DCIT, Range-2, V. Amrish International,

ITSSA 278/DEL/2002

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9665 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 4 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-08-2012
• Assessment Year: misc
• Appeal Filed On: 16-08-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDER
• Assessee Lawyers: RAJEEV SAXE NA ABHISHAK VERMA
• Keywords: Unexplained investment; Gift; Income from undisclosed sources; Document seized; Assessment record; Block assessment; Documents seized
• Section: 69C; 143(3); 69; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G: NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 309/DEL/2002 ASSESSMENT YEAR: 2006- 2007 ACIT VS. SHRI PREM CH AND GOEL, RANGE-1, MORADABAD. A-2, LAJPAT NAGAR, MORADABAD. (APPELLANT) (RESP ONDENT) IT(SS)A NO. 98/DEL/2008 BLOCK ASSTT. YEAR : 1990-91 TO 2000-2001 SHRI AMRISH KUMAR GOEL VS. ACIT, LATE OF SHRI PREM CHAND GOEL, RANGE 1, MORADABAD. 430, CIVIL LINES, MORADABAD, PIN- 244001 (U.P) (APPELLANT) (RES PONDENT) IT(SS)A NO. 278/ DEL/2002 BLOCK ASSTT. YEAR : 1990- 91 TO 2000-01 DCIT, RANGE II, VS. M/S . AMRISH INTERNATIONAL, MORADABAD. LAJPAT NAGAR, MORADABAD. APPELLANT BY : SHRI RAMESH CH ANDER, CIT DR RESPONDENT BY : SHRI RAJEEV SAXE NA, ABHISHAK VERMA, ADVOCATE S ORDER PER I.C. SUDHIR, JUDICIAL MEMBER ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 2 THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN EXCLUDING THE AMOUNTS OF RS. 1 8,000/- & RS. 42,000/- FROM UNDISCLOSED INCOME, WHICH WAS ADDE D AS UNDISCLOSED RENTAL INCOME. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN EXCLUDING RS. 1,02,000/- FROM UNDISC LOSED INCOME, WHICH WAS ADDED AS THE INVESTMENT NOT VERIFIABLE FROM BALANCE SHEET AS ON 31.3.1990. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 5,24,080/-, WHICH WAS MADE FOR PAYMENT OF PLOT FROM OUT OF BOOKS. 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 8, 96,400/- MADE ON ACCOUNT OF UNDISCLOSED TDRS. 5. THAT THE LD. CIT(A) HAS FAILED TO APPREC IATE THAT THE ADDITION OF RS. 8,96,400/- WAS MADE ON ACCOUNT OF UN DISCLOSED TDRS BEING NO. 202268 TO 202272 WHILE RELIEF HAS BEEN ALLOWED ON TDRS NO. 202278 TO 202282. 6. THAT THE LD. CIT(A) HAS ERRED IN AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 89,733/- A ND RS. 29,102/- WHICH WERE MADE ON ACCOUNT OF UNDISCLOSED INVESTMEN T. 7. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN ADMITTING THE ADDITIONAL GROUND REGARD ING CHARGEABILITY OF INTEREST U/S 158BFA WHILE THE SAME GROUND OF AP PEAL WAS NOT ADMITTED BY THE LD. CIT(A) IN THE CASE OF AMRISH INT ERNATIONAL VIDE HIS ORDER NO. 119 DATED 24.5.2002 ON THE GROUND THAT TH IS ISSUE IS NOT APPEALABLE WHEREIN ASSESSEE IS ALSO A PARTNERS. 8. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE AO TO RECALCULATE INTEREST U/S 158BFA (1) AFTER FOLLOWING THE DECISION OF HONBLE M.P. SI NGH REPORTED IN 254 ITR 568. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 3 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCE D BY THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW AS WELL AS MATERIAL AVAILABLE ON RECORD. GROUND NO. 1 3. RELIEF OF RS. 18,000/- AND RS. 42,000/- BY EXCLUDING THE SAME FROM UNDISCLOSED INCOME ON ACCOUNT OF RENTAL INCOME GIVE N BY THE LD. CIT(A) HAS BEEN QUESTIONED BY THE REVENUE. THE AO HAD MADE ADDITION OF RS. 18,000/- FOR THE ASSESSMENT YEAR 1990-91 AND RS. 42 ,000/- FOR THE ASSESSMENT YEAR 1991-92 ON ACCOUNT OF UNDISCLOSED I NCOME WITH THIS OBSERVATION THAT THE ASSESSEE HAD STARTED FILING OF RETURN OF INCOME FROM THE ASSESSMENT YEAR 1992-93 ONWARDS AND THAT SINCE NO RETURN OF INCOME WAS FILED FOR THE ASSESSMENT YEARS 1989-90, 1990-9 1, 1991-92 THE COMPUTATION OF INCOME FURNISHED FOR THESE YEARS FOR THE BLOCK PERIOD IS NOT ACCEPTABLE. 4. IN SUPPORT OF THE GROUND LD. DR HAS BASICA LLY PLACED RELIANCE ON THE ASSESSMENT ORDER, WHEREAS THE LD. AR HAS TRIED TO J USTIFY FIRST APPELLATE ORDER IN THIS REGARD. 5. LD. DR POINTED OUT THAT LD. CIT(A) HAS DELE TED THESE ADDITIONS ACCEPTING THE PLEA MADE FOR SET OFF FOR CAPITAL LOS SES SUFFERED IN FINANCIAL YEARS 1989-90 AND 1990-91 ON SALE OF SHARES AND LAN D AGAINST THIS RENTAL INCOME AND WHILE DOING SO APART FROM RELYING ON TH E PROVISIONS OF SECTION 71 HAS ALSO DRAWN SUPPORT FROM THE DECISION OF THE TRIBUNAL. HE SUBMITTED ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 4 THAT FOR THE YEARS FOR WHICH LOSSES WERE CLAIMED RE TURNS WERE NOT EVEN FILED AND WHEN IT WAS SO THE CLAIM FOR LOSSES WERE NOT BA SED ON DOCUMENTS FOUND DURING SEARCH AND HENCE ALLOWING SET OFF AGAI NST THE INCOME FOUND DURING THE SEARCH IS NOT IN ACCORDANCE WITH PROVISI ONS OF LAW. THE LD. DR POINTED OUT THAT WHILE GIVING RELIEF THE LD. CIT(A) HAS NOT EVEN DISCUSSED THE DETAILS OF THE DECISION OF THE TRIBUNAL ON WHIC H HE HAS PLACED RELIANCE. 6. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT THE AO HAD MADE ADDITIONS IN QUESTION WITH THIS FINDING THAT AS PER PROVISION OF SECTION 71(3) THE ASSESSEE IS NOT ENTITLED TO SET OFF LOSSES AGAI NST THE INCOME UNDER THE HEAD CAPITAL GAINS FOR THE BLOCK RETURN FOR THE ASSESSMENT YEARS 1990-91 AND 1991-92. THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) REMAINED THAT CHANGES IN SECTION 71 OF THE ACT MADE WITH EFFECT FROM 1.4.1992 CARRIES SUFFICIENT FORCE AND THERE IS NO C ASE TO AGREE WITH THE VIEW OF THE AO THAT THE ASSESSEE WAS NOT ENTITLED TO HAV E SET OFF OF LOSSES AGAINST INCOME UNDER THE HEAD PROPERTY INCOME. ACCE PTING THIS CONTENTION OF THE ASSESSEE THE LD. CIT(A) HAS HELD THAT THE AC TION OF THE AO IN TREATING THE RENTAL INCOME AS INCOME FROM UNDISCLOSED SOURCE IS NOT MAINTAINABLE. IT WAS SUBMITTED THAT DURING THE COURSE OF SEARCH AT T HE PREMISES OF THE ASSESSEE AND HIS RELATIVES AND ASSOCIATES CONCERN, SEVERAL DOCUMENTS WERE SEIZED, OUT OF THOSE DOCUMENTS PAGE NOS. 3 & 4 OF A NNEXURE A-4/I DESCRIBED THE RECEIPT OF RENT FOR THE FINANCIAL YEA RS 1989-90, 1990-91 AND 1991-92 AT RS. 18,000/- AND RS. 24,000/- RECEIVED A ND RS. 18,000/- WAS TO ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 5 BE RECEIVED. THE FURTHER SUBMISSION OF THE ASSESSEE REMAINED THAT THE ASSESSEE HAD SEVERAL LOSSES ON SALE OF ASSETS DURIN G THE FINANCIAL YEARS 1989-90 AND 1990-91 AMOUNTING TO RS. 52,450/- AND R S. 40,800/- ON ACCOUNT OF SALE OF FLAT AND SALE OF SHARES, THUS TH E TOTAL INCOME COMPUTED ACCORDING TO THE PROVISIONS OF I.T. ACT AND AFTER S ETTING OFF THE LOSS ON SALE OF ASSETS FROM THE INCOME FROM HOUSE PROPERTY THE I NCOME WAS MUCH BELOW THE TAXABLE LIMIT. HENCE THE ASSESSEE WAS NOT REQUI RED TO FILE HIS RETURN OF INCOME. IT WAS ALSO SUBMITTED THAT THE PROVISIONS U /S 71(3) INSERTED W.E.F. 1.4.1992 WAS NOT APPLICABLE DURING THE YEAR. RELIAN CE WAS ALSO PLACED ON THE DECISION IN THE CASE OF CIT VS. M.P. RAMCHANDRA NYER 241 ITR 832 (KERALA HIGH COURT). ACCEPTING THE ABOVE CONTENTION OF THE ASSESSEE THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 18,000/- AND RS. 42,000/- IN QUESTION. 7. CONSIDERING THE ABOVE SUBMISSION WE DO NOT FIND REASON TO INTERFERE WITH THE FINDING OF THE FIRST APPELLATE AUTHORITY A S THERE IS NO DISPUTE THAT SUB SECTION (3) TO SECTION 71 OF THE I.T. ACT WAS I NSERTED W.E.F. 1.4.1992. HENCE IT WAS NOT APPLICABLE DURING THE ASSESSMENT Y EARS UNDER CONSIDERATION. PRIOR TO INSERTION OF THE SUB CLAUSE (3) THE ASSESSEE WAS ENTITLED TO HAVE SUCH LOSS (ON THE SALE OF ASSETS A ND SHARES) SET OFF AGAINST THE INCOME. THE DECISION IN THE CASE OF CIT VS. M.P . RAMCHANDRAN NYER (SUPRA) ALSO SUPPORTS THE CASE OF THE ASSESSEE WHER EIN IT WAS HELD THAT IF THE INCOME FOR ANY PREVIOUS YEAR CONTAINS IN THE BL OCK PERIOD IS BELOW THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 6 TAXABLE LIMIT IT NEED NOT BE INCLUDED IN THE UNDISC LOSED INCOME. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS REASONED ONE . HENCE IT IS UPHELD. GROUND NO. 1 IS REJECTED. GROUND NO. 2 8. THE AO TREATED THE INVESTMENT IN SHARES OF RS. 1,20,000/- AS UN EXPLAINED INVESTMENT IN THE ASSESSMENT YEAR 1990-91 WHICH WAS QUESTIONED BEFORE THE LD. CIT(A). THE LD. CIT(A) BE ING SATISFIED WITH THE SUBMISSION OF THE ASSESSEE HAS DELETED THE ADDITION , WHICH HAS BEEN QUESTIONED BEFORE THE TRIBUNAL. 9. IN SUPPORT OF THE GROUND LD. DR SUBMITTE D THAT THE PAGE 3 OF A-4 / 1 FOUND DURING THE COURSE OF SEARCH REVEALED INVEST MENT IN SHARES AT RS. 1,20,000/- IN THE NAME OF URMILLA GOEL, WIFE OF THE ASSESSEE, WHO WAS NOT ASSESSED TO TAX. THE ASSESSEE ALSO FAILED TO EXPLAI N THE AVAILABILITY OF FUND OR THE SOURCE OF THIS INVESTMENT, HENCE THE AO WAS JUSTIFIED IN MAKING THE ADDITION. BEFORE THE LD. CIT(A) THE ASSESSEE CHANGE D THE STAND AND CAME UP WITH THE EXPLANATION THAT THIS INVESTMENT WAS OU T OF WITHDRAWAL FROM THE CURRENT ACCOUNT MAINTAINED WITH THE FIRM AMRISH INT ERNATIONAL. LD. CIT(A) WITHOUT CONFRONTING THE EXPLANATION WITH THE AO, HA S DELETED THE ADDITION. LD. DR SUBMITTED FURTHER THAT IT IS NOT UNDERSTANDA BLE AS TO WHY THE SALE PROCEEDINGS WERE DEPOSITED IN THE SAVING BANK ACCOU NT OF THE WIFE WHEN THE SOURCE OF WITHDRAWAL WAS CLAIMED OUT OF THE CUR RENT ACCOUNT WITH THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 7 FIRM. THE DATE OF WITHDRAWAL AND THE DATE OF INVEST MENT IN SHARES WAS ALSO NOT MADE AVAILABLE ON RECORD. 10. LD. AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER ON THE ISSUE. HE REITERATED THE SUBMISSION MADE BEFORE THE LD. CIT(A). HE SUBMITTED THAT THE AO IGNORED THIS EXPLANATION OF T HE ASSESSEE THAT INVESTMENT WAS NOT MADE BY SMT. URMILA GOEL. THE L D CIT(A) VERIFIED THE WITHDRAWAL FROM THE FIRM AMRISH INTERNATIONAL REGUL ARLY ASSESSED TO TAX AND THEN SALE PROCEEDINGS OF SHARES DEPOSITED IN BANK A ND HAS GIVEN THE RELIEF. 11. AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW WE FIND THAT THE AO WHILE MAKING THE ADDITION AS UNDIS CLOSED INVESTMENT HAS MENTIONED HIS OBSERVATION FROM THE BALANCE SHEET T HAT NEITHER THERE WAS WITHDRAWAL FROM CAPITAL ACCOUNT OR FROM THE PERSONA L CAPITAL ACCOUNT TO ASCERTAIN THE AVAILABILITY OF THE CASH. THE EXPLANA TION OF THE ASSESSEE REMAINED THAT THE ASSESSEE HAD PURCHASED SHARES OF VARUN PRAKASHAN (P) LTD. WORTH RS. 1,02,000/- IN THE NAME OF HIS WIFE M RS. URMILA OUT OF MONEY WITHDRAWN FROM HIS CURRENT ACCOUNT MAINTAINED WITH M/S. AMRISH INTERNATIONAL WHO WAS REGULARLY ASSESSED TO THE INC OME TAX. THESE SHARES WERE LATER SOLD AND THE MONEY RECEIVED OUT OF SALE OF THESE SHARES WAS DEPOSITED IN THE SAVING BANK ACCOUNT OF THE ASSESSE E . IT WAS FURTHER SUBMITTED THAT THE DETAILS WERE GIVEN TO THE AO. TH E FACT OF THE CLAIMED DRAWING WAS VERIFIABLE FROM THE ACCOUNTS OF M/S. AM RISH INTERNATIONAL. CONSIDERING THESE MATERIAL ASPECTS OF THE ISSUE, W E ARE OF THE VIEW THAT THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 8 LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION TREATIN G THE SAME AS DISCLOSED. THE SAME IS UPHELD . GROUND NO. 2 IS ACCORDINGLY RE JECTED. GROUND NO. 3 12. THE AO TREATED THE SUM OF RS. 5,24,080/- AS INCOME FROM UNDISCLOSED SOURCES ON THE BASIS OF PAGE NO. 124 OF A3/4 FOUND DURING SEARCH. HE CONCLUDED THAT THE COST OF THE LAND PURC HASED FOR CONSTRUCTION OF SHOP WAS RS. 15,55,750/- WHEREAS THE PURCHASE VA LUE MENTIONED IN THE DEED WAS RS. 5,84,353/- ONLY PLUS STAMP VALUE OF RS . 94,249/-. THE AO OBSERVED THAT EXTRA PAYMENT OF RS. 4.60 LACS WAS M ADE BY SHRI AMRISH KUMAR GOEL OUT OF BOOKS. FROM THE DETAILED DISCUSSI ON MADE IN THE BODY OF THE ORDER IN THE CASE OF SHRI AMRISH KUMAR GOEL, HE OBSERVED THAT ON GOING THROUGH THE ENTRIES IN THIS ACCOUNT IT WAS NOTICED THAT THERE WAS A DEBIT OF RS. 4,50,000/- ON 29.10.95 BY CHEQUE NO. 407995. TH ERE WAS YET ANOTHER ENTRY OF DEBIT OF RS. 5 LAC ON 25.3.96 BY CHEQUE NO . 407995 AND ALSO DEBIT OF RS. 11,000/-. 13. THE CONTENTION OF THE ASSESSEE AGAINST TH E ACTION OF THE AO BEFORE THE LD. CIT(A) REMAINED THAT THE SALE DEED WAS A RE GISTERED DOCUMENT AND SALE PRICE AS MENTIONED WERE PAID BY THE ASSESSEE. THERE WAS NO EVIDENCE TO SAY THAT EXTRA MONEY WAS PAID. IN CASE THE AO WA S NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THEN SHE COULD HAVE CAL LED THE SELLER OR HAVE PERUSED HIS ACCOUNT TO ASCERTAIN THE FACTS. RELIANC E WAS PLACED ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 9 SATINDER KUMAR 250 ITR 484 (P & H). BEING SATISFIE D WITH THE SUBMISSION THE LD. CIT(A) HAS DELETED THE ADDITION. 14. IN SUPPORT OF THE GROUND LD. DR HAS BASIC ALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED THAT THE AO HAS MADE ADDITION ON THE BASIS OF ANALYSIS OF PAGE NO. 108 TO 121, 123 AND 124 OF ANNEXURE A-3/4 FOUND AND SEIZED DURING THE COURSE OF SEARCH. PAGE NO. 123 CLEARLY MENTIONED THE TOTAL COST OF PLOT OF LAND TO THE ASS ESSEE WAS RS. 15,55,750/- WHEREAS THE SALE DEED SHOWED IT AT RS. 5,84,353/- + STAMP AT RS. 94,249. LD. CIT(A) WHILE DELETING THE ADDITION BASED ON THE SALE OF PRICE MENTIONED IN THE SALE / PURCHASE DEED HAS IGNORED PAGE NO. 12 3 RELIED BY THE AO. THE LD. DR SUBMITTED THAT RS. 15,55,750/- WAS SHOWN AS COST AT PAGE 123 OF THE ANNEXURE. THE LD. CIT(A) WAS THUS NOT JUSTIFIED TO HIS FINDING PURELY ON THE BASIS OF PURCHASE / SALE DEED. 15. LD. AR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDER OF THE LD. CIT(A). HE REITERATED THE EXPLANATION MADE BEFORE THE AUTHO RITIES BELOW. HE SUBMITTED THAT IT WAS EXPLAINED BEFORE THE AO VIDE REPLY DATED 7.8.2001 THAT THE ENTRIES ON THE DOCUMENTS ARE WORKING RELAT ED TO CONSTRUCTION OF SHOP ON THE LAND PURCHASED BY THE ASSESSEE AT RAMPU R ROAD, MORADABAD AND ENTERED INTO A PARTNERSHIP FIRM IN THE NAME AND STYLE OF M/S. AMRISH INTERNATIONAL. RS. 5,84,353/- WAS THE PRICE AT WHICH THE LAND WAS PURCHASED AND RS. 7 LACS WAS THE EXPECTED COST OF CONSTRUCTION OF THE SHOP ADDING BOTH THE FIGURES COMES TO RS. 12,84,3 53/- WHICH WAS THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 10 EXPECTED COST OF PROJECT FOR CONSTRUCTION OF SHOP. IT WAS EXPECTED THAT ALL THE SHOPS CAN BE SOLD FOR RS. 15,55,750/- AND WHEN THE EXPECTED COST OF THE PROJECT WAS DEDUCTED FROM THE EXPECTED SELLING AMOUNT A PROFIT OF RS. 2,71,397/- WAS EXPECTED OUT OF WHOLE TRANSACTION, W HICH WAS ROUND OFF TO RS. 2,72,000/-. SINCE THE AMOUNT OF EXPECTED PROFIT WAS NOT THAT LUCRATIVE, THAT TOO WITHOUT CONSIDERING THE EXPENSES FOR REGIS TRATION OF THE SALE DEED AT RS. 5,020/- LAWYER FEES RS. 3,000/- FOR OBTAININ G INCOME TAX CLEARANCE CERTIFICATES AND OTHER EXPENSES, THE PLANNING WAS D ROPPED AND INSTEAD THE FIRM WAS GETTING ITS FACTORY PREMISES CONSTRUCTED O N THIS LAND. 16. THE AO, WITHOUT ASCERTAINING THE SALE CONSI DERATION FROM SHRI BADRINATH I.E THE SELLER, HAS REMAINED OF THE VIEW THAT THE LAND WAS PURCHASED ON AN AMOUNT EXCEEDING THE SALE CONSIDERA TION SHOWN IN THE SALE DEED. LD. CIT(A) WAS THUS JUSTIFIED IN DELETIN G THE ADDITION WITH THIS FINDING THAT IN ABSENCE OF MATERIAL EVIDENCE TO CON TRADICT THE SALE CONSIDERATION SHOWN IN THE SALE DEED THE AO WAS NOT JUSTIFIED TO PRESUME THE SALE VALUE WITHOUT ASCERTAINING THE FACT FROM T HE SELLER ETC. 17. ON GOING THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW WE FIND THAT THE AO HAS DISCUSSED THE ISSUE IN DETAIL AT PAGE NO S. 12 TO 15 OF THE ASSESSMENT ORDER AND HAS MADE THE ADDITION WITH THI S FINDING THAT RS. 5,24,080/- MUST HAVE BEEN PAID BY THE ASSESSEE FROM UNDISCLOSED SOURCES. THE VERY LANGUAGE OF THE ASSESSMENT ORDER SUGGESTS THAT THIS FINDING OF THE AO IS BASED ON ASSUMPTION ONLY. IT IS AN ESTABLISHE D PROPOSITION OF LAW THAT ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 11 FOR MAKING ADDITION U/S 69 B OF THE ACT THE ONUS LI ES ON THE REVENUE TO ESTABLISH THAT THE SOURCE WAS UNDISCLOSED. THERE IS NO DISPUTE THAT THE AO WAS AT LIBERTY TO ASCERTAIN THE SALE CONSIDERATION FROM THE SELLER SHRI BADRI , BUT HE DID NOT AVAIL IT AND HAS MADE ADDITION MER ELY ON THE ASSUMPTION THAT AN AMOUNT TO THE TUNE OF RS. 5,10,000/- PLUS E XPENSES OF RS. 14,080/- AGGREGATING TO RS. 5,24,080/- MUST HAVE BEEN PAID BY THE ASSESSEE FROM UNDISCLOSED SOURCES. UNDER THESE FACTS AND CIRCUMST ANCES WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE AD DITION WITH THIS FINDING THAT IN ABSENCE OF MATERIAL EVIDENCE GATHERED BY TH E AO TO CONTRADICT THE SALE CONSIDERATION SHOWN IN THE REGISTERED SALE DEE D THERE WAS NO CASE TO PRESUME THE SALE VALUE EXCEEDING THE SALE CONSIDERA TION SHOWN IN THE SALE DEED. THE FIRST APPELLATE ORDER IN THIS REGARD IS T HUS UPHELD. GROUND NO. 3 IS ACCORDINGLY REJECTED. GROUND NO. 4 18. ON THE BASIS OF PAGE NO. 120 OF THE COMPU TER PRINT OUT SHOWING 5STDRS OF EACH VALUING AT RS. 179280/- COMING TO RS . 895400/- IN TOTAL WHICH WAS NOT SHOWN BY THE ASSESSEE, THE AO ADDED R S. 895400/- AS UNDISCLOSED INVESTMENT BY THE ASSESSEE. BEING SATIS FIED WITH THE EXPLANATION OF THE ASSESSEE THE LD. CIT(A) HAS DELE TED THE ADDITION. 19. IN SUPPORT OF THE GROUND THE LD. DR SUBMIT TED THAT DURING THE COURSE OF SEARCH, THE ASSESSEE WAS ASKED TO FURNISH CHART OF FDRS / TDR. THE ASSESSEE FURNISHED A CHART SHOWING 14TDRS WHERE AS PAGE NO. 120 OF ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 12 THE COMPUTER PRINT SHOWED 19 TDRS. IN RESPONSE TO T HE LETTER OF THE ASSESSEE, THE BANK HAD ALSO CONFIRMED THE EXISTENCE OF THOSE 5TDRS. THE LD. CIT(A) HAS DELETED THE ADDITION ON THE BASIS TH AT THE SAID TDRS WERE NOT BELONGED TO THE ASSESSEE. IN THIS CONTEXT THE L D. DR SUBMITTED THAT THE LD. CIT(A) WHILE ADJUDICATING THE APPEAL HAS MISDIR ECTED HIMSELF. THE FINDING OF THE LD. CIT(A) IS ERRONEOUS BECAUSE THE AO DID NOT MAKE ADDITION ON ACCOUNT OF TDRS NOS. 202278 TO 202282. THE ADDITION MADE BY THE AO WAS ON ACCOUNT OF 5TDRS BEARING NOS. 202268 TO 202272. THUS THE ORDER OF THE LD. CIT(A) IS CLEARLY CONTRARY TO THE FINDINGS MADE BY THE AO. 20. LD. AR ON THE OTHER HAND PLACED RELIANCE ON THE FIRST APPELLATE ORDER. HE SUBMITTED THAT THE AO DID NOT NOTICE THAT ERROR WAS COMMITTED BY THE ASSESSEE IN SUBMITTING THE BEARING NUMBERS OF FDRS / ITRS FOR WHICH IT CANNOT BE PUNISHED. THE NUMBERS SHOWN BY THE ASS ESSEE BELONGED TO OTHERS AS NOTICED BY THE AO AS WELL AS SBI. THE VAL UE OF FDRS ARE CORRECTLY SHOWN. HE SUBMITTED THAT AO VIDE LETTER DATED 3.5.2 002 INFORMED THAT AS PER CERTIFICATE OF SBI LETTER DATED 2.5.1998, TDR B EARS NOS. 202268 TO 202272 DATED 2.6.1998 AND 202283 TO 202291 DATED 3. 6.1998 OF THE FACE VALUE OF RS. 1,79,082/- BELONGING TO THE ASSESSEE T DR NOS. 202278 TO 202285 DID NOT BELONG TO ASSESSEE CERTIFIED BY THE REPORT AND THUS THERE WAS NOTHING AS UNEXPLAINED. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 13 21. WE FIND THAT DURING THE COURSE OF HEARING OF FIRST APPEAL PREFERRED BY THE ASSESSEE, THE LD. CIT(A) HAD ASKED COMMENT O F THE AO ON THE ABOVE SUBMISSION OF THE ASSESSEE. IN COMPLIANCE TH E AO VIDE HIS REPORT DATED 3.5.2002 HAD INFORMED THAT TDR HELD BY THE AS SESSEE AS PER CERTIFICATE BY THE STATE BANK OF INDIA (DATED 2.5.2 002) WERE BEARING NOS. 202268 TO 202272 DATED 2.6.1998 AND 202283 TO 20229 1 DATED 3.6.1998 OF THE FACE VALUE (EACH) OF RS. 1,79,082/- BELONGS TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT TDR BEARING NO. 202278 TO 2 02285 DID NOT BELONG TO HIM. THIS FACT WAS ALSO CERTIFIED BY THE REPORT OF THE AO. IT WAS SUBMITTED THAT TDR BEARING NOS. 202278, 202279, 202 280, 202281 AND 202282 BELONG TO SMT. AMLA GUPTA, SAKUNTALA, SMT. K OMAL AND VINOD KUMAR GUPTA HAVING AMOUNT OF RS. 11,593/-, RS. 3446 /- RS. 4000/-, RS. 12000/- AND RS. 11,131/-. THUS IT WAS EXPLAINED THA T THERE WAS NO CASE TO TREAT THE VALUE OF THESE TDRS AT RS. 1,79,080/- AS DONE BY THE AO. KEEPING THIS FACT IN MIND AND THAT THE BANK HAS ALSO CERTIF IED ONLY 35 STDR IN THE NAME OF THE ASSESSEE AND TDR NUMBERING 202278 TO 20 2282 IN THE NAME OF OTHER PERSONS, WE ARE OF THE VIEW THAT THE LD. C IT(A) WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT THERE REMAINED NOTHIN G AS UNEXPLAINED AND IN THE RESULT IN DELETING THE ADDITION OF RS. 8,96,400 /-. THE SAME IS UPHELD. GROUND NO. 4 IS ACCORDINGLY REJECTED. GROUND NO. 5 ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 1 4 22. IN THIS GROUND THE ADDITIONS OF RS. 89,733/ - AND RS. 29,102/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS DELETE D BY THE LD. CIT(A) HAS BEEN QUESTIONED BY THE REVENUE. 23. IN SUPPORT OF THE GROUND THE LD. DR HAS B ASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE POINTED OUT THAT THE AO OB SERVED THAT THE FDRS WORTH RS. 89,733/- AND RS. 29,102/- WERE NOT INCLUD ED IN THE CHART FURNISHED IN RESPECT OF THE FDRS. REGARDING THE FDR S WORTH RS. 89,733/- IT WAS ARGUED BEFORE THE AO THAT THESE ARE OWNED BY HU F AND WAS MADE BEFORE THE BLOCK PERIOD. BUT ASSESSEE FAILED TO FUR NISH EVIDENCE QUA THE CREATION OF HUF OR ABOUT THE INCOME OF HUF. SIMILAR LY ABOUT THE FDR OF RS. 29,102/-, THE AO NOTICED THAT IT WAS OUT OF THE ORI GINAL INVESTMENT IN FDR OF RS. 10,000/- MADE ON 25.10.1991 IN WIFE URMILA GOEL S NAME WHO WAS NOT HAVING ANY INDEPENDENT SOURCE OF INCOME. THE LD. CI T(A) HAS DELETED THE ADDITION ON THE BASIS THAT THEY WERE REFLECTED IN T HE BANK ACCOUNT ON VARIOUS DATES. SIMILAR WAS THE OBSERVATION BY THE A O QUA THE OTHER FDR OF RS. 29,102/-. THE LD. DR SUBMITTED THAT THE RELIEF GIVEN BY THE LD. CIT(A) IS WITHOUT TAKING NOTE OF THE SUBMISSION AS MADE BE FORE THE AO. SIMPLY BECAUSE THE TRANSACTION IS OUT OF BANK ACCOUNT, WAS NOT RIGHT IN SAYING THAT IN SUCH CIRCUMSTANCES THEY DO NOT BECOME UNDISCLOSE D DESPITE THAT IN THE BOOKS OF ACCOUNTS THEY WERE NOT EVEN RECORDED. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT BEFORE ACCEPTING THE CHANGED EXPLANATION COMMENTS OF AO WAS CALLED FOR. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 15 24. LD. AR ON THE OTHER HAND PLACED RELIANCE ON THE FIRST APPELLATE ORDER. HE SUBMITTED THAT INITIALLY INVESTMENTS OF RS.8,000 /- IN FDR WAS MADE ON 23.9.1976 AND OF RS. 5,000/- WAS MADE ON 23.9.1981 WHICH WERE RENEWED FROM TIME TO TIME. HE SUBMITTED THAT IN SUPPORT A C OPY OF BANK LETTER DATED 14.9.1999 WAS FILED TO THIS EFFECT THAT FDR OF RS. 5,000/- WAS MADE ON ACCOUNT OF 23.9.81 AND LATER ON RENEWED FROM TIME T O TIME. SIMILARLY THE FDRS OF RS. 8,000/- WAS RENEWED FROM TIME TO TIME. SINCE THE INITIAL INVESTMENT IN THESE FDRS IS MUCH PRIOR TO BLOCK PER IOD AND THE FDRS WERE DULY RECORDED IN THE BANK W.E.F 23.9.81 AND 23.9.76 . THESE CANNOT BE TREATED AS UNDISCLOSED INCOME. IT WAS SUBMITTED THA T THE OTHER FDR IN THE NAME OF WIFE WAS ALSO RECORDED IN THE BANK ACCOUNT. 25. CONSIDERING THE ABOVE SUBMISSIONS WE FIND TH AT THERE WAS SUBSTANCE IN THE EXPLANATION OF THE ASSESSEE HENCE CONSIDERIN G THE SAME THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME. THE SAME IS UPHELD. GROUND NO. 5 IS ACCORDINGLY REJECTED. GROUND NO. 6 26. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE A O TO RECALCULATE INTEREST U/S 158BFA(1) IN VIEW OF THE DECISION IN THE CASE O F K HEMCHAND V. DEPUTY COMMISSIONER OF INCOME-TAX [2002] 254 ITR 568 (MP). ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 16 27. THE CONTENTION OF THE LD. DR THAT THERE WAS NO PLEA FROM ASSESSEES SIDE THAT THERE WAS ANY DELAY IN PROVIDING HIM THE COPIES OF THE SEIZED DOCUMENTS. THE LD. CIT(A) WAS THUS NOT JUSTIFIED IN DIRECTING THE AO TO CALCULATE THE INTEREST IF CHARGEABLE UNDER THE LAW WITHOUT EXAMINING THE AVERMENT OF THE ASSESSEE AND WITHOUT ASCERTAINING T HE RELEVANCY OF THE DOCUMENTS REQUESTED BUT NOT SUPPLIED BY THE DEPARTM ENT QUA THE FILING OF THE RETURN OF INCOME. 28. THE LD. AR ON THE OTHER HAND PLACED RELI ANCE ON THE FIRST APPELLATE ORDER IN THIS REGARD AND ON THE DECISION CITED BEFO RE HIM. HE SUBMITTED FURTHER THAT IT IS AN ESTABLISHED PROPOSITION OF LA W THAT IN CASE DELAY IN SUPPLY OF THE RELEVANT DOCUMENTS IS NOT ATTRIBUTABL E TO THE ASSESSEE, THE ASSESSEE CANNOT BE PENALIZED WHICH PAYMENT OF INTER EST FOR THE DELAYED PERIOD OF SUPPLY OF THE DOCUMENT TO ENABLE THE ASSE SSEE TO FILE RETURN OF INCOME IN COMPLIANCE TO THE NOTICE. CONSIDERING THE ABOVE SUBMISSION WE FIND SUBSTANCE IN THE ABOVE ARGUMENT OF THE ASSESSE E WHICH IS ALSO SUPPORTED BY THE CITED DECISION IN THE CASE OF KHEM CHAND VS. DCIT (SUPRA) WE THUS DO NOT FIND THE REASON TO INTERFERE WITH TH E FIRST APPELLATE ORDER IN THIS REGARD AS IN THE FIRST APPELLATE ORDER, THE LD . CIT(A) HAS SPECIFICALLY MENTIONED THAT COPIES OF ALL THE MATERIAL WERE NOT SUPPLIED TO THE ASSESSEE IN THE MONTH OF JUNE, 1991. HENCE THE PERIOD OF FIL ING THE RETURN WAS EXTENDED UP TO THE DATE OF GIVING COPIES OF SEIZED MATERIAL AND INTEREST IF ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 17 ANY BE CHARGED W.E.F. JUNE 2001. UNDER THESE CIRCUM STANCES AND KEEPING IN MIND WE ARE OF THE VIEW THAT APPLYING THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IN THE ABOVE CITED CASE THE LD. CIT(A) HAS RIGHTLY REMANDED THE MATTER BACK TO THE FILE OF THE AO TO RECALCULAT E THE INTEREST IF CHARGEABLE UNDER THE LAW AS PER THE SAID DECISION OF THE HONB LE HIGH COURT. THE ACTION OF THE LD. CIT(A) IN THIS REGARD IS THUS UPHELD. TH E GROUND NO. 6 IS ACCORDINGLY REJECTED. 29. CONSEQUENTLY APPEAL IS DISMISSED. IT(SS) A NO. 98/D/2008 30. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1. THAT ORDER OF THE LEARNED C.L.T (APPEALS), BAREI LLY CONFIRMING THE ADDITION OF RS. 34,600/- MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF UNEXPLAINED INVESTMENT A/C DEPOSIT IS CONTRARY TO L AW AND THE FACTS OF THE CASE. 2. THAT ORDER OF THE LEARNED C.I.T (APPEALS), BARE I11Y CONFIRMING THE ADDITION OF RS. 56,501/- MADE B THE ASSESSING OFFIC ER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY IS CON TRARY TO LAW AND THE FACTS OF THE CASE. 3. THAT ORDER OF THE LEARNED C.I.T (APPEALS), BAREI LLY CONFIRMING THE ADDITION OF RS. 25,000/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY IS CON TRARY TO LAW AND THE FACTS OF THE CASE. 4. THAT ORDER OF THE LEARNED C.I.T (APPEALS), BAREI LLY CONFIRMING THE ADDITION OF RS. 10,000/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY IS CON TRARY TO LAW AND THE FACTS OF THE CASE. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 18 5. THAT ORDER OF THE LEARNED C.I.T (APPEALS), BAREI 11Y CONFIRMING THE ADDITION OF RS. 31,855/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY IS CONTRARY TO LAW AND THE FACTS OF THE CASE. 6. THAT ORDER OF THE LEARNED C.I.T (APPEALS), BAREI 1LY CONFIRMING THE ADDITION OF' RS. 1,46,630/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF UNEXPLAINED CASH IS CONTRARY TO LAW AND THE FACT S OF THE CASE. 31. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. GROUND NO. 1 32. IN THIS GROUND THE ASSESSEE HAS QUESTIONED ADDITION OF RS. 34,600/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT SUSTAINED BY THE LD. CIT(A). 33. IN SUPPORT OF THE GROUND THE LD. AR SUBMITT ED THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THE EXPLANATION OF THE A SSESSEE THAT THE AMOUNT WAS RECEIVED THROUGH DRAFT IN ACCOUNT NO. 165 SBI M ORADABAD AS A RETURN OF ADVANCE. HE SUBMITTED THAT THE AMOUNT WAS PAID TO ONE SHRI RAJ PAL AGAINST PURCHASE OF LAND FOR THE ASSESSMENT YEAR 19 87-88 BUT THE DEAL DID NOT MATURE AND IN CONSEQUENCE THE AMOUNT WAS RETURN ED IN THE ASSESSMENT YEAR 1990-91. 34. THE LD. DR ON THE OTHER HAND TRIED TO JUSTIF Y THE ORDERS OF THE AUTHORITIES BELOW WITH THIS SUBMISSION THAT THE ASS ESSEE DID NOT FURNISH ANY EVIDENCE IN SUPPORT OF THE ABOVE EXPLANATION HENCE THE AUTHORITIES BELOW ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 19 WERE JUSTIFIED IN MAKING AND SUSTAINING THE ADDITIO N IN QUESTION. 35. HAVING GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW WE DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE O RDER AS ADMITTEDLY THE ONUS WAS LYING UPON THE ASSESSEE TO ESTABLISH THE GENUIN ENESS OF ITS CLAIM THAT THE AMOUNT WAS RECEIVED THROUGH DRAFT WAS ACTUALLY RETURN OF ADVANCE CANCELLATION OF THE DEAL WITH SHRI RAJ PAL GOT ENTE RED INTO 1987-88 AGAINST THE PURCHASE OF LAND. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. GROUND NO. 2 36. THE AO MADE ADDITION OF RS. 56,501/- U/S 6 9C OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY WHI CH HAS BEEN SUSTAINED BY THE LD. CIT(A). 37. IN SUPPORT OF THE GROUND LD. AR SUBMITTED T HAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE EXPLANATION OF THE AS SESSEE FURNISHED IN THIS REGARD THAT THREE SALE DEEDS WERE EXECUTED FOR THE CONSIDERATION OF RS. 1,13,000/- IN THE NAME OF THE FATHER OF THE ASSESSE E, RS. 83,000/- IN FAVOUR OF HIS WIFE AND RS. 48,000/- IN FAVOUR OF HIS SON R ESPECTIVELY. IT WAS EXPLAINED THAT SHRI AMRISH GOEL (SON) WAS SEPARATEL Y ASSESSED BY THE AO AND NO ADDITION WAS MADE IN HIS HANDS. SINCE THE SA LE DEED WAS IN FAVOUR OF SHRI AMRISH GOEL THE ASSESSEE WAS NOT REQUIRED TO EXPLAIN. 38. THE LD. DR ON THE OTHER HAND PLACED RELIANC E ON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 20 39. ON HAVING GONE THROUGH THE ORDERS OF THE A UTHORITIES BELOW WE FIND THAT THE AO HAS DEALT WITH THE ISSUE AS UNDER IN PA RA NO. 7.1 PAGE 11 OF THE ASSESSMENT ORDER, REPRODUCED HEREUNDER :- AS PER A/5 PAGE 41 TO 43, TITLED AS DAKHAL NAMA' ENTERED INTO BETWEEN S/SHRI SUNDAR SINGH, RAMESHWAR SINGH AND PR EM PAL SINGH S/O SHRI HODAL SINGH R/O VILI. CHAUDHARPUR, MORADAB AD AND THE ASSESSEE ON 21.9.90 IN RESPECT OF LAND DEALING MEAS URING 0.14 DISMAL, 0.34 DISMAL, 7.60 DISMAL AND 15.15 DISMAL A GGREGATING 23.23 DISMAL( KHASRA NO. 888/10-, 889/A, 888/7 AND 889 RE SPECTIVELY) SITUATED AT VILL. CHAUDHARPUR FOR A SUM OF RS. 2,52 ,150/-. THIS 'DAKHAL NAMA' IS CO-RELATED WITH A3/2, PAGE NO. 1 T O 11 AND PAGE NO. 17 TO 22 CONTAINING TWO REGISTERED PURCHASE DEED IN RESPECT OF FOUR LANDS UNDER CONSIDERATION. THESE TWO PURCHASE DEEDS WERE ( REGISTERED BEFORE THE SR, MORADABAD ON 26/10/1990 F OR A CONSIDERATION OF RS.1,11 ,900/-(80,000+ 31,900) AND RS.82,040/- (65,000+ 17,040) AND STAMP VALUE AT RS.2,19,675/- A ND RS. 1,17,500/- RESPECTIVELY. FROM THE FACTS IT IS EVIDE NT THAT THE ACTUAL COST OF THESE PLOTS ARE OF RS. 2,52,501/- AS AGAIN ST SALE PROCEED MENTIONED IN THE REGISTERED DEED AT RS.1,93,940/-. ON EXAMINATION OF ASSESSMENT RECORDS IT REVEALED THAT THE ASSESSEE HA S SHOWN THESE PLOT OF LANDS AT RS.1,96,000/- IN THE BALANCE SHEET FILED FOR THE FIRST TIME AS ON 31/3/95 AND BALANCE SHEET FILED DURING BLOCK ASSESSMENT PROCEEDINGS ,AS ON 31/3/1991 . THIS FACT WAS CONFRONTED TO THE AUTHORISED REPRESENTATIVE OF THE 'ASSESSEE TO EXPLA IN THIS VARIATION. NO SATISFACTORY REPLY HAS BEEN OFFERED EXCEPT SIMPL Y STATED THAT THE NO EXTRA COST HAS BEEN PAID. SINCE THE DOCUMENTS RE COVERED FROM THE POSSESSION OF THE ASSESSEE, THE ONUS GOES ON THE SH OULDER OF THE ASSESSEE TO PROVE IT WHICH HE HAS FAILED TO DO SO. THEREFORE, IT IS CLEARLY ESTABLISHED THAT THE ASSESSEE HAS ACTUALLY INCURRED RS.2,52,150/-. THE EXTRA AMOUNT PAID TO THE TUNE OF RS.56,501/- IS TREATED AS EXPENSES INCURRED FROM OUT OF BOOKS AND THE SAME IS TREATED AS ASSESSEE'S UNDISCLOSED INCOME U/S 69C OF THE INCOME TAX ACT FOR ASSESSMENT YEAR 1991-1992. 40. WHEN WE CONSIDER THE ABOVE FINDING OF THE AO UPHELD BY THE LD. CIT(A) WE ARE OF THE VIEW THAT THERE IS SUBSTANCE I N THE CONTENTION OF THE ASSESSEE THAT WHEN SHRI AMRISH GOEL WAS SEPARATELY ASSESSED BY THE AO ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 21 DOCUMENT RELATING TO SHRI AMRISH GOEL FOUND DURING THE COURSE OF SEARCH WAS TO BE EXPLAINED BY SHRI AMRISH GOEL . WE THUS S ET ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE CONTENTION OF THE ASSESSEE IN THIS REGARD AND DECIDE THE ISSUE AFRESH AFTER AFFORDING OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THE GROUND IS THUS ALLOWED FOR STATIS TICAL PURPOSES. GROUND NO. 3 & 4 41. THE ADDITIONS OF RS. 25,000/- AND RS. 10,000 /- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY SUSTAI NED BY THE LD. CIT(A) HAS BEEN QUESTIONED. 42. IN SUPPORT OF THE GROUNDS, THE LD. AR SUBM ITTED THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE EXPLANATION OF THE ASSESSEE THAT THE ADVANCE OF RS. 25,000/- PAID ON 14.10.1994 TO ONE MOHAMMAD HAZI FOR LAND SETTLED FOR RS. 30,000/- BUT THE DEAL WAS NOT MAINTAINED AND THE AMOUNT WAS RECEIVED BACK ON 27.10.1994. ADVANCE OF RS. 10,000/- PAID FOR THE LAND SETTLED FOR RS. 1,50,000/- DOCUMENTS O F WHICH WERE FOUND. THE ABOVE ADVANCES WERE PAID THROUGH FIRM M/S. AMRISH I NTERNATIONAL WHICH WAS SEPARATELY ASSESSED BY THE AO. ON CANCELLATION OF THE DEAL THE AMOUNT WAS RETURNED AND DEPOSITED. IN SUPPORT THE ASSESSEE HAD FURNISHED LETTER DATED 7.8.2001. 43. LD. DR ON THE OTHER HAND TRIED TO JUSTIFY T HE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT ONUS ALWAYS LIES UPON THE CLAIMANT TO ESTABLISH GENUINENESS OF ITS CLAIM TO WHICH THE ASSESSEE HAS THOROUGHLY FAILED TO. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 22 44. ON GOING THROUGH THE ORDERS OF THE AUTHORIT IES BELOW IN THIS REGARD WE FIND THAT THE AO HAS DEALT WITH THE ISSUE IN PAR A NOS. 7.2 AND 7.3 AT PAGE NOS. 11 & 12 OF THE ORDER AND THE LD. CIT(A) H AS SIMPLY UPHELD THE ACTION OF THE AO AFTER DISCUSSING THE EXPLANATION O F THE ASSESSEE AT PAGE 5 PARA NO. 8 OF THE FIRST APPELLATE ORDER. WE FULLY C ONCUR WITH THE FINDING OF THE AO THAT IN ABSENCE OF EVIDENCE IN SUPPORT OF TH E ABOVE EXPLANATION THAT THE MONEY IN QUESTION WAS RETURNED DUE TO CANCELLAT ION OF THE AGREEMENT TO PURCHASE THE LAND I.E. SUBJECT MATTER OF PAGE 40 OF ANNEXURE A-7, THE EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED. IN CONSEQUENCE THE AO HAS RIGHTLY MADE THE ADDITION IN QUESTION SUSTAINED BY THE LD. CIT(A). THE GROUNDS ARE ACCORDINGLY REJECTED. GROUND NO. 5 45. THE AO MADE ADDITION OF RS. 31,855/- ON ACCO UNT OF UNEXPLAINED INVESTMENT IN JEWELERY WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A). 46. IN SUPPORT OF THE GROUND THE LD. AR SUBMITTE D THAT THE CASH FOUND AND PURCHASE OF JEWELLERY WAS OUT OF THE AMOUNT OF SALE PROCEEDS OF AGRICULTURE PRODUCE. HE SUBMITTED THAT DURING THE C OURSE OF SEARCH 566.400 GMS OF GOLD JEWELLERY, 2 GOLD COINS, 4.007 KG OF SI LVER AND 125 SILVER COINS WERE FOUND. HE SUBMITTED THAT IN THE CASE OF SON SH RI AMRISH GOEL (SON) NO ADDITION WAS MADE BY THE AO AFTER BEING SET ASIDE B Y THE TRIBUNAL FOLLOWING THE CBDT CIRCULAR. THE LD. AR SUBMITTED THAT THE FA MILY CONSISTS OF ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 23 ASSESSEE, HIS WIFE SMT. URMILA GOEL HIS SON SHRI A. K. GOEL, SMT. ALKA GOEL DAUGHTER IN LAW AND THEIR TWO KIDS. THE JEWELLERY W AS FOUND IN RESPECT OF BOTH SHRI A.K. GOEL AND ASSESSEE. HE EXPLAINED THAT PART OF THE JEWELLERY WAS PURCHASED FROM THE WITHDRAWALS MADE FROM M/S. A MRISH INTERNATIONAL DURING THE BLOCK PERIOD AND PART OF THE JEWELLERY WAS ACQUIRED ON DIFFERENT OCCASIONS I.E. MARRIAGE, INHERITANCE AND GIFT. SI LVER COINS WERE ACQUIRED BY THE FAMILY ON THE OCCASION OF DIFFERENT FESTIVALS W HICH IS CUSTOMARY IN HINDU FAMILY GIVING THE FOLLOWING BREAK UP, THE LD. AR SU BMITTED THAT THE GOLD ORNAMENTS RECOVERED FROM THE ASSESSEES PREMISES BE ING 566.400 GRAMS :- P.C. GOEL A.K. GOEL TOTAL GOLD ORNAMENTS (GRMS) 566.400 849.10 0 1415.500 GOLD COINS (NOS.) 2 2 4 SILVER (KGS) 4.007 1.367 5.374 SILVER COINS (NOS.) 125 40 165 47. AFTER NARRATING THE STATUS OF THE FAMIL Y, HE POINTED OUT THAT AS PER CBDT CIRCULAR NO. 1916 DATED 11.5.94 A MARRIED LADY OF A FAMILY IS ALLOWED TO HAVE 500 GRAMS OF JEWELLERY AND 100 GRAMS PER MA LE MEMBER IS ALLOWED FOR THE PURPOSE OF SEIZURE. THUS NO ADVERSE INFEREN CE CAN BE DRAWN. BESIDES SILVER WARES OF 4.007 KG AND 125 COINS WERE FOUND. SILVER COINS HAVE BEEN EXPLAINED TO HAVE BEEN ACQUIRED ON DIFFE RENT FESTIVAL. HENCE NO ADVERSE INFERENCE CAN BE DRAWN. SILVER WARES OF 4. 007 KG FOUND HAS BEEN VALUED ON HIGHER SIDE. WE FIND THAT THE AO HAS ALS O TAKEN CARE OF THE CBDT CIRCULAR DATED 11.5.94 WHILE CONSIDERING THE ISSUE AND HAS ONLY TREATED THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 24 SILVER WARE OF 4.007 KGS AS UNEXPLAINED IN VIEW OF SOURCE SHOWN BY THE ASSESSEE FOR THE INVESTMENT. HE HAS TAKEN THE VALUE OF THE SILVER AT RS. 7950/- PER KG AS ON THE DATE OF SEARCH WORKING OUT TO BE WORTH RS. 31,855/-. WE THUS FIND THAT THE ASSESSMENT ORDER IN THIS REGARD IS REASONED ONE AND DOES NOT CALL ANY INTERFERENCEH. LD. CIT(A) HAS THUS RIGHTLY UPHELD THE ADDITION. THE GROUND IS ACCORDINGLY REJECTED. GROUND NO. 6 48. THE ACTION OF THE LD. CIT(A) IN CONFIRMING T HE ADDITION OF RS. 1,46,630/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED ACCOUNT HAS BEEN QUESTIONED. 49. IN SUPPORT OF THE GROUND THE LD. AR SUBMITTE D THAT ASSESSEES SOURCE OF AGRICULTURAL INCOME WAS NEVER DISPUTED DURING TH E COURSE OF ASSESSMENT PROCEEDINGS HENCE THERE WAS NO REASON TO REJECT THE EXPLANATION OF THE ASSESSEE THAT THE JEWELLERY WAS PURCHASED FROM CASH AVAILABLE AND THE AMOUNT FOUND REPRESENTED SALE VALUE OF AGRICULTURAL PRODUCE. 50. THE LD. DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW, WITH THIS CONTENTION THAT THEY W ERE JUSTIFIED IN THEIR ACTION IN NOT ACCEPTING THE EXPLANATION OF THE ASSE SSEE IN ABSENCE OF EVIDENCE IN SUPPORT. 51. CONSIDERING THE ABOVE SUBMISSION WE FULLY CON CUR WITH THE SUBMISSION OF THE LD. DR THAT IN ABSENCE OF EVIDENCE IN SUPPOR T GENUINENESS OF AN ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 25 EXPLANATION FURNISHED BY THE ASSESEE WAS RIGHTLY RE JECTED BY THE AUTHORITIES BELOW. 52. GROUND NO. 6 IS ACCORDINGLY REJECTED. IN THE RESULT APPEAL IS PARTLY ALLOWED. ITA NO. 278/D/2002 53. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT( APPEALS) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE TO DELETE THE ADDITION OF RS. 59,80,201/- RS. 84,64,549/- & RS. 55,49,139/- MADE IN BLOCK PERIOD ON ACCOUNT OF EXCE SS OF ASSETS OVER LIABILITIES U/S 69 OF THE I. T. ACT 196 1. 2. THAT THE LD. CIT(APPEALS) HAS FAILED TO CONSIDER BEFORE ALLOWING RELIEF THAT THE ASSESSEE DID NOT MAINTAIN PROPER & REGULAR BOOKS OF ACCOUNT AS IS EVIDENT FROM THE FACT THAT ASSESSEE DID NOT PRODUCE ANY BILL/VOUCHER OR ANY OTHER SUPPORTING DOCUMENTS. 3. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW AND O N THE FACTS OF THE CASE ON OBSERVING THAT THE APPELLANT FIRM ASSESSMEN T FOR AYS 96-97 AND 97-98 HAVE BEEN COMPLETED U/S 143( 3) AND INCOM E FOR A. Y.98- 99 HAS BEEN COMPLETED U/S 143(1) OF THE I.T.ACT 196 1 & NO QUESTION ARISE TO INCLUDE THE INCOME OF THESE YEARS IN BLOCK PERIOD WHEN ON1Y UNDISCLOSED INCOME HAS BEEN TAKEN IN BLOCK PERIOD. 4. THAT THE LD. CI T( A) HAS ERRED IN LAW AND ON T HE FACTS IN OBSERVING THAT UNDER NO PROVISION, THE ASSESSING OFFICER IS E MPOWERED TO PICK ONE SET OF FIGURES FROM ONE SOURCE AND ANOTHER SET OF FIGURES FROM DIFFERENT SOURCE WHILE THE ASSESSING OFFICER MADE A DDITIONS ONLY ON THE BASIS OF DIFFERENCE BETWEEN THE CASH AS PER COM PUTERISED PRINT AND SHOWN WITH REGULAR RETURN OF INCOME. 5. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW AND O N THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 2,14,140/- WHI CH WAS MADE ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING SEARCH. ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 26 6. THAT THE LD. CIT( APPEALS) HAS ADMITTED AN ADDIT IONAL EVIDENCE REGARDING AVAILABILITY OF CASH OF RS. 2 LAKHS FROM SALE OF LAND AS PER BALANCE SHEET OF SHRI P.C.GOEL WHICH IT IN CONTAVAN TION OF RULE 46A OF I. T.RULES,1962 AS THE ASSESSING OFFICER HAS ALLOWE D REASONABLE OPPORTUNITY TO THE ASSESSEE. 7. THAT THE LD. CIT(APPEALS) HAS FAILED TO CONSID ER THAT THE ASSESSEE TRIED TO EXPLAIN THE CASH OF RS. 2,14,140/- AS PER PROVISIONS BALANCE SHEET PREPARED AS ON 3.8.99 BUT IT FAILED TO GIVE A NY EVIDENCE IN SUPPORT OF IT. 54. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BE LOW MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. GROUND NO. 1 TO 4 55. THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITIONS OF RS. 59,80,201/-, RS. 84,64,549/- AND RS. 55,49,139/- MA DE BY THE AO ON ACCOUNT OF EXCESS OF ASSETS OVER LIABILITIES HAS BE EN QUESTIONED BY THE REVENUE. 56. IN SUPPORT OF THE GROUND THE LD. DR SUBMIT TED THAT IN AN ACTION CARRIED OUT U/S 132 OF THE ACT COMPUTERS WERE SEIZE D AND ITS PRINT OUTS WERE TAKEN WHICH DISCLOSED HUGE DISCREPANCIES IN TR IAL BALANCE, CASH BOOK, LEDGER ETC. THE ASSESSEE HAD ADMITTED THAT NO MANUA L ACCOUNTING WAS DONE. DURING THE COURSE OF ASSESSMENT ALSO BASIC RE CORDS LIKE BILLS, VOUCHERS ETC. WERE NOT PRODUCED. COMPARISON OF THE FIGURES SO OBTAINED FROM COMPUTER REVEALED STARTLING DISCREPANCIES (E XPENSES FIGURES ETC.) AND THE RESULTS SO OBTAINED WERE NOT TALLYING WITH THE RESULTS SHOWN IN THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 27 RETURNS. DIFFERENCE IN CASH BALANCES WERE FOUND. WH ILE BALANCES AS PER RETURN WERE LESS BUT AS PER THE COMPUTER PRINT OUT IT WAS MORE AND THE DIFFERENCES WERE AS UNDER :- AS ON 31.3.96 RS. 59,80,201 AS ON 31.3.97 RS. 81,34,620/- AS ON 31.3.98 RS. 55,49,139/- 57. LD. DR SUBMITTED THAT DESPITE BEING SPECIFI CALLY ASKED REGULAR BOOKS WERE NOT PRODUCED BY THE ASSESSEE. THE CONTENTION O F THE ASSESSEE REMAINED THAT THE DATA IN THE HARD DISC HAD CORRUPT ED. THE ASSESSEE HOWEVER FAILED TO EXPLAIN AS TO HOW GENERATION OF D ATA AS ON SPECIFIC DATES WAS POSSIBLE WHEN THE DATA HAD CORRUPTED OR EFFECTE D BY VIRUS. FURTHER HOW THE DATA REVEALED BY HARD DISC IS CORRUPTED WAS ALS O NOT PROVED. THE AO NOTICED THAT GENERALLY THE RETURNS FOR THESE YEARS WERE ALSO FILED VERY LATE AT TIMES AFTER THE DELAY OF 17 MONTHS. AFTER ANALYZ ING THE FACTUAL POSITION THE AO MADE ADDITIONS IN QUESTION U/S 69 OF THE AC T. THE LD. CIT(A) HAS HOWEVER DELETED THE ADDITIONS WITH THIS OBSERVATION THAT AO HAD ADDED ALL THE AMOUNTS WHICH WERE WITHDRAWN FROM THE BANK. WHI LE OBSERVING SO THE LD. CIT(A) HAS JUST GONE BY THE SUBMISSIONS OF THE ASSESSEE AND DISREGARDED THE DATA THROWN UP BY THE COMPUTER SEIZ ED. IT WAS FOR THE ASSESSEE TO PIN POINT THE SPECIFIC REASONS FOR DIS CREPANCIES BETWEENS THE CASH BALANCES AS SHOWN BY THE COMPUTER DATA VIS A V IS RETURNS OF INCOME ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 28 FILED. THUS THE ASSESSEE HAD FAILED TO DISCHARGE IT S ONUS AND IF AT ALL THERE WAS ANY DOUBT THE AO OUGHT TO HAVE BEEN CONFRONTED OR THE MATTER SHOULD HAVE BEEN REMANDED TO THE AO FOR HIS SPECIFIC COMME NTS. 58. LD. AR ON THE CONTRARY TRIED TO JUSTIFY THE FIRST APPELLATE ORDER ON THE ISSUE. HE REFERRED THE COPIES OF DIFFERENT DOCUMEN TS AND WRITTEN SUBMISSIONS ADDRESSED TO THE FIRST APPELLATE AUTHOR ITY, PLACED ON RECORD IN THE SHAPE OF PAPER BOOK FILED ON BEHALF OF THE ASSE SSEE CONTAINING PAGE NOS. 1 TO 60 OF THE PAPER BOOK. 59. CONSIDERED THE ARGUMENTS ADVANCED BY THE PA RTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. THE ASSESSEE A PARTNERSHIP FIRM WAS CARRYING ON THE BUSINESS OF MA NUFACTURING AND EXPORTS OF INDIAN HANDICRAFTS. PREMISES OF THE ASSESSEE FIR M WAS SEARCHED U/S 132 OF THE ACT ON 3.8.99. THE ACCOUNTS OF THE ASSESSEE FIRM WERE BEING MAINTAINED REGULARLY ON COMPUTER AND BACK UP OF THE SAME WAS TAKEN ON FLOPPY DISK. AT THE TIME OF SEARCH HARD DISC OF THE COMPUTER WAS AFFECTED BY THE VIRUS AND THE CASH PAYMENT FILE WAS DESTROYED. THE BACK UP FLOPPY DISC ALONGWITH THE COMPUTERS WERE SEIZED BY THE DEPARTME NT . THE ASSESSEE FIRM REQUESTED THE AO TO RESTORE THE DATA FROM FLOP PY DISC VIDE ITS LETTER DATED 9.7.2001. THE CONTENTION OF THE ASSESSEE REMA INED THAT THE AO FRAMED THE ASSESSMENT U/S 158 BC AFTER RESTORING TH E ACCOUNTS CONTAINED IN THE FLOPPY DISK. THE ADDITIONS OF RS. 59,80,201/-, RS. 84,64,549/- AND RS. 55,49,139/- MADE U/S 69 OF THE ACT FOR THE BLOCK PE RIOD ON ACCOUNT OF ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 29 EXCESS OF ASSETS OVER LIABILITIES WAS FURTHER QUEST IONED BY THE ASSESSEE BEFORE THE LD. CIT(A) ON THE BASIS THAT PRINT OUT T AKEN FROM THE VIRUS AFFECTED SEIZED COMPUTERS WERE NOT THE REGULAR BOOK S OF ACCOUNTS OF THE ASSESSEE FIRM AND AS REQUESTED BY THE ASSESSEE AO SHOULD HAVE RESTORED THE DATA FROM THE FLOPPY DISK AS IN REGULAR PRACTIC E THE ASSESSEE USED TO TAKE BACK UP OF DATA STORED IN THE HARD DISK AT FLO PPY. IT WAS POINTED OUT THAT THE UNDISCLOSED INCOME AS DEFINED U/S 158B OF THE ACT HAS TO BE ASSESSED UNDER CHAPTER IVB OF THE ACT. IT WAS CONTE NDED THAT WHILE FRAMING THE BLOCK ASSESSMENT U/S 158BC UNDISCLOSED INCOME D ETECTED AT A RESULT OF SEARCH CAN BE TAXED ONLY ON THE BASIS OF THE MATERI AL FOUND DURING THE COURSE OF SEARCH. RELIANCE WAS ALSO PLACED ON THE F OLLOWING DECISIONS :- 1. CIT VS. SHAMBHULAL C. BACHKANIWALA (2000) 245 ITR 488 2. N.R. PAPER AND BOARD LTD. VS. DCIT 234 IT R 733 60. THE FURTHER CONTENTION OF THE ASSESSEE REMA INED THAT THE AO WAS NOT JUSTIFIED IN RECOMPUTING THE TOTAL INCOME OF THE AS SESSEE FOR THE VARIOUS ASSESSMENT YEARS IN THE BLOCK ASSESSMENT, FOR WHICH REGULAR ASSESSMENT WAS REQUIRED TO BE MADE U/S 143(3) OF THE ACT. IT W AS SUBMITTED THAT EXPENSES INCURRED DURING THE COURSE OF BUSINESS OF THE ASSESSEE FIRM AND PERSONAL DRAWINGS OF THE PARTNERS WERE STRICTLY MET OUT FROM THE CASH WITHDRAWN FROM THE BANK ACCOUNT OF THE ASSESSEE FIR M AND WAS BEING MENTIONED IN THE COMPUTER PRINT OUTS. SINCE CASH PA YMENT FILES WERE DAMAGED DUE TO VIRUS IN THE COMPUTER AND CASH PAYME NTS WERE NOT FOUND ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 30 RECORDED THEREIN WHOLE OF THE CASH WITHDRAWN IN SEL F BY THE FIRM IS APPEARING THEREIN AS CASH IN HAND. THE DIFFERENCE B ETWEEN THE EXPENSES AND PERSONAL DRAWINGS OF THE PARTNERS AS STATED IN THE FINANCIAL STATEMENTS AND HAVE RECORDED IN THE COMPUTER PRINT OUTS WAS EX ACTLY EQUAL TO THE DIFFERENCE OF CASH IN HAND AS SHOWN IN THE FINANCIA L STATEMENT AND COMPUTER PRINT OUT. IT WAS SUBMITTED THAT THE SOLE SOURCE OF INCOME AS SHOWN IN THE FINAL ACCOUNTS FILED WITH THE DEPARTME NT ALONGWITH THE RETURN OF INCOME AND IN THE SEIZED MATERIAL AS WELL WERE EXPORT SALES, EXPORT INCENTIVES IN ADDITION TO THE INTEREST ACCRUED IN F OREIGN CURRENCY TDRS. THE ASSESSEE HAD FURNISHED THE FIGURES OF EXPORT SALES FOR THE FINANCIAL YEAR ENDING ON 31.3.1996, 31.3.1997 AND 31.3.1998 AS PER PROFIT AND LOSS ACCOUNT AND AS PER SEIZED MATERIAL. THE FIGURES WER E SIMILAR AND THERE WAS NO CHANGE. SIMILAR WAS THE POSITION WITH REGARD TO COMPUTER DRAW BACKS. 61. FURTHER CONTENTION OF THE ASSESSEE REMAINED THAT DURING THE COURSE OF SEARCH ON 3.8.99 CASH IN STOCK WORTH RS.214140/- AN D RS. 70,000/- WERE FOUND IN ADDITION TO 15.87 KG SILVER FROM THE PREMI SES OF THE ASSESSEE FIRM. IT WAS STATED THAT THE AO HAD NOT INCLUDED THE INCO ME FOR THE PERIOD 1.4.99 TO 3.8.99 SINCE ALL THE TRANSACTIONS RELATING TO TH IS PERIOD WERE RECORDED IN THE BOOKS OF ACCOUNTS PRODUCED BEFORE THE AO AND TH E AO WAS SATISFIED ABOUT THE GENUINENESS OF THE BOOKS OF ACCOUNTS. IT WAS ALSO FORTIFIED FROM THE FACT THAT THE AO HAD FOUND THE STOCK AND SILVER TO BE PROPERLY RECORDED IN THE BOOKS OF ACCOUNTS AND THAT WAS THE SOLE REAS ON THAT NO ADDITION WAS ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 31 MADE ON THIS ACCOUNT. REGARDING THE CASH FOUND IT W AS SUBMITTED THAT THE AO HAD OBSERVED THAT THE EXPLANATION OFFERED AT THI S STAGE WAS EVASIVE AND AFTER THOUGHT AND HENCE THE SAME WAS HAVING NO FORC E. 62. IT WAS ARGUED FURTHER THAT IT IS AN ESTABLIS HED POSITION THAT THE CLOSING BALANCE OF CASH IN HAND FOR THE PRECEDING YEAR HAS TO BE TAKEN AS OPENING BALANCE OF THE SUCCEEDING YEAR. HOWEVER THE CLOSING BALANCE OF CASH OF THE PRECEDING YEAR AS ADOPTED BY THE AO DIFFERS FROM TH E OPENING BALANCE OF CASH OF THE SUCCEEDING YEAR. PARA NO. 5 OF THE AS SESSMENT ORDER WAS REFERRED, TO SUPPORT THE CONTENTION OF THE ASSESSEE THAT THE AO HAS TAKEN THE CASH BALANCE AS PER COMPUTER PRINT AS ON 31.3.1 996, 31.3.1997 AND 31.3.1998 AT RS. 60,13,080/-, RS. 81,72,879/- AND R S. 55,89,624/- RESPECTIVELY. THUS THE CLOSING BALANCE AS ON 31.3.1 996 AT RS. 60,13,080/- BE RESTRICTED AS OPENING BALANCE AS ON 1.4.1996 AT RS. 60,13,080/- WHEREAS THE AO HAS ADOPTED THE FIGURE OF RS. 32,879.45 . SI MILAR POSITION WAS THERE FOR OTHER YEARS. 63. TAKING INTO CONSIDERATION THE ABOVE DISCUSSE D SUBMISSION AND HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, W E ARE OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY GIVEN THE RELIEF. FOR A READY REFERENCE PARA NO. 5 OF THE FIRST APPELLATE ORDER IS BEING REPRODUCED HE REUNDER :- 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF T HE COUNSEL AND HAVE PERUSED THE ORDER FRAMED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS PRACTICALLY ADDED ALL THE AMOUNT WHICH WAS WITH DRAWN FROM THE BANK ACCOUNT STATING THAT THIS AMOUNT HAS NOT BEEN UTILI ZED FOR INCURRING THE EXPENSES IN THE BUSINESS. THE ASSESSING OFFICER HAS NOT BEEN ABLE TO PIN ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 32 POINT THE SOURCE WHERE FROM THE EXPENSES HAVE BEEN MET OUT. THE APPELLANT WAS WITHDRAWING MONEY FROM TIME TO TIME F ROM THE BANK TO MEET OUT THE EXPENSES. THE WITHDRAWALS WERE MADE EITHER IN THE NAME OF SELF OR IN THE NAME OF PARTNER OF THE FIRM AND THE SAME AMO UNT HAVE BEEN UTILIZED FOR MEETING OUT THE EXPENSES. HAD THE ASSESSING OFF ICER RELIED THE FIGURES CONTAINED IN COMPUTER PRINTS OUT TRUE THEN ALL THE FIGURES CONTAINED THEREIN HAD TO BE CONSIDERED WHILE DETERMINING THE UNDISCLO SED INCOME OF THE APPELLANT. UNDER NO PROVISIONS CONTAINED IN CHAPTER XIVB OF THE ACT THE AO IS EMPOWERED TO PICK ONE SET OF FIGURES FROM ONE SO URCE AND ANOTHER SET OF FIGURES FROM DIFFERENT SOURCE. IN THE CASE OF SAMRA T BEER BAR VS. ACIT (2001) ITR (AT) 0001 WHEREIN IT WAS HELD THAT THE E VIDENCE GATHERED BY THE AUTHORIZED OFFICER U/S 132 ALONGWITH THE OTHER MATERIAL SEIZED, MARKED OR INVENTORIED WOULD BE AVAILABLE BEFORE THE AO WHE N HE EXERCISE HIS POWER TO ASSESSEE THE UNDISCLOSED INCOME. THIS EVIDENCE F OUND AND MATERIAL AVAILABLE SHOULD BE THE BASIS FOR COMPUTING THE UND ISCLOSED INCOME. IN THE VERY SCHEME OF A BLOCK ASSESSMENT ANY GUESS WORK OR ESTIMATE IS EXCLUDED FROM THE RECKONING. THIS POSITION HOWEVER BE DIFFER ENT. IF THERE IS INHERENT EVIDENCE IN THE SEIZED MATERIAL ITSELF TO SHOW THAT THE SEIZED MATERIAL IS NOT THE COMPLETE RECORD OF UNACCOUNTED TRANSACTIONS OR WHERE THERE ARE INDICATIONS TO SHOW THAT THE APPELLANT HAD CERTAIN OTHER RECORD OF UNACCOUNTED TRANSACTIONS WHICH WAS NOT UNEARTHED IN THE COURSE OF SEARCH. THE ASSESSING OFFICER HAS ACCEPTED THE PAR T OF THE ENTRIES FROM A PARTICULAR PLACE I.E PRINT OUT TAKEN FROM THE COMPU TER AND PART OF THE ENTRIES FROM THE BOOKS OF ACCOUNT SEIZED. THE PRINT OUT TAKEN FROM THE COMPUTER WAS NOT FULL AND COMPLETE. THE ASSESSING O FFICER SHOULD HAVE TIRED TO MAKE IT FULL AND COMPLETE AND ONLY THEN, I F DISCREPANCIES FOUND ADDITION COULD BE MADE. SIMPLY THE ADDITIONS MADE O F THE AMOUNTS WITHDRAWN FROM THE BANK WITHOUT STATING THE FACT WH ERE THIS MONEY GONE. THE NORMAL PRACTICE OF THE BUSINESS IS TO WITHDRAW THE AMOUNT FROM THE BANK TO MEET OUT THE EXPENSES I.E. BUSINESS EXPENS ES ETC. AND THIS IS THE PECULIAR CASE WHERE I AM FINDING THAT THE MONEY WIT HDRAWN FROM THE BANK HAS BEEN ADDED AS INCOME WITHOUT PIN POINTING THE R EASONS. THE ASSESSING OFFICER IS ALSO DEBARRED BY VIRTUE OF EXPLANATION (B ) TO THE SECTION 158BA OF THE I.T ACT FROM MAKING THE ADDITIONS AS THE TOTAL UNDISCLOSED INCOME RELATING THE BLOCK PERIOD SHALL NOT INCLUDES THE IN COME ASSESSED IN ANY REGULAR ASSESSMENT AS INCOME OF THE BLOCK PERIOD. I N THE CASE OF THE APPELLANT FIRM ASSESSMENT FOR THE AYS. 96-97 AND 97 -98 AHS BEEN COMPLETED U/S 143(3) AND INCOME FOR THE AY 98-99 HA S BEEN COMPLETED U/S 143(1) OF THE ACT HENCE NO QUESTION ARISE TO INCLUD ING THE INCOME OF THESE YEARS IN THE BLOCK PERIOD. WITH REGARD TO CASH FOUN D AT THE TIME OF SEARCH, IT IS NOTICED FROM THE BALANCE SHEET OF PC GOYAL F OR THE YEAR ENDING ON 31.3.99 THAT A SUM OF RS. 2 LACS REPRESENT THE SALE VALUE OF LAND AND THE ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 33 BALANCE REMAINING OUT OF CASH WITHDRAWN FROM THE BA NK. THUS FROM WHAT HAVE BEEN DISCUSSED ABOVE AND THE FACT THE WITHDRAW ALS FROM THE BANK WERE MADE BY THE FIRM EITHER IN THE NAME OF SELF OR BY THE PARTNER ARE NOT DISPUTED BY THE AO AND EXPENDITURE IN CONNECTION WI TH BUSINESS ACTIVITIES WERE MET OUT FROM THESE. THEREFORE THE ENTIRE ADDIT IONS MADE ON THE PRESUMPTION BASIS ARE NOT MAINTAINABLE AND LIABLE T O BE DELETED. AS SUCH THE ADDITIONS AMOUNTING TO RS. 59,80,201/-, 84,64,5 49/-, 55,49,139/- AND RS. 2,14,140/- MADE IN BLOCK PERIOD (SUPRA) ARE DEL ETED. THE APPEAL IS ALLOWED WITH A TOTAL RELIEF OF RS. 2,01,08,0290/-. 64. WE FULLY CONCUR WITH THE LD. CIT(A) THAT AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF ALL THE AMOUNTS WHICH WERE W ITHDRAWN FROM THE BANK ACCOUNT ALLEGING THAT THESE AMOUNTS WERE NOT U TILIZED FOR INCURRING THE EXPENSES IN THE BUSINESS WITHOUT PIN-POINTING THE S OURCE WHEREFROM THE EXPENSES HAVE BEEN MET OUT. IT IS ALSO CORRECT TO O BSERVE BY LD. CIT(A) THAT IF THE AO HAD RELIED UPON THE FIGURES CONTAINE D IN COMPUTER PRINT OUT THEN ALL THE FIGURES CONTAINING THEREIN HAD TO BE C ONSIDERED WHILE DETERMINING THE UNDISCLOSED INCOME OF THE ASSESSEE. WE ALSO AGREE WITH THE FINDING OF THE LD. CIT(A) THAT THE AO SHOULD NO T HAVE INCLUDED THE INCOME OF THE YEARS IN QUESTION IN THE BLOCK PERIOD WHICH HAD BEEN ASSESSED IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98 AND SHOWN IN T HE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 1998-99 PROCESSED 143 (1) OF THE ACT. REGARDING THE ADDITION OF RS. 2,14,140/- I.E. CASH FOUND DURING THE COURSE OF SEARCH THE LD. CIT(A) HAS GIVEN FINDING THAT IN THE BALANCE SHEET OF SHRI P.C. GOEL FOR THE YEAR ENDING ON 31.3.1999 A SUM OF RS. 2 LAC REPRESENTED ITA NO. 309/DEL/2002 ITA NO. 98/DEL/2008 & ITA NO. 278/DEL/2002 34 THE SALE VALUE OF LAND AND THE BALANCE REMAINING WA S OUT OF CASH WITHDRAWN FROM THE BANK. IT WAS SUBMITTED THAT THE WITHDRAWAL FROM THE BANK WERE MADE BY THE FIRM EITHER IN THE NAME OF SELF OR BY T HE PARTNER WHICH WAS NOT DISPUTED BY THE AO AND EXPENDITURE IN CONNECTION WI TH BUSINESS ACTIVITY WERE MET OUT FROM THESE. CONSIDERING THESE MATERIAL ASPECTS OF THE FACT WE ARE OF THE VIEW THAT LD. CIT (A) WAS JUSTIFIED IN D ELETING ALL THE ADDITIONS QUESTIONED IN GROUND NOS. 1 AND 5 OF THE APPEAL. TH E REMAINING GROUNDS ARE IN SUPPORT OF THESE MAIN GROUNDS. THE FIRST APP ELLATE ORDER IN THIS REGARD IS THUS UPHELD. GROUND NOS. 1 TO 8 ARE ACCOR DINGLY REJECTED. 65. IN THE RESULT APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2013. SD/- SD/- (T.S. KAPOOR) ( I. C. SUDHIR ) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED 16 TH DECEMBER, 2013 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR, ITAT