SHASHIKANT G. CHOUBAL (Through legal heir Gautam S Choubal), MUMBAI V. ACIT CIR 23(3), MUMBAI

ITSSA 234/MUM/2005

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2278 (ITAT-MUMBAI)
• Duration Of Justice: 11 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-03-2015
• Assessment Year: misc
• Appeal Filed On: 02-06-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPKANT PRASAD
• Assessee Lawyers: M N NANDGAONKAR
• Keywords: Gift; Valuation report; Block assessment
• Section: 148; 132; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH MUMBAI . . , , BEFORE SHRI G.S.PANNU, AM & SHRI PAWAN SINGH, JM ( ) ./ IT(SS)A NO.234/MUM/2005 ( !'# # '# / BLOCK PERIOD :1989-90 TO 1999-2000) MR. SHASHIKANT G. CHOUBAL (THROUGH LEGAL HEIR GAUTAM S. CHOUBAL), 20, GURUJYOT, MAHATMA PHULE ROAD, MULUND (E), MUMBAI-400081 VS. ACIT,CIRCLE-23(3), 6 TH FLOOR, C-12, PRATYAKSH KAR BHAVAN, BANDRA, MUMBAI-51 $ ./ ./PAN/GIR NO. : ( $& /APPELLANT ) .. ( '($& / RESPONDENT ) ( ) ./ IT(SS)A NO.265/MUM/2005 ( !'# # '# / BLOCK PERIOD :1989-90 TO 1999-2000 SMT. SHAILA S. CHOUBAL 20, GURUJYOT, MAHATMA PHULE ROAD, MULUND (E), MUMBAI-400081 VS. ACIT,CIRCLE-23(3), 6 TH FLOOR, C-12, PRATYAKSH KAR BHAVAN, BANDRA, MUMBAI-51 $ ./ ./PAN/GIR NO. : ( $& /APPELLANT ) .. ( '($& / RESPONDENT ) #) /ASSESSEE BY : SHRI M.N.NANDGAONKAR /REVENUE BY : SHRI DEEPKANT PRASAD , - / DATE OF HEARING : 22/04/2016 , - /DATE OF PRONOUNCEMENT 20/07/2016 / O R D E R PER PAWAN SINGH (J.M) : THESE TWO APPEALS FILED BY TWO ASSESSEES FOR BLOCK PERIOD 1989-90 TO 1999-2000, WERE HEARD TOGETHER AS BOTH THE APPEALS ARE ARISING OUT OF RESULT OF SEARCH U/S 132 CARRIED OUT BY THE REVENUE. FIRST WE SHALL TAKE UP APPEAL ITA IT(SS)A NOS.234 & 265/M/05 2 NO.234/M/2005 FILED BY THE ASSESSEE AGAINST THE ORD ER DATED 24-3-2005, PASSED BY THE CIT(A)-XXIII, MUMBAI. THE ASSESSEE INITIALLY RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER HAS ERRED IN PASSING ORDER U/S.158BC WITHOU T SATISFYING HIMSELF WHETHER AN AUTHRORIZATION U/S.132 WAS EVER ISSUED A GAINST THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. ASSESSING OFFICER HAS ERRED IN APPLYING THE PROVISIONS OF CHA PTER XIV-B OF THE ACT TO THE APPELLANT 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN S USTAINING THE ADDITION OF RS.57,248/- AND RS.11,850/- ON ACCOUNT OF UNDISCLOSED INCOME BY FAILING TO APPRECIATE THE FACT THAT IT WA S NOT BASED ON THE MATERIAL FOUND AS A RESULT OF SEARCH OR NOT EVEN ON THE MATERIAL WHICH WAS BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE HE PASSED HIS INITIAL ASSESSMENT ORDER. THE ASSESSEE VIDE APPLICATION (LETTER) DATED 22-6-2 009, FILED AMENDED GROUND NO.3, WHICH IS AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN SU STAINING THE ADDITION OF RS.57,248/-(PARA 33), RS.1,05,930/-(PARA 26), RS .1,20,199/- (PARA 31) & RS.11850/-(PARA 43 OF HIS ORDER) ON ACCOUNT OF UNDI SCLOSED INCOME, BY FAILING TO APPRECIATE THE FACTS THAT THE ADDITIONS WERE NOT BASED ON THE MATERIAL FOUND AS RESULT OF SEARCH OR NOT BASED EVE N ON THE MATERIAL WHICH WAS BEFORE THE ASSESSING OFFICER 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH WAS CO NDUCTED U/S.132 OF THE ACT, IN DALVI GROUP OF CASES ON 11-6-1998 AND ASSESSEES PREMISES WERE ALSO COVERED. THE ASSESSEE WAS SERVED WITH THE NOTICE TO FILE RET URN OF BLOCK PERIOD. NO RETURN OF INCOME WAS FILED BY ASSESSEE FOR BLOCK ASSESSMEN T YEAR 1989-90 TO 1999- 2000 AND, THUS, PASSED THE ASSESSMENT ORDER ON 28-6 -2000 U/S.158BC WAS PASSED EX-PARTY. WHILE FRAMING OF ASSESSMENT THE ASSESSING OFFICER (AO) ASSESSED THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS.14,67,980/ - FOR THE BLOCK PERIOD. AGGRIEVED BY THE ORDER OF AO ASSESSEE FILED APPEAL BEFORE CIT(A) WHEREIN THE ASSESSEE WAS GRANTED PARTIAL RELIEF, THUS THE PRESE NT APPEAL IS FILED BEFORE US. DURING THE PENDENCY OF APPEAL THE ASSESSEE DIED ON 4-1-2012 AND HIS LRS. WAS BROUGHT ON RECORD. 3. WE HAVE HEARD LD. AR FOR ASSESSEE AND DR FOR REV ENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE WE MAY DISCUSS THE FACTS OF THE PRESENT CASE, IT(SS)A NOS.234 & 265/M/05 3 LET US EXAMINE THE PROVISIONS RELATING TO THE COMPU TATION OF UNDISCLOSED INCOME OF THE BLOCK PERIOD AS PROVIDED IN CHAPTER XIVB OF THE ACT, WHICH IS READ AS UNDER: PROCEDURE FOR BLOCK ASSESSMENT . 158BC. WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SE CTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQ UISITIONED UNDER SECTION 132A, IN THE CASE OF ANY PERSON, THEN, (A) THE ASSESSING OFFICER SHALL (I) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCO UNT OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED AFTER THE 30T H DAY OF JUNE, 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS; (II) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACC OUNT OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED ON OR AFTER T HE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM T O FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS BUT NOT MORE THAN FORTY-FIVE DAYS, AS MAY BE SPECIFIED IN THE NOTICE A RETURN IN THE P RESCRIBED FORM 30 AND VERIFIED IN THE SAME MANNER AS A RETURN UNDER CLAUS E (I) OF SUB-SECTION (1) OF SECTION 142, SETTING FORTH HIS TOTAL INCOME INCL UDING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD : PROVIDED THAT NO NOTICE UNDER SECTION 148 IS REQUIR ED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDER THIS CHAPTER: PROVIDED FURTHER THAT A PERSON WHO HAS FURNISHED A RETURN UNDER THIS CLAUSE SHALL NOT BE ENTITLED TO FILE A REVISED RETU RN; (B) THE ASSESSING OFFICER SHALL PROCEED TO DETERMI NE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 143 31[, SECTION 144 AND SECTION 145] SHALL, SO FAR AS MAY B E, APPLY; (C) THE ASSESSING OFFICER, ON DETERMINATION OF THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN ACCORDANCE WITH THIS CHAPTER, SHALL PASS AN ORDER OF ASSESSMENT AND DETERMINE THE TAX PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT; [(D) THE ASSETS SEIZED UNDER SECTION 132 OR REQUIS ITIONED UNDER SECTION 132A SHALL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 132B.] ON CLOSE READINGS OF THE PROVISIONS CLAUSE (B) OF S ECTION 158BC, WE MAY FIND THE AO HAS TO DETERMINE THE UNDISCLOSED INCOME OF THE B LOCK PERIOD, IN THE MANNER PROVIDED IN SECTION 158BB. AND AS PER SUB-SECTION ( 1) OF SECTION 158BB, THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHALL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PER IOD COMPUTED, IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF EV IDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE AO AND RELATABLE TO SUCH EVIDENCE, AS REDUCED BY THE AGGREGATE OF THE TOTAL INCOME, OR AS THE CASE MAY BE, IT(SS)A NOS.234 & 265/M/05 4 AS INCREASED BY THE AGGREGATE OF THE LOSSES OF SUCH PREVIOUS YEARS. THUS WHILE DETERMINING / COMPUTING THE UNDISCLOSED INCOME OF B LOCK PERIOD THE AO SHALL COMPUTE THE INCOME ON THE BASIS OF EVIDENCE FOUND A S A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT. THIS IS SO, BECAUS E, THE CORRECTNESS OR OTHERWISE THE RETURN FILED IN PURSUANCE OF A NOTICE U/S 158BC (A) HAS TO BE EXAMINED WITH REFERENCE TO THE MATERIAL IN POSSESSION OF THE AO H AVING NEXUS TO THE ASSESSMENT OF UNDISCLOSED INCOME WHICH IS WITH THE ASSESSING AUTHORITY. SO THE BLOCK ASSESSMENT HAS TO BE FRAMED IN THE LIGHT OF MATERIA L CAME INTO THE POSSESSION OF THE ASSESSING AUTHORITY DURING THE SEARCH, WHICH IS THE FOUNDATION OF THE PROCEEDINGS. LD AR OF ASSESSEE MADE THE STATEMENT THAT HE IS NOT PRESSING GROUND NO. 1&2, THUS GROUND NO.1&2 ARE DISMISSED . GROUND NO. 3 IS ABOUT SUSTAINING THE ADDITION OF RS .57,248/-, RS.1,05,930/- AND RS.1,20,199/-. REGARDING ADDITION OF RS. 57,248 /- LD AR OF ASSESSEE ARGUED THAT THIS ADDITION IS NOT BASED ON ANY MATERIAL SEIZED O R RELATABLE TO SUCH AND AS SUCH ARE NOT UNDISCLOSED INCOME OF ASSESSEE FOR COMPUTAT ION OF ASSESSMENT UNDER THE PROVISIONS OF SECTION 158 BB. THIS ADDITION WAS CON FIRMED BY LD. CIT(A) BY OBSERVING THAT THE ASSESSEE NOT EXPLAINED THE AGGRE GATE DEPOSIT IN THE BANK ACCOUNT. FOR ADDITION OF RS 105930/-, IT WAS ARGUED THAT ASSESSEE HAS PROPERLY EXPLAINED BEFORE AO AS WELL AS BEFORE CIT(A) AND FI LED THE SUFFICIENT EVIDENCE IN THE FORM OF BANK PASS BOOK. RS.1,05,000/-WAS TRANSF ERRED FROM SAVING BANK ACCOUNT NO 5202 OF MRS SHAILA CHOUBAL ON THE 15 TH MAY1998,, RS. 640/-AND RS 290/-WERE DEPOSITED AS DIVIDEND THROUGH CHEQUES ON THE SAME DAY. THUS THE SUFFICIENT EXPLANATION WAS GIVEN ABOUT THIS SORT OF DEPOSIT AND THE SAME WAS NOT UNDISCLOSED INCOME OF THE ASSESSEE. FOR ADDITION OF RS 11850/- IT WAS ARGUED THAT THIS ADDITION IS ON THE BASIS OF THE MATERIAL FOUND DURING THE SEARCH IN CASE OF GOTHAM CHOUBAL, THE MATERIAL IS USED AGAINST THE AS SESSEE, WITHOUT FOLLOWING THE PROCEDURE PROVIDED UNDER SECTION 158 BD OF THE ACT. HOWEVER, OTHERWISE THE INVESTMENT WAS PROPERLY ACCOUNTED TO THE SATISFACTI ON OF AO AND CIT(A). DR FOR REVENUE SUPPORTED THE CASE OF AUTHORITIES BELOW. IT(SS)A NOS.234 & 265/M/05 5 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT WHILE MAKING ASSESSMENT THE AO MADE THE FOLLOWING OBSERVATION WHILE FRAMING ASS ESSMENT FOR BLOCK PERIOD: THAT SUMMONS TO THE ASSESSEE WERE ISSUED BUT ASSESS EE HAS NOT EXPLAINED THE SOURCE OF THE SAME NOR THE DATE OF INVESTMENT IS FURNISHED HE NCE, IN THE ABSENCE OF COPY OF BANK STATEMENT FOR EARLIER PERIOD, THE AO ESTIMATE CREDI TS AS UNDER :- ASST. YEAR TOTAL OF CREDITS IN ALL THE BANKS IS ESTIMATED AS UNDER :- 1989-90 RS.60,000 1990-91 RS.70,000 1991-92 RS.75,000 1992-93 RS.80,000 1993-94 RS.85,000 1994-95 RS.160000(INCLUDING RS.71000 LOAN ADVANCED TO SON) 1995-96 RS.1,05,000 1996-97 RS.1,87,000(INCLUDING RS.72000 LOAN ADVANCED TO SON) 1997-98 RS.185000(INCLUDING RS.6000 LOAN ADVANCED TO SON) 1998-99 RS.60000(INCLUDING RS.48189 CREDITS APPEAR ING IN NEW INDIA COOP. BANK LTD.) ----------------- RS.10,68,000 ADDITION TO BE MADE FOR A.Y.1999-2000 COMES TO RS.3 ,99,980/- (RS.105930+RS.50000+RS.244050). THUS, THE ASSESSEE S UNDISCLOSED INCOME FOR THE BLOCK PERIOD WORKS OUT AS UNDER :- FOR THE A.Y.1989-90 TO A.Y.1998-99 RS.10,68,000 FOR THE A.Y.1999-2000 RS.3,99,980 ------------------ TOTAL INCOME RS.14,67,980 THUS THE ADDITION MADE BY AO WERE BASED ON MERE EST IMATION AND NOT ON THE BASIS OF INCRIMINATING MATERIAL SEIZED DURING THE S EARCH CONDUCTED BY INVESTIGATION TEAM OF THE REVENUE. HOWEVER, LD. CIT (A) IN PARA 27 OF ITS ORDER HOLD THAT IN CASE OF ASSESSEE. THERE IS NO EVIDENCE FOUND ON WHICH SUCH ESTIMATE COULD BE BASED. THE ASSESSMENT IS RATHER BASED ON C ERTAIN CREDITS FOUND IN THE BANK ACCOUNT WHICH WOULD FURNISH BY THE BANKS. SECT ION 158 BB OF THE ACT CLEARLY ESTABLISHED THAT THE ADDITION CAN MADE ONLY ON THE BASIS OF EVIDENCE FOUND AT AS RESULT OF SEARCH OR OTHER MATERIAL OR INFORMA TION AVAILABLE WITH THE AO. ADMITTEDLY, THE BANK PASS BOOK WERE NOT FOUND AS RE SULT OF SEARCH, SO AS PER OUR CONSIDERED OPINION, NO ADDITION IN RESPECT OF BLOCK ASSESSMENT PERIOD, THEN THE BASIS FOR COMPUTATION OF UNDISCLOSED INCOME. THUS T HE ADDITION OF RS.57,248/-, WHICH WAS SUSTAINED BY LD. CIT(A) IS DELETED. SO FA R AS ADDITION OF RS.1,05,930/- IS CONCERNED, THE ASSESSEE DULY SUBSTANTIATED THE C REDIT IN HIS BANK ACCOUNT, BY IT(SS)A NOS.234 & 265/M/05 6 FILING THE SAVING BANK PASS BOOK OF HIS WIFE SMT. S HAILA CHOUBAL. SHAILA CHOUBAL WAS EMPLOYED AND WAS EARNING, AGAINST WHOM THE BLOC K ASSESSMENT WAS ALSO MADE BY MAKING THE BASIS OF SUCH ON THE BASIS OF WH ICH BLOCK ASSESSMENT WAS OPENED AGAINST THE ASSESSEE. THUS THE SOURCE OF DEP OSITS OF RS 105930/- IS NOT UNDISCLOSED INCOME OF THE ASSESSEE AND THE SAME IS ALSO DELETED. FURTHER, THE ADDITION OF RS 11850/-SUSTAINED /CONFIRMED BY CIT(A ) IN THE IMPUGNED ORDER WAS MADE ON THE BASIS OF MATERIAL FOUND DURING THE SEAR CH IN CASE OF GAUTAM CHOUBAL (SON OF ASSESSEE). THE MATERIAL IS USED AGAINST THE ASSESSEE WITHOUT PROPERLY FOLLOWING THE PROCEDURE WHILE USING THE SAID MATERI AL AGAINST THE ASSESSEE. THE AO HAS NOT FOLLOWED THE PROCEDURE PROVIDED U/S. 158 BD OF THE ACT. WE HAVE FURTHER NOTICED THAT THE ASSESSEE HAS EXPLAINED THE PAYMENT OF INVESTMENT IN SHARES IN THE NAME OF GOTHAM S. CHOUBAL AS RS. 3000 /- WAS PAID FROM SAVING BANK ACCOUNT OF SHAILA CHOUBAL ON 15 TH MARCH 1993 FOR SUPER TANNERY, RS 1850/- FOR JORD ENGINEERING AND RS. 5000 FOR HDF C LTD. ON 22 ND DEC 1994 FROM THE ACCOUNT OF MRS SHAILA CHOUBAL WITH NEW IND IA CO-OPERATIVE BANK LTD. AND RS. 2000 FOR CENTURY TEXTILES WAS EXPLAINED AS OLD SHARE ACQUIRED IN 1997- 98, AND THE EVIDENCE WAS ALSO FILED BEFORE THE CIT( A), WHICH IS AVAILABLE ON RECORD (PAGE NO. 7 TO 10 OF PAPER BOOK, II). IN VIE W OF THE ABOVE FACTUAL DISCUSSION, WE DELETE ALL THREE ADDITIONS SUSTAINED BY LD. CIT(A) BY ACCEPTING THE GROUND 3 RAISED BY THE ASSESSEE IN THE PRESENT APPE AL. 5. IN IT(SS)A NO.265/M2005 , THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED ASSESSING OFFICER HAS ERRED USING AND RELYING ON TH E MATERIAL SEIZED IN CASE OF OTHER PERSON DURING THE COURSE OF ACTION UNDER S ECTION 132, AGAINST SUCH OTHER PERSON AND ASSESSING UNDISCLOSED INCOME UNDER SECTION 158 BC OF THE ACT. IN THE HANDS OF THE APPELLANT WITHOUT SATISFYI NG THE CONDITIONS PRESCRIBED UNDER SECTION 158 BD OF THE ACT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN SUS TAINING ADDITION OF RS. 17,000/-ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT AND RS. 30,000/-ON LOAN GIVEN TO SON. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LANDED COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN SUS TAINING THE ADDITION OF RS. 158078/-ON ACCOUNT OF JEWELLERY AND SILVER UTEN SILS. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED ASSESSING OFFICER HAS ERRED IN ADDING AND LANDED CI T (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS 18296/-AS UNDISCLOSED INCOME OF THE APPEAL OF THE APPELLANT. IT(SS)A NOS.234 & 265/M/05 7 6 . BRIEF FACTS OF THE CASE ARE THAT IN THE SEARCH ACTION U/S. 132, AGAINST THE EMPLOYER OF HUSBAND OF ASSESSEE, THE RESIDENTIAL PR ICE PREMISES OF ASSESSEES HUSBAND WAS SEARCHED ON THE SAME DAY. DURING THE SE ARCH OPERATION, INVENTORY OF THE INVESTMENT AND BANK ACCOUNTS OF TH E ASSESSEE WAS ALSO PREPARED. THE STATEMENT OF ASSESSEE WAS RECORDED ON 11.06.1998 U/S. 132 (4). THE ASSESSEE WAS SERVED NOTICE U/S. 158BC FOR FILIN G RETURN OF BLOCK ASSESSMENT PERIOD. ASSESSEE DID NOT FILE RETURN OF INCOME FOR BLOCK ASSESSMENT PERIOD. SINCE, ASSESSEE FAILED TO FILE HER RETURN O F BLOCK PERIOD, THE AO MADE THE ASSESSMENT OF BLOCK PERIOD AND ASSESSED THE UND ISCLOSED INCOME FOR THE BLOCK PERIOD OF RS.15,03,760/- IN ITS ASSESSMENT OR DER DATED 2.06.2000. AGGRIEVED BY THE ORDER OF ASSESSMENT, ASSESSEE FILE D APPEAL BEFORE CIT(A). IN APPEAL CIT(A) SUSTAINED THE ADDITION OF RS. 17,000/ - ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNT AND RS. 30,000/- ON ACCOUNT OF LOAN GIVEN TO HER SON. SUSTAINED THE ADDITION OF RS 1,58,078/- ON ACCOUNT OF JEWELLERY AND SILVER UTENSILS AND FURTHER CONFIRMED THE ADDITION OF RS 1 8,296/- AS UNDISCLOSED INCOME OF ASSESSEE. FURTHER AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 7. WE HAVE HEARD LD AR OF ASSESSEE AND LD DR FOR R EVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. GROUND NO 1 , IN THIS APPEAL IS THAT AO HAS ERRED IN USING AND RELYING ON THE MATERIAL SEIZED IN CASE OF OTHER PERCENT AND NOT RE CORDED SATISFACTION AS PRESCRIBED U/S/ 158 BD OF THE ACT. DURING THE COURS E OF MAKING SUBMISSION LD. AR OF THE ASSESSEE HAS NOT ARGUED ANYTHING IN R ESPECT OF GROUND NO 1, THEREFORE, THIS GROUND IS CONSIDERED AS NOT PRESSED AND THE SAME IS DISMISSED BEING NOT ARGUED. GROUND NO 2 IS RAISED AGAINST SUSTAINING OF ADDITION OF RS 17, 000/- ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNT AND RS. 30, 000/- ON ACCOUNT OF LOAN GIVEN TO SON. LD AR OF ASSESSEE ARGUED THAT THE AS SESSEE WAS EMPLOYED IN BANK OF INDIA FROM THE YEAR 1968. THE ASSESSEE EARN ED SALARY FROM HIS EMPLOYER, WHICH WAS ALWAYS DISCLOSED BY HER FOR THE PURPOSE OF INCOME TAX AS TAX WAS DEDUCTED AT SOURCE FROM HER SALARY AND I T WAS SHOWN WHILE FILING IT(SS)A NOS.234 & 265/M/05 8 RETURN OF INCOME EVERY YEAR. THE ASSESSEE WAS HAVIN G A SMALL INTEREST INCOME ON HER SAVINGS, THOUGH INTEREST INCOME NEVER EXCEED ED THE LIMIT OF DEDUCTION UNDER THE LAW. THE ASSESSEES SUBMITTED THE SUFFICI ENT EVIDENCE BEFORE THE REVENUE AUTHORITIES. THE ASSESSEE HAS PLACED ON REC ORD HER BANK STATEMENT. LD AR OF ASSESSEE FURTHER ARGUED THAT AO MADE ADDITION OF UNDISCLOSED INCOME ON THE BASIS OF MERE ESTIMATION. NO INCRIMINATING D OCUMENT WAS SEIZED DURING THE SEARCH OPERATION. WITHOUT PREJUDICE, IT WAS ARG UED THAT NO SEARCH ACTION WAS INITIATED AGAINST THE ASSESSEE; THE ASSESSEE WA S SERVED WITH NOTICE AFTER EXPIRY OF 21 MONTH OF THE SEARCH. DR FOR REVENUE SU PPORTED THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE APPELLATE PROCEEDING, THE ASSESSEE FILED THE STATEMENT OF ACCOUNT OF HER SAVI NG BANK ACCOUNT. THE MATTER WAS REMANDED TO THE FILE OF AO TO VERIFY THE BANK A CCOUNTS. THE AO EXAMINED THE BANK STATEMENT OF A/C NO. 5075 IN BANK OF INDIA AS WELL AS COPIES OF FORM NO.16 AND SALE STATEMENT OF THE ASSE SSEE AND FURNISHED HIS REMAND REPORT DATED 15 TH APRIL 2002, WHEREIN AO STATED THAT MOST OF THE ENTRIES CREDITED TO THE BANK ACCOUNT COMPRISED OF S ALE RECEIVED BY THE ASSESSEE. AFTER EXAMINING THE BANK STATEMENT, THE A O POINTED OUT THE FOLLOWING DISCREPANCIES. AY 1992-93 RS.3670/- AY 1993-94 RS. 10,250/- AY 1994-95 RS. 5250/- AY 1992-96 RS.2475/- AY 1992-97 RS. 431/- AY 1997-98 RS. 700/- AY 1998-99 RS.15810/- AY 199-00 RS. 11304/- TOTAL RS. 49,98 0/- THE ASSESSEE EXPLAINED THE SAID DISCREPANCY AND SUB MITTED THE DETAIL AS MENTIONED IN PARA-5.18 OF THE ORDER OF CIT(A) AND T HE SAME IS REFERRED HEREINAFTER. AY 1992-93 RS.3000/- RS.170/- FESTIVAL ADVANCE RECEIVED FROM BANK OF INDIA DIVIDEND FROM STAFF CO-OPERATIVE CREDIT SOCIETY AY 1993-94 RS.10,000/- RS,250/- CASH DEPOSITED OUT OF EARLIER WITHDRAWALS DIVIDEND FROM STAFF CO-OPERATIVE SOCIETY AY 1994-95 RS.5000/- RS.250/- CASH DEPOSIT OUT OF EARLIER WITHDRAWAL DIVIDEND FROM STAFF CO-OPERATIVE SOCIETY IT(SS)A NOS.234 & 265/M/05 9 AY 1995-96 RS.2000/- RS.475/- CASH DEPOSIT OUT OF EARLIER WITHDRAWAL DIVIDEND FROM STAFF CO-OPERATIVE SOCIETY AY 1996-97 RS.431/- RECEIVED FROM EMPLOYER-SALARY DIFFERENCE AY 1997-98 RS.700/- DIVIDEND FROM STAFF CO-OPERATIVE SOCIETY AY 1998-99 RS.944/- RS.5079/- RS.9787/- RECEIVED FROM EMPLOYER-SALARY DIFFERENCE MATURITY AMOUNT OF DOUBLE BENEFIT DEPOSIT MATURITY AMOUNT OF DOUBLE BENEFIT DEPOSIT AY 1999-00 RS.8786/- RS.2518/ MATURITY AMOUNT OF DOUBLE BENEFIT DEPOSIT GSLI PREMIUM FROM EMPLOYER RECEIVED ON RETIREMENT 9. THE EXPLANATION OF ASSESSEE WAS NOT ACCEPTED BY LD. CIT(A) IN RESPECT OF CASH DEPOSIT CONCLUDING THAT IT IS NOT PROBABLE THA T AMOUNT OF RS. 10,000/- AND RS. 5,000/- ARE DEPOSITED OUT OF HOUSEHOLD SAVINGS. THERE IS NO PROOF OF SUCH SAVINGS. THE LD. CIT(A) CONCLUDED THAT RS. 10,000/- FOR AY 1992-93, RS. 10,000/- FOR AY 1993-94 AND RS. 5,000/- FOR AY 2004 -05 AND RS. 2000/- FOR AY 2005-06 ARE UNEXPLAINED. THE CONCLUSION DRAWN BY LD . CIT(A) IS CONTRARY TO THE FIGURES MENTIONED IN THE PRECEDING PARAS (5.17) FOR AY 1992-93, THE AO POINTED OUT THE UNEXPLAINED ENTRY OF RS. 3670/- ONLY WHICH WAS PROPERLY EXPLAINED BY ASSESSEE (IN PARA 5.18). FURTHER, RS. 10,250/- FOR AY 1993-94 AS POINTED OUT BY AO WAS ALSO EXPLAINED BY ASSESSEE IN PARA 5.18 (CAS H DEPOSIT FROM OUT OF EARLIER WITHDRAWALS). THE ASSESSEE WAS EMPLOYED WITH BANK O F INDIA AND DEPOSIT OF SUCH AMOUNT CANNOT BE RULED OUT. MOREOVER, THE ADDITION SUSTAINED BY CIT(A) IS NOT BASED ON INCRIMINATING MATERIAL FOUND DURING THE SE ARCH, THUS, WE DELETE THE ADDITION OF RS. 17,000/-. 10. OUT OF THE ESTIMATED CREDIT IN THE BANK ACCOU NT, THE ADDITION OF RS. 30,000/- WAS CONFIRMED BY CIT(A) THAT THE APPELLANT HAS ADVANCED LOAN TO HER SON IN AY 1997-98, SOURCE OF WHICH COULD NOT BE PRO VED, THERE IS NO SUCH ENTRY IN THE BANK ACCOUNT OF ASSESSEE. THE AR OF ASSESSEE ARGUED THAT THE ASSESSEE WAS EMPLOYED IN A BANK FROM LAST 20 YEARS AND WAS HAVIN G SUFFICIENT FUND IN CASH WHICH CANNOT BE SAID TO BE UNDISCLOSED INCOME OF TH E ASSESSEE. DR FOR REVENUE RELIED UPON THE ORDER OF AUTHORITIES BELOW. WE HAVE CONSIDERED THE CONTENTION OF BOTH THE PARTIES. THIS PART OF ADDITION IS ALSO A P ART OF ESTIMATED ADDITION MADE BY AO IN BLOCK ASSESSMENT. THE SAME IS NOT BASED ON TH E INCRIMINATING MATERIAL FOUND DURING THE SEARCH. THE AO AS WELL AS LD. CIT( A) FORMED THEIR OPINION ONLY ON THE BASIS OF EXPLANATION FURNISHED BY ASSESSEE. KEEPING IN VIEW THE FACT THAT IT(SS)A NOS.234 & 265/M/05 10 ASSESSEE WAS A BANK EMPLOYEE AND INVESTED HER DISCL OSED MONEY IN VARIOUS GOVERNMENTS SECURITIES, THUS RS. 30,000/- CANNOT B E SAID TO BE UNDISCLOSED INCOME OF THE ASSESSEE AND THE SAME IS DELETED. 11. GROUND NO.3 RAISED IN THE PRESENT APPEAL IS AGAINST SUSTAINING THE ADDITION OF RS. 1,58,078/- ON ACCOUNT OF JEWELLERY AND SILVE R UTENSILS. LD. AR OF ASSESSEE ARGUED THAT THE JEWELLERY ARTICLE FOUND DURING THE SEARCH WAS RECEIVED BY THE ASSESSEE AS A GIFT AT THE TIME OF HER MARRIAGE IN 1 972 AS WELL AS ON OTHER VARIOUS AUSPICIOUS OCCASIONS. THE SILVER UTENSILS WHICH WER E FOUND WERE ALSO RECEIVED AS A GIFT SINCE HER MARRIAGE. SILVER UTENSILS WERE ALS O RECEIVED AS A GIFT ON VARIOUS AUSPICIOUS OCCASIONS LIKE DIWALI, BIRTHDAY, NAMING CEREMONY OF CHILDREN AND MARRIAGE ANNIVERSARY. THE JEWELLERY AND SILVER UTEN SILS FOUND WERE NOT ACQUIRED FROM UNDISCLOSED INCOME SOURCES OF ASSESSEE, THE SA ME WAS PROPERLY EXPLAINED. LD. DR FOR REVENUE SUPPORTED THE ORDER OF AUTHORITI ES BELOW. 12. WE HAVE CONSIDERED THE RIVAL CONTENTION OF TH E PARTIES. LD. CIT(A) WHILE CONSIDERING THE ADDITION ON ACCOUNT OF JEWELLERY OB SERVED THAT AS PER VALUATION REPORT THE WEIGHT OF JEWELLERY (GOLD NOT MENTIONED IN THE ORDER) WAS 467.6 GMS. THE JEWELLERY WAS EXPLAINED THAT IT WAS RECEIVED BY WAY OF GIFT ON SUBSEQUENT OCCASIONS. THE SILVER JEWELLERY WAS ALSO EXPLAINED. LD. CIT(A) FURTHER OBSERVED THAT THE RECEIPT OF JEWELLERY AT THE TIME OF MARRIA GE AND ON OTHER OCCASIONS CANNOT BE DENIED. HOWEVER, THE ADDITION ON ACCOUNT OF JEWE LLERY WAS CONFIRMED TO THE EXTENT OF 70%. NO REASON WAS DISCLOSED BY LD. CIT(A ) AS TO HOW HE CAME TO SUCH CONCLUSION. THE FIGURE OF 70% IS BASED ON MERE ESTI MATION OF THE LD. CIT(A) WHICH IS NOT PERMISSIBLE UNDER THE LAW IN BLOCK ASS ESSMENT, HENCE, THE SAME IS DELETED. 13. GROUND NO.4 RAISED IN THE PRESENT APPEAL IS AGAINST THE CONFIR MING THE ADDITION OF RS. 18,296/- AS UNDISCLOSED INCOME OF A SSESSEE. LD. AR OF THE ASSESSEE ARGUED THAT ASSESSEE WAS AN EMPLOYEE OF PU BLIC SECTOR BANK. HER SOURCE OF INCOME WAS HER SALARY AND INVESTMENT INCOME OUT OF SMALL SAVING MADE DURING HER CARRIER. THE EMPLOYER REGULARLY DEDUCTED TDS. T HE ADDITION OF RS. 18,296/- FOR AY-1999-2000 CONFIRMED BY LD. CIT(A) WAS NOT UN DISCLOSED INCOME. THE ADDITION WAS MADE ON THE BASIS OF MERE ESTIMATION, THE ESTIMATION MUST ALSO BE IT(SS)A NOS.234 & 265/M/05 11 BASED ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH. LD. DR FOR REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. 14. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF T HE PARTIES QUA THIS ADDITION AND WE DO NOT FIND THAT THIS GROUND WAS DEALT WITH INDEPENDENTLY BY LD. CIT(A). RATHER, WE FIND THAT WHILE CONSIDERING THE MAIN ADD ITION OF RS. 10,05,000/- THAT AN ENTRY OF RS. 11,304/- FOR AY 1999-2000 WAS UNEXP LAINED BY ASSESSEE DURING THE REMAND PROCEEDING (PARA 5.17). THE AMOUNT WAS D ULY SUBSTANTIATED BY ASSESSEE IN HER REPLY AS REFERRED BY LD. CIT(A) IN PARA 5.18. THUS, THIS GROUND OF APPEAL IS ALSO ALLOWED. AS WE HAVE ALREADY DELETED THE ADDITION ON THE BASIS OF ESTIMATED CREDIT IN THE BANK ACCOUNT OF THE ASSESSE E VIDE GROUND NO.2 (SUPRA). 15. IN THE RESULT, BOTH THE APPEALS FILED BY ASSES SEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20/07/20 16. SD/- SD/- ( . . ) (G.S.PANNU) ( ) (PAWAN SINGH) # / ACCOUNTANT MEMBER # / JUDICIAL MEMBER ! MUMBAI; 2 DATED 20/07/2016 SK , . / PS $%&' ('% / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , ! / ITAT, MUMBAI 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 5 ( ) / THE CIT(A), MUMBAI. 4. 5 / CIT 5. 67 ''# , - '# , ! / DR, ITAT, MUMBAI 6. 78 / GUARD FILE. (6 ' //TRUE COPY//