2(D) IS IN RESPECT OF INVESTMENT IN PROPERTY AT VILLAGE BALTANA AND THE EXPLANATION OF THE ASSESSEE WAS THAT THE SAID ASSET HAS NOT BEEN PURCHASED BY THE ASSESSEE. HOWE VER, THE PERUSAL OF THE ORDER OF CIT(APPEALS) AT PAGES 88 TO 90 REFLECT THAT THE ASSESSING OFFICER, DURING THE ASSESSMENT PROCEEDINGS HAD CONF RONTED THE ASSESSEE WITH THE SEIZED DOCUMENT AND IT WAS EXPLAINED BY TH E ASSESSEE THAT THE DEAL NEVER GOT MATERIALIZED. THE GRIEVANCE OF THE ASSESSEE BEFORE THE CIT(APPEALS) WAS THAT THE AFFIDAVIT OF ONE SHRI VIJ AY SINGLA WAS IGNORED. 29. THE CIT(APPEALS) VIDE PARA 151 AT PAGE 91 OF TH E APPELLATE ORDER HAS GIVEN A FINDING THAT THE AMOUNTS ON THE SO CALL ED DOCUMENT WERE LINKED WITH RESPECT TO A SPECIFIC PROPERTY AND SUCH PAPER COULD NOT BE CALLED A DUMB DOCUMENT. FURTHER, THE ASSESSEE HIMS ELF CLAIMS THAT THE DEAL NEVER MATERIALIZED BUT HAD FAILED TO FURNISH A NY EVIDENCE IN THIS REGARD EXCEPT AN AFFIDAVIT DATED 15.03.2003 OF SHRI VIJAY SINGLA. THE SAID AFFIDAVIT WAS HELD TO HAVE NO CORRESPONDING EV IDENCE AS THE SAME WAS NOT FURNISHED DURING THE ORIGINAL ASSESSMENT PR OCEEDINGS AND FURNISHED AT A VERY LATE STAGE DURING THE SECOND RO UND OF ASSESSMENT PROCEEDINGS. WE FIND MERIT IN THE ORDER OF THE CIT (APPEALS) IN THIS REGARD AND UPHOLDING THE SAME, WE DISMISS GROUND NO . 2(D) RAISED BY THE ASSESSEE. 25 30. THE GROUND NO. 2(E) IS IN RESPECT OF INVESTMENT IN SCF 24, MANI MAJRA, THAT OUT OF TOTAL PAYMENT OF RS.6,62,500/-, THE CHEQUE PAYMENT OF RS. 2,65,500/- HAS BEEN ACCEPTED AND ONLY ADDITI ON HAS BEEN MADE ON ACCOUNT OF THE CASH PAYMENT OF RS.15,000/- + RS. 3,82,000/-. THE STAND OF THE ASSESSEE WAS THAT HE HAD INVESTED ONLY 50% IN THE SAID PROPERTY AND THE BALANCE 50% WAS INVESTED BY ONE SH RI VIJAY GOYAL. HOWEVER, AS THE SAID EVIDENCE FILED BY THE ASSESSEE WAS AFTER A LONG GAP OF TIME AND COULD NOT BE VERIFIED BY THE ASSESS ING OFFICER BECAUSE OF THE NON-COOPERATIVE ATTITUDE OF THE ASSESSEE, TH E SAID ONUS NOT BEING DISCHARGED BY THE ASSESSEE, THE ADDITION WAS UPHELD IN THE HANDS OF THE ASSESSEE BY THE CIT(APPEALS).WE FIND MERIT IN THE S AME AND GROUND NO. 2(E) RAISED BY THE ASSESSEE IS THUS, DISMISSED. 31. THE ISSUE IN GROUND NO. 2(F) IS IN RESPECT OF S CF 26 MANIMAJRA. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD IS S IMILAR TO GROUND NO. 2(E) AND IT HAS BEEN CLAIMED THAT THE INVESTMENT HA S BEEN MADE BY ONE SHRI MAMAN CHAND ALONGWITH THE ASSESSEE. HOWEVER, THE SAID AFFIDAVIT HAS NO EVIDENTIARY VALUE BEING FILED AFTER A LONG G AP OF TIME AND IN THE ABSENCE OF THE VERIFICATION OF THE SAME, WE UPHOLD THE ADDITION OF RS. 1,32,000/- AND DISMISS GROUND NO. 2(F) RAISED BY AS SESSEE. 32. THE ISSUE IN GROUND NO. 2(G) IS IN RESPECT OF P ROPERTY NO. SCO 7, SECTOR 5,PANCHKULA WHICH IS CO-OWNED BY THE ASSESSE E AND HIS BROTHER SHRI CHANDER DEEP JAIN. WE HAVE ALREADY ADJUDICATE D GROUND NO. 2(D) RAISED BY SHRI CHANDER DEEP JAIN IN THIS REGARD AND HAVE UPHELD THE ADDITION ON ACCOUNT OF THE INVESTMENT IN THE SAID P ROPERTY. FOLLOWING THE SAME PARITY OF REASONING, WE UPHOLD THE ADDITIO N OF RS. 3,12,500/- IN THE HANDS OF THE ASSESSEE BEING HIS SHARE OF INV ESTMENT AND DISMISS GROUND NO. 2(G) RAISED BY THE ASSESSEE. 26 33. THE GROUND NO. 2(H) RAISED BY THE ASSESSEE IS A GAINST THE INVESTMENT IN SCO 117, SECTOR 5, PANCHKULA. THE SA ID ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF P AGE NOS. 19 & 20 OF D-8 FOUND FROM THE RESIDENCE OF SHRI CHANDER DEEP J AIN PERTAINING TO AN AGREEMENT TO SELL THE SAID PROPERTY FOR A SUM OF RS. 7,08,000/- BETWEEN MAJOR K.K. PURI AND SHRI VIPIN KUMAR ALONGW ITH MRS. RENU SACHDEVA. THE ASSESSEE FAILED TO FURNISH ANY REPLY DURING THE ASSESSMENT PROCEEDINGS AND CONSEQUENTLY, A SUM OF R S.7,08,000/- WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE CLAIMS THAT ONLY RS. 75,000/- WAS PAID IN CASH AT THE TIME OF EXECUTION OF THE DEED AND NO EVIDENCE WAS FOUND OF ANY FURTHER PAYME NT. FURTHER, THE SAID DEED WAS CLAIMED TO HAVE BEEN CANCELLED. THE ABOVE PLEA OF THE ASSESSEE WAS REJECTED BY ASSESSING OFFICER. HOWEVE R, THE CIT(APPEALS) REDUCED THE ADDITION TO 50% OF THE INV ESTMENT AS THE ASSESSEE WAS CO-OWNER ALONGWITH MRS. RENU SACHDEVA. 34. IN THE ABSENCE OF ANY EVIDENCE PRODUCED TO THE CONTRARY, WE FIND NO MERIT IN THE STAND OF THE ASSESSEE AND CONFIRM T HE ADDITION OF RS. 3,54,000/- AND DISMISS GROUND NO. 2(H) RAISED BY TH E ASSESSEE. 35. THE GROUND NO. 2(I) IS AGAINST INVESTMENT IN PL OT NO. 49, INDUSTRIAL AREA-II CHANDIGARH, AS THE ASSESSEE FAIL ED TO GIVE NECESSARY EVIDENCE OF INVESTMENT IN THE SAID DEAL EVIDENCED B Y DOCUMENT D-7 AT PAGE 32 SEIZED FROM THE RESIDENCE OF SHRI CHANDER D EEP JAIN. THE EXPLANATION OF THE ASSESSEE WAS THAT THE ORIGINAL A LLOTMENT OF THE SAID PLOT WAS IN THE NAME OF SHRI HARNETRA SINGH, WHO IN -TURN HAD GIVEN POWER OF ATTORNEY TO SELL THIS PLOT TO SHRI T.S.BAW A AND THE SAID DOCUMENT WAS IN THE POSSESSION OF THE ASSESSEE AS H E HAD ASKED TO SEARCH FOR A BUYER OF THE PROPERTY. THE DEAL WAS S AID TO BE FINALIZED FOR RS. 25,00,000/- AGAINST WHICH RS. 2,00,000/- WA S GIVEN. AS THE 27 PAPERS WERE FOUND FROM THE POSSESSION OF THE ASSESS EE, ADDITION OF RS. 2 LACS WAS MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE TO THE CONTRARY AND IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE STAND OF THE ASSESSEE AND T HE SAME IS REJECTED. UPHOLDING THE ORDER OF CIT(APPEALS), WE DISMISS GRO UND NO. 2(I) RAISED BY THE ASSESSEE. 36. THE GROUND NO. 2(J) IS AGAINST ADDITION OF RS.4 ,05,500/- ON ACCOUNT OF ALLEGED INVESTMENT IN SCF 60 SECTOR 10, PANCHKULA. THE ASSESSEE EXPLAINED THAT THE SOURCE OF THE SAID INVE STMENT WAS OUT OF LOAN RECEIVED FROM ONE SHRI DEVI DAYAL. THE SAID L OAN WAS CLAIMED TO BE RECEIVED ON 30.10.1996 BUT THE AFFIDAVIT EVIDENC ING THE SAME WAS FILED ON 15.03.2003 AND THE SAME WAS REJECTED BY BO TH THE ASSESSING OFFICER AND THE CIT(APPEALS). IN VIEW OF OUR OBSER VATIONS IN THE INITIAL PARAS IN RESPECT OF THE EVIDENCES FILED BY THE ASSESSEE AT A LATE STAGE I.E. AT THE CLOSE OF THE SECOND ROUND OF ASSE SSMENT PROCEEDINGS WHEN THERE WAS NO TIME LEFT WITH THE ASSESSING OFFI CER TO MAKE FURTHER INVESTIGATION, WE FIND NO MERIT IN THE STAND OF THE ASSESSEE. IN ANY CASE, MERE FILING OF AN AFFIDAVIT DOES NOT DISCHARG E ONUS CAST UPON THE ASSESSEE TO ESTABLISH ITS CLAIM. UPHOLDING THE ORD ER OF CIT(APPEALS) IN THIS REGARD, WE DISMISS GROUND NO. 2(J) RAISED BY T HE ASSESSEE. 37. THE ISSUE IN GROUND NO. 2(K) RAISED BY THE ASSE SSEE IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 2(E) IN THE CASE O F SHRI CHANDER DEEP JAIN. THE TRIBUNAL VIDE PARAS 42 TO 46 HAVE DELETE D THE ADDITION IN THE HANDS OF SHRI CHANDER DEEP JAIN. RELEVANT FINDINGS ARE AS UNDER : 42. THE GROUND NO. 2(E) IS AGAINST ADDITION OF RS. 3,21,500/- BEING 50% SHARE IN ALLEGED INVESTMENT IN M/S LIMA E NGINEERING PVT. LTD. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE PURCHASED SHARES OF M/S LIMA ENGINEERING PVT.LTD. A LONGWITH HIS BROTHER SHRI VIPIN KUMAR JAIN AND MRS. KASHMIR DHIL LON AND SUM OF RS. 3,00,000/- EACH WAS CLAIMED TO HAVE BEEN PAI D. HOWEVER, AN ADDITION OF RS. 3,21,500/- WAS MADE WHILE COMPLETIN G THE ORIGINAL 28 ASSESSMENT. DURING THE SAID ASSESSMENT, THE ASSESS EE WAS ASKED TO FURNISH THE EVIDENCE IN RESPECT OF THE SAME AND THE EXPLANATION OF THE ASSESSEE WAS THAT THE AMOUNT WAS PAID BY CHEQUE FOR RS. 1,50,000/-. FURTHER, AS PER THE SEIZED DOCUMENT NO . 22 ANNEXURE A-2, THE ASSESSEE HAD FAILED TO JUSTIFY THE ENTRIES OF RS.1,80,000/- PAID TO MR. GURPREET AND ADDITION OF RS. 3,21,500/- I.E. 50% OF SUM OF RS. 6,43,000/- WAS MADE BY THE ASSESSING OFFICER . THE CIT(APPEALS) NOTED THAT SHRI KULJEET SINGH HAD SOLD THE COMPANY FOR RS. 8,92,000/- TO SHRI CHANDERDEEP JAIN AND SHR I VIPIN KUMAR JAIN AND THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS. 3,21,500/- BEING 50% OF RS. 6,43,000/- HELD AS UNDI SCLOSED INCOME OF THE ASSESSEE. 43. BEFORE THE CIT(APPEALS), THE ASSESSEE PLACED RE LIANCE ON THE AFFIDAVITS FILED WHICH WAS REJECTED BY THE CIT(APPE ALS) AS THE ASSESSEE HAD FAILED TO FURNISH THE SAME AT APPROPRI ATE TIME BEFORE THE ASSESSING OFFICER. WITH REGARD TO THE NARRATIO NS AND DOCUMENT NO. 22 OF ANNEXURE A-2, THE CIT(APPEALS) NOTED THAT ASSESSEE AND SHRI GURPREET SINGH HAD A LINK WITH THE TRANSACTION AND CONSEQUENTLY THE ADDITION WAS UPHELD IN THE HANDS O F THE ASSESSEE. 44. THE LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TO THE DOCUMENT PLACED AT PAGE 226 OF THE PAPER BOOK AND P OINTED OUT THAT THE PERUSAL OF THE SAME WOULD REFLECT IT TO BE A DUMB DOCUMENT. FURTHER, IT WAS POINTED OUT BY THE LD. AR FOR THE A SSESSEE THAT THE STATEMENT OF MR. KULJEET SINGH I.E. THE PERSON WHO HAD SOLD THE COMPANY, HAD CATEGORICALLY GIVEN A STATEMENT THAT N O CASH PAYMENT WAS EVER MADE TO HIM OVER AND ABOVE THE AMOUNT OF R S. 7,92,000/-. THE COPY OF THE STATEMENT OF SHRI KULJEET SINGH IS PLACED AT PAGES 240 TO 242 OF THE PAPER BOOK. WITHOUT PREJUDICE TO THE ABOVESAID SUBMISSION, LD. AR FOR THE ASSESSEE FURTHER SUBMITT ED THAT 1/3 RD INVESTMENT WAS MADE BY MRS. KASHMIR DHILLON AND HER INVESTMENT SHOULD BE EXCLUDED. HE MADE A REFERENCE TO THE AFFI DAVIT OF MRS.KASHMIR DHILLON PLACED AT PAGE 179 OF THE PAPER BOOK. FURTHER, OUR ATTENTION WAS DRAWN TO THE AFFIDAVIT O F MR. GURPREET SINGH PLACED AT PAGE 173 OF THE PAPER BOOK IN WHICH HE STATED THAT HE HAD NOT RECEIVED ANY COMMISSION FOR SALE/TRANSFE R OF SHARES OF M/S LIMA ENGINEERING PVT. LTD. FROM ASSESSEE OR FRO M SHRI VIPIN KUMAR JAIN. 45. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELAT ION TO THE ALLEGED INVESTMENT MADE IN THE PURCHASE OF SHARES OF M/S LI MA ENGINEERING PVT. LTD. AND ALSO COMMISSION PAID FOR THE SAID TRA NSACTION. THE ASSESSEE ALONGWITH HIS BROTHER AND ONE MRS. KASHMIR DHILLON CLAIMS TO HAVE INVESTED SUM OF RS. 3,00,000/- EACH IN THE PURCHASE OF SHARES OF M/S LIMA ENGINEERING PVT. LTD. IN ADD ITION, AS PER THE NOTINGS ON DOCUMENT NO. 22 OF ANNEXURE A-2 SEIZED D URING THE COURSE OF SEARCH, FURTHER ADDITION OF RS. 3,51,000/ - HAS BEEN MADE IN THE HANDS OF THE ASSESSEE BEING ON ACCOUNT OF TH E COMMISSION PAID FOR THE SAID TRANSACTION. THE TOTAL INVESTMEN T IN THE PURCHASE OF SHARES OF M/S LIMA ENGINEERING PVT. LTD. IS RS. 9,00,000/- OUT OF WHICH, RS. 3,00,000/- IS CLAIMED BY MRS.KASHMIR DHI LLON TO HAVE BEEN PAID VIDE CHEQUE DRAWN ON HER BANK ACCOUNT. N ECESSARY AFFIDAVIT IN THIS REGARD IS PLACED AT PAGE 179 OF T HE PAPER BOOK. IN VIEW OF THE AMOUNT HAVING BEEN PAID VIDE CHEQUE, WH ICH IN TURN WAS DEPOSITED IN THE CURRENT ACCOUNT WITH TIMES BANK, C HANDIGARH OF 29 THE SAID COMPANY, THERE IS NO MERIT IN TREATING SAI D INVESTMENT AS THE INVESTMENT MADE BY THE ASSESSEE. THE BALANCE I NVESTMENT MADE BY THE ASSESSEE AND HIS BROTHER SHRI VIPIN KUMAR JA IN IS RS. 6,00,000/-. 46. THE ASSESSING OFFICER HAD PRESUMED THE CONSIDER ATION OF THE PROPERTY AT RS. 12,43,000/- I.E. RS. 7,92,000/- + R S. 1,00,000/- + RS. 3,51,000/-. THE EVIDENCE FOR SOURCES OF RS. 6, 00,000/- WERE ACCEPTED AS HAVING BEEN MADE BY THE ASSESSEE AND HI S BROTHER SHRI VIPIN KUMAR JAIN AND THE BALANCE SUM OF RS. 6,43,00 0/- WAS ADDED AS INCOME OF THE ASSESSEE AND HIS BROTHER SHRI VIPI N KUMAR JAIN. HOWEVER, WE FIND NO MERIT IN THE ADDITION MADE BY T HE AUTHORITIES BELOW ON THE BASIS OF THE NOTING ALLEGEDLY ON DOCUM ENT NO. 22 OF ANNEXURE A-2 WHICH ARE SCRIBBLES OF DIFFERENT DENOM INATIONS AND AT BEST, THE SAID PAPER COULD BE SAID TO BE A ROUGH CA LCULATION ONLY.IN VIEW OF OUR ALLOWING RELIEF ON ACCOUNT OF THE INVES TMENT MADE BY MRS. KASHMIR DHILLON AND ALSO NO ADDITION TO BE MAD E ON ACCOUNT OF THE NOTINGS ON THE LOOSE PAPER, THERE IS NO MERI T IN THE ADDITION MADE BY THE ASSESSING OFFICER AND THE SAME IS DIREC TED TO BE DELETED. GROUND NO. 2(E) RAISED BY THE ASSESSEE IS THUS, ALLOWED. 38. FOLLOWING THE SAME PARITY OF REASONING, WE ALLO W GROUND NO. 2(K) RAISED BY THE ASSESSEE AND ADDITION OF RS.3,21,500/ - IS DELETED. 39. THE ISSUE IN GROUND NO.2(L) IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 2(G) IN THE CASE OF SHRI CHANDER DEEP JA IN WHICH HAS BEEN DELIBERATED UPON BY US IN PARAS 54 TO 60 OF THE OR DER AND ADDITION OF RS. 6,50,000/- HAS BEEN DELETED IN THE HANDS OF THE ASSESSEE. THE RELEVANT FINDINGS ARE AS UNDER : 54. THE ISSUE IN GROUND NO. 2(G) IS AGAINST TH E ADDITION OF RS. 6,50,000/- FOR INVESTMENT IN PROPERTY NO. 259, INDUSTRIAL AREA, CHANDIGARH. 55. THE BRIEF FACTS RELATING TO THE ABOVESAID ISSUE ARE THAT DURING THE COURSE OF SEARCH, POWER OF ATTORNEY IN F AVOUR OF THE ASSESSEE IN RESPECT OF PROPERTY NO. 259, INDUSTRIAL AREA, PHASE-I, CHANDIGARH WAS FOUND. THE SAID PROPERTY WAS PURCHA SED FOR A TOTAL CONSIDERATION OF RS. 13,00,000/-. THE EXPLAN ATION OF THE ASSESSEE WAS THAT HE WAS ONLY A GENERAL POWER OF AT TORNEY HOLDER AND NOT THE OWNER OF THE PROPERTY. HOWEVER, IN TH E ABSENCE OF ANY EVIDENCE FILED BY THE ASSESSEE TO CONFIRM THAT THE PROPERTY WAS NOT TRANSACTED BY HIM AND HIS BROTHER, 50% OF T HE SAID INVESTMENT OF RS.6,50,000/- WAS ADDED AS UNDISCLOSE D INCOME OF THE ASSESSEE. THE ASSESSING OFFICER DELIBERATED UP ON THIS ISSUE AT PAGE 10 OF THE ASSESSMENT ORDER. 56. THE CIT(APPEALS) VIDE PARA 93 TO 95 AT PAGES 58 & 59 OF THE APPELLATE ORDER HAVE CONSIDERED THE ISSUE AND H ELD THAT THE ONUS WAS UPON THE ASSESSEE TO PROVE THAT EVEN THOUG H HE WAS 30 HOLDING THE POWER OF ATTORNEY, YET THE OWNERSHIP VE STS WITH SOME OTHER PERSON AND IN THE ABSENCE OF ANY MATERIAL BEI NG BROUGHT ON RECORD, THE ADDITION WAS UPHELD IN THE HANDS OF THE ASSESSEE. 57. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH E AGREEMENT TO SELL WAS BETWEEN ONE SHRI HARINDER GOYAL AND SHR I PRITAM DASS AND THE POWER OF ATTORNEY WAS IN THE NAME OF SHRI V IPIN JAIN WHICH IS PLACED AT PAGES 183 TO 185 OF THE PAPER BO OK. IT WAS FURTHER POINTED OUT THAT THERE WAS NO EVIDENCE OF T HE PAYMENT BEING MADE BY THE ASSESSEE AND HENCE, NO MERIT IN T HE AFORESAID ADDITION. FURTHER IT WAS POINTED OUT BY THE LD. AR FOR THE ASSESSEE THAT THE TOTAL INVESTMENT WAS RS.13,00,000 /- 58. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDER OF THE ASSESSING OFFICER. 59. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. DURING THE COURSE OF SEARCH, DOCUMENT MARK ED AS D-13 TO 18 WAS FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEE WHICH IS THE POWER OF ATTORNEY EXECUTED BY ONE SHRI NARIN DER KUMAR GOYAL IN FAVOUR OF SHRI VIPIN KUMAR JAIN AS HIS POW ER OF ATTORNEY HOLDER. COPY OF THE SAID DOCUMENT IS PLACED AT PAG ES 232 TO 239 OF THE PAPER BOOK. PERUSAL OF THE SAID POWER OF AT TORNEY REFLECTS THAT AS PER CLAUSE-2 OF THE POWER OF ATTORNEY, THE ATTORNEY HOLDER HAS TO PAY THE BALANCE PRICE/INSTALMENTS, IF ANY OF THE SAID INDUSTRIAL SHARE TO THE GOVERNMENT AND OBTAIN RECEI PT THEREOF AND AS PER CLAUSE-5, POWER IS GIVEN TO SELL/TRANSFER/GIFT/EXCHANGE/MORTGAGE THE SAID BUILD -UP INDUSTRIAL SHED TO SHRI PRITAM DASS KANSAL AND SHRI VIJAY KUMA R. ADMITTEDLY, THE SAID POWER OF ATTORNEY IS EXECUTED BY A THIRD PERSON I.E. SHRI NARINDER KUMAR GOYAL IN FAVOUR OF SHRI VIPIN KUMAR JAIN WHO IS THE BROTHER OF THE ASSESSEE AND T HE SPECIFIC RECITATION IN PARA 5 IS FOR THE SPECIFIC PURPOSE TO SELL/TRANSFER/GIFT/EXCHANGE/MORTGAGE THE SAID BUILD -UP INDUSTRIAL SHED TO SHRI PRITAM DASS KANSAL AND SHRI VIJAY KUMA R. 60. DURING THE COURSE OF SEARCH OPERATIONS, VARIOUS OTHER DOCUMENTS REFLECTING THE ALLEGED INVESTMENT MADE BY THE ASSESSEE AND/OR HIS BROTHER WAS FOUND AND IN THE ABSENCE OF THE SAME AND MERELY BECAUSE OF POWER OF ATTORNEY HAS BEEN EXECUT ED IN FAVOUR OF THE BROTHER OF THE ASSESSEE AND THAT ALSO FOR A SPECIFIC PURPOSE, DOES NOT ESTABLISH THE FACTUM OF INVESTMENT BY THE ASSESSEE FOR THE PURCHASE OF THE SAID INDUSTRIAL SHED. FURTHER THE ASSESSEE HAS ALSO FILED ON RECORD THE COPY OF SUIT FILED BY MR. PRITA M KANSAL AND MR. VIJAY KANSAL AGAINST SHRI NARINDER KUMAR GOYAL FOR TRANSFER OF THE SAID PROPERTY IN THEIR FAVOUR, COPY OF WHICH IS PLACED AT PAGES 188 AND 192 OF THE PAPER BOOK. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE ADDI TION OF RS. 6,50,000/- ON ACCOUNT OF ALLEGED INVESTMENT IN INDU STRIAL SHED AT 259, INDUSTRIAL AREA, PHASE-I CHANDIGARH, IN THE HA NDS OF THE ASSESSEE AND/OR HIS BROTHER. ACCORDINGLY, WE DIREC T THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.6,50,000/-. G ROUND NO. 2(G) RAISED BY THE ASSESSEE IS THUS, ALLOWED. 40. FOLLOWING THE SAME PARITY OF REASONING, WE ALLO W THE CLAIM OF THE ASSESSEE AND GROUND NO. 2(L) RAISED BY THE ASSESSEE IS THUS, ALLOWED. 31 41. THE ISSUE IN GROUND NO. 2(M) RAISED BY THE ASSE SSEE IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 2(H) IN THE CAS E OF SHRI CHANDER DEEP JAIN. THE TRIBUNAL VIDE PARA 61 TO 64 WHILE D ELIBERATING UPON THE ISSUE HAS DISMISSED THE GROUND OF APPEAL RAISED BY THE ASSESSEE. THE RELEVANT FINDINGS ARE AS UNDER: 61. THE ISSUE IN GROUND NO. 2(H) RAISED BY THE ASS ESSEE IS AGAINST THE ADDITION OF RS. 4,80,000/- BEING 50% OF INVESTMENT IN SURAJ THEATRE. IN THE FACTS OF THE ISSUE RAISED, T HE ASSESSEE HAD MADE INVESTMENT IN THE PURCHASE OF SURAJ THEATRE AN D ALSO AMOUNT SPENT ON RENOVATION OF THE SAID THEATRE. DURING TH E COURSE OF SEARCH, VARIOUS DOCUMENTS WERE SEIZED WHICH REFLECT ED THE SAID INVESTMENT. THE DOCUMENTS FOUND DURING THE COURSE O F SEARCH REFLECTED THE DETAILS OF RENOVATION, ON THE BASIS O F WHICH AMOUNT OF RS. 4,60,000/- WAS DETERMINED AS TOTAL RENOVATIO N AND THE COPY OF THE SAID DOCUMENT IS ENCLOSED AS ANNEXURE-C OF THE ASSESSMENT ORDER. THE ASSESSEE PARTLY EXPLAINED TH E SOURCE OF INVESTMENT IN THE PURCHASE OF THE SAID PROPERTY TO THE EXTENT OF RS. 10 LACS AND BALANCE RS. 5 LACS WAS TREATED AS UNEXP LAINED. HOWEVER, ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF RENOVATION OF RS.4,60,000/- MADE BY THE ASSESSEE AND HIS BROTH ER SHRI VIPIN KUMAR JAIN. CONSEQUENTLY, THE SUM OF RS. 4,80,000/ - BEING 50% OF THE TOTAL INVESTMENT IN SURAJ THEATRE WAS TREATE D AS INCOME OF THE ASSESSEE. THE ASSESSING OFFICER DELIBERATED UP ON THIS ISSUE AT PAGE 10 OF THE ASSESSMENT ORDER. THE CIT(APPEALS) VIDE PARAS 96 TO 99 AT PAGES 59 AND 60 OBSERVED THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF THE SAID INVESTMENT AND THE R ELIANCE ON THE CASH FLOW STATEMENT WAS REJECTED AND THE ADDITION M ADE BY THE ASSESSING OFFICER WAS UPHELD BY CIT(APPEALS). THE A SSESSEE IS IN APPEAL AGAINST THE SAID ADDITION. 62. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH E TOTAL INVESTMENT IN THE PURCHASE OF THE SAID ASSET WAS RS . 15 LACS AND THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PR OCEEDINGS HAD ACCEPTED THE INVESTMENT OF RS.10 LACS. HOWEVER, IN RESPECT OF CASH PAYMENT OF RS. 5 LACS AND FURTHER RENOVATION TO THE EXTENT OFRS.4.6 LACS MADE BY THE ASSESSEE AND HIS BROTHER SHRI VIPI N JAIN, THOUGH THE ASSESSEE FURNISHED THE CASH FLOW STATEMENT BUT THE SAME WAS REJECTED IN THE ABSENCE OF ANY DATE OF CASH PAYMENT . 63. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDERS OF THE AUTHORITIES BELOW. 64. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAD MADE A TOTAL INVESTMENT O F RS. 15 LACS FOR THE PURCHASE OF SURAJ THEATRE AND THEREAFTER, H AS ADMITTEDLY INCURRED RS.4.6 LACS ON THE RENOVATION OF THE SAID THEATRE. THE TOTAL INVESTMENT THUS, IS RS.19.60 LACS. INVESTMEN T OF RS. 10 LACS HAS BEEN ACCEPTED IN THE HANDS OF THE AE AND THE IS SUE ARISING VIDE PRESENT GROUND OF APPEAL IN RESPECT OF THE BALANCE INVESTMENT OF RS. 9.60 LACS BEING MADE BY THE ASSESSEE AND HIS BR OTHER SHRI VIPIN JAIN. THE SOURCE OF INVESTMENT IN THE SAID A SSET IS CLAIMED TO BE MADE OUT OF CASH FLOW STATEMENT. NO CREDENCE CAN BE GIVEN 32 TO THE SAID CASH FLOW STATEMENT IN VIEW OF OUR COMM ENTS IN THE PARAS HEREIN ABOVE AND IN VIEW THEREOF, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE AND IN THE ABSENCE OF ANY EVID ENCE OF SOURCE OF HAVING INVESTED THE SAID AMOUNT, FOR THE PURCHAS E OF SURAJ THEATRE, WE UPHOLD THE ADDITION OF RS. 4.80 LACS BE ING HALF SHARE IN RS.9.60 LACS. GROUND NO. 2(H) RAISED BY THE ASS ESSEE IS, THUS DISMISSED. 42. FOLLOWING THE SAME PARITY OF REASONING, WE DISM ISS THE CLAIM OF THE ASSESSEE AND GROUND NO. 2(M) RAISED BY THE ASSE SSEE IS DISMISSED. 43. THE ISSUE IN GROUND NO. 2(N) IS AGAINST THE SOU RCE OF INVESTMENT IN SHARES OF M/S A.C.C. LTD. AND M/S KRISHNA POLYES TER. THE EXPLANATION OF THE ASSESSEE IS THAT INVESTMENT IS O UT OF HUF FUNDS WHICH CANNOT BE ACCEPTED IN THE ABSENCE OF ANY EVID ENCE. THE GROUND NO. 2(N) IS THUS, DISMISSED. 44. THE ISSUE IN GROUND NO. 2(O) IS AGAINST ALLEGED INVESTMENT IN FDRS. DURING THE COURSE OF SEARCH, DOCUMENT WAS SE IZED, ON WHICH CERTAIN NOTINGS HAD BEEN MADE. THE PLEA OF THE ASS ESSEE WAS THAT THESE WERE ROUGH JOTTINGS OF SOURCES OF FUNDS/ADVANCES. THE ASSESSING OFFICER MADE THE ABOVE ADDITION, WHICH WAS CONFIRME D BY CIT(APPEALS). HOWEVER, NO EVIDENCE OF INVESTMENT I N FDRS WAS FOUND DURING THE COURSE OF SEARCH AND IN THE ABSENCE OF S AME, NO ADDITION IS WARRANTED. THE GROUND OF APPEAL NO. 2(O) IS THUS A LLOWED. 45. THE ISSUE IN GROUND NO. 3 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 3 IN THE CASE OF S HRI CHANDER DEEP JAIN. THE TRIBUNAL WHILE DELIBERATING UPON THE ISS UE HAD PARTLY ALLOWED THE GROUND OF APPEAL RAISED BY THE ASSESSEE VIDE PARAS 65 TO 68, WHICH READ AS UNDER: 65. THE GROUND NO. 3 RAISED BY THE ASSESSEE IS AGA INST THE ADDITION MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWA LS TOTALING RS. 8.10,000/-. THE ASSESSING OFFICER VIDE PARA 3 AT PAGES 5 & 6 NOTED THAT BOTH THE ASSESSEE AND HIS WIFE HAD DRAWN DIFFERENT AMOUNTS FOR HOUSEHOLD EXPENSES AS TABULATED AT PARA 3 PAGE 5 OF 33 THE ASSESSMENT ORDER. THE PLEA OF THE ASSESSEE WAS THAT THE HOUSEHOLD EXPENSES HAVE BEEN ESTIMATED BY THE ASSES SING OFFICER IN THE FIRST ROUND OF ASSESSMENT PROCEEDINGS WHEREA S NO ADDITION COULD BE MADE DURING BLOCK ASSESSMENT WITHOUT BRING ING ANY EVIDENCE ON RECORD TO PROVE THAT THE HOUSEHOLD EXPE NSES SHOWN BY THE ASSESSEE WERE LESS THAN THE AMOUNT ACTUALLY SPE NT. THE ASSESSING OFFICER NOTES THAT DURING THE COURSE OF S EARCH, DOCUMENT NO. D-5 PAGE 14 DETAILS OF HOUSEHOLD EXPEN SES FOR SEPTEMBER,1998, WERE FOUND IN WHICH MONTHLY EXPENSE S ON VEGETABLES, FRUITS AND OTHER GROCERY ITEMS, MEDICIN ES, GIFTS ETC. WERE NOTED AND THE EXPENDITURE SHOWN BY THE ASSESSE E WAS ON THE LOWER SIDE. FURTHER DOCUMENTS WERE ALSO FOUND DURI NG THE COURSE OF SEARCH WHICH INDICATED HIGH STYLE OF LIVING OF T HE ASSESSEE I.E. PAGE 11 OF D-5 GAVE DETAILS OF PURCHASE OF CERTAIN GIFT ITEMS AND PAGE 12, 13 WERE RATES OF GIFT ITEMS, PAGE 22 OF D- 7 WAS A BILL FROM CHANDIGARH CLUB AND PAGE 18 OF D-5 GAVE DETAIL S OF CERTAIN CASH EXPENSES I.E. GIFT ON MARRIAGE OF RS. 10,000/- , GIFT OF JEWELLERY ON MARRIAGE OF RS.10,000/-, AMOUNT FOR TI RUPATI BALAJI OF RS. 13,000/- AND CASH FOR T.E. FOR RS. 16,000/-. FURTHER, THERE WERE CASH RECEIPTS FOUND WHICH ARE PLACED AT PAGE 1 5 & 16 OF D-5 FOR PURCHASE OF TWO COMPRESSORS FOR RS. 9,200/- EAC H. IN VIEW OF THE STANDARD OF LIVING OF THE ASSESSEE AND THE VARI OUS ASSETS FOUND INSTALLED AT THE RESIDENCE OF THE ASSESSEE WHICH WE RE TABULATED BY THE ASSESSING OFFICER, THE ANNUAL HOUSEHOLD EXPENSE S OF THE ASSESSEE WERE ESTIMATED AT RS. 3,00,000/- I.E. @ RS .25,000/- PER MONTH. HOWEVER, FOR THE PERIOD 1.4.1988 TO 31.3.19 93, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE EXPENSES WOULD BE ON THE LOWER SIDE AS COMPARED TO THE LATER YEARS BECAU SE OF FIRST INFLATION FACTOR AND ALSO BECAUSE OF THE JOINT KITC HEN WITH HIS BROTHER SHRI VIPIN JAIN AND AN ESTIMATED ADDITION O F RS.16,20,000/- WAS MADE DURING THE BLOCK PERIOD, AF TER TAKING INTO ACCOUNT THE WITHDRAWALS MADE BY THE ASSESSEE FOR HO USEHOLD EXPENSES. THE TOTAL WITHDRAWALS BY THE ASSESSEE VA RIED BETWEEN RS. 25,000/- TO RS. 40,000/- PER YEAR. 66. THE CIT(APPEALS) VIDE PARA 59 TO 67 CONSIDERED THE SUBMISSIONS OF THE ASSESSEE ELABORATELY AND ALSO TH E EARLIER TWO ORDERS OF THE ASSESSING OFFICER DATED 31.10.2000 AN D 31.3.2003 AND NOTED THAT THE ADDITIONS WERE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH. THE ASSESSING OFFICER IN THE ASSESSMENT OR DER HAD REFERRED TO VARIOUS ITEMS AND IT WAS OBSERVED BY TH E CIT(APPEALS) THAT THE ASSESSEE WAS HAVING ATTRIBUTION OF HIGH ST YLE OF LIVING BECAUSE OF THE FOLLOWING : (I) THE ASSESSEE IS HAVING THE LUXURY OF ACS, E XERCISERS, CELL-PHONES, ETC. WITHDRAWLS SHOWN BY THE ASSESSEE CANNOT SUPPOR T EVEN THE DAY-TO- DAY KITCHEN EXPENSES. THE EXPENSES ARE DEPENDENT UP ON THE PERSONAL LIKING OF THE ASSESSEE ALSO. (II) THE ASSESSEE IS HAVING A RENTED HOUSE, IND ULGES IN GAMBLING, MAINTAINS VEHICLES AND GIVES COSTLY GIFTS. THE SEIZ ED DOCUMENTS REVEALED THAT EXCHANGE OF GIFTS ON MARRIAGE OR TO F RIENDS IS EVEN UPTO RS.LOOOO/- EACH. AS AGAINST THE WITHDRAWAL SHOWN BY THE ASSESSEE RANGING FROM RS.25000/- TO RS.50000/- FOR THE WHOLE YEAR IN DIFFERENT FINANCIAL YEARS, THE WITHDRAWALS COME ON AN AVERAGE OF RS.3500/- PER MONTH. THE ELECTRIC BILLS ON ACCOUNT OF RUNNING ACS WOULD COME AROUND RS.3000/- TO 4000/- PER MONTH. 34 (III) HIGHER AMOUNTS OF GIFTS EXCHANGED BETWEEN FRIENDS INDICATE THE HIGH STYLE OF LEAVING. WITH SUCH STYLE OF LEAVING W HICH IS EVIDENCED BY THE COSTLY ITEMS FOUND DURING THE COURSE OF SEARCH AND ALSO THE NOTINGS FOUND IN THE SEIZED DOCUMENTS GIVES ENOUGH PROOF FO R HIGHER HOUSEHOLD EXPENSES. THIS FACT IS FURTHER ESTABLISHED BY THE D ETAILED NOTES FOUND IN ONE OF THE SEIZED DOCUMENT NO. D-5 (PAGE-14) ; WHICH GIVES THE DETAILS OF EXPENSES. 67. THE CONCLUSION OF THE CIT(APPEALS) VIDE PARA 64 WAS THAT THE ESTIMATIONS WERE MADE ON THE BASIS OF SEIZED DO CUMENTS AND ALSO ON THE BASIS OF ASSETS FOUND DURING THE COURSE OF SEARCH AND THERE WAS NO MERIT IN THE CONTENTION OF THE ASSESSE E THAT THE ADDITION HAS BEEN MADE WITHOUT ANY EVIDENCE. FURTH ER VIDE PARA 65, THE CIT(APPEALS) OBSERVED THAT IN VIEW OF THE A MENDMENT IN SECTION 158BC(B) OF THE ACT WITH RETROSPECTIVE EFFE CT FROM 01.04.1995, THE STATUTE PROVIDES THAT THE ASSESSING OFFICER CAN MAKE ESTIMATED ADDITIONS. THE RELEVANT PARAS READ A S UNDER : 64. THE ASSESSING OFFICER HAS BASED HIS ESTIMATES ON THE BASIS OF THE SEIZED DOCUMENTS AND ALSO ON THE ASSETS FOUND DURING THE C OURSE OF SEARCH. THERE IS NO MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE AD DITION HAS BEEN MADE WITHOUT ANY EVIDENCE. THE ASSESSING OFFICER IS DUTY BOUND TO G IVE A FAIR ESTIMATE BASED ON THE MATERIAL ON RECORD. THE ONLY REQUIREMENT IS THAT T HE ESTIMATION SHOULD BE FAIR HAVING NEXUS WITH THE MATERIAL FOUND DURING THE COU RSE OF SEARCH. ALL THE FACTS WHICH HAVE BEEN NARRATED BY THE ASSESSING OFFICER D O REVEAL THAT WITHDRAWALS SHOWN BY THE ASSESSEE ARE VERY LOW. IN FACT, THERE ARE WITHDRAWALS OF CASH IN VARIOUS BANK ACCOUNTS OF THE ASSESSEE ON DIFFERENT DATES. THE ASSESSEE WOULD HAVE UTILIZED THESE WITHDRAWALS OF CASH TO SUPPORT THAT HIGH SCALE OF LIVING ALTHOUGH THE ASSESSEE SUBMITTED THAT THESE WITHDRAWALS OF CA SH ARE REINVESTED SUBSEQUENTLY ON DIFFERENT DATES IN DIFFERENT BANKS. 65 THE LD. COUNSEL HAS ALSO TAKEN AN OBJECTION THAT IN THE BOOKS OF ACCOUNTS, THERE IS NO SCOPE OF ESTIMATION. IT MAY BE POINTED OUT THAT THERE IS AN AMENDMENT IN SECTION 158BC(B) WITH RETROSPECTIVE EFFECT FROM 1/7/95 WHEREIN THE S TATUTE HAS PROVIDED THAT THE ASSESSING OFFICER CAN MAKE AN ESTIMATE. IT IS THE DUTY OF THE ASSESSING OLLLEER TO MAKE A LAIR ESTIMATE WHERE NO EVIDENCE IS PROVIDED BY THE ASSESSEE. IN T HIS CASE, THE ASSESSING OFFICER HAS FAIRLY MADE AN ESTIMATION OF HOUSE HOLD EXPENSES AFTER GIV ING VALID REASONS. THERE IS ALWAYS AN ELEMENT OF ESTIMATION IN THESE CIRCUMSTANCES [REFER VED PARKASH VS. CIT, 265 ITR 642 (P&H)]. 68. THE CIT(APPEALS) VIDE PARA 67, HOWEVER ESTIMATE D THE HOUSEHOLD EXPENSES AT RS. 8,10,000/- I.E. 50% OF TH E ADDITION MADE BY THE ASSESSING OFFICER AND GAVE A RELIEF OF RS. 8,10,000/-. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID ADD ITION. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO VARIOUS SEIZED DOCUMENTS FOUND DURING THE COURSE OF SEARCH AND ALSO THE PROVISIONS OF SECTION 158BC(B) OF THE ACT, FAIR ESTIMATE OF IS TO BE MADE IN THE HANDS OF THE ASSESSEE. HOWEVER , WE RESTRICT THE ADDITION TO RS. 4,00,000/-. THUS, THE GROUND N O. 3 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 46. FOLLOWING THE SAME PARITY OF REASONING, WE REST RICT THE ADDITION TO RS. 3,50,000/- AND GROUND NO. 3 RAISED BY THE AS SESSEE IS PARTY ALLOWED. 35 47. THE ISSUE IN GROUND NO. 4 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 4 IN THE CASE OF S HRI CHANDER DEEP JAIN. THE TRIBUNAL WHILE DELIBERATING UPON THE ISS UE HAS PARTLY ALLOWED THE GROUND OF APPEAL RAISED BY THE ASSESSEE VIDE PARAS 69 TO 86 WHICH READ AS UNDER : 69. THE ISSUE IN GROUND NO. 4 RAISED BY THE ASSESS EE IS AGAINST THE ADDITION OF RS. 1,59,72,599/- ON ACCOUNT OF CRE DITS IN THE BANK ACCOUNT AND SUM OF RS. 13,35,000/- ON ACCOUNT OF AL LEGED INVESTMENT IN FDRS. THE ASSESSING OFFICER VIDE PAG E 11 OF THE ASSESSMENT ORDER HAS CONSIDERED THE ISSUE AND HAS O BSERVED THAT LARGE NUMBER OF BANK ACCOUNTS WERE MAINTAINED BY TH E ASSESSEE, COPIES OF WHICH WERE FOUND AND SEIZED DURING THE CO URSE OF SEARCH. THERE WERE LARGE NUMBER OF CASH DEPOSITS I N THE SAID BANK ACCOUNTS AND THE ASSESSEE WAS UNABLE TO RECONC ILE THE SAID CASH DEPOSITS. CONSEQUENTLY, ADDITION OF THE SAID DEPOSITS WAS MADE IN THE HANDS OF THE ASSESSEE AFTER GIVING RELI EFS ON ACCOUNT OF CERTAIN ITEMS OF RECEIPTS. 70. BEFORE THE CIT(APPEALS), LD. AR FOR THE ASSESSE E PLACED RELIANCE ON THE CASH FLOW STATEMENT AND THE BOOKS O F ACCOUNT WHICH ADMITTEDLY WERE PREPARED AFTER THE SEARCH ACT ION AND WERE PRODUCED ONLY FOR THE FIRST TIME BEFORE THE CIT(APP EALS). THE CIT(APPEALS) OBSERVED THAT DURING THE COURSE OF SEA RCH, INCRIMINATING MATERIAL WAS FOUND AND EVEN IF THE AS SESSEE WAS MAINTAINING REGULAR BOOKS OF ACCOUNT, THE SAME WERE LIABLE TO BE REJECTED. HOWEVER IN THE FACTS OF THE CASE, THE AS SESSEE WAS NOT MAINTAINING REGULAR BOOKS OF ACCOUNT AND ANY DOCUME NT PREPARED AFTER THE SEARCH WAS HELD TO HAVE NO EVIDENTIARY VA LUE. THE RELIANCE OF THE ASSESSEE UPON THE CASH FLOW STATEME NT WAS ALSO REJECTED AS THE SAME COULD NOT BE EQUATED WITH THE REGULAR BOOKS OF ACCOUNT AND THEREFORE, THE SAME CANNOT BE RELIED UPON. THE RELEVANT OBSERVATIONS OF THE CIT(APPEALS) ARE VIDE PARAS 100 TO 107 AT PAGES 61 TO 70 OF THE APPELLATE ORDER. THE CIT(APPEALS), HOWEVER FURTHER NOTED THAT CERTAIN MATERIAL WAS PRO DUCED BEFORE THE ASSESSING OFFICER AT THE FAG END OF THE ASSESSM ENT PROCEEDINGS AND ALSO STATEMENTS OF SOME PERSONS WERE RECORDED O N 27.03.2003. AS THERE WAS NO TIME LEFT TO MAKE INVESTIGATIONS, T HE ASSESSING OFFICER REJECTED THE SAME. THE PLEA OF THE ASSESSE E BEFORE THE CIT(APPEALS) WAS THAT THE SAME SHOULD BE CONSIDERED . THE CIT(APPEALS) AFTER DELIBERATING UPON THE ISSUE AT L ENGTH ALLOWED CERTAIN RELIEFS ON ACCOUNT OF INCOME SHOWN BY THE A SSESSEE AND ON ACCOUNT OF SALE OF AGRICULTURE LAND TO THE EXTENT O F RS. 19,35,158/- AND THE BALANCE ADDITION WAS CONFIRMED IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IS IN APPEAL AGAINST THE OR DER OF THE CIT(APPEALS). 71. THE LD. AR FOR THE ASSESSEE VEHEMENTLY PLACED R ELIANCE ON THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE T O EXPLAIN EACH AND EVERY ENTRY IN THE SAVING BANK ACCOUNTS. THE L D. AR FOR THE ASSESSEE POINTED OUT THAT THE DETAILS WERE FURNISHE D BEFORE THE ASSESSING OFFICER WHICH ARE PLACED AT PAGES 627 OF THE PAPER 36 BOOK AND THEREAFTER REMAND REPORT WAS SENT BY THE A SSESSING OFFICER WHICH HAS NOT BEEN CONSIDERED BY THE CIT(AP PEALS) AND THE ADDITION HAS BEEN UPHELD IN TOTALITY. OUR ATTE NTION WAS DRAWN TO THE EXPLANATION AT PAGE 309 AND ALSO AT PAGE 83 OF THE PAPER BOOK TO POINT OUT THAT CERTAIN ENTRIES IN THE DETAI LS PREPARED BY THE ASSESSING OFFICER WERE INCORRECT. OUR ATTENTIO N WAS ALSO DRAWN TO THE DETAILS OF FIXED DEPOSITS PLACED AT PA GE 225 OF THE PAPER BOOK. 72. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDER OF THE CIT(APPEALS). 73. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING VIDE PRESENT GROUND OF A PPEAL NO. 4 IS AGAINST THE ADDITION MADE ON ACCOUNT OF NON-EXPLANA TION OF THE BANK CREDITS. THE ASSESSEE WAS MAINTAINING VARIOUS BANK ACCOUNTS IN WHICH THERE WERE BOTH CASH AND CHEQUE D EPOSITS. THE CASH DEPOSITS IN THE VARIOUS BANK ACCOUNTS WERE EXP LAINED THROUGH THE THEORY OF CASH FLOW STATEMENT. BEFORE THE CIT( APPEALS), THE ASSESSEE ALSO PLACED RELIANCE ON THE BOOKS OF ACCOU NT PREPARED BY IT, ADMITTEDLY AFTER THE DATE OF SEARCH. HOWEVER, THE SAID RELIANCE PLACED BY THE ASSESSEE BOTH ON THE BOOKS OF ACCOUNT AND CASH FLOW STATEMENTS WERE REJECTED BY THE CIT(APPEALS). WE FI ND THAT THE ASSESSEE HAD NOT FURNISHED ANY BALANCE SHEET ALONGW ITH THE RETURN OF INCOME AND THE BALANCE SHEETS WERE PREPARED ONLY DURING THE COURSE OF SECOND ROUND OF APPELLATE PROCEEDINGS. T HE BOOKS OF ACCOUNT WERE ALSO PREPARED AFTER THE SEARCH ACTION AND WERE PRODUCED FOR THE FIRST TIME DURING THE SECOND ROUND OF APPELLATE PROCEEDINGS. IN OUR VIEW, THE SAID BOOKS OF ACCOUN T AND THE BALANCE SHEETS CANNOT BE RELIED UPON AS THE SAME WE RE PREPARED AFTER SEARCH ACTION AND WERE NOT PRODUCED BEFORE TH E ASSESSING OFFICER DURING TWO ROUNDS OF ASSESSMENT PROCEEDINGS BUT WERE ONLY PRODUCED BEFORE THE CIT(APPEALS) DURING THE SE COND ROUND OF ASSESSMENT PROCEEDINGS. IN ANY CASE, DURING THE CO URSE OF SEARCH, INCRIMINATING MATERIAL WAS FOUND FROM THE POSSESSIO N OF THE ASSESSEE WHICH HAS BEEN SEIZED AND ON THE BASIS OF WHICH WE HAVE ALREADY UPHELD THE ADDITIONS ON VARIOUS ACCOUNTS. RELIANCE OF THE ASSESSEE ON THE SAID BALANCE SHEET OR THE BOOKS OF ACCOUNT IS THUS, REJECTED. 74. FURTHER IN THE PARAS ABOVE, WE HAVE ALREADY AT LENGTH ADDRESSED THE ISSUE OF ADMISSIBILITY OF THE CASH FL OW STATEMENT BECAUSE OF THE DEFECTS REFERRED TO BY US IN THE SAI D CASH FLOW STATEMENT PREPARED IN THE ASSESSEE. IN VIEW THEREO F, NO RELIANCE CAN BE PLACED UPON THE SAID CASH FLOW STATEMENT AND AS SUCH THE CASH DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSEE WHICH THE ASSESSEE EXPLAINED TO BE THROUGH THE CASH FLOW STAT EMENT, ARE TO BE ADDED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAS ALSO IN THE CASH FLOW S TATEMENT, REFLECTED CASH RECEIVED ON SALE OF TREES FROM THE H UF ACCOUNT. THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE OF SALE OF TREES THOUGH. THE ASSESSEE, TIME AND AGAIN HAS PRODUCED THE EVIDENCE OF LAND HOLDING BY THE HUF OF THE ASSESSEE, THE LAN D BEING ANCESTRAL LAND. SUCH PLEA OF THE ASSESSEE, AT SUCH LATE STAGE CANNOT BE ACCEPTED AS THE ASSESSEE HAS FAILED TO PR ODUCE THE EVIDENCE AT THE RELEVANT TIME OF ASSESSMENT PROCEED INGS AND IT IS DIFFICULT TO MAKE FURTHER INVESTIGATION BECAUSE OF LAPSE OF TIME. NO 37 BENEFIT CAN BE ALLOWED TO THE ASSESSEE ON ACCOUNT O F THE ALLEGED RECEIPTS IN CASH RECEIVED ON ACCOUNT OF SALE OF TRE ES. THIS POINT HAS ALSO BEEN ADJUDICATED BY US IN THE PARAS ABOVE WHILE DISMISSING THE RELIANCE OF THE ASSESSEE ON THE CASH FLOW STATEMENT. 75. THE SECOND ASPECT OF THE BANK ENTRIES IN THE VA RIOUS BANK ACCOUNTS OF THE ASSESSEE ARE THE CREDIT ENTRIES WHI CH ARE CLAIMED TO HAVE BEEN RECEIVED THROUGH CHEQUES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO F URNISH COMPLETE INFORMATION IN RESPECT OF THE LOANS RECEIV ED BY THE ASSESSEE DURING THE BLOCK PERIOD. THE ASSESSING OFF ICER ALSO DIRECTED THE ASSESSEE TO PRODUCE THE PERSONS FROM W HOM SUCH LOANS WERE RECEIVED. AT THE FAG END OF THE ASSESSME NT PROCEEDINGS I.E. ON 27.03.2002, STATEMENTS OF CERTAIN PERSONS P RODUCED BY THE ASSESSEE WERE RECORDED BUT AS THERE WAS NO TIME TO MAKE FURTHER INVESTIGATIONS, THE ASSESSING OFFICER REJECTED THE SAID STATEMENTS AND CONFIRMED THE ADDITION IN THE HANDS OF THE ASSE SSEE. THE COURTS HAVE TIME AND AGAIN HELD THAT MERE PAYMENT O F CHEQUE OR THROUGH BANKING CHANNEL IS NOT SUFFICIENT TO DISCHA RGE THE ONUS WHERE THE ASSESSEE CLAIMS THAT IT HAD RECEIVED THE CREDITS BY WAY OF LOAN FROM VARIOUS PERSONS. FIRST ONUS IS UPON TH E ASSESSEE TO ESTABLISH THE IDENTITY AND CREDIT WORTHINESS OF THE LOAN CREDITOR AND ALSO TO ESTABLISH THE GENUINENESS OF THE LOAN. IN CASE THE INFORMATION IS FILED BY THE ASSESSEE TO ESTABLISH I TS CLAIM THEN THE ASSESSING OFFICER HAS TO MAKE INVESTIGATION IN RESP ECT OF SOURCE OF VARIOUS CREDIT ENTRIES IN THE BANK ACCOUNTS. IN TH E FACTS OF THE PRESENT CASE BEFORE US AND AS POINTED OUT BY US IN THE PARAS AGAIN AND AGAIN, THERE WAS TOTAL NON-COOPERATION BY THE A SSESSEE DURING THE TWO ROUNDS OF ASSESSMENT PROCEEDINGS AND THE IN FORMATION BEFORE THE CIT(APPEALS) IN THE SECOND ROUND OF APPE LLATE PROCEEDINGS WAS ALSO FILED IN PIECEMEAL. THE CIT(A PPEALS) HAS RECORDED THE EXPLANATION OF THE ASSESSEE OBSERVING, THE ASSESSING OFFICER HAS ALSO TO VERIFY WHETHER THAT C REDITOR IS SHOWING ITS INCOMES IN HIS RETURN OF INCOME OR NOT. THE ASSESSEE IS EXPECTED TO FURNISH THE INFORMATION AT THE PROPE R TIME SO THAT THERE IS ENOUGH ROOM TO MAKE NECESSARY ENQUIRIES AN D INVESTIGATIONS. IT IS AN ESTABLISHED LAW THAT ONUS IS ON THE ASSESSEE TO PROVE THE CREDITS WITH COGENT EVIDENCE. MERE FURNISHING OF AFFIDAVIT IS NOT SUFFICIENT TO DISCHA RGE THE ONUS. THE CIT(APPEALS) AT PAGE 63 OF THE APPELLATE ORDER OBSERVED THAT THOUGH THERE WAS SUFFICIENT TIME AVAILABLE WITH THE ASSESSEE FROM THE DATE OF SEARCH TO THE DATE OF ORIGINAL ASSESSME NT TO FURNISH ALL THE DOCUMENTS, BUT THE ASSESSEE FOR THE FIRST TIME FILED THE RETURN OF INCOME ONLY IN OCTOBER,2000 AND AFTER FILING THE RETURN, THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFI CER IN THE FIRST ROUND AND THE MATTER WAS SET ASIDE. THE MATERIAL W HICH WAS PLACED BEFORE THE CIT(APPEALS) AS ADDITIONAL EVIDEN CE WAS NOT FILED BEFORE THE ASSESSING OFFICER. THE CIT(APPEALS ), THUS HELD THAT ON THE BASIS OF THE DOCUMENTS I.E. THE AFFIDAV ITS FURNISHED AT THE FAG END OF THE ASSESSMENT PROCEEDINGS, IT WAS N OT POSSIBLE TO GIVE RELIEF. WE ARE IN CONFORMITY WITH THE OBSERVA TIONS OF THE CIT(APPEALS) IN THIS REGARD THAT BECAUSE OF THE INE FFICIENCY OF THE ASSESSEE IN FURNISHING THE INFORMATION IN TIME WHIC H IN-TURN WOULD HAVE ENABLED THE ASSESSING OFFICER TO CARRY OUT THE REQUISITE INVESTIGATIONS, THE INFORMATION/EVIDENCES FILED AT A LATER DATE WHEN THE SAME COULD NOT BE PUT TO TEST OF EVIDENCE BECAUSE OF LAPSE OF TIME OR FURTHER INVESTIGATIONS, NO RELIANC E CAN BE PLACED 38 ON THE SAID DOCUMENTS/EVIDENCES FILED BY THE ASSESS EE BEFORE THE ASSESSING OFFICER AT THE FAG END OF THE ASSESSMENT PROCEEDINGS OR EVEN BEFORE THE CIT(APPEALS) DURING THE SECOND ROUN D OF APPELLATE PROCEEDINGS. 76. THE LD. AR FOR THE ASSESSEE HAS VEHEMENTLY POIN TED OUT BEFORE US THAT THE ORDER OF THE CIT(APPEALS) SUFFER S FROM A LEGAL ERROR AS VARIOUS REMAND REPORTS REQUISITIONED DURIN G THE PENDENCY OF APPELLATE PROCEEDINGS HAVE NOT BEEN CONSIDERED B Y THE CIT(APPEALS) BEFORE ADJUDICATING THE ISSUE VIS--VI S THE ADDITION MADE ON ACCOUNT OF THE BANK CREDITS. THE LD. AR FO R THE ASSESSEE REFERRED TO THE REMAND REPORT FILED BY THE ASSESSIN G OFFICER PLACED AT PAGES 627 TO 631 DATED 02.09.2005 OF THE PAPER BOOK IN WHICH VERIFICATION OF THE DEPOSITORS/CREDITORS WAS CARRIED OUT BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS REPORTED IN RESPECT OF CERTAIN DEPOSITORS THAT THE LOAN APPEARS TO BE GENUINE AND IN RESPECT OF OTHERS, IT HAS BEEN REPORTED THAT THE CREDIT ENTRIES MAY BE TREATED ON MERITS. IN THE SAID REPO RT FURTHER, THERE IS SUBMISSION THAT THE AGRICULTURE LAND IS ANCESTRA L PROPERTY AND THE HUF CREDITS MAY BE CONSIDERED ON MERITS. THEREA FTER, ANOTHER REMAND REPORT DATED 16.11.2005 WAS SUBMITTED BY THE ASSESSING OFFICER IN WHICH THERE IS EXPLANATION IN RESPECT OF CREDIT ENTRIES TO THE EXTENT OF RS. 45,81,251/-. THE THIRD REMAND REPORT WAS FILED BY THE LD. AR FOR THE ASSESSEE DURING THE RES UMED HEARING, WHICH IN TURN IS PLACED AT PAGES 672 TO 674 OF THE PAPER BOOK IN WHICH THERE IS BIFURCATION OF THE CASH DEPOSITS AND ENTRIES TREATED AS CASH BY THE ASSESSING OFFICER BUT IN ACTUAL, WHI CH WERE ENTRIES OF CLEARANCE OF CHEQUES. AS PER THE LD. AR FOR THE ASSESSEE, THE ASSESSING OFFICER HAS REPORTED THAT THE ASSESSEE HA D SUFFICIENT CASH IN HAND IN HIS BOOKS OF ACCOUNT ON THE DATES W HEN CASH WAS DEPOSITED IN THE BANK ACCOUNT AND AS SUCH, HAS ACCE PTED THE EXPLANATION IN RESPECT OF THAT ENTRIES. 77. FURTHER CONTENTION OF THE LD. AR FOR THE ASSESS EE WAS THAT THE CIT(APPEALS) HAS NOT TAKEN COGNIZANCE OF THE SA ID REMAND REPORTS WHILE ADJUDICATING THE ISSUE AGAINST THE AS SESSEE. 78. WE FIND NO MERIT IN THE SAID STAND OF THE ASSES SEE. REFERENCE IS MADE TO PARA 107 AT PAGE 68 OF THE APP ELLATE ORDER WHEREIN IT HAS BEEN HELD AS UNDER : 107 AS REGARDS OTHER ENTRIES, THE ASSESSING OFF ICER NEVER HAD ANY OCCASION DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO VERI FY, EXAMINE AND INVESTIGATE THOSE DOCUMENTS. ANY EVIDENCE OR STATEMENT RECORDED BY THE ASSESSING OFFICER IN PURSUANCE OF THE LETTERS ISSUED BY CIT(APPEALS) ARE NOT BEING CONSIDERED EXCEPT WHERE IT IS FELT THAT THE EVIDENCE IS SUCH T HAT CLINCHES THE ISSUE. IT MAY BE POINTED OUT THAT THE CIT(APPEALS) FORWARDED THE SUBMISSIONS OF THE ASSESSEE TO THE ASSESSING OFFICER. SOMETIMES, A DIR ECTION IS GIVEN TO VERIFY THOSE ENTRIES. THIS SHOULD NOT BE CONSTRUED THAT TH E CIT(APPEALS) HAS TAKEN A DECISION TO ENTERTAIN SUCH DOCUMENTS WHICH WERE NEV ER PRODUCED BEFORE THE ASSESSING OFFICER. THE CIT(APPEALS) HAS PERHAPS DON E SO ONLY TO BE AWARE OF THE FACTS OF THE CASE IN A BETTER MANNER. THIS IS A LSO THE REASON THAT THE ASSESSEE HAS BEEN GIVEN RELIEF IN RESPECT OF CERTAI N ENTRIES. THE ASSESSEE HAS BEEN GIVEN RELIEF ON ACCOUNT OF RENTAL INCOME RECEI VED; RECEIPTS ON ACCOUNT OF SALE OF AGRICULTURAL LAND AND IN TURN RECEIVED LOAN FROM THE PERSONS WHO GOT THE MONEY BY WAY OF SALE OF AGRICULTURAL LAND; PROF ITS FROM M/S S,K. & COMPANY CREDITED IN THE CAPITAL ACCOUNT OF THE ASSE SSEE; INTEREST INCOME; SALARY; IT MAY BE POINTED OUT THAT THE ASSESSING OF FICER :.N PARA-8 OF THE 39 ORIGINAL ASSESSMENT ORDER HAS MENTIONED THAT THE EN TRIES RELATING TO TRANSFER OF ENTRIES FROM ONE ACCOUNT TO ANOTHER ACCOUNT HAVE BE EN EXCLUDED IN ANNEXURE X-6 OF THE ORIGINAL ASSESSMENT ORDER. IN RESULT, THIS GROUND IS PARTLY ALLOWED. 79. THE CIT(APPEALS) HAS GIVEN A FINDING THAT WHERE THE SUBMISSIONS OF THE ASSESSEE HAVE BEEN FORWARDED TO THE ASSESSING OFFICER FOR VERIFICATION OF THE ENTRIES, SHOULD NOT BE CONSTRUED THAT THE CIT(APPEALS) HAD TAKEN A DECISION TO ENTER TAIN SUCH DOCUMENTS WHICH WERE NEVER PRODUCED BEFORE THE ASSE SSING OFFICER. THE CIT(APPEALS) FURTHER OBSERVES THAT SU CH EXERCISE WAS TO BE BETTER AWARE OF THE FACTS. FURTHER CERTAI N RELIEF WAS GIVEN BY THE CIT(APPEALS) ON ACCOUNT OF RENTAL INCO ME RECEIVED, RECEIPTS ON ACCOUNT OF SALE OF AGRICULTURE LAND AND LOAN RECEIVED FROM THE PERSONS WHO GOT THE MONEY BY WAY OF SALE O F AGRICULTURE LAND, PROFITS FROM S.K. & COMPANY, INTEREST INCOME AND SALARY. IN VIEW THEREOF, WE FIND NO MERIT IN THE STAND OF T HE LD. AR FOR THE ASSESSEE THAT THE REMAND REPORTS HAVE NOT BEEN CONS IDERED BY THE CIT(APPEALS) BEFORE ADJUDICATING THE ISSUE. HOWEVE R, IN ORDER TO BE FAIR AND TO ADJUDICATE THE ISSUE FURTHER, WE CON SIDER THE ABOVESAID REMAND REPORTS SUBMITTED BY THE ASSESSING OFFICER. ANNEXURE X-6 ATTACHED TO THE ORIGINAL ASSESSMENT OR DER TABULATES THE ENTRIES IN THE BANK ACCOUNTS WHICH THE ASSESSEE HAD FAILED TO EXPLAIN AND ADDITION WAS MADE IN THE HANDS OF THE A SSESSEE ON THE BASIS OF THE AFORESAID ANNEXURE X-6 TO THE ORIGINAL ASSESSMENT ORDER. THE LD. AR FOR THE ASSESSEE HAS TIME AND AG AIN POINTED OUT THAT THE ASSESSING OFFICER HAD FAILED TO GIVE CREDI T OF THE ENTRIES RELATING TO TRANSFER OF ENTRIES FROM BANK ACCOUNT T O THE OTHER BANK ACCOUNT. HOWEVER, VIDE PARA 8 OF THE ORIGINAL ASSE SSMENT ORDER, THE ASSESSING OFFICER HAS CLEARLY MENTIONED THAT TH E ENTRIES RELATING TO TRANSFER OF ENTRIES FROM ONE ACCOUNT TO ANOTHER ACCOUNT, HAVE BEEN EXCLUDED IN ANNEXURE X-6 OF THE ORIGINAL ASSESSMENT ORDER. FURTHER IN THE ABSENCE OF ASSESSE E HAVING EXPLAINED SOURCE OF AMOUNT TRANSFERRED FROM ONE BAN K ACCOUNT TO ANOTHER, ADDITION OF THE SAME IS MERITED IN THE HAN DS OF ASSESSEE. 80. NOW COMING TO THE CONTENTS OF THE VARIOUS REMAN D REPORTS DELIVERED BY THE ASSESSING OFFICER, WE PROCEED TO D EAL WITH THE FINDINGS OF THE ASSESSING OFFICER IN EACH ONE OF TH E SAID REPORT. THE FIRST REMAND REPORT IS ANNEXURE-1 PLACED AT PAG ES 627 TO 631 IS DATED 02.09.2005 IN WHICH THERE IS VERIFICATION OF VARIOUS CREDITORS AND THE ASSESSING OFFICER HAS REPORTED TH AT SOME OF THE SAID LOANS WERE TO BE TREATED AS GENUINE AND IN RES PECT OF OTHERS, THERE IS REPORT THAT THE SAME MAYBE CONSIDERED ON M ERITS. IN VIEW OF EXERCISE CARRIED OUT BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE CREDITS REPORTED BY ASSESSING OFFICER TO BE TREATED AS GENUINE, TOTALING RS. 25,65,000/- MAYBE ACCEPTED IN THE HAND S OF THE ASSESSEE. HOWEVER, THE OTHER CREDITS WHICH TOTAL T O RS. 12,21,200/- AS PER THE DETAILS FURNISHED BY THE ASS ESSEE IN THIS REGARD, HAVE BEEN ACCEPTED VIDE CHEQUES AND MAJORIT Y OF THE SAME ARE CLAIMED TO BE REPAID DURING THE BLOCK PERIOD, B UT THE ASSESSEE HAS FAILED TO COMPLETELY DISCHARGE HIS ONUS OF ESTA BLISHING THE IDENTITY AND CREDIT WORTHINESS OF THE SAID CREDITOR S AND IN THE ABSENCE OF SAME, SUCH CREDITS CANNOT BE ACCEPTED AS GENUINE. 40 81. THE THIRD CREDITS ARE ON ACCOUNT OF THE AMOUNTS RECEIVED ON ACCOUNT OF SHARE OF AGRICULTURE LAND SOLD BY THE AS SESSEE ALONGWITH OTHER FAMILY MEMBERS, CREDIT OF WHICH HAS ALREADY BEEN ALLOWED BY THE CIT(APPEALS). FURTHER, THE INCOME FR OM SALE PROCEEDS OF TREES RECEIVED IN CASH CANNOT BE ACCEPT ED IN THE HANDS OF THE ASSESSEE IN VIEW OF OUR OBSERVATIONS WITH RE GARD TO THE CASH FLOW STATEMENT. 82. THE NEXT REMAND REPORT IS PLACED AT PAGES 635 A ND 636 OF THE PAPER BOOK WHICH HAVE BEEN PLACED ON RECORD BY THE ASSESSEE. THE FIRST ISSUE ARISING IN THE SAID REMAND REPORT I S IN RESPECT OF THE REFUND RECEIVED OF RS. 76,500/- WHICH MAY BE AL LOWED TO THE ASSESSEE. THE AMOUNT RECEIVED FROM FAMILY MEMBERS AS PER ANNEXURE-B OF RS. 32,64,000/- HAS ALREADY BEEN CONS IDERED BY THE CIT(APPEALS) AND RELIEF HAS BEEN ALLOWED ON ACCOUNT OF TRANSFER OF ENTRIES ON SALE OF LAND. IN VIEW THEREOF, WE FI ND NO MERIT IN FURTHER ALLOWING ANY RELIEF ON THIS ACCOUNT. 83. THE NEXT ISSUE IS ON ACCOUNT OF RENT OF HOUSE N O. 52 SECTOR 8-A, CHANDIGARH WHICH HAD BEEN RECEIVED AS PER THE SUPREME COURT ORDER AND THE CREDIT FOR THE SAME HAS ALREADY BEEN ALLOWED BY THE CIT(APPEALS) AND NO FURTHER RELIEF ON THIS A CCOUNT IS MERITED. 84. THE LAST ITEM IS IN RESPECT OF THE TRANSFER FRO M ONE ACCOUNT TO OTHERS AND SUCH BANK TRANSFERS TOTALING RS. 7,46 ,656/-. THE CIT(APPEALS) HAS GIVEN A FINDING THAT ANNEXURE X-6 DID NOT CONTAIN ANY OF SUCH AMOUNTS OF INTER-BANK TRANSFERS AND THE ASSESSEE HAVING FAILED TO CONTROVERT THE SAID FINDI NGS OF CIT(APPEALS), WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AND THE SAME IS REJECTED. 85. IN VIEW THEREOF, THE ASSESSEE GETS FURTHER RELI EF OF RS. 76,500/- ON ACCOUNT OF REMAND REPORT DATED 16.11.20 05. 86. THE LAST REMAND REPORT PLACED AT PAGES 672 TO 6 74 IS DATED 1.5.2006 IN RESPECT OF CASH AVAILABLE WITH THE ASSE SSEE AND IN VIEW OF OUR DELIBERATION ON THE ISSUE, WE FIND NO M ERIT IN THE STAND OF THE LD. AR FOR THE ASSESSEE ON PLACING REL IANCE ON THE SAME, AS POINTED OUT BY THE CIT(APPEALS). FURTHER, WE FIND THAT THE CIT(APPEALS) HAS AT PAGES 64 TO 66 CONSIDERED A NOTHER ASPECT OF THE FACTS OF THE PRESENT CASE WHEREIN AS COMPARE D TO THE INCOME OF RS. 11,58,158/- DECLARED BY THE ASSESSEE DURING THE BLOCK PERIOD VIS-A-VIS THE PROPERTIES ACQUIRED BY THE ASS ESSEE DURING BLOCK PERIOD. THE EXPLANATION OF THE ASSESSEE IN TH IS REGARD DID NOT MATCH IN VIEW OF NON-AVAILABILITY OF THE FUNDS. THE CLAIM OF THE ASSESSEE THAT IT HAD RAISED LOANS FROM SEVERAL PERSONS HAS BEEN ADDRESSED BY THE CIT(APPEALS) AT PAGE 65 OF TH E APPELLATE ORDER AND REJECTED. IN VIEW THEREOF, NO CREDIT CAN BE ALLOWED ON THE SO CALLED CASH FLOW STATEMENT. THE GROUND NO. 4 RAISED BY ASSESSEE IS THUS PARTLY ALLOWED. 48. THE ASSESSING OFFICER IS DIRECTED TO ALLOW SIMI LAR RELIEF IN THE HANDS OF THE ASSESSEE. FOLLOWING THE SAME PARITY OF REASONING, GROUND NO. 4 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 41 49. THE ISSUE IN GROUND NO. 5 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 7 IN THE CASE OF S HRI CHANDER DEEP JAIN. THE TRIBUNAL WHILE DELIBERATING UPON THE ISS UE HAS DISMISSED THE GROUND OF APPEAL RAISED BY THE ASSESSEE. FOLLOWING THE SAME PARITY OF REASONING, WE REJECT THE CLAIM OF THE ASSESSEE AND GROUND NO. 5 RAISED BY THE ASSESSEE IS DISMISSED 48. THE ISSUE IN GROUND NO. 6 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 6 IN THE CASE OF S HRI CHANDER DEEP JAIN. THE TRIBUNAL WHILE DELIBERATING UPON THE ISS UE HAS DISMISSED THE GROUND OF APPEAL RAISED BY THE ASSESSEE. FOLLOWING THE SAME PARITY OF REASONING, WE DISMISS THE CLAIM OF THE ASSESSEE AND GROUND NO. 6 RAISED BY THE ASSESSEE IS DISMISSED ITSS 17/CHD/2009 : REVENUES APPEAL 49. THE ISSUE VIDE GROUND NO. 1 IS AGAINST THE DELE TION OF ADDITION OF RS. 218,310/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNACCOUNTED CASH. 50. DURING THE COURSE OF SEARCH, CASH AMOUNTING TO RS. 259,310/- WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE. HOWEVER, IN ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED THAT CASH WAS OUT OF OVER DRAFT DRAWN FROM THE ACCOUNT OF SMT. SNEH JAIN WITH STATE BANK OF PATIALA, SECTOR 17, CHANDIGARH ON 01.09.1998. THE ASSESSING OFFICE R DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND ONLY ALLOWED A MARGIN OF RS. 1000/- TO THE ASSESSEE AND AS RS. 40,000/- WAS ADDED IN TH E HANDS OF HIS WIFE SMT. SNEH JAIN, BALANCE OF RS. 218,310/- WAS ADDED AS UNACCOUNTED INCOME OF THE ASSESSEE. THE CIT(APPEALS) ACCEPTED THE PLEA OF THE WITHDRAWAL FROM THE OVER-DRAFT ACCOUNT AFTER VERIFY ING THE COPY OF BANK ACCOUNT OF SMT. SNEH JAIN. 42 51. THE LD. DR FOR THE REVENUE HAS FAILED TO CONTRO VERT THE FINDINGS OF CIT(APPEALS) AT PAGE 79 IN ACCEPTING THE WITHDRA WAL OF THE SAID AMOUNT FROM THE BANK ACCOUNT OF THE WIFE OF THE ASS ESSEE. ACCORDINGLY, WE DISMISS THE GROUND NO. 1 RAISED B THE REVENUE. 52. THE ISSUE IN GROUND NO. 2 RAISED BY THE REVENUE IS AGAINST THE ALLOWANCE OF RELIEF OF RS. 55,600/- BY TREATING 100 GMS. OF JEWELLERY AS EXPLAINED IN THE HANDS OF THE ASSESSEE. THE ASSESSI NG OFFICER HAD INCLUDED THE TOTAL VALUE OF THE JEWELLERY FOUND FRO M THE RESIDENCE OF THE ASSESSEE AND THE BANK LOCKER OF THE ASSESSEE AS UNACCOUNTED INCOME OF THE ASSESSEE. HOWEVER, THE CIT(APPEALS) VIDE PA RA 137 AT PAGE 82 ALLOWED THE BENEFIT TO THE EXTENT OF 100GMS. OF JEW ELLERY TO BE TREATED AS EXPLAINED. 53. WE FIND THAT WE HAVE DEALT WITH THIS ISSUE RAIS ED BY ASSESSEE VIDE GROUND NO. 2(A) AGAINST PART RELIEF ALLOWED BY CIT( A). FOLLOWING SAME PARITY OF REASONS, WE FIND NO MERIT IN GROUND OF AP PEAL NO. 2 RAISED BY THE REVENUE AND THE SAME IS DISMISSED. 54. THE GROUND NO. 3 RAISED BY THE REVENUE IS AGAIN ST DELETION OF ADDITION OF RS. 3000/-. THE ASSESSEE WAS FOUND IN POSSESSION OF FDRS TOTALING RS.5,000/-, OUT OF WHICH FDRS TOTALING RS. 3,000/- WERE IN THE NAME OF HIS CHILDREN AND RS. 2,000/- WERE IN THE NA ME OF HIS WIFE. ADDITION OF RS. 3,000/- WAS MADE IN THE HANDS OF TH E ASSESSEE, WHICH WAS DELETED BY THE CIT(APPEALS) VIDE PARA 139 AT PA GE 84 BEING GIFTS RECEIVED BY THE CHILDREN FROM THE ELDERS ON VARIOUS OCCASIONS. 55. WE ARE IN CONFORMITY WITH THE FINDINGS OF THE C IT(APPEALS) IN THIS REGARD AND DISMISS GROUND NO. 3 RAISED BY THE REVENUE. 43 56. THE GROUND NO. 4 RAISED BY THE REVENUE IS LINKE D TO GROUND NO. 2(B) RAISED IN ASSESSEE'S OWN CASE AND IN VIEW OF O UR ORDER IN RELATION TO IT, THIS GROUND OF APPEAL IS DISMISSED. 57. THE GROUND NOS. 5 TO 9 ARE AGAINST THE RELIEFS ALLOWED BY THE CIT(APPEALS) FOR THE INVESTMENTS IN VARIOUS PROPERT IES WHICH ARE AS UNDER : GROUND NO. PROPERTY AMOUNT 5 SCO 41 SECTOR 18-D,CHANDIGARH RS. 1,00,000/- 6 SCO 117, SECTOR 5,PANCHKULA RS. 3,54,000/- 7 LAND AT VILLAGE RALLY RS. 1,00,000/- 8 PLOT NO. 189,PHASE-I,PANCHKULA RS. 5,94,433/- 9 SCO 174, SECTOR 5,PANCHKULA RS. 2,00,000/- 58. THE ASSESSING OFFICER WHILE COMPLETING THE ASSE SSMENT ORDER HAD MADE THE ABOVESAID INVESTMENTS AS BEING NOT EXPLAIN ED BY THE ASSESSEE. THE CIT(APPEALS) HAS SEPARATELY DEALT WITH EACH GRO UND OF APPEAL RAISED BY THE ASSESSEE AND ALLOWED RELIEF TO THE AS SESSEE. THE RELEVANT FINDINGS OF THE CIT(APPEALS) VIDE THE RESPECTIVE PA RAS ARE BEING DEALT WITH AS UNDER. 59. THE FIRST ISSUE VIDE GROUND NO. 5 IS IN RESPECT OF SCF 41 SECTOR 18D,CHANDIGARH. THE CIT(APPEALS) VIDE PARA 159 AT P AGE 97 OBSERVED AS UNDER : 159. 1 HAVE CAREFULLY CONSIDERED THE RIVAL SUBMI SSIONS. THE SEIZED DOCUMENTS CLEARLY ESTABLISH THAT SH. VISHNU GOYAL PURC HASED SCF 41. SECTOR 18-D, CHANDIGARH. THE DEPARTMENT RECORDED THE STATEMENT O F SH. VISHNU GOYAL WHO STATED THAT A SUM OF RS. 1 LAC WAS GIVEN BY SH. VIP IN JAIN. THERE IS NO OTHER EVIDENCE BROUGHT BY THE DEPARTMENT TO PROVE THAT SH . VIPIN JAIN MADE THE INVESTMENT. IN THE SEIZED DOCUMENTS, THERE IS NO ME NTION OF SH. VIPIN JAIN. IN MY OPINION, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THIS ADDITION SIMPLY ON THE BASIS OF STATEMENT OF SH. VISHNU GOYAL BECAUSE THE SEIZED DOCUMENTS DO NOT MAKE ANY MENTION OF SH. VIPIN JAIN. THEREFORE, THIS GROU ND OF THE ASSESSEE IS ALLOWED. 44 60. THE LD. DR FOR THE REVENUE HAS FAILED TO CONTRO VERT THE FINDINGS OF THE CIT(APPEALS) AND HENCE GROUND NO. 5 IS DISMI SSED. 61. IN RESPECT OF THE INVESTMENT IN SCO 117 SECTOR 5 PANCHKULA, THE CIT(APPEALS) ALLOWED RELIEF OF 50% BEING INVESTMENT MADE BY THE CO- OWNER MRS. RENU SACHDEVA. 62. WE HAVE ALREADY DEALT WITH THIS ISSUE IN GROUND NO. 2(H) AND THE ISSUE BEING LINKED, WE DISMISS GROUND NO. 6 RAISED BY THE REVENUE. 63. THE ISSUE VIDE GROUND NO. 7 IS INVESTMENT IN LA ND AT VILLAGE RALLY WHICH WAS DELETED BY THE CIT(APPEALS) VIDE PARA 170 AS NO DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH AND THE ADDI TION WAS MADE MERELY ON THE BASIS OF STATEMENT OF SHRI V.K.BANSAL . IN THE ABSENCE OF ANY DOCUMENT BEING FOUND DURING THE COURSE OF SEARC H, WE ARE INCONFORMITY WITH THE ORDER OF THE CIT(APPEALS) AND DISMISS GROUND NO. 7 RAISED BY THE REVENUE. 64. THE ISSUE IN GROUND NO.8 IS AGAINST THE INVESTM ENT IN M/S JASMINE ENTERPRISES PVT.LTD., PLOT NO. 189,PHASE-I PANCHKULA AT RS. 594,433/-. THE ADDITION WAS MADE IN THE HANDS OF TH E ASSESSEE ON ACCOUNT OF THE SEIZED DOCUMENTS RELATING TO INVESTM ENT IN M/S JASMINE ENTERPRISES PVT. LTD. 65. THE CIT(APPEALS) VIDE PARA 176 CONSIDERED THAT THE SOURCE OF INVESTMENT WAS OUT OF WITHDRAWALS FROM THE CANARA B ANK ACCOUNT IN WHICH CASH WAS DEPOSITED. THE CIT(APPEALS) THUS, H ELD THAT AS CASH DEPOSITED IN THE BANK HAS BEEN ADDED IN THE HANDS O F THE ASSESSEE, THERE WAS NO MERIT IN FURTHER ADDITION OF RS. 594,4 33/-. IN THE ENTIRETY OF THE ABOVESAID FACTS AND CIRCUMSTANCES, WE UPHOLD THE ORDER OF CIT(APPEALS) AND DISMISS GROUND NO.8 RAISED BY THE REVENUE. 45 66. THE GROUND NO. 9 RAISED BY THE REVENUE IS AGAIN ST THE DELETION OF ADDITION OF RS.2,00,000/- FOR INVESTMENT IN SCO NO. 174 SECTOR 5, PANCHKULA. THE ADDITION WAS MADE BY THE ASSESSING OFFICER VIDE PARA 14 AT PAGE 9 OF THE ASSESSMENT ORDER. HOWEVER, THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS. 2,00,000/- ON THE BASIS OF SEIZED DOCUMENTS, WHICH WAS DELETED BY THE CIT(APPEALS) VI DE PARA 179 HOLDING THAT THE SAID INVESTMENT WAS NOT MADE BY TH E ASSESSEE AND THE NOTINGS WERE ONLY ROUGH NOTINGS. WE UPHOLD THE ORD ER OF THE CIT(APPEALS) IN THIS REGARD AND DISMISS GROUND NO. 9 RAISED BY THE REVENUE. 67. THE GROUND NO. 10 RAISED BY REVENUE IS LINKED T O GROUND NO. 3 RAISED BY THE ASSESSEE AND IN VIEW OF OUR ORDER IN RELATION TO IT, THIS GROUND OF APPEAL IS DISMISSED. 68. THE GROUND NO. 11 RAISED BY REVENUE IS LINKED T O GROUND NO. 4 RAISED BY THE ASSESSEE AND IN VIEW OF OUR ORDER IN RELATION TO IT, THIS GROUND OF APPEAL IS DISMISSED. 69. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF DECEMBER, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6 TH DECEMBER, 2013 POONAM COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH