Sh Gahnshyam Valecha, Indore V. The DCIT 2 (1), Indore

ITSSA 37/IND/2006

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8242 (ITAT-INDORE)
• Duration Of Justice: 5 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-05-2011
• Assessment Year: misc
• Appeal Filed On: 04-04-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Assessee Lawyers: H CHIMNANI CAS; M C MEHTA S S DESHPANDE
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Search and seizure; Loose papers; Opportunity of being heard; Cost of acquisition; Corroborative evidences; Valuation report; Block assessment
• Section: 143(3); 133A; 69; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARMA , AM IT(SS)A NOS.42, 39, 40, 36, 38, 41 & 37/IND/2006 BLOCK PERIOD 1.4.1990 TO 26.9.2000 (AY: 1991-92 T O 2001- 02) 1. UDHALAL VALECHA, INDORE PAN AATPV 2038 C 2. NANLAL VALECHA, INDORE PAN AATPV 2039 D 3. GANGARAM VALECHA, INDORE PAN AATPV 2037 P 4. NARESH VALECHA, INDORE PAN AATPV 2032 J 5. JAMNADAS VALECHA, INDORE PAN AATPV 2036 N 6. SURESH VALECHA, INDORE PAN AATPV 2035 R 7. GHANSHYAM VALECHA, INDORE PAN AATPY 2033 K APPELLANTS VS. DCIT, CIRCLE-2(1), INDORE RESPONDENT IT(SS)A NOS.49, 55, 56, 54, 50, 51 & 52/IND/2006 BLOCK PERIOD 1.4.1990 TO 26.9.2000 (AY: 1991-92 T O 2001- 02) ACIT-2(1), INDORE APPELLANT VS. -: 2: - 2 1. UDHALAL VALECHA, INDORE PAN AATPV 2038 C 2. NANLAL VALECHA, INDORE PAN AATPV 2039 D 3. GANGARAM VALECHA, INDORE PAN AATPV 2037 P 4. NARESH VALECHA, INDORE PAN AATPV 2032 J 5. JAMNADAS VALECHA, INDORE PAN AATPV 2036 N 6. SURESH VALECHA, INDORE PAN AATPV 2035 R 7. GHANSHYAM VALECHA, INDORE PAN AATPY 2033 K RESPONDENTS ASSESSEES BY S/SHRI M.C.MEHTA, S.S. DESHPANDE & H.CHIMNANI, CAS DEPARTMENT BY SHRI KESHAVE SAXENA, CIT(DR) ORDER PER R.C. SHARMA, ACCOUNTANT MEMBER THESE CROSS-APPEALS ARE FILED BY THE ASSESSEE AND REVENUE AGAINST THE DIFFERENT ORDERS OF LD. CIT(A)- UJJAIN, DATED 31.1.2006 FOR THE BLOCK PERIOD 1.4.90 TO 26.9.2000 (AY: 1991- 92 TO 2001-02) IN THE MATTER OF ORDERS PASSED U/S 158BC R.W.S. 143(3) OF THE I.T. ACT. 2. FIRSTLY, WE ARE REPRODUCING THE GROUNDS OF THE APPE ALS FILED BY THE ABOVE ASSESSEES AS UNDER: - -: 3: - 3 3. IN IT(SS)A NO.42/IND/2006 (UDHALAL VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G -: 4: - 4 THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE LD. CIT(A) HAS ERRED IN GIVING A DIRECTION FOR CONSIDERING THE GIFTS IN THE HANDS OF THE WIFE IS AGAIN BAD IN LAW. THE WIFE IS SEPARATELY ASSESSED AND THE GIFTS ARE SHOWN IN HER CASE. THE LD. CIT(A) HAD NO POWER TO LOOK INTO THE MERITS FOR SOME OTHER ASSESSEE. THE DIRECTION GIVEN FOR EXAMINING THE POINT IN THE HANDS OF THE WIFE IS TOTALLY BAD IN LA W AND HENCE SUCH A DIRECTION MAY PLEASE BE ANNULLED AND TREATED AS ILLEGAL. 1.5 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS. IT WAS PROVED BEFORE TH E LD. CIT(A) THAT THE FUNDS WERE AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENTS AND PART OF THE AMOUNT WAS ALREADY OFFERED IN THE RETURN AND AS SUCH ON ADDITION COULD HAVE BEEN MADE ON THIS ACCOUNT. 2.1 THE ADDITION MAINTAINED BY THE LD. CIT(A) AT RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS MAY PLEASE BE DELETED. -: 5: - 5 3. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.1,63,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES. 3.1 THE ESTIMATION OF THE HOUSE HOLD EXPENSES ON THE BASIS OF A PAPER FOUND FOR FOUR MONTHS CANNOT BE MADE AND AS SUCH THE WHOLE ADDITION IS UNWARRANTED FOR. 3.2 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE CASH W AS AVAILABLE ON ACCOUNT OF SALE OF GOODS OF AMBIKA FANCY STORES AND AS SUCH HE SHOULD HAVE CONSIDERED SUCH A CASH AVAILABLE FOR THE PURPOSE OF INCURRING HOUSE HOLD EXPENSES. 3.3 THE EXPENSES ON MILK INCURRED AT THE TIME OF SAMAJ FUNCTION CANNOT BE A BASIS OF ESTIMATING THE EXPENDITURE. 3.4 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE EXPENDITURE INCURRED BY THE MEMBERS OF THE FAMILY FOR DETERMINING THE UNDISCLOSED INCOME. 3.5 THE ADDITION OF RS.1,63,000/- ON ACCOUNT OF ESTIMATION OF HOUSE HOLD EXPENSES MAY PLEASE BE DELETED. -: 6: - 6 4. IN IT(SS)A NO.39/IND/2006 (NANDLAL VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G -: 7: - 7 THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE LD. CIT(A) HAS ERRED IN GIVING A DIRECTION FOR CONSIDERING THE GIFTS IN THE HANDS OF THE WIFE IS AGAIN BAD IN LAW. THE WIFE IS SEPARATELY ASSESSED AND THE GIFTS ARE SHOWN IN HER CASE. THE LD. CIT(A) HAD NO POWER TO LOOK INTO THE MERITS FOR SOME OTHER ASSESSEE. THE DIRECTION GIVEN FOR EXAMINING THE POINT IN THE HANDS OF THE WIFE IS TOTALLY BAD IN LA W AND HENCE SUCH A DIRECTION MAY PLEASE BE ANNULLED AND TREATED AS ILLEGAL. 1.5 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2 THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS. IT WAS PROVED BEFORE TH E LD. CIT(A) THAT THE FUNDS WERE AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENTS AND PART OF THE AMOUNT WAS ALREADY OFFERED IN THE RETURN AND AS SUCH ON ADDITION COULD HAVE BEEN MADE ON THIS ACCOUNT. 2.1 THE ADDITION MAINTAINED BY THE LD. CIT(A) AT RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS MAY PLEASE BE DELETED. -: 8: - 8 3 THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.1,63,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES. 3.1 THE ESTIMATION OF THE HOUSE HOLD EXPENSES ON THE BASIS OF A PAPER FOUND FOR FOUR MONTHS CANNOT BE MADE AND AS SUCH THE WHOLE ADDITION IS UNWARRANTED FOR. 3.2 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE CASH W AS AVAILABLE ON ACCOUNT OF SALE OF GOODS OF AMBIKA FANCY STORES AND AS SUCH HE SHOULD HAVE CONSIDERED SUCH A CASH AVAILABLE FOR THE PURPOSE OF INCURRING HOUSE HOLD EXPENSES. 3.3 THE EXPENSES ON MILK INCURRED AT THE TIME OF SAMAJ FUNCTION CANNOT BE A BASIS OF ESTIMATING THE EXPENDITURE. 3.4 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE EXPENDITURE INCURRED BY THE MEMBERS OF THE FAMILY FOR DETERMINING THE UNDISCLOSED INCOME. 3.5 THE ADDITION OF RS.1,63,000/- ON ACCOUNT OF ESTIMATION OF HOUSE HOLD EXPENSES MAY PLEASE BE DELETED. 5. IN IT(SS)A NO.40/IND/2006 (GANGARAM VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: -: 9: - 9 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE LD. CIT(A) HAS ERRED IN GIVING A DIRECTION FOR CONSIDERING THE GIFTS IN THE HANDS OF THE WIFE IS -: 10: - 10 AGAIN BAD IN LAW. THE WIFE IS SEPARATELY ASSESSED AND THE GIFTS ARE SHOWN IN HER CASE. THE LD. CIT(A) HAD NO POWER TO LOOK INTO THE MERITS FOR SOME OTHER ASSESSEE. THE DIRECTION GIVEN FOR EXAMINING THE POINT IN THE HANDS OF THE WIFE IS TOTALLY BAD IN LA W AND HENCE SUCH A DIRECTION MAY PLEASE BE ANNULLED AND TREATED AS ILLEGAL. 1.5 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS. IT WAS PROVED BEFORE TH E LD. CIT(A) THAT THE FUNDS WERE AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENTS AND PART OF THE AMOUNT WAS ALREADY OFFERED IN THE RETURN AND AS SUCH ON ADDITION COULD HAVE BEEN MADE ON THIS ACCOUNT. 2.1 THE ADDITION MAINTAINED BY THE LD. CIT(A) AT RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS MAY PLEASE BE DELETED. 3. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.1,63,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES. 3.1 THE ESTIMATION OF THE HOUSE HOLD EXPENSES ON THE BASIS OF A PAPER FOUND FOR FOUR MONTHS CANNOT BE -: 11: - 11 MADE AND AS SUCH THE WHOLE ADDITION IS UNWARRANTED FOR. 3.2 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE CASH W AS AVAILABLE ON ACCOUNT OF SALE OF GOODS OF AMBIKA FANCY STORES AND AS SUCH HE SHOULD HAVE CONSIDERED SUCH A CASH AVAILABLE FOR THE PURPOSE OF INCURRING HOUSE HOLD EXPENSES. 3.3 THE EXPENSES ON MILK INCURRED AT THE TIME OF SAMAJ FUNCTION CANNOT BE A BASIS OF ESTIMATING THE EXPENDITURE. 3.4 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE EXPENDITURE INCURRED BY THE MEMBERS OF THE FAMILY FOR DETERMINING THE UNDISCLOSED INCOME. 3.5 THE ADDITION OF RS.1,63,000/- ON ACCOUNT OF ESTIMATION OF HOUSE HOLD EXPENSES MAY PLEASE BE DELETED. 6. IN IT(SS)A NO.36/IND/2006 (NARESH VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO -: 12: - 12 AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE LD. CIT(A) HAS ERRED IN GIVING A DIRECTION FOR CONSIDERING THE GIFTS IN THE HANDS OF THE WIFE IS AGAIN BAD IN LAW. THE WIFE IS SEPARATELY ASSESSED AND THE GIFTS ARE SHOWN IN HER CASE. THE LD. CIT(A) HAD NO POWER TO LOOK INTO THE MERITS FOR SOME OTHER ASSESSEE. THE DIRECTION GIVEN FOR EXAMINING THE POINT IN THE HANDS OF THE WIFE IS TOTALLY BAD IN LA W AND HENCE SUCH A DIRECTION MAY PLEASE BE ANNULLED AND TREATED AS ILLEGAL. -: 13: - 13 1.5 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.15,585/- ON ACCOUNT OF DEPOSITS IN SUVICHAR SANSTHA. 2.1 IT WAS PROVED BEFORE THE AO AND LD. CIT(A) THAT THE DEPOSITS ARE OUT OF THE WITHDRAWALS AND SAVING AND ALSO INCLUDES THE DEPOSITS IN THE NAME OF THE WIFE WHICH CANNOT BE INCLUDED IN THE HANDS OF THE ASSESSEE. 2.2 THE ADDITION MAY PLEASE BE DELETED. 7. IN IT(SS)A NO.38/IND/2006 (JAMNADAS VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. -: 14: - 14 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE LD. CIT(A) HAS ERRED IN GIVING A DIRECTION FOR CONSIDERING THE GIFTS IN THE HANDS OF THE WIFE IS AGAIN BAD IN LAW. THE WIFE IS SEPARATELY ASSESSED AND THE GIFTS ARE SHOWN IN HER CASE. THE LD. CIT(A) HAD NO POWER TO LOOK INTO THE MERITS FOR SOME OTHER ASSESSEE. THE DIRECTION GIVEN FOR EXAMINING THE POINT IN THE HANDS OF THE WIFE IS TOTALLY BAD IN LA W AND HENCE SUCH A DIRECTION MAY PLEASE BE ANNULLED AND TREATED AS ILLEGAL. -: 15: - 15 1.5 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS. IT WAS PROVED BEFORE TH E LD. CIT(A) THAT THE FUNDS WERE AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENTS AND PART OF THE AMOUNT WAS ALREADY OFFERED IN THE RETURN AND AS SUCH ON ADDITION COULD HAVE BEEN MADE ON THIS ACCOUNT. 2.1 THE ADDITION MAINTAINED BY THE LD. CIT(A) AT RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS MAY PLEASE BE DELETED. 3. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.1,63,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES. 3.1 THE ESTIMATION OF THE HOUSE HOLD EXPENSES ON THE BASIS OF A PAPER FOUND FOR FOUR MONTHS CANNOT BE MADE AND AS SUCH THE WHOLE ADDITION IS UNWARRANTED FOR. 3.2 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE CASH W AS AVAILABLE ON ACCOUNT OF SALE OF GOODS OF AMBIKA FANCY STORES AND AS SUCH HE SHOULD HAVE CONSIDERED SUCH A CASH AVAILABLE FOR THE PURPOSE OF INCURRING HOUSE HOLD EXPENSES. -: 16: - 16 3.3 THE EXPENSES ON MILK INCURRED AT THE TIME OF SAMAJ FUNCTION CANNOT BE A BASIS OF ESTIMATING THE EXPENDITURE. 3.4 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE EXPENDITURE INCURRED BY THE MEMBERS OF THE FAMILY FOR DETERMINING THE UNDISCLOSED INCOME. 3.5 THE ADDITION OF RS.1,63,000/- ON ACCOUNT OF ESTIMATION OF HOUSE HOLD EXPENSES MAY PLEASE BE DELETED. 8. IN IT(SS)A NO.41/IND/2006 (SURESH VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. -: 17: - 17 ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS. IT WAS PROVED BEFORE TH E LD. CIT(A) THAT THE FUNDS WERE AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENTS AND PART OF THE AMOUNT WAS ALREADY OFFERED IN THE RETURN AND AS SUCH ON ADDITION COULD HAVE BEEN MADE ON THIS ACCOUNT. 2.1 THE ADDITION MAINTAINED BY THE LD. CIT(A) AT RS.50,000/- ON ACCOUNT OF INTERIOR DECORATION, FURNITURE AND LOOSE PAPERS MAY PLEASE BE DELETED. -: 18: - 18 3. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.1,63,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES. 3.1 THE ESTIMATION OF THE HOUSE HOLD EXPENSES ON THE BASIS OF A PAPER FOUND FOR FOUR MONTHS CANNOT BE MADE AND AS SUCH THE WHOLE ADDITION IS UNWARRANTED FOR. 3.2 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE CASH W AS AVAILABLE ON ACCOUNT OF SALE OF GOODS OF AMBIKA FANCY STORES AND AS SUCH HE SHOULD HAVE CONSIDERED SUCH A CASH AVAILABLE FOR THE PURPOSE OF INCURRING HOUSE HOLD EXPENSES. 3.3 THE EXPENSES ON MILK INCURRED AT THE TIME OF SAMAJ FUNCTION CANNOT BE A BASIS OF ESTIMATING THE EXPENDITURE. 3.4 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE EXPENDITURE INCURRED BY THE MEMBERS OF THE FAMILY FOR DETERMINING THE UNDISCLOSED INCOME. 3.5 THE ADDITION OF RS.1,63,000/- ON ACCOUNT OF ESTIMATION OF HOUSE HOLD EXPENSES MAY PLEASE BE DELETED. 4. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.12,230/- ON ACCOUNT OF DEPOSITS IN SUVICHAR SANSTHA. THE ADDITION MAY PLEASE BE DELETED. -: 19: - 19 5. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.49,000/- ON ACCOUNT OF INVESTMENT IN THE MARUTI CAR. 5.1 THE LD. CIT(A) HAS MAINTAINED THIS ADDITION ON THE GROUND OF ENTRIES ON THE PAPER IN LPS 1 PAGE 27. THE LD. CIT(A) HAS FAILED TO CONSIDER THAT ON THE SAME PAPER THERE IS A CREDIT ENTRY OF RS.40,000/-. THE ADDITION SUSTAINED ON THIS ACCOUNT MAY PLEASE BE DELETED. 6. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION ON ACCOUNT OF INVESTMENT IN PURCHASE OF MOTOR BIKE OF RS.30,000/-. 9. IN IT(SS)A NO.37/IND/2006 (GHANSHYAM VALECHA) FILED BY THE ASSESSEE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN GIVING DIRECTIONS T HAT THE NRE GIFTS ARE NOT GENUINE AND THE SAME SHOULD BE CONSIDERED IN THE REGULAR ASSESSMENT OF THE ASSESSEE. 1.1 THE LD. CIT(A) DID NOT EXAMINE THE GENUINENESS OF THE GIFT AND HAS SIMPLY RELIED ON THE ORDER OF THE AO AND GAVE A DIRECTION FOR EXAMINING THE SAME IN THE REGULAR ASSESSMENT. 1.2 SUCH A DIRECTION IS BEYOND THE POWERS OF THE LD. CIT(A) IN VIEW OF THE DECISION OF THE INDORE BENCH OF -: 20: - 20 TRIBUNAL. THE POINT AGITATED BEFORE THE LD. CIT(A) AS WHETHER THE INCOME IS TAXABLE U/S 158BC OR NOT. ONCE HAVING HELD THAT THE INCOME IS NOT TAXABLE, NO FURTHER POINT COULD BE CONSIDERED. SINCE IT WAS PURELY A MATTER RELATING TO THE UNDISCLOSED INCOME, THE LD. CIT(A) HAD NO JURISDICTION TO GIVE A DIRECT ION FOR CONSIDERING THE SAME IN THE REGULAR ASSESSMENT. 1.3 SINCE ALL THE GIFTS WERE DISCLOSED IN THE REGULAR RETURNS ALONG WITH THE GIFT DEEDS AND HAVE BEEN CONFIRMED BY THE RESPECTIVE DONEES INCLUDING BANK CERTIFICATE, THERE WAS NO JUSTIFICATION FOR TREATIN G THEM AS NOT GENUINE GIFTS. THE DIRECTION GIVEN BY T HE LD. CIT(A) ARE THUS BAD IN LAW. 1.4 THE DIRECTION OF THE LD. CIT(A) IN RESPECT OF GIFTS TO BE CONSIDERED IN THE REGULAR ASSESSMENT MAY BE HELD ILLEGAL AND MAY BE DIRECTED TO BE CANCELLED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.20,000/- ON ACCOUNT OF CASH FOUND. THE SAID CASH WAS OUT OF THE SAVINGS AND/OR THE CASH BALANCE OF THE FIRM. THE ADDITION OF RS.20,000/- MAY PLEASE BE DELETED. 3. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.15,585/- ON ACCOUNT OF DEPOSITS IN SUVICHAR SANSTHA. 3.1 IT WAS PROVED BEFORE THE AO AND LD. CIT(A) THAT THE DEPOSITS ARE OUT OF THE WITHDRAWALS AND SAVING AND -: 21: - 21 ALSO INCLUDES THE DEPOSITS IN THE NAME OF THE WIFE WHICH CANNOT BE INCLUDED IN THE HANDS OF THE ASSESSEE. 3.2 THE ADDITION MAY PLEASE BE DELETED. 10. NOW, WE ARE REPRODUCING THE GROUNDS OF APPEALS FIL ED BY THE REVENUE AS UNDER: - 11. IN IT(SS)A NO.49/IND/2006 (UDHALAL VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS.35 LACS ON ACCOUNT OF INVESTMENT IN HUNDIES AND RS.22,13,773/- ON ACCOUNT OF INTEREST EARNED THEREON. 2. REDUCING THE ADDITION BY RS.2,21,000/- ON ACCOUNT O F INVESTMENT IN INTERIOR DECORATION. 3. DIRECTING NOT TO LEVY SURCHARGE 4. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. -: 22: - 22 12. IN IT(SS)A NO.55/IND/2006 (NANDLAL VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS.3,67,870/- ON ACCOUNT O F UNEXPLAINED INVESTMENT IN GOLD JEWELLERY. 2. DELETING THE ADDITION OF RS.25,05,000/- ON ACCOUNT OF INVESTMENT IN HUNDIES AND RS.18,24,208/- ON ACCOUNT OF INTEREST EARNED THEREON. 3. DELETING THE ADDITION OF RS.6,40,000/- ON ACCOUNT O F MARRIAGE EXPENSES. 4. DELETING THE ADDITION OF RS.2,05,672/- ON ACCOUNT O F FDS TAKEN IN THE NAME OF VARIOUS FAMILY MEMBERS. 5. DIRECTING NOT TO LEVY SURCHARGE 6. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. 13. IN IT(SS)A NO.56/IND/2006 (GANGARAM VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN -: 23: - 23 1. DELETING THE ADDITION OF RS.18,370/- ON ACCOUNT OF CASH FOUND. 2. DELETING THE ADDITION OF RS.25,10,000/- ON ACCOUNT OF INVESTMENT IN HUNDIES AND RS.19,19,313/- ON ACCOUNT OF INTEREST EARNED THEREON. 3. REDUCING THE ADDITION BY RS.71,000/- ON ACCOUNT OF INVESTMENT IN INTERIOR DECORATION AND ADDITION OF RS.4,20,216/- EXPENDITURE ON LOOSE PAPERS. 4. DELETING THE ADDITION OF RS.3,50,000/- ON ACCOUNT O F MARRIAGE EXPENSES. 5. DELETING THE ADDITION OF RS.2,89,663/- ON ACCOUNT O F UNEXPLAINED INVESTMENT IN GOLD JEWELLERY. 6. DIRECTING NOT TO LEVY SURCHARGE 7. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. 14. IN IT(SS)A NO.54/IND/2006 (NARESH VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS.4,25,000/- ON ACCOUNT O F INVESTMENT IN HUNDIES AND RS.2,45,987/- ON ACCOUNT OF INTEREST EARNED THEREON. -: 24: - 24 2. DELETING THE ADDITION OF RS.4,20,216/- EXPENDITURE ON LOOSE PAPERS. 3. DIRECTING NOT TO LEVY SURCHARGE 4. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. 15. IN IT(SS)A NO.50/IND/2006 (JAMNADAS VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS.11,900/- ON ACCOUNT OF CASH FOUND. 2. DELETING THE ADDITION OF RS.23,50,000/- ON ACCOUNT OF INVESTMENT IN HUNDIES AND RS.17,80,062/- ON ACCOUNT OF INTEREST EARNED THEREON. 3. REDUCING THE ADDITION BY RS.3,96,216/- ON ACCOUNT O F INVESTMENT IN INTERIOR DECORATION AND ADDITION OF RS.4,20,216/- EXPENDITURE ON LOOSE PAPERS. 4. DELETING THE ADDITION OF RS.2,50,000/- ON ACCOUNT O F MARRIAGE EXPENSES. 5. DELETING THE ADDITION OF RS.2,73,854/- ON ACCOUNT O F UNEXPLAINED INVESTMENT IN GOLD JEWELLERY. 6. DIRECTING NOT TO LEVY SURCHARGE -: 25: - 25 7. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. 16. IN IT(SS)A NO.51/IND/2006 (SURESH VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS.5,48,846/- ON ACCOUNT O F UNEXPLAINED INVESTMENT IN GOLD JEWELLERY 2. DELETING THE ADDITION OF RS.8,20,000/- ON ACCOUNT O F INVESTMENT IN HUNDIES AND RS.4,24,704/- ON ACCOUNT OF INTEREST EARNED THEREON. 3. REDUCING THE ADDITION TO RS.3,82,000/- ON ACCOUNT O F INVESTMENT IN INTERIOR DECORATION TO RS.2,93,000/- AND ADDITION OF RS.22,30,564/- EXPENDITURE ON LOOSE PAPERS. 4. DELETING THE ADDITION OF RS.19,82,750/- ON ACCOUNT OF PURCHASE OF HOUSE AT USHA NAGAR/DUBEY COLONY, INDORE. 5. DIRECTING NOT TO LEVY SURCHARGE 6. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. -: 26: - 26 17. IN IT(SS)A NO.52/IND/2006 (GHANSHYAM VALECHA) FILED BY THE REVENUE , THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS.5,10,000/- ON ACCOUNT O F INVESTMENT IN HUNDIES AND RS.4,01,563/- ON ACCOUNT OF INTEREST 2. DIRECTING NOT TO LEVY SURCHARGE 3. THE ORDER OF THE LD. CIT(A) IS THUS ERRONEOUS IN LA W AS WELL AS ON THE FACTS OF THE CASE. 18. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. IN THE PRESENT APPEALS, VARIOUS ISSUES CO MMON TO OTHER APPEALS OF THE GROUP ARE INVOLVED AND AS SUCH THE FINDINGS ARRIVED ON THE COMMON ISSUES IN THE APPEAL OF UDHALAL VALECHA WOULD BE BROADLY APPLIED BY REFERR ING TO THE DISCUSSIONS AND FINDINGS IN THIS APPEAL TO THE OTHE R APPEALS ON THE SAME ISSUES WITH THE REQUIRED MODIFICATIONS AS MAY BE CALLED FOR IN THE FACTS AND CIRCUMSTANCES OF THAT C ASE AND AS CONSIDERED NECESSARY. 19. THE FACTS, IN BRIEF, ARE THAT SEARCH AND SEIZURE OPERATIONS WERE COMMENCED AT RESIDENTIAL PREMISES O F VALECHA -: 27: - 27 GROUP I.E. SHRI UDHALAL AND SHRI SURESH VALECHA, 5 93, USHANAGAR EXTENSION, INDORE ON 26.9.2000 AND WERE CONCLUDED ON 22.11.2000. VALECHA GROUP MADE A GROSS DISCLOSURE OF UNDISCLOSED INCOME OF RS. 21.12 LACS. FIRSTLY, WE ARE DEALING WITH APPEAL OF UDHALAL VALECHA. DURING THE COURSE OF SEARCH, APART FROM INCRIMINATING DOCUMENTS FOLLO WING VALUABLES VIZ. CASH AND JEWELLERY WERE FOUND OUT OF WHICH PART OF THE JEWELLERY WAS SEIZED. IN THE CASE OF UDHALAL VALECHA THE ASSESSING OFFICER STATED THAT THE ASSESSEE DID NOT MAINTAIN REGULAR BOOKS OF ACCOUNTS AND THAT BALANCE SHEET AL ONG WITH THE RETURNS WERE PREPARED ON ESTIMATE BASIS. THE DE TAILS OF THE ASSETS FOUND AND SEIZED ARE AS UNDER :- DESCRIPTION OF THE ITEM FOUND IN RS. SEIZED IN RS. CASH 3,460 NIL GOLD JEWELLERY 624,870 203,209 SILVER JEWELLERY 3,000 NIL OTHERS (FDS,ETC.) 2,411,078 1,982,957 IN THE ASSESSMENT FRAMED U/S 158BC IN RESPECT OF UD HALAL VALECHA, FOLLOWING ADDITIONS WERE MADE BY THE ASSES SING OFFICER :- -: 28: - 28 RS. 1. UNEXPLAINED DEPOSITS IN BANK CAMOUFLAGED AS GIFTS FROM NRE A/C, ADDED U/S 69 8,56,000 8,56,000 2. UNEXPLAINED INVESTMENT IN KVP NSC, ETC. 10,69,000 3. SHARE INVESTMENT IN INTERIOR DECORATION 3,46,600 4. UNEXPLAINED DEPOSITS IN BANK 94,92 8 5. UNEXPLAINED INVESTMENT IN HUNDIES 3500000 6. INTEREST EARNED ON THESE HUNDIES 22,13,773 7. SHARE IN HOUSEHOLD EXPENDITURE 2,49,427 TOTAL UNDISCLOSED INCOME 83,29,718 OR ROUNDED TO 83,29,720 20. THE FIRST ISSUE BEFORE US RELATES TO DELETION OF A DDITION OF RS.35 LACS ON ACCOUNT OF INVESTMENT IN HUNDIES A ND RS. 22,13,773/- ON ACCOUNT OF INTEREST THEREON. DURING THE COURSE OF SEARCH, VARIOUS HUNDIES WERE FOUND. TOTAL NUMBER OF HUNDIES PERTAINING TO SHRI UDHALAL VALECHA WERE 32 INVOLVING AMOUNT OF RS.12,70,000/- AS PER THE SAID ANNEXURE. -: 29: - 29 SIMILARLY, SMT. MOHINI VALECHA WIFE OF THE ASSESSEE IS HOLDING TOTAL 67 HUNDIES OF THE VALUE OF RS.22,30,000/-. TH E TOTAL AMOUNT OF THESE HUNDIES IS ONLY RS. 35,00,000/-. TH E ASSESSING OFFICER PROPOSED TO ADD THE ENTIRE AMOUNT OF RS. 35 LACS AS UNDISCLOSED INCOME OF THE ASSESSEE. 21. BEFORE THE ASSESSING OFFICER THE ASSESSEE FURNISHE D COMPLETE CHART OF THE HUNDIES PAGE WISE, PERSON WIS E SHOWING THE STATUS OF THE HUNDI, WHETHER ORIGINAL OR RENEWA L. IT WAS SUBMITTED THAT SOME OF THE AMOUNTS ARE RENEWED FOR 7 TO 8 TIMES IN HS1. THE ASSESSEE ALSO FURNISHED PERSON W ISE CHART SHOWING HOW THE AMOUNTS HAVE BEEN FLOWN AND WHAT IS THE SOURCE OF THE SAME. THE AMOUNTS HAVE BEEN DISCLOSED IN THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE ALONG WI TH THE RETURNS. 22. BEING DISSATISFIED WITH THE ASSESSEES CONTENTIONS , THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF ALL H UNDIES, EVEN IN RESPECT OF HUNDIES WHICH WERE RENEWED ON SEVERAL OCCASIONS BY STATING THAT THESE ARE SEPARATE HUNDIES. -: 30: - 30 23. BY THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) DELETED THE ADDITION AFTER HAVI NG MADE THE FOLLOWING OBSERVATIONS :- 5.6 THE FACTS ON RECORD PERTAINING TO THE AFORESAID ISSUE, THE FINDINGS OF THE A.O. AND THE CONTENTIONS OF THE APPELLANT IN THIS BEHALF INCLUDING THE COPIES OF RELEVANT DOCUMENTS ARE TAKEN INTO CONSIDERATION. THE A.O. HAS APPARENTLY MADE THIS ADDITION WITHOUT PROPER APPRECIATION OF FACTS ON RECORD WHICH HAS RESULTED IN MULTIPLE ADDITION FOR SOME INVESTMENT AS RENEWAL HAVE AGAIN BEEN CONSIDERED AS FRESH INVESTMENTS AND FURTHER INTEREST HAS ALSO BEEN ACCORDINGLY CALCULATED ON SUCH INFLATED AMOUNT. ALL SUCH INVESTMENTS WERE DISCLOSED IN THE REGULAR RETURNS FILED BY THE APPELLANT AND THE SPOUSE OF THE APPELLANT. THE A.O. IN THE COURSE OF APPEAL PROCEEDINGS ALSO, HAS TOTALLY FAILED TO COME UP WITH ANY BASIS OR EXPLANATION TO SUPPORT SUCH UNCALLED FOR ADDITION. LASTLY, THE PRINT OUT -: 31: - 31 TAKEN FROM THE COMPUTER HARD DISC IN THE POSSESSION OF THE DEPARTMENT CONCERNING SUCH INVESTMENT CLEARLY SUPPORTS THE APPELLANTS CASE THAT ALL SUCH INVESTMENTS WERE DULY DISCLOSED IN THE REGULAR RETURNS OF INCOME FILED AND HENCE SUCH ADDITION IS FOUND TO BE TOTALLY UNWARRANTED AND UNCALLED FOR AND ACCORDINGLY DIRECTED TO BE DELETED. IT MAY BE OBSERVED BEFORE CONCLUDING THAT THE ISSUE WHETHER OR NOT BOOKS OF ACCOUNTS WERE MAINTAINED IN THE REGULAR COURSE OF BUSINESS AND FURTHER WHETHER REGULAR BALANCE SHEET WERE DRAWN WAS NOT AT ALL MATERIAL AS LONG ON SUCH INVESTMENT AND INCOME EARNED THEREFROM WAS BEING DISCLOSED IN THE RETURNS OF INCOME AND SUCH FACT HAS NOT BEEN CONTROVERTED BY THE A.O. EITHER IN COURSE OF ASSESSMENT PROCEEDINGS OR FURTHER IN APPELLATE PROCEEDINGS. HENCE SUCH ADDITION WAS NOT ONLY OUTSIDE THE SCOPE OF UNDISCLOSED INCOME FOR THE PURPOSES OF BLOCK ASSESSMENT BUT WAS OTHERWISE ALSO NOT CALLED FOR -: 32: - 32 IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IT MAY BE FINALLY OBSERVED THAT THE AMOUNT OF INTEREST, IF AT ALL OMITTED TO BE CONSIDERED IN THE REGULAR RETURNS OF INCOME ON HUNDIES, WHICH WERE PRIMA FACIE CLEARLY DISCLOSED, WOULD NOT BE OF ANY SIGNIFICANT AMOUNT AS DISCUSSED ABOVE AND IN ANY CASE WOULD FALL OUTSIDE THE SCOPE OF THE BLOCK ASSESSMENT PROCEEDINGS AS BEING RELATED TO DISCLOSED INVESTMENTS. HENCE NO ADDITION ON THAT COUNT ALSO CAN BE SUSTAINED. IN THE RESULT, ENTIRE ADDITION MADE FOR UNEXPLAINED INVESTMENT IN HUNDIES AND ACCRUED INTEREST THEREON IS DIRECTED TO BE DELETED. 24. THE REVENUE IS IN APPEAL BEFORE US AGAINST DELETIO N OF ADDITION ON ACCOUNT OF HUNDIES AND INTEREST THEREON . 25. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FIND FROM RECORD THAT THE HUNDIES FOUND DURING THE COURSE OF SEARCH WERE DISCLOSED TO THE DEPARTMENT IN THE REGULAR RET URNS FILED WITH IT, FOR ALL THE ASSESSMENT YEARS UNDER CONSIDE RATION -: 33: - 33 COMPRISING IN THE BLOCK PERIOD. THE ASSESSEE HAS A LSO FURNISHED DETAILS OF HUNDIES ADVANCED DURING THE BL OCK PERIOD TO VERIFY THE FACTUAL POSITION. THE LEARNED COMMI SSIONER OF INCOMETAX (APPEALS) HAS ALSO CALLED FOR A REMAND RE PORT. AFTER CONSIDERING THE REMAND REPORT, THE LEARNED COMMISSI ONER OF INCOMETAX (APPEALS) RECORDED A FINDING TO THE EFFEC T THAT SINCE ALL THE HUNDIES AND INTEREST THEREON WERE DULY DISC LOSED IN THE REGULAR RETURNS FILED WITH THE DEPARTMENT, NO ADDIT ION UNDER THESE HEADS IS CALLED FOR IN THE BLOCK ASSESSMENT. THE ASSESSEE AND HIS WIFE WERE ALSO FOUND TO BE REGULAR LY ASSESSED SEPARATELY. A CATEGORICALLY FINDING HAS BEEN RECOR DED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) TO THE EFFECT THAT THE ASSESSING OFFICER IN THE COURSE OF APPELLATE PR OCEEDINGS HAS TOTALLY FAILED TO COME UP WITH ANY BASIS OR EXP LANATION TO SUPPORT HIS CONCLUSION THAT HUNDIES FOUND DURING TH E COURSE OF SEARCH WERE NOT DISCLOSED TO THE DEPARTMENT. TH E PRINT OUT TAKEN FROM THE COMPUTER HARD DISC IN THE POSSESSION OF THE DEPARTMENT WITH RESPECT TO THESE HUNDIES CLEARLY SU PPORTS THE ASSESSEES CONTENTION THAT ALL SUCH INVESTMENTS WER E DULY DISCLOSED IN THE RETURN FILED. THIS FINDING OF THE LEARNED -: 34: - 34 COMMISSIONER OF INCOMETAX (APPEALS) HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. WE, THEREFORE, DO N OT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED C OMMISSIONER OF INCOMETAX (APPEALS) IN DELETING THE ADDITION MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF HUNDIES AND INTERES T THEREON AND CONFIRM THE SAME. 26. THE NEXT GRIEVANCE OF THE REVENUE RELATES TO DELET ION OF ADDITION TOWARDS INTERIOR DECORATION AS FOUND IN TH E LOOSE PAPERS AMOUNTING TO RS.1,21,600/-. ADDITION ON ACCOUNT OF INTERIOR DECORATION 27. WITH REGARD TO INTERIOR DECORATION FOUND DURING TH E COURSE OF SEARCH, THE ASSESSING OFFICER GOT IT VALU ED BY REGISTERED VALUER. IN THE BLOCK ASSESSMENT ORDER, T HE ASSESSING OFFICER STATED THAT AS PER THE VALUATION REPORT, THE INVESTMENT IN INTERIOR DECORATION WORKS OUT TO RS. 17,33,000/- WHICH WAS DIVIDED EQUALLY IN THE HANDS OF FIVE BROT HERS. RS. 3,46,600/- WAS ADDED IN THE HANDS OF EACH OF THE BR OTHERS ON THE BASIS OF VALUATION REPORT. THE CONTENTION OF TH E ASSESSEE WAS THAT THE ITEMS LIKE SOFA, CHAIRS, ALMIRAH, FANS ARE OLD AND PURCHASED PRIOR TO THE BLOCK PERIOD. SOME ITEMS HA VE BEEN -: 35: - 35 RENEWED AND VERY FEW ITEMS HAVE BEEN ACQUIRED WHICH ARE COVERED IN THE AMOUNT SURRENDERED. IT WAS ALSO SUB MITTED THAT ALL THESE ITEMS ARE NORMALLY ACQUIRED BY THE F AMILY MEMBERS FROM DAY-TO-DAY EXPENDITURE. THE FAMILY IS QUITE OLD AND A NUMBER OF ITEMS HAVE BEEN ACCUMULATED FROM TI ME TO TIME AND RECEIVED AT THE TIME OF MARRIAGES. 28. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FIND FROM RECORD THAT THE ADDITION WAS MADE ON THE BASIS OF V ALUERS REPORT. THE ASSESSEE HAS DISCLOSED THE INVESTMENT IN THE INTERIOR DECORATION IN THE REGULAR BOOKS OF ACCOUNT S. THE COST OF HOME APPLIANCES PURCHASED AND DEBITED TO THE BOO KS HAS BEEN ESTIMATED AT A HIGHER FIGURE BY THE VALUER. W E FIND THAT THE VALUER IN HIS REPORT HAS VALUED FANS, TVS, GEYS ERS, CARTONS, REFRIGERATOR, ETC. THESE ITEMS ARE REQUIRE D BY THE FAMILY MEMBERS WHICH ARE PURCHASED BY THEM OUT OF D AY TO DAY WITHDRAWALS. WITHOUT CONSIDERING THE YEAR OF P URCHASE, THE ASSESSING OFFICER HAS ADDED THE ENTIRE AMOUNT B Y DISREGARDING THE DISCLOSURE OF THESE INVESTMENTS IN THE BOOKS OF ACCOUNTS. WE FIND THAT THE SAME AMOUNT HAS BEEN TAXED -: 36: - 36 29. BY THE IMPUGNED ORDER, THE LD. CIT(A) PARTLY DELETE D THE ADDITION ON ACCOUNT OF INVESTMENT IN INTERIOR D ECORATION TO THE EXTENT OF IMPUGNED SURRENDER BY VARIOUS ASSESSE ES, HOWEVER, HE HAS ENHANCED THE ADDITION ON ACCOUNT OF INTERIOR DECORATION BY RS. 50,000/- IN EACH OF THE SIX ASSES SEES AMOUNTING IN TOTAL TO RS. 3 LAKHS. FOLLOWING IS THE PRECISE FINDING AND CONCLUSION OF THE CIT(A):- THE FACTS ON RECORD, THE FINDINGS GIVEN BY THE AO ON THE TWIN INTERLINKED ISSUES INVOLVED, IN THE MATTER OF ADDITION OF UNEXPLAINED INVESTMENT/EXPENDITURE IN INTERIOR DECORATION AND RENOVATION OF TWO HOUSES AT LARKANA NAGAR AND 593, USHA NAGAR BASED ON IV'S REPORT, AS WELL AS ADDITION MADE ON THE BASIS OF SEIZED LOOSE PAPERS, ARE VERY CAREFULLY CONSIDERED IN THE LIGHT OF EXPLANATIONS OFFERED BY THE APPELLANTS. THIS FACT IS NOT DISPUTED BY THE APPELLANT THAT CERTAIN UNACCOUNTED EXPENDITURE WAS MADE ON INTERIOR DECORATION AND ACQUISITION OF HOUSE HOLD ITEMS AND FURNITURE ETC. AND SUCH -: 37: - 37 UNACCOUNTED EXPENDITURE FORMS THE MAJOR PORTION OF DISCLOSURE OF UNDISCLOSED INCOME BY THE APPELLANT GROUP AT RS. 21.12 LAKHS, WHICH AS PER DETAILS FURNISHED AS EXTRACTED ABOVE ALSO, AMOUNTS TO RS. 15.10 LAKHS IN THE FOLLOWING HANDS :- (1) SRI UDALAL VALECHA RS.1.75 LAKHS (2) SRI NANDLAL VALECHA RS.3.25 LAKHS (3) SRI JAMNADAS VALECHA RS.3.20 LAKHS (4) SRI GANGARAM VALECHA RS.2.25 LAKHS (5) SRI SURESH VALECHA RS.1.45 LAKHS (6) SRI SRICHAND VALECHA RS.3.20 LAKHS 7.3.1 THE FURTHER CAP ADDED BY THE APPELLANT GROUP IS THAT SUCH AMOUNT INCLUDE UNEXPLAINED EXPENDITURE ON HOUSE-HOLD EXPENSES AND OTHER EXPENSES WHICH REMAIN VAGUE. THE AO HAS FAILED TO GIVE DETAILED WORKING AS TO HOW THE GROSS AMOUNT OF RS.22,16,720/- HAS BEEN ARRIVED FROM BUNCH OF SEIZED PAPERS BEING LPS- 1,2,3 & 4 AND FURTHER HOW THE NET AMOUNT EXCLUDING AMOUNT PERTAINING TO SRI SURESH -: 38: - 38 VALECHA BEING RS.1,L5,642/- I.E. RS.21,OL,078/- HAS BEEN ARRIVED AT. THE AO HAS NOT APPENDED ANY ANNEXURES TO THE ASSESSMENT ORDER TO INDICATE THE WORKING OF SUCH AMOUNT. ON THE OTHER HAND AS PER WORKING FURNISHED BY THE APPELLANT THE AMOUNT HAS BEEN ARRIVED AT RS. 1,43,369/- FOR HOUSE-HOLD GOODS/EXPENSES AND RS. 12,23,766/- FOR OTHER EXPENSES WHICH HAS BEEN EXPLAINED TO PERTAIN TO INTERIOR DECORATION EXPENSES. 7.3.2 THUS, NO CLEAR FINDING ON FACTS ARE AVAILABLE TO ARRIVE AT THE PROPER QUANTUM OF AMOUNT REQUIRED TO BE ADDED IN DIFFERENT HANDS. THE AO HAS IN ABSENCE OF PROPER DETAILS DIVIDED THE AMOUNT EQUALLY IN 1/5 TH PROPORTION FOR ADDITION BASED ON VALUATION REPORT OF INTERIOR DECORATOR (IN SHORT IVR) IN THE HANDS OF SRI UDALAL, NANDLAL, JAMNALAL AND SRICHAND & GANGARAM VALECHA. WHEREAS THE -: 39: - 39 ADDITION BASED ON SEIZED LOOSE PAPERS OF THE NET AMOUNT EXCLUDING SRI SURESH VALECHA'S EXPENSES HAS BEEN SOUGHT TO BE DIVIDED IN FIVE HANDS AT RS.4,20,216/- EACH, BUT IT APPEARS THAT THE ADDITION HAS BEEN MADE FOR UNEXPLAINED, EXPENDITURE AT RS. 4,20,216/- EACH IN FOUR HANDS ONLY BEING IN THE HANDS OF SRI SRICHAUD, NARESH, GANGARAM AND JAMNADAS. FURTHER, THERE IS APPARENT MERIT IN THE CONTENTIONS OF THE APPELLANT THAT THE ENTIRE AMOUNT ARRIVED AT BY IVR FOR EXPENDITURE IN INTERIOR DECORATION CANNOT BE TREATED AS UNEXPLAINED AS THE PROPERTY BEING OLD, SOME PART OF THE INVESTMENT/EXPENDITURE MADE, WILL CERTAINLY FALL BEYOND BLOCK PERIOD ALSO. 7.3.3 AS NO CLEAR FINDINGS ON FACTS IS AVAILABLE IN ASSESSMENT ORDERS NOR THE FACTS HAVE BEEN/COULD BE FULLY BROUGHT ON RECORD BY THE APPELLANT'S SIDE IN VIEW OF THE PARTIAL DESCRIPTION ON LOOSE PAPERS, IT WAS -: 40: - 40 CONTEMPLATED TO REMIT THE MATTER OF SUCH TWIN/TRIPLICATE ADDITION TO THE AO FOR DECIDING THE ISSUE AFRESH WITH AN OPEN MIND AND WITH DIRECTION TO ENSURE THAT ONLY SINGLE ADDITION BASED ON EXPENSES RECORDED IN LOOSE PAPERS FOR INTERIOR DECORATION AND FURNITURE ETC. AS WELL IVR BE MADE AND NO DOUBLE/TRIPLICATE ADDITIONS ARE MADE. BUT SUCH PREPOSITION WAS SERIOUSLY OPPOSED BY THE ARS OF THE APPELLANT CONTENDING THAT THE AO IN ROUTINE MANNER WILL BE BROADLY REPEATING THE SAME ADDITION AND SUCH AN EXERCISE WILL NOT BRING THE LITIGATION TO AN END, AS APPELLANT ALSO HAD NO FURTHER EXPLANATION AND DETAILS TO OFFER AND HENCE A PROPER AND DEFINITE VIEW BE ARRIVED IN APPELLATE PROCEEDINGS ITSELF. 7.3.4 IN COURSE OF DISCUSSION, THE AR PRESENT FAIRLY ENOUGH CONCEDED THAT THEY ARE AGREEABLE TO CONCEDE THAT THE ENTIRE AMOUNT DECLARED AS UNDISCLOSED INCOME AT RS.15.10 LAKHS MAY BE -: 41: - 41 TREATED AS PERTAINING TO UNEXPLAINED EXPENDITURE/INVESTMENT IN INTERIOR DECORATION. IT WAS FURTHER CLARIFIED THAT THE AO, PERHAPS, BE ON ACCOUNT OF PAUCITY OF TIME ON ACCOUNT LACK OF CLARITY AS DIVIDED SUCH EXPENSES IN EQUAL PROPORTION IN FIVE HANDS, WHEREAS THEY HAVE MADE AN ATTEMPT TO DISCLOSE THE AMOUNT BASED ON THE NAMES MENTIONED ON SEIZED PAPERS. 7.3.5 THE AR AND THE APPELLANT PRESENT EMPHASIZED IN COURSE OF DISCUSSION IN CONTINUATION WITH THE SUBMISSION MADE IN THE CASE OF SRI UDHALAL VALECHA AND OTHER CONNECTED CASES, BY REFERRING TO COMMON WRITTEN SUBMISSION FILED IN GROUP CASES DTD. 11.09.03 AND 20.02.04 IN PARA-11.1 (RELEVANT PORTION EXTRACTED HERE-IN-ABOVE) THAT APART FROM THE UNDISCLOSED INCOME ADMITTED IN THE HANDS OF VARIOUS MEMBERS OF T HE GROUP FOR INTERIOR DECORATION AND RENOVATION ETC. AT RS.15.10 LAKHS, FUNDS WERE AVAILABLE FOR MAKING SUCH -: 42: - 42 INVESTMENT OUT OF WITHDRAWALS FROM UNEXPLAINED DEPOSITS WITH BANK ACCOUNT WITH OBC AGGREGATING NEARLY RS. 2.00 LAKHS BY SRI SURESH VALECHA. SO ALSO, THE APPELLANTS HAD FURTHER FUNDS AVAILABLE FROM UNRECORDED SALES AS FOUND IN THE CASE OF M/S. AMBIKA FANCY STORES AT RS.5.33 LAKHS, BESIDES, INCOME DISCLOSED FROM UNACCOUNTED TRANSACTIONS IN THE CASE OF ANOTHER CONCERN OF THE GROUP M/S. AMBIKA TRADERS AT RS.2.50 LAKHS. THUS, BROADLY THE APPELLANT GROUP HAD FUNDS AVAILABLE FOR EXPLAINING UNACCOUNTED EXPENDITURE TO THE EXTENT OF RS. 24.50 LAKHS. 7.3.6 CONTINUING FURTHER, IT WAS EXPLAINED THAT THE DEPARTMENT HAD OBTAINED TWO VALUATION REPORTS ABOUT INTERIOR DECORATION FROM THE VALUER SRI KIRAN SINDE ACCORDING TO WHICH THE AMOUNT SPENT ON INTERIOR DECORATION ETC. WAS ARRIVED AT RS. 17.33 LAKHS FOR 33-34, LARKANA NAGAR AND RS. 2,93,OOO/- FOR HOUSE AT 593, USHA NAGAR -: 43: - 43 EXTN. THUS ACCORDING TO INTERIOR VALUATION REPORTS ALSO THE TOTAL EXPENDITURE IN INTERIOR DECORATION ETC. WAS ARRIVED AT RS. 20.26 LAKHS. WHILE THE AO HAS MADE ADDITION FOR UNEXPLAINED EXPENDITURE BASED ON THESE REPORTS SEPARATELY AT RS. 20.26 LAKHS AND TOP OF IT, HE HAS MADE ADDITION OF RS. 21,OL,078/- IN THE HANDS OF FIVE MEMBERS OF THE SEARCH GROUP AND STILL, ON TOP OF IT ANOTHER AMOUNT OF RS.22.31 LAKHS (APPROX.) HAS BEEN ADDED IN THE HANDS OF THE APPELLANT SRI SURESH VALECHA BASED ON SUCH LOOSE PAPERS. THUS, IT WAS EMPHASIZED THAT AS AGAINST A MAXIMUM ADDITION BASED ON INTERIOR VALUATION REPORTS AT RS. 20.26 LAKHS, THE AO HAS MADE ADDITION AT NEARLY THREE TIMES OF SUCH AMOUNT IN DIFFERENT CASES OF THE GROUP. 7.4 THE CONTENTIONS OF THE APPELLANT ARE VERY CAREFULLY EXAMINED. THERE IS DEFINITE SUBSTANCE IN THE CONTENTIONS OF THE APPELLANT TO THE EXTENT -: 44: - 44 THAT THE AO HAS MADE AT LEAST DOUBLE ADDITION FOR THE SAME EXPENDITURE BASED ON INTERIOR VALUATION REPORT (IVR) AND THEN ON THE BASIS OF NOTINGS ABOUT SUCH EXPENDITURE IN THE LOOSE' PAPERS FOUND. NO DETAILED WORKING ARE GIVEN BY THE AO EITHER IN THE ASSESSMENT ORDER OR BY WAY OF ANNEXURE HOW THE VARIOUS AMOUNTS AS ADDED AS PER DIFFERENT PARAS OF ASSESSMENT ORDER BEING 9(A) TO 9(F) HAVE BEEN ARRIVED AT. THE COPY OF ASSESSMENT ORDER IN THE CASE OF M/S. AMBIKA FANCY STORE HAS BEEN EXAMINED AND IT IS SEEN THAT THE AO HAS ADDED AN AMOUNT AT RS. 5,33,3661- FOR DIFFERENCE IN STOCK FOUND IN COURSE OF SURVEY U/S. 133A AND HE HAS MADE SEPARATE ADDITION FOR UNRECORDED PURCHASES AS PER LOOSE PAPERS AT RS. 42,565/- ARID RS. 2,296/-. M/S. AMBIKA FANCY STORE HAS APPENDED A NOTE TO THE TRADING ACCOUNT THAT STOCK AS PER BOOKS CAME TO APPROXIMATELY RS. 14,61,310/- AND THE STOCK WAS FOUND LESS -: 45: - 45 BY THE DEPARTMENT DURING THE COURSE OF SURVEY AT RS. 8,05,206/- AND IT IS FURTHER STATED THAT SUCH DEFICIT IS ON ACCOUNT OF OLD STOCK CLEARED AT APPROXIMATELY COST PRICE AND SUCH. AMOUNT WAS UTILIZED BY THE PARTNERS FOR THE COLOURING AND INTERIOR OF THE RESIDENTIAL HOUSE AND SUCH STOCK WAS REDUCED IN THE BOOKS BY DEBIT TO PARTNERS AND SINCE SUCH GOODS WERE SOLD AT COST, NO PROFIT WAS ACCOUNTED FOR ON SUCH SALES. 7.4.1 THE CONTENTION IN RESPECT OF THE AVAILABILITY OF FUNDS FROM WITHDRAWAL FROM UNACCOUNTED DEPOSITS IN BANK ACCOUNT WITH OBC, SUDAMA NAGAR BR. BY THE APPELLANTS ARE EXAMINED WITH REFERENCE TO COPY OF SUCH BANK ACCOUNT FURNISHED BY THE APPELLANT. IT IS SEEN THAT THE MAJOR AMOUNTS HAVE BEEN WITHDRAWN BY WAY OF CLEARING. ONE MAJOR AMOUNT BEING RS. 96,000/- DEBITED IN BANK ACCOUNT ON 9.3.01 WHICH IS SUCCEEDED BY A CASH DEPOSIT OF RS. 95,000/- ON 3.3.01. NO DIRECT, DEFINITE AND -: 46: - 46 CREDIBLE DETAILS AND EVIDENCES HAVE BEEN BROUGHT ON RECORD TO ESTABLISH THAT SUCH WITHDRAWALS WERE UTILIZED FOR THE PURPOSE OF MEETING EXPENDITURE ON INTERIOR DECORATION AND RENOVATION OF HOUSES ETC. ONLY AND WERE NOT UTILIZED OTHERWISE. HENCE, IN ABSENCE OF CORROBORATIVE EVIDENCES, SUCH SELF-SERVING STATEMENT OF THE APPELLANT CANNOT BE ACCEPTED AND NO CREDIT FOR AVAILABILITY OF SUCH FUNDS SHALL BE CONSIDERED AGAINST ADDITION FOR UNEXPLAINED EXPENDITURE ON INTERIOR DECORATION AND RENOVATION ETC. 7.4.2 COMING TO THE UNDISCLOSED INCOME OFFERED IN THE HANDS OF M/S. AMBIKA TRADERS AT RS.2.50 LAKHS, IT IS SEEN THAT THERE IS NO CLEAR CUT MENTION IN THE RETURN OF INCOME FILED THAT SUCH AMOUNT WAS UTILIZED IN A PARTICULAR FASHION NOR THERE ARE ANY, FINDINGS TO THIS EFFECT IN THE ASSESSMENT ORDER. IN ABSENCE OF ANY CLEAR ADMISSION OR DETAILS AND EVIDENCES TO SUPPORT -: 47: - 47 THE CONTENTION THAT SUCH AMOUNT WAS UTILIZED TOWARDS EXPENDITURE ON INTERIOR DECORATION ETC., THE APPELLANT'S CONTENTION MERELY ON THE BASIS OF STATEMENT WITHOUT ANY CORROBORATIVE EVIDENCES AND DETAILS CANNOT BE ACCEPTED. 7.4.3 FINALLY TO SUM UP, THE APPELLANT GROUP AS A WHOLE HAS OWNED UP UNDISCLOSED\ INVESTMENT IN INTERIOR DECORATION AND RENOVATION ETC. AT RS. 15.10 LAKHS IN THE HANDS OF SIX INDIVIDUALS AS DISCUSSED ABOVE AND FURTHER AMOUNT OF RS. L,87,000/- HAS BEEN OFFERED IN THE HANDS OF APPELLANT SRI SURESH VALECHA FOR EXPENSES BASED ON LOOSE PAPERS ETC. AS PER DISCUSSION, IT WAS MADE CLEAR TO THE AR PRESENT AND SRI SURESH VALECHA AND AGREED BY THEM THAT NO CREDIT AGAINST ANY PART OF SUCH DISCLOSURE COULD BE ENTERTAINED FOR ADDITION OF ANY UNDISCLOSED EXPENDITURE UNDER THE HEAD HOUSE-HOLD -: 48: - 48 EXPENSES. THUS, ADMITTED UNDISCLOSED EXPENDITURE ON THIS HEAD AMOUNTS TO RS. 15.10 + RS. 1.87 LAKHS OR SAY RS. 16.97 LAKHS. FURTHER, THE APPELLANTS CANNOT BE DENIED THE BENEFIT OF AVAILABILITY OF CASH FROM UNRECORDED SALES TRANSACTIONS IN THE CASE OF M/S. AMBIKA FANCY STORE, AS IT HAS BEEN CATEGORICALLY STATED BY WAY OF NOTE TO THE TRADING ACCOUNT AND THE SAME IS CORROBORATED BY CORRESPONDING DEBIT ENTRIES TO PARTNERS ACCOUNT AGGREGATING RS. 6,46,104/-. EVEN IF THE AO'S FINDINGS ARE TAKEN INTO CONSIDERATION, THE DIFFERENCE IN STOCK HAS BEEN WORKED OUT AT RS. 5,33,366/- AND ADDITION HAS BEEN MADE FOR UNRECORDED PURCHASES AT RS. 42,565/- AND RS. 25,296/- I.E. AGGREGATING RS. 67,761/-. THUS, EVEN CONSIDERING THE AO'S FINDINGS THE AVAILABILITY OF SUCH FUNDS TO THE EXTENT OF RS. 4.66 LAKHS (APPROX.) CANNOT BE DENIED TO THE APPELLANT AND THUS, THE AVAILABLE FUNDS IN THE HANDS OF THE VARIOUS MEMBERS OF -: 49: - 49 THE GROUPS COMES TO RS. 21.63 LAKHS. 7.4.4 NOW, IT IS SEEN THAT THE AO HAS MADE ADDITION FOR EXPENSES INCURRED ON INTERIOR DECORATION, RENOVATION OF HOUSE AND ACQUISITION OF HOUSE-HOLD FURNITURE AND ELECTRONICS GOODS ETC. AT RS. 17.33 LAKHS BASED ON IVR'S REPORT IN FIVE CASES AND HAS ADDED FURTHER AMOUNT OF RS.21.01 LAKHS BASED ON DESCRIPTION OF EXPENSES ON SIMILAR NATURE IN FIVE CASES OF THE GROUP EXCLUDING THE CASE OF SRI SURESH VALECHA. THE AO HAS FURTHER MADE ADDITION FOR ACQUISITION OF HOUSE-HOLD GOODS AT RS.2.69 LAKHS IN THE CASE OF SRI SURESH VALECHA, BESIDES ADDITION OF RS.2.93 LAKHS ON A SEPARATE INTERIOR VALUER'S REPORT PERTAINING TO USHA NAGAR BUILDING AND FURTHER AMOUNT OF RS.20.31 LAKHS IS ADDED BASED ON NOTINGS FOUND ON LOOSE PAPERS CONCERNING EXPENSES OF INTERIOR DECORATION, RENOVATION OF HOUSE AND ACQUISITION OF FURNITURE AND OTHER ELECTRONIC GOODS ETC. THE -: 50: - 50 TOTAL AMOUNT ADDED THUS COMES TO RS. 64.02 LAKHS. 7.5 IN VIEW OF THE AFORESAID DISCUSSION, THERE IS SUFFICIENT MERIT IN THE APPELLANT'S CONTENTION THAT THE APPROACH ADOPTED BY THE AO HAS RESULTED IN MORE THAN DOUBLE ADDITION ON THE SAME SCORE, BUT THERE IS NO MERIT IN CONTENTIONS THAT SUCH ADDITION BE CONFINED TO AMOUNT ARRIVED IN IVR'S REPORTS, AS SUCH REPORTS DO NOT COVER ALL EXPENSES RECORDED IN SEIZED LOOSE PAPERS. 7.5.1 IN THIS BACK DROP, IT IS AGAIN REITERATED THAT THE UNDISCLOSED INCOME ADMITTED PERTAINING TO SUCH ACCOUNTED EXPENSES IN THE HANDS OF SIX PERSONS AS AFORESAID' INCLUDING THE AMOUNT OF RS. 1.87 LAKHS IN THE CASE OF SRI SURESH VALECHA COMES TO RS. 16.97 LAKHS. IT WAS ALSO EMPHASIZED THAT EXPENDITURE TO THE TUNE OF RS. 88,OOO/-(APPROX.) HAS BEEN -: 51: - 51 DISCLOSED IN THE BALANCE-SHEET OF SRI SURESH VALECHA AND HIS WIFE SMT. LEENA VALECHA. FURTHER, IT HAS BEEN HELD THAT AN AMOUNT OF RS. 4.66 LAKHS IS TO BE TREATED AS AVAILABLE IN THE HANDS OF THE APPELLANT GROUP FOR MEETING SUCH UNACCOUNTED EXPENSES OUT OF THE STOCK/GOODS SOLD FROM M/S. AMBICA FANCY STORES. THUS THE OVERALL FUNDS AVAILABLE COMES TO RS. 22.50 LAKHS. 7.5.2 AS HAS BEEN HELD ABOVE, AN ELEMENT OF ESTIMATION HAS TO BE NECESSARILY INVOLVED EVEN IN ARRIVING AT QUANTUM OF UNDISCLOSED INVESTMENT/EXPENDITURE ON SUCH HEADS. FURTHER, ONE ALTERNATIVE IS TO APPORTION SUCH ESTIMATED AMOUNT IN EQUAL AMOUNTS IN THE HANDS OF THE FAMILY HEADS AND FOR CONCERNED PERSONS. BUT THE APPELLANT GROUP HAS DISCLOSED VARYING AMOUNTS AS NOTED ABOVE IN SIX DIFFERENT HEADS, AGGREGATING AS NOTED ABOVE, AT RS. / -: 52: - 52 16.97 LAKHS. 7.5.3 ON OVERALL CONSIDERATION AND GIVING WEIGHTAGE TO THE APPELLANT'S CONTENTION THAT THE AO'S APPROACH HAS BEEN RESULTED IN MORE THAN DOUBLE. IT IS DIRECTED THAT FURTHER ADDITION OF RS.50,OOO/- EACH IN THE HANDS OF SRI UDHALAL VALECHA, SRI NANDLAL VALECHA, SRI JAMNALAL VALECHA, SRI GANGARAMVALECHA, SRI SURESH VALECHA & SRI SHRICHAND VALECHA WOULD BE JUSTIFIED AND PROPER TO MEET THE ENDS OF JUSTICE, IN ABSENCE OF PROPER AND RELIABLE BASIS MADE AVAILABLE. BY EITHER AO OR THE APPELLANTS AND ACCORDINGLY THE AO IS DIRECTED TO RESTRICT SUCH ADDITION IN THE CASE OF SIX CASES OF THE GROUP BASED ON THESE FINDINGS AND AMOUNT DISCLOSED BY THE APPELLANT IN THIS BEHALF AS UNDER, FOR ADDITION BASED ON INTERIOR VALUER'S REPORT AS WELL ACQUISITION OF HOUSE-HOLD GOODS AND ADDITION MADE ON LOOSE PAPERS, EXCLUDING OF COURSE ADDITION HOUSE-HOLD EXPENSES, WHICH -: 53: - 53 HAVE BEEN DECIDED SEPARATELY. AMOUNT AS ADMITTED TO BE SPENT FURTHER ADDITION TO BE MADE TOTAL (1) SRI UDHALAL VALECHA 1,75,000 50,000 2,25,000 (2) SRI NANDLAL VALECHA 3,25,000 50,000 3,75,000 (3) SRI JAMNALAL VALECHA 3,20,000 50,000 3,70,000 (4) SRI GANGARAM VALECHA 2,25,000 50,000 2,75,000 (5) SRI SURESH VALECHA 3,32,000 50,000 3,82,000 (6) SRI SHRICHAND VALECHA 3,20,000 50,000 3,70.000 TOTAL 16,97,000 3,00,000 18,97,000 30. IT IS QUITE CLEAR FROM THE ORDER OF THE CIT(A) THAT HE HAS CONSIDERED THE VALUATION REPORT IN RESPECT OF EXPEN DITURE INCURRED BY THE ASSESSEE ON ACCOUNT OF INTERIOR DEC ORATION AND ALSO NOTINGS IN THE LOOSE SLIPS FOUND DURING THE CO URSE OF SEARCH AND AFTER CONSIDERING THE DOUBLE ADDITION MA DE BY THE ASSESSING OFFICER ON DIFFERENT OCCASIONS BY REFERRI NG TO THE -: 54: - 54 LOOSE PAPERS AND ALSO DVOS REPORT, THE LD. CIT(A) HAS REASONABLY RESTRICTED THE TOTAL ADDITION ON ACCOUNT OF INTERIOR DECORATION AT RS. 18.97 LAKHS OUT OF WHICH RS. 16.9 7 LAKHS WERE ALREADY ADMITTED BY THE ASSESSEE. AFTER MAKING FURTHER ADDITION OF RS. 50,000/- IN THE HANDS OF EACH OF TH E FAMILY MEMBERS AMOUNTING IN TOTAL TO RS. 3 LAKHS, THE LD. CIT(A) HAS REASONABLY UPHELD THE ADDITION ON ACCOUNT OF INTERI OR DECORATION. NOTHING WAS POINTED OUT BY THE LD. SENI OR A.R.NOR BY THE CIT DR TO CONTROVERT THE FINDING RECORDED BY THE LD. CIT(A) WITH RESPECT TO OBSERVATION ON ACCOUNT OF DV OS REPORT VIS--VIS LOOSE PAPERS FOUND DURING COURSE OF SEARC H INDICATING INVESTMENT AND ALSO AMOUNT SURRENDERED BY THE VARIO US ASSESSEES ON ACCOUNT OF INTERIOR DECORATION. ACCORD INGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT( A). 31. IN THE RESULT, GROUND TAKEN BY THE REVENUE AND ASSESSEE BOTH WITH RESPECT TO ADDITION/DELETION IN INVESTMENT IN INTERIOR DECORATION AND RENOVATION OF HOUSE AT L ARKANA NAGAR AND USHA NAGAR ARE DISMISSED. 32. THE AO HAS ALSO MADE ADDITION IN THE HANDS OF ALL THE ASSESSEES BY ESTIMATING HOUSE HOLD EXPENDITURE. THE LD. CIT(A) -: 55: - 55 HAS GIVEN PART RELIEF AND SUSTAINED ADDITION TO THE EXTENT OF RS. 1.63 LAKHS IN THE HANDS OF EACH OF THE ASSESSEE , AFTER HAVING FOLLOWING OBSERVATIONS :- 8.3 THE AO'S DETAILED FINDINGS AND NOTINGS ON SEIZED PAPERS BEING LPS-1 PAGE- 20 TO 27 AND THE CONTENTION OF THE APPELLANT ARE CAREFULLY TAKEN INTO CONSIDERATION. '{HE DESCRIPTION ON LOOSE PAPER ABOUT EXPENSES RELATING TO DRY CLEANING, SWEETS, RICE, SUNDRY ELECTRICAL ITEMS, KIRANA, UTENSILS ETC. DO NOT LEAVE ANY IOTA OF DOUBT THAT SUCH EXPENSES RELATED TO HOUSE-HOLD EXPENSES. THE AGGREGATE AMOUNT OF SIX LOOSE PAGES CONTAINING PARTICULARS OF HOUSE-HOLD EXPENSES AT RS.17,570/-, RS.26,619/-, RS.11,396/, RS.9,040/-, RS.12,916/- AND RS.39,659/- WERE ADDED TOGETHER WITH ANOTHER ITEM OF RS.64,800/- WITH NARRATION READING AS 'DUDHWALA CHHEH MAHAKA' I.E. MILK EXPENSES FOR SIX MONTHS AND THE AGGREGATE OF SUCH AMOUNT AT RS.1,82,000/- WAS THEN DIVIDED INTO -: 56: - 56 TWO PORTION AT RS. 91,000/- WITH THE DESCRIPTION 'TO BE TAKEN'. THE APPELLANT HAS NOT GIVEN DUE AND PROPER EXPLANATION AS TO FROM WHOM SUCH AMOUNT W AS TO BE TAKEN. THE APPELLANT'S CONTENTION THAT SUCH EXPENSES INCLUDED SALES- TAX ETC. HAVE ,ABSOLUTELY NO MERIT, AS THE AMOUNT OF SALES-TAX ETC. ARE MENTIONED ON A SEPARATE PAGE WHERE THE AMOUNT OF RS. 91,000/- WAS CONSIDERED AS 50% EXPENSES. NONE OF THE ITEMS LIKE SALES-TAX ETC. APPEAR ON THE SIX LOOSE PAGES, TOTAL WHEREOF, INCLUDING MILK EXPENSES AGGREGATED AT RS. 1,82,000/-. THUS, THE AO'S FINDINGS THAT SUCH EXPENSES WERE HOUSE-HOLD EXPENSES AND PERTAIN TO A PERIOD OF SIX MONTHS HAS TO BE NECESSARILY APPROVED BEING CLEARLY SUPPORTED BY LOOSE PAPERS FOUND AND ADMITTED BY THE APPELLANT GROUP TO BE BELONGING TO THEM. THE APPELLANT GROUP HAS FURTHER ADMITTED TO INCURRING UNACCOUNTED EXPENSES AS THE DISCLOSURE MADE -: 57: - 57 BY APPELLANTS IN RETURNS FILED INCLUDED DISCLOSURE OF SUCH EXPENSES ALSO, AS EXTRACTED IN THE BEGINNING OF THE APPEAL ORDER. 8.3.1 THE APPELLANT HAS COME FORWARD WITH GENERAL CONTENTIONS AND THERE IS NO BASIC HOW THE BALANCE AMOUNT OF RS.10,000/- PER MONTH HAS BEEN ARRIVED. THE CONTENTION THAT THE MONTHLY MILK EXPENDITURE WAS TO RS.2,000/- FOR THE ENTIRE FAMILY CONSISTING OF 30 ADULTS AND MINOR CHILDREN BELONGING TO THE FAMILY OF FIVE BROTHERS CANNOT BE ACCEPTED ON THE FACE OF IT WHEN DURING THE PERIOD OF PRICE OF MILK PER LITER WAS RS.13-14 PER LITRE IT WILL TRANSLATE TO THE EXPENSE OF MILK PER DAY AT 5 LITERS ONLY FOR A FAMILY OF 30 PERSONS. SECONDLY, THE CONTENTION THAT SUCH MILK EXPENSES PERTAINED TO MILK SUPPLIED TO A SOCIAL GATHERING OF ISSYOG ALSO CANNOT BE ACCEPTED FULLY IN VIEW OF THE ABOVE DISCUSSION AS WELL AS WANT OF DEFINITE AND -: 58: - 58 RELIABLE EVIDENCES. THERE MIGHT BE AT BEST SOME NOMINAL AMOUNT OF EXPENSES ON MILK PERTAINING TO SUCH SOCIAL GATHERING. CONSIDERING SUCH CONTENTIONS, THE EXPENSES FOR THE WHOLE YEAR ARE DIRECTED TO BE TAKEN AT RS. 3,50,000/- IN PLACE OF RS. 4,00,000/- ESTIMATED BY THE AO. 8.3.2 PROCEEDING FURTHER, THE AO'S ACTION IN ESTIMATING HOUSE-HOLD EXPENSES FOR THE ENTIRE BLOCK PERIOD BASED ON SUCH ESTIMATE OF HOUSE- HOLD EXPENSES IS FOUND TO BE ALSO FULLY JUSTIFIED AND PROPER IN VIEW OF THE LATER AMENDMENT TO THE SCHEME OF BLOCK ASSESSMENT WHEREBY PROVISION OF SEC. 145 WERE SPECIFICALLY MADE APPLICABLE. FURTHER, CONSIDERING THE PRICE INCREASE AND OTHER FACTORS PERTAINING TO SIZE OF FAMILY, REDUCTION GRANTED ON YEARLY BASIS AT RS. 25,000/- PER YEAR BY THE AO APPEARS TO BE VERY FAIR AND REASONABLE AS THE AMOUNT THUS ARRIVED FOR AY 91-92 COMES TO RS. 1.25 LAKHS ONLY AGAINST WITHDRAWAL SHOWN BY THE GROUP AT RS. -: 59: - 59 98,300/-. IN VIEW OF THESE FINDINGS, THE AO'S ESTIMATION OF UNRECORDED HOUSE-HOLD EXPENSES FOR THE PART OF THE YEAR COMPRISING FOR A PERIOD OF SIX MONTHS IS DIRECTED TO BE TAKEN AT RS. 1,90,000/- CONSIDERING ELEMENT OF PRICE CEASE. THUS, THE TOTAL AMOUNT COMES TO RS. 25,65,000/- IN PLACE OF RS. 31,25,000/- DETERMINED BY THE AO. \ 8.3.3 THE AO IN ARRIVING AT THE UNEXPLAINED EXPENDITURE ON HOUSE-HOLD EXPENSES, HAS FURTHER CONSIDERED THE AMOUNT OF RS. 1,82,000/- WHICH HAS BEEN ADDED SEPARATELY ON THE BASIS OF LOOSE PAPERS. SUCH AMOUNT HAS BEEN EXCLUDED IN ARRIVING AT THE FINDINGS FOR ADDITION BASED ON LOOSE PAPERS WHILE DECIDING THE ISSUE RELATING TO UNDISCLOSED INCOME PERTAINING TO EXPENSES INCURRED ON INTERIOR DECORATION AND ADDITION BASED ON INTERIOR VALUER'S REPORT. ACCORDINGLY, THE AO IS DIRECTED TO DIVIDE THE BALANCE OF RS. 9,77,500/- (RS. 25,65,000 - RS. -: 60: - 60 14,46,000 SHOWN BY THE APPELLANT GROUP AND ACCEPTED BY THE ASSESSING OFFICER AND FURTHER AMOUNT OF EXPENSES INCURRED IN LAST PERIOD OF SIX MONTHS AS PER DETAILS SUBMITTED AS EXTRACTED AT THE RS. 1,41,643 OR SAY RS.1,41,500) IN 6 HANDS EQUALLY AS DONE BY HIM WHICH COMES TO RS. 1,62,900/- (APPROX) OR SAY RS. 1,63,000/-. 33. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND THAT NO INCRIMINATING PAPER WAS FOUND ABOUT INCURRI NG OF EXPENDITURE EXCEPT ONE BUNCH OF PAPERS AS INDICATED IN THE PAPER BOOK AT PAGES 14-21 FILED BEFORE THE CIT(A). THE LD. CIT(A) HAS DULY CONSIDERED THE ENTRIES OF THESE PAP ERS AND FOUND THAT SOME OF THESE EXPENSES ARE ALREADY DEBIT ED IN THE BOOKS. MILK EXPENDITURE DEBITED AT RS. 64,480/- BEC AUSE OF THE VOUCHER BELONGING TO PAYMENT OF MILK FOR THE IS SYOG ORGANIZATION OF PATNA OF WHICH ONE OF THE ASSESSEES SHRI SURESH VALECHA IS A MEMBER. THE SAID PAYMENT WAS FO R -: 61: - 61 FUNCTION HELD AT INDORE IN JULY, 2000, FOR THE EXPE NSES ON ACCOUNT OF MILK, WHICH WAS CONTRIBUTED BY THE ASSES SEE FAMILY AS HAVING BEEN COLLECTED FROM SAMAJ PEOPLE. THE ASS ESSEE HAS ALSO SUBMITTED THE PAPER CUTTING OF SUCH FUNCTION B EFORE THE LOWER AUTHORITIES. AFTER CONSIDERING THE VARIOUS HO USE HOLD EXPENSES, WHICH ARE LIKELY TO BE INCURRED, THE CIT( A) HAS REASONABLY RESTRICTED THE ADDITION TO THE EXTENT OF RS. 1,63,000/- IN THE HANDS OF EACH OF THE ASSESSEE. AG AINST THE PART DELETION OF ADDITION, THE REVENUE IS NOT IN AP PEAL BEFORE US, FURTHERMORE, THE LD. AUTHORIZED REPRESENTATIVE COULD NOT POINT OUT ANY FAULT IN THE ORDER OF LD. CIT(A) FOR RESTRICTING THE ADDITION TO THE EXTENT OF RS. 1,63,000/-. ACCORDING LY, WE CONFIRM THE ACTION OF CIT(A) WITH REGARD TO HOUSE H OLD EXPENSES. 34. IN THE RESULT, THE GROUND TAKEN BY ALL THE ASSESSE ES IN RESPECT OF ADDITION FOR HOUSE HOLD EXPENDITURE IS H EREBY DISMISSED. 35. IN ALL THE YEARS UNDER CONSIDERATION, THE REVENUE I S ALSO AGGRIEVED FOR DELETION OF SURCHARGE LEVIED BY THE ASSESSING OFFICER IN RESPECT OF ALL THE ASSESSEES. THE ISSUE FOR LEVY OF -: 62: - 62 SURCHARGE IN CASE OF BLOCK ASSESSMENT IS SQUARELY C OVERED BY THE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF SURESH GUPTA, 297 ITR 222. ACCORDINGLY, WE REVERSE THE OR DER OF CIT(A) ON THIS GROUND AND CONFIRM THE ACTION OF THE AO FOR LEVY OF SURCHARGE IN RESPECT OF TAXES TO BE COMPUTED AFT ER GIVING APPEAL EFFECT IN THE AMOUNT OF INCOME TAX SO COMPUT ED. WE DIRECT ACCORDINGLY. 36. IN THE RESULT, THE GROUND TAKEN BY REVENUE IN ALL THE YEARS WITH REGARD TO LEVY OF SURCHARGE IS HEREBY AL LOWED. 37. WITH REGARD TO ADDITION MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF UNEXPLAINED DEPOSITS IN NRE GIFTS, TH E SAME HAVE BEEN EXCLUDED BY THE LD. CIT(A) IN BLOCK ASSES SMENT. HOWEVER, AT THE VERY SAME TIME, HE HAS GIVEN A VERY CLEAR CUT DIRECTION TO THE EFFECT THAT SUCH ADDITION CANNOT B E MADE IN THE BLOCK ASSESSMENT IN SO FAR AS NRE GIFTS SO RECE IVED HAVE ALREADY BEEN DISCLOSED IN THE REGULAR RETURN AND DI RECTED THE AO TO LOOK INTO THE REGULAR RETURNS BY REOPENING TH E SAME. AS THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE GIFTS, THE LD. CIT(A) HAS DIRECTED FOR REOPENING THE ASSES SMENT OF ALL THE ASSESSEES U/S 147. THE ASSESSEE IS NOW BEFORE U S AGAINST -: 63: - 63 THIS DIRECTION OF THE CIT(A). IT WAS CONTENDED BY T HE LD. AUTHORIZED REPRESENTATIVE THAT THE CIT(A) HAS GOT N O POWER FOR GIVING DIRECTION FOR OTHER YEARS. HE ALSO RELIED ON THE ORDER OF THE I.T.A.T. INDORE BENCH IN THE CASE OF R. D. JAIN . ON THE OTHER HAND, IT WAS ARGUED BY THE LD. CIT DR THAT CI T(A) HAS GOT CO-TERMINUS POWER WITH THAT OF THE AO AND HE CA N NOT ONLY DEAL WITH THE ADDITION MADE BY THE ASSESSING OFFICE R BUT CAN ALSO ENHANCE THE ASSESSMENT. IN THE SAME WAY, IF HE FOUND THAT THE ADDITION WAS NOT JUSTIFIED IN A PARTICULAR YEAR OR IN RESPECT OF A PARTICULAR ASSESSEE, AFTER CONSIDERING THE RELEVANT FACTS AND MATERIAL RECORDED, THE CIT(A) CAN ISSUE N ECESSARY DIRECTIONS FOR CORRECT ASSESSMENT OF INCOME IN OTHE R YEARS TO WHICH IT PERTAINED AND ALSO DIRECTION FOR REOPENING THE ASSESSMENTS FOR THOSE RESPECTIVE YEARS, TO WHICH TH E INCOME IS REALLY PERTAINS. HE ALSO RELIED ON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF A. B. PAREEKH, 203 ITR 186, EM PHASIZING THE PROVISIONS OF EXPLANATION 3 TO SECTION 153(3). 38. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND THAT DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E CIT(A) -: 64: - 64 TRIED TO EXAMINE THE GENUINENESS OF THE GIFTS FOR W HICH HE WAS NOT SATISFIED. HOWEVER, AT THE VERY SAME TIME, HE F OUND THAT AMOUNT OF NRI GIFTS WERE ALREADY DISCLOSED BY THE A SSESSEE IN THE REGULAR RETURNS. THEREFORE, HE DIRECTED THE AO TO REOPEN THE REGULAR ASSESSMENT AND EXAMINE THE GENUINENESS OF NRE GIFTS . WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE LD. CIT(A) FOR ISSUING SUCH DIRECTIONS IN SO FAR AS THE PROVIS IONS OF EXPLANATION 2 TO SECTION 153(3), CLEARLY ENVISAGES THAT IF THE APPELLATE AUTHORITY IN THE COURSE OF APPELLATE PROC EEDINGS FIND THAT ANY INCOME IS REQUIRED TO BE EXCLUDED FORM THE TOTAL INCOME OF THE ASSESSEE FOR AN ASSESSMENT YEAR, BUT IS REQUIRED TO BE CONSIDERED FOR TAXATION IN ANOTHER ASSESSMENT YEAR, THE APPELLATE AUTHORITY IS FULLY EMPOWERED TO ISSUE SUC H DIRECTION AFTER RECORDING NECESSARY FINDING IN THIS BEHALF. F URTHERMORE, EXPLANATION 3 ENVISAGED LEGISLATIVE INTENT THAT IF SOME INCOME IS REQUIRED TO BE EXCLUDED FROM THE HANDS OF ONE PE RSON BUT SIMULTANEOUSLY IS REQUIRED TO BE CONSIDERED IN THE HANDS OF ANOTHER PERSON, THE APPELLATE AUTHORITY AFTER RECOR DING SUCH FINDING CAN ISSUE APPROPRIATE DIRECTION FOR CONSIDE RING SUCH -: 65: - 65 INCOME IN APPROPRIATE HANDS AFTER GIVING SUCH OTHER PERSON AN OPPORTUNITY OF BEING HEARD BEFORE SUCH ORDER WAS PA SSED. 39. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR ISSUIN G DIRECTION FOR REOPENING, THE ASSESSMENT IN WHICH THE ASSESSEE HAS INCORPORATED THE NRE GIFTS. 40. IN THE RESULT, THE GROUND TAKEN IN ALL THE YEARS U NDER CONSIDERATION ARE HEREBY DISMISSED. 41. THE REVENUE IS ALSO AGGRIEVED BY DELETION OF ADDIT ION OF RS. 2,73,854/- IN THE HANDS OF JAMNADAS VALECHA I.T.(SS).A.NO. 50/IND/2006, IN RESPECT OF JESWELLER Y. 42. THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN JEWELLERY WERE DELETED BY THE LD. CIT(A) IN CASE OF SURESH VALECHA, NANDLAL VALECHA, GANGARAM VALECHA AND JAMN ADAS VALECHA. THE ISSUE HAS BEEN DISCUSSED IN DETAIL BY THE LD. CIT(A) WHILE DECIDING THE APPEAL OF SURESH VALECHA. FOLLOWING WAS THE PRECISE OBSERVATION AND CONCLUSION OF THE C IT(A) IN THIS REGARD :- -: 66: - 66 3.1.1 THE AO HAS CONSIDERED THIS ISSUE IN PARA -2 ON PAGE 4 & 5 OF THE ASSESSMENT WHICH READ AS UNDER :- GOLD JEWELLERY FOUND AT RESIDENCE 1517 GMS. VALUED AT RS. 624870/- :- GOLD JEWELRY FOUND AT SHOP AS PER ANNEXURE JF - A TO E DATED 26-09.2000 WAS WEIGHING 1517 GMS AND VALUED AT RS. 6,24,870/- . IT IS EXPLAINED THAT THERE ARE TWO LADY MEMBERS I.E SMT. MOHINI DEVI W/O SHRI UDHALAL VALECHA AND SMT. LEENA W/O SHRI SURESH VALECHA. THERE IS A MINOR DAUGHTER ALSO. IT IS ALSO CLAIMED THAT THE GOLD JEWELLRY FOUND IS ALMOST EQUA L IN VIEW OF GUIDELINES ISSUED BY THE CBDT THEREFORE THE SAME MAY KINDLY BE ACCEPTED. ON GOING THROUGH THE SEIZED LOOSE PAPERS LS-4 PAGE 40 THE TOTAL WEIGHT OF GOLD POSSESSED BY SHRI UDHAL AL IS MENTIONED AT 1022 GMS. AS PER PAGE 43, IT IS MENTIONED THAT SMT. MOHINI VALECHA POSSESSED -: 67: - 67 559.43 GMS. OUT OF WHICH JEWELLERY RECEIVED AT THE TIME OF MARRIAGE WAS 58 GMS GOLD JEWELLERY ONLY. AS PER PAGE 47, SHRI SURESH VALECHA POSSESSED 582.590 GMS AND HAS RECEIVED AT THE TIME OF' MARRIAGE GOLD ORNAMENTS WEIGHING 92.59 GMS. THUS AT THE TIME OF MARRIAGE OF SMT. MOHINI W/O SHRI UDHALAL AND OF SHRI SURESH VALECHA ONLY 150.59 GMS OF GOLD IS RECEIVED. IT IS RECORDED ON PAGE 47, THA T THE GOLD JEWELLERY IS NEW IN MOST OF THE ITEMS WHICH ESTABLISHES THAT THE ASSESSSEE HAS INVESTED THE MONEY IN PURCHASING THE GOLD JEWELLERY. THEREFORE THE CONTENTION OF THE ASSESSEE IS REJECTED. THEREFORE, OUT OF 1517 GMS, ONLY GOLD JEWELLERY WEIGHING 150.59 GMS IS CONSIDERED TO BE EXPLAINED. RAMAINING 1366.41 GMS OF GOLD JEWELLERY IS TREATED TO BE UNEXPLAINED. THE VALUE OF GOLD JEWELLERY PER GMS. IS TAKEN AT RS. 5,48,846/- & IS ADDED AS UNDISCLOSED & UNEXPLAINED INVESTMENT IN GOLD JEWELLERY IN VIEW OF PROVISIONS 'SECTION 69A' OF TH E -: 68: - 68 INCOME TAX ACT, 1961 FOR WHICH PENALTY U/S 158 BFA(2) IS BEING SEPARATELY INITIATED. 3.1.2 THE APPELLANT HAS EXPLAINED THE POSITION IN T HIS BEHALF PER WRITTEN SUBMISSION DTD.11.09.03 READING AS UNDER :- REGARDING JEWELLERY, IT IS SUBMITTED THAT THE GOLD JEWELLERY WEIGHING 3699.4 GMS. WERE FOUND AT THE RESIDENCE AND VARIOUS LOCKERS IN THE NAMES OF T HE MEMBERS OF THE FAMILY. THE SAME HAS BEEN VALUED AT RS.14,L7,644/-. IT IS SUBMITTED THAT THE JEWELLERY OF VARIOUS LADIES ARE EXCHANGED FOR TEMPORARY USE AND AS SUCH THE TOTAL JEWELLERY OF THE FAMILY AS A WHOL E MAY BE CONSIDERED. IF THE TOTAL JEWELLERY IS CONSIDERED THEN IT WOULD BE NOTED THAT THERE IS NO EXCESS JEWELLERY POSSESSED BY THE FAMILY. THE TOTAL JEWELLERY FOUND IS AS UNDER . -: 69: - 69 AT THE RESIDENCE OF SH.SURESH & UDHALAL 1517 GMS. AT THE RESIDENCE OF SHRI NANDLAL & OTHERS3700 GMS. 5217 GMS. THERE ARE EIGHT LADIES IN THE FAMILY AND ABOUT 10 UNMARRIED DAUGHTERS. THE JEWELLERY ALLOWED AS PER THE BOARD INSTRUCTIONS IS 500 GRAMS PER LADY AND 250 PER UNMARRIED DAUGHTER. THUS, THE TOTAL JEWELLERY WOULD BE APPROXIMATELY MORE THAN 6000 GRAMS WHICH IS MORE THAN THE ACTUAL JEWELLERY FOUND. LOOKING TO THE STATUS OF THE FAMILY NO EXCES S JEWELLERY IS FOUND AND AS SUCH THE SAME MAY BE ACCEPTED. DETAILED EXPLANATION WAS FURNISHED TO THE ID. AO. IT WAS EXPLAINED TO HIM THAT THE LOOSE PAPERS WHICH MENTION DETAILS OF JEWELLERY, CONTAIN THE JEWELLERY GIVEN AT THE TIME OF THE MARRIAGE BY THE PARENTS AND THE JEWELLERY GIVEN BY THE PARENTAL SIDE AND ACQUIRED SUBSEQUENTLY HAVE BEEN INCLUDED IN THE LIST. THE WORDS 'NEW' ARE MENTIONED ON THE ITEMS WHICH REPRESENT THE OLD ITEMS RENOVATED FROM -: 70: - 70 TIME TO TIME ON THE BASIS OF THE RECENT FASHIONS. THEY ARE NOT PURCHASED NEWLY BUT THE SAME HAS BEEN ACQUIRED AT THE TIME OF THE MARRIAGE AND SUBSEQUENTLY ON DIFFERENT OCCASIONS. LOOKING TO THE STATUS OF THE FAMILY AND THE BOARD'S CIRCULAR AND THE JUDGMENTS OF VARIOUS TRIBUNALS, IT IS HUMBLY PRAYED THAT THE JEWELLERY POSSESSED BY THE FAMILY MAY PLEASE BE ACCEPTED. 3.1.3 THE APPELLANT MADE FURTHER SUBMISSION PER EXPLANATION DTD. 20.02.04 REITERATING EARLIER SUBMISSION AS EXTRACTED ABOVE. THE RELEVANT PORTION FROM THE SAME READ AS UNDER JEWELLERY 8. COMPLETE SUBMISSIONS HAVE BEEN GIVEN IN OUR EARLIER LETTER DT. 11.09.2003. IT IS SUBMITTED THAT THE TOTAL JEWELLERY FOUND IN THE FAMILY IS 5,217 GMS. THE FAMILY CONSISTS OF 8 LADIES WHO ARE MARRIED AND ABOUT 10 UNMARRIED DAUGHTERS. IF AS PER BOARD'S INSTRUCTIONS OF 1994 THE JEWELLERY IS CONSIDERED TH EN -: 71: - 71 THERE WOULD BE NO EXCESS JEWELLERY POSSESSED BY THE FAMILY. THE LD. A.O. HAS REMARKED THAT THERE IS NO EVIDENCE OF PURCHASE OF THE SAID JEWELLERY. HE HAS RELIED ON THE LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH FROM PAGES 40 TO 48 ( PAGE 5 TO 13 OF GENERAL PAPERS) WHERE IN DETAILS OF JEWELLERY POSSESSED BY EACH GROUP HAS BEEN MENTIONED. ON THE SAID PAPER IN LAST IT HAS BEEN MENTIONED 'SHADI KA MILA'. THE LD. A.O. HAS CONCLUDED THAT EXCEPT THIS ENTRY ALL OTHER JEWELLERY IS PURCHASED DURING THE BLOCK PERIOD AND HAS MADE THE ADDITION ACCORDINGLY. 8.1. IT MAY BE SEEN THAT THE LOOSE PAPERS FOUND AT S.NO. 40 TO 48 DO NOT CONTAIN THE DATE OR YEAR. THI S WAS PREPARED AT THE TIME OF SEPARATION OF THE FAMIL Y INDIVIDUALLY. AT THAT POINT OF TIME THE JEWELLERY POSSESSED BY EACH GROUP OF FAMILY WAS TOTALLED TO SEE ANY DISPARITY. THE ENTRY 'SHADI KA MILA' ONLY INDICATES JEWELLEY GIVEN BY PARENTS AT THE TIME OF MARRIAGE ( I.E. RECEIVED FROM VALECHA FAMILY). IT D OES NOT CONTAIN THE JEWELLERY BROUGHT BY THE LADIES IN -: 72: - 72 MARRIAGE FROM THEIR RESPECTIVE PARENTS, AND RECEIVE D SUBSEQUENTLY AT THE SPECIAL OCCASIONS LIKE BIRTH OF BABY AND DIWALI ETC. THE APPROACH OF THE LD. A. O. TO TAKE THE JEWELLERY ONLY AT THE FIGURE MENTIONED 'SH ADI KA MILA' IS MOST UNJUDICIOUS. THE MARRIAGES TOOK PLACE IN THE YEAR 1965, 1969, 1975 (TWO), 1978 FOR 5 BROTHERS AND IN 1988, 1997 AND 1999 FOR SONS. THE FATHER OF 5 BROTHERS SHRI WADHUMAL WANGIMAL CAME FROM PAKISTAN AND WAS QUITE AFFLUENT DOING THE JEWELLERY BUSINESS IN PAKISTAN. A CERTIFICATE TO TH IS EFFECT IS ENCLOSED FROM THE UNCLE WHO IS THE EX- PRESIDENT OF SINDHI SAMAJ AND IS DOING THE JEWELLER Y BUSINESS IN INDORE. THIS IS A CORROBORATIVE EVIDENC E. THE POSSESSION OF JEWELLEY OF 500 GMS. IS QUITE REASONABLE. NUMBER OF TRIBUNALS HAVE ALSO HELD THAT 500 GMS OF JEWELLERY FOR EACH MARRIED LADY SHOULD BE ACCEPTED. IN VIEW OF THIS IT IS SUBMITTED THAT T HE ADDITIONS MADE ON ACCOUNT OF JEWELLEY IN EACH CASE IS UNCALLED FOR AND HENCE BE DELETED. 3.2.2 IN COURSE OF DISCUSSION, IT WAS -: 73: - 73 EMPHASIZED BY THE AR AND THE APPELLANT PRESENT THAT APART FROM THE UNSUSTAINABLE APPROACH OF THE AO IN CONSIDERING THE ENTIRE JEWELLARY OF 1366.41 GRAMS AS UNEXPLAINED, TREATING ONLY JEWELLARY TO THE EXTENT OF 150.59 GRAMS AS EXPLAINED BASED ON INTERPRETATION OF SEIZED PAPERS, SUCH ADDITION WAS NOT SUSTAINABLE IN THE HANDS OF THE APPELLANT AS TRADITIONALLY IN INDIAN FAMILIES THE JEWELLARIES ARE TREATED AS 'STRIDHAN' AND ARE CONSIDERED AS OWNED AND POSSESSED BY THE LADY MEMBERS OF THE FAMILY. HENCE, IF SUCH JEWELLARIES WERE CONSIDERED TO BE UNEXPLAINED, SUCH ADDITION COULD HAVE BEEN VALIDLY MADE ONLY IN THE HANDS OF LADY MEMBERS ONLY. APART FROM THAT, THERE WAS STILL NO CASE AT ALL FOR EVEN CONSIDERING THE JEWELLARIES BELONGING TO THE MOTHER OF THE APPELLANT AS UNEXPLAINED IN THE HANDS OF THE APPELLANT WHEN HIS FATHER SRI UDHALAL VALECHA WAS ALSO SEPARATELY ASSESSED -: 74: - 74 AND A BLOCK ASSESSMENT IN HIS CASE WAS SEPARATELY MADE. IT WAS EMPHASIZED THAT THE MOTHER OF THE APPELLANT WAS MARRIED SOME WHERE IN THE FEAR 1965 AND CONSIDERING THE YEAR OF MARRIAGE IT WOULD BE TOTALLY UNJUST AND IMPROPER TO CONSIDER SUCH JEWELLARIES HAVING BEEN ACQUIRED DURING THE BLOCK PERIOD FILING IN THE YEAR 1990 TO 2000. LASTLY, IT WAS IMPRESSED THAT IN THE MATTER OF ADDITION CONCERNING JEWELLARIES BROADLY IN ALL THE REPORTED DECISIONS OF HON'BLE !TAT, A REASONABLE AND LENIENT APPROACH HAS BEEN ADOPTED BASED ON BOARD'S CIRCULAR THAT JEWELLARIES TO THE EXTENT OF 500 GRAMS PER LADY MEMBER SHOULD BE TREATED AS EXPLAINED. 3.3 THE FACTS ON RECORD, THE FINDINGS GIVEN BY THE AO AND THE SEIZED PAPER CONCERNING DESCRIPTION OF JEWELLARY BEING LS-4 PAGE-40 TO 48 ARE CAREFULLY CONSIDERED. IT IS TRUE THAT IN -: 75: - 75 SUCH LOOSE PAPERS AGAINST VARIOUS ITEMS OF JEWELLARY AS PER INVENTORY PREPARED IN INDIVIDUAL NAMES, IT HAS BEEN MENTIONED NEW AS WELL 'DIAMOND' AGAINST SOME OF THE ITEMS AND ADJUSTMENTS HAVE BEEN MADE FOR CERTAIN QUANTITIES OF JEWELLARIES TREATING THE SAME HAVING BEEN RECEIVED IN MARRIAGE. BUT SUCH DESCRIPTION ON THE LOOSE PAPER DO NOT CONCLUSIVELY ESTABLISH THAT SUCH JEWELLARIES WERE NEW JEWELLARIES ACQUIRED BY THE APPELLANT OR THE FAMILY MEMBERS DURING THE BLOCK PERIOD. THERE IS APPARENTLY SUFFICIENT MERIT IN THE CONTENTIONS OF THE APPELLANT MADE IN THIS BEHALF THAT SUCH LIST WAS PREPARED FOR THE PURPOSE OF FAMILY SETTLEMENT ONLY. FURTHER, THERE IS MERIT IN THE APPELLANT'S CONTENTION THAT THE WORD 'NEW' DOES NOT INDICATE THAT THE SAID JEWELLARY WAS PURCHASED AS A NEW JEWELLARY, BUT CONSIDERING THE YEARS OF MARRIAGE OF THE SENIOR LADY MEMBERS OF THE FAMILY, THE PREPOSITION THAT -: 76: - 76 SOME OF OLD JEWELLARIES WERE CONVERTED TO NEW JEWELLARIES, CANNOT BE RULED OUT, MORE SO WHEN THE FAMILY BELONGED TO AN ANCESTRAL JEWELLAR'S FAMILY. THE MOST IMPORTANT POINT IN FAVOUR OF THE APPELLANT GROUP AS A WHOLE ON THE ISSUE IS THAT THE OVERALL JEWELLARY FOUND STANDS AT 5217 GRAMS WHEREAS THE APPELLANT SEARCH GROUP CONSISTED OF EIGHT MARRIED LADIES AND TEN UNMARRIED DAUGHTERS. THUS, ON OVERALL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE. OF THE APPELLANT GROUP AND THE BROAD LENIENT VIEW ADOPTED IN VARIOUS REPORTED DECISIONS OF HON'BLE ITAT, AS WELL CONSIDERING THE AO'S APPROACH IN WRONGLY CONSIDERING SUCH ADDITION IN THE HANDS OF THE MALE MEMBERS OF THE FAMILY, SUCH ADDITIONS ARE NOT FOUND TO BE SUSTAINABLE BOTH IN FACTS AND IN LAW AND THE ENTIRE ADDITION ON THIS SCORE IS HEREBY DELETED. -: 77: - 77 43. REVENUE IS IN APPEAL BEFORE US AGAINST THE ABOVE DELETION. 44. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE AO HAS MADE ADDITION IN RESPEC T OF THE JEWELLERY FOUND WITH VARIOUS FAMILY MEMBERS OF VALE CHA GROUP. DESCRIPTION OF JEWELLERY IS GIVEN IN LS-4. T HE LD. CIT(A) AFTER VERIFYING THE INVENTORY OF JEWELLERY PREPARED FOUND THAT THE DESCRIPTION OF THE JEWELLERY IN THE LOOSE PAPER NOWHERE INDICATE THAT SUCH JEWELLERY WERE NEW JEWELLERY ACQ UIRED BY THE FAMILY MEMBERS DURING THE BLOCK PERIOD, HOWEVER, ME RE REMAKING OF OLD JEWELLERY AS PER NEW DESIGN DOES NO T AMOUNT TO NEW JEWELLERY AT ALL. IT WAS FOUND AND CATEGORIC ALLY RECORDED BY CIT(A) THAT OVERALL JEWELLERY FOUND WITH ALL THE FAMILY MEMBERS CONSISTING OF EIGHT MARRIED LADIES, TEN UNM ARRIED DAUGHTERS AND EIGHT MALE MEMBERS WERE 5217 GMS. IN VIEW OF C.B.D.T. INSTRUCTION NO. 1916 DATED 11.5.1994, A HI NDU MARRIED LADY CAN KEEP GOLD ORNAMENTS WEIGHING 500 G MS., UNMARRIED LADIES 250 GMS. AND MALE PERSON 100 GM. CONSIDERING THE STATUS OF THE ASSESSEE FAMILY AND T HE FACTS -: 78: - 78 AND CIRCUMSTANCES OF THE CASE VIS--VIS NUMBER OF M ALE AND FAMILY MEMBERS, THE OVER-ALL JEWELLERY FOUND, WORKS OUT TO BE MUCH LESS THAN THE LIMITS PROVIDED BY C.B.D.T. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A ) FOR DELETING THE ADDITION MADE ON ACCOUNT OF JEWELLERY IN THE HA NDS OF SURESH VALECHA, NANDLAL VALECHA, GANGARAM VALECHA, JAMUNADAS VALECHA. 45. IN THE RESULT, THE GROUND OF THE REVENUES APPEAL IN CASE OF ALL THE ASSESSEES ARE DISMISSED. 46. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION MADE ON ACCOUNT OF INVESTMENT IN FD AMOUNTING TO RS. 2,0 5,672/- IN THE HANDS OF NANDLAL VALECHA (I.T.(SS).A.NO.55/ IND/2006). 47. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT IN THE CASE OF SRI NANDLAL, THE FDS ARE FOUND AS UNDER :- RS. 50,000/- VANDANA BULCHANDANI (DAUGHTER'S DAUGHT ER) RS. 25,000/- VARSHA GIRISH (MARRIED DAUGHTER) RS. 3,000/- +1000+2000 - VINITA NANDLAL (UNMARRIED DAUGHTER) RS. 1,000/- +4000+6000-VARSHA (UNMARRIED DAUGHTER) RS . 2,000/- + 1000/- BHARTI NANDLAL (UNMARRIED DAUGHTER ) -X RS. 25,000/- VARSHA GIRISLI BULCHANDANI (MARRIED D AUGHTER) ~ -: 79: - 79 RS. 25,000/- GIRISH JETHANAND (SON IN LAW) RS. 25,000/- SURAJ GIRISH BULCHANDANI (DAUGHTERS S ON) RS. 25,000/- GIRISH BULCHANDANI ( SON IN LAW) RS. 11,000/- HEMLATA GOLDIE PAHUJA (MARRIED DAUGHTE R) 48. OUT OF THE ABOVE FDS, F. D. OF RS. 1.75 LAKHS STAND ING IN THE NAME OF PINKI VARSHA MOOLCHANDANI, HER HUSBA ND AND SON AND DAUGHTER BELONGED TO THEM AND THERE WAS NO REASON FOR MAKING ADDITION IN THE HANDS OF NANDLAL VALECHA , SIMPLY BECAUSE SUCH FDS WERE FOUND IN THE POSSESSION OF TH E ASSESSEE. REMAINING FDS WERE IN THE NAME OF MARRIED AND UNMARRIED DAUGHTERS AGGREGATING TO RS. 31,000/- ONL Y AND IN THE INDIAN HOUSE HOLD, IT IS NOT UNUSUAL TO GIVE SM ALL GIFTS TO THE DAUGHTERS IN FAMILY ON VARIOUS OCCASION. THUS T HERE WAS NO MERIT FOR MAKING ADDITION IN THE HANDS OF THE AS SESSEE. THE LD. CIT(A) HAS DISCUSSED THE ISSUE IN DETAIL AT PAG E 6 & 7 AND RECORDED HIS FINDING, WHICH IS NOT CONTROVERTED BY THE DEPARTMENT. ACCORDINGLY, WE DO NOT FIND ANY MERIT F OR DELETION OF ADDITION MADE ON ACCOUNT OF INVESTMENT IN FDS IN THE HANDS OF NANDLAL VALECHA. -: 80: - 80 49. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION IN THE HANDS OF SURESH VALECHA ON ACCOUNT OF INVESTMENT IN HOUSE PROPERTY AMOUNTING TO RS. 19,82 ,750/-. 50. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT THE ASSESSE E HAS PURCHASED THE HOUSE PROPERTY AT 593, USHA NAGAR EXT ENSION VIDE REGISTERED DEEDS THE DETAILS OF WHICH ARE AS U NDER :- 1) GROUND FLOOR OF 593, USHA NAGAR EXTENSION IS PURCHASED IN THE NAME OF SMT. LEENA VALECHA W/O SHRI SURESH VALECHA FOR RS. 4,00,000/- ON 9.4.99. THE AMOUNT WAS PAID RS. 25,000/- IN CASH AND RS. 3,75,000/-BY CHEQUES DATED 7.4.99. THE EXPENSES OF REGISTRATION AND STAMP ETC. ARE OF RS. 2,59,000/-. ALL THE ORIGINAL STAMP, DEEDS AND PHOTOCOPIES WERE SEIZED DURING THE COURSE OF SEARCH . APART FROM THE ABOVE, ANOTHER LOOSE PAPER SERIAL NO. 29 AS PER ANNEXURE LS-4 WAS ALSO SEIZED THE PHOTOCOPY OF WHICH IS -: 81: - 81 ANNEXED WITH THE ASSESSMENT ORDER AS ANNEXURE A. THE DETAILS MENTIONED IN THE SAID PAPER ARE AS UNDER: - ESTIMATE MAKAN PETE (CASH +CHEQUE) 26,68,000/- MAKAN SAUDA 27 MEIN )(32000 BYAJ) 74000/- REGISTRY THE AMOUNT OF RS. 2668000/- IS TOWARDS THE PURCHASE COST OF THE HOUSE, RS.74000/ARE TOWARDS EGISTRATION EXPENSES +STAMPS+FEES RS. 12000/- FOR CHANNEL AND GRILLS. RS. 5000/- TOWARDS TRANSFER FEES OF SOCIETY. 51. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 3.11.5 THE FACTS ON RECORD, THE AOS FINDINGS IN THE ASSESSMENT ORDER AND SUBSEQUENT ENQUIRY REPORT OF THE INSPECTOR AS WELL THE AO'S COMMENTS ON THE SAME AND THE APPELLANT'S CONTENTIONS IN THIS BEHALF ARE VERY CAREFULLY -: 82: - 82 TAKEN INTO CONSIDERATION. THE BROAD DESCRIPTION OF RELEVANT SEIZED PAPER BEING LS-4 PAGE-29 HAS ALREADY BEEN INCORPORATED BY THE AO IN THE ASSESSMENT ORDER, AS EXTRACTED ABOVE. THE SAID DESCRIPTION CLEARLY SUPPO RTS THE APPELLANT'S CASE ON SEVERAL COUNTS: FIRSTLY BEING I T WAS AN ESTIMATE, SECONDLY IT PERTAINED TO A HOUSE IN DUBEY COLONY AND THIRDLY THE FIGURES INDICATED AT RS. 26.68 LAKH S (+) RS. 74,000/- BEING EXPENSES FOR REGISTRY, STAMP DUTY ETC. (+) RS. 12,000/- FOR CHANNEL JALLI ERECTION ETC. AND RS. 5,000/- BEING TRANSFER FEES OF SOCIETY FURTHER SUPPORTS APP ELLANT'S CASE THAT THESE WERE MERE ESTIMATES, AS ALL SUCH FI GURES ARE ROUND FIGURES. THERE IS ABSOLUTELY NOTHING TO L INK IT WITH THE HOUSE OWNED BY THE APPELLANT TOGETHER WITH HIS WIFE SMT. LEENA VALECHA AT 593, USHA NAGAR EXTENSIO N. IT IS NOT THE AO'S CASE THAT USHA NAGAR EXTENSION IS A LSO KNOWN AS DUBEY COLONY. IT HAS BEEN FURTHER EXPLAINE D BY THE APPELLANT BY FILING THE MAP OF INDORE CITY THAT USHA NAGAR AREA AND THE DUBEY COLONY ARE SITUATED AT QUI TE A DISTANCE. EVEN THE AO IN HIS REPORT HAS STATED THAT THE INSPECTORS WERE TAKEN TO ANOTHER COLONY BEING JAYSH REE -: 83: - 83 SYDICATE COLONY AND THUS EVEN AFTER GIVING FURTHER OPPORTUNITY IN COURSE OF APPEAL PROCEEDINGS NO CRED IBLE EVIDENCES HAVE BEEN BROUGHT ON RECORD THAT SUCH TRANSACTION AS PER SEIZED PAPER RELATED TO PURCHASE OF USHA NAGAR HOUSE. 5.11.5.1 THE AO HAS BROADLY HARPED ON THREE FACTORS FIRST BEING THAT THE STAMP DUTY PAID IN RESPECT OF USHA NAGAR HOUSE, IF ADDED WITH THE COST OF REGISTRATION WILL COME TO APPROXIMATELY RS. 74,OOO/- AND ALSO AN AMOUNT OF RS. 5,OOO/- WAS PAID BY THE APPELLANT AS TRANSFER FEES CONCERNING 593, USHA NAGAR PROPERTY AND THE AO HAS FURTHER INTERPRETED THAT THE APPELLA NT HAS INCURRED EXPENSES OF RS. 12,OOO/- ON FITTING OF CHANNELS AND GRILLS TO COME TO THE CONCLUSION THAT SUCH PAPER WAS NOT MERELY AS ESTIMATE . 3.11.5.2 SUCH INFERENCES DRAWN BY THE AO ARE NOT FOUND TO BE PROPER ON THE FACE OF CLEAR NOTINGS ON THE SEIZED PAPER, WHICH IS BEING MADE THE BASIS FOR HUG E ADDITION OF RS. 19,82,750/-. THE HOUSE AT USHA NAGA R -: 84: - 84 WAS PURCHASED BY THE APPELLANT IN THE YEAR 1999 CONSISTING OF TWO STORIED BUILDING TOGETHER WITH PL OT OF LAND, JOINTLY WITH HIS WIFE. THE TOTAL LAND AREA OF PLOT WAS 1750 SQ.FT. AND CONSTRUCTED AREA AS PER THE CONSTRUCTION PLAN SUBMITTED BY THE APPELLANT COMES TO NEARLY 800 SQ.FT. EACH ON GROUND FLOOR AND FIRST FL OOR. THUS, TOTAL CONSTRUCTED AREA OF THE PROPERTY COMES TO APPROXIMATELY 1600 SQ.FT. EVEN GOING BY THE PREVAILING MARKET RATE DURING THE YEAR 1999 IN USHA NAGAR AREA, IT WILL BE TOO MUCH TO STATE THAT THE PROPERTY CONSISTING OF 1600 SQ.FT. IN USHA NAGAR AR EA WOULD BE BOUGHT AND SOLD FOR AN AMOUNT OF RS. 27.00 LAKHS IN THE YEAR 1999. IN ANY CASE APART FROM DRAWING SOME INFERENCES THE AO HAS DONE PRECIOUS LITTLE TO ESTABLISH THAT SUCH PAPER RELATED TO ACQUISITION OF USHA NAGAR PROPERTY. FURTHER STILL, NO OTHER PROPERTY PERTAINING TO THE APPELLANT GROUP MEETING THE DESCRIPTION OF THE PROPERTY MENTIONED I N SUCH SEIZED PAPER COULD BE FOUND TO BE ACQUIRED OR OWNED BY THE APPELLANTS. THUS, THE AO'S ACTION IN -: 85: - 85 MAKING ADDITION OF RS. 19,82,750/- IS FOUND TO BE TOTALLY UNCALLED FOR BOTH IN FACTS AND IN LAW AND I S ACCORDINGLY DIRECTED TO BE DELETED. 52. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM RECORD THAT THAT HOUSE AT USHA NAGAR WA S PURCHASED BY THE ASSESSEE IN THE YEAR 1999. AREA OF THE BUILDING WAS 1750 SQ.FT. AND CONSTRUCTION AREA WAS AROUND 800 SQ.FT. EACH ON THE GROUND FLOOR AND FIRST FLOOR . THE CIT(A) FOUND THAT EVEN GOING BY THE PREVALENT MARKET RATE DURING THE YEAR 1999 IN THE USHA NAGAR AREA, THERE WAS NO REAS ON TO HOLD THAT THE PROPERTY WAS PURCHASED FOR AN AMOUNT OF RS . 27 LAKHS IN THE YEAR 1999. IT WAS ALSO OBSERVED THAT N O OTHER PROPERTY PERTAINING TO THE ASSESSEE GROUP, WHICH ME ETS THE DESCRIPTION OF THE PROPERTY MENTIONED IN SUCH SEIZE D PAPERS COULD BE FOUND TO BE ACQUIRED BY THE ASSESSEE OR OW NED BY THE ASSESSEE. THE LD. CIT(A) AFTER RECORDING DETAILED F INDING AT PARA 3.11.5, 3.11.5.1 AND 3.11.5.2 REACHED TO THE CONCLU SION THAT THE AOS ACTION IN MAKING ADDITION OF RS. 19.82,750 /- WAS UNCALLED FOR BOTH IN FACTS AND IN LAW. WE DO NOT FI ND ANY -: 86: - 86 REASON TO INTERFERE IN THE FINDING OF THE CIT(A). A CCORDINGLY, THIS GROUND OF THE REVENUES APPEAL STANDS DISMISSE D. 53. THE ADDITION MADE IN THE HANDS OF GANGARAM VALECHA AMOUNTING TO RS. 18,370/- AND IN THE HANDS OF JAMNA DAS VALECHA AMOUNTING TO RS. 11,900/- IN RESPECT OF CAS H FOUND WITH THEM WERE DELETED BY THE LD. CIT(A) BY OBSERVI NG THAT LOOKING TO THE STATUS OF THE ASSESSEE FAMILY, SUCH SMALLNESS OF THE AMOUNT CAN BE FOUND WHICH IS REQUIRED FOR DAY T O DAY ACTIVITY AS WELL AS FOR MEETINGS ANY EMERGENCY EXPE NSES. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT(A) FOR SUCH DELETION. SIMILARLY, ADDITION OF RS. 20,000/- ON AC COUNT OF CASH FOUND DURING SEARCH, IN THE HANDS OF GHANSHYAM IS JUSTIFIABLE IN VIEW OF THE DETAILED FINDING GIVEN B Y THE LD. CIT(A). NO INTERFERENCE IS REQUIRED FOR SUCH ADDITI ON. 54. AS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF INVESTMENT IN MOTOR BIKE AMOUNTING TO RS. 30,000/-, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT( A) FOR CONFIRMING ADDITION IN THE HANDS OF SURESH VALECHA AMOUNTING TO RS. 30,000/- ON ACCOUNT OF INVESTMENT IN MOTOR BIKE/SCOOTER. SIMILARLY, ADDITION ON ACCOUNT OF MAR UTI CAR -: 87: - 87 AMOUNTING TO RS. 49,000/- AS CONFIRMED BY THE LD. CIT(A) IS RETAINED. ACCORDINGLY, WE CONFIRM THE ACTION OF THE CIT(A) WITH REGARD TO THE ADDITION MADE ON ACCOUNT OF MARUTI CA R RS. 49,000/- AND MOTOR BIKE AT RS. 30,000/- IN THE HAND S OF SURESH VALECHA. 55. THE AO HAS ALSO MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SUVICHAR SAKH SAMSTHAN AMOUNTING TO RS. 12,230/- IN THE HANDS OF SURESH VA LECHA, RS. 15,585/- IN THE HANDS OF NARESH VALECHA AND RS . 15,986/- IN THE HANDS OF GHANSHYAM VALECHA. WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR RE TAINING THIS ADDITION AS THE ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE OF THESE INVESTMENTS. EVEN NOTHING WAS BROUGHT TO OUR NOTICE BY THE LD. AUTHORIZED REPRESENTATIVE TO PERSUADE US TO DEVIATE FROM THE FINDING RECORDED BY THE LOWER AUTHORITIES WHILE MAKING THESE ADDITIONS. ACCORDINGLY, WE CONFIRM THE SE ADDITIONS IN THE HANDS OF SURESH VALECHA, NARESH VA LECHA AND GHANSHYAM VALECHA. -: 88: - 88 56. ADDITION OF RS. 50,000/- WAS MADE BY THE ASSESSING OFFICER IN THE HANDS OF JAMNADAS VALECHA WITH REGAR D TO THE ENTRIES FOUND IN THE LOOSE PAPERS. 57. THE LD. CIT(A) HAS DISCUSSED THIS ISSUE WHILE CONSIDERING THE UNEXPLAINED INVESTMENT IN INTERIOR DECORATION. AS WE HAVE ALREADY CONFIRMED THE ACTION OF THE CIT( A) WITH REGARD TO INVESTMENT IN INTERIOR DECORATION, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) FOR RETAINING ADDITION OF RS. 50,000/- IN THE HANDS OF JAMNADAS V ALECHA WITH RESPECT TO ENTRIES IN THE LOOSE PAPERS AMOUNTI NG TO RS. 50,000/-. 58. ADDITION ON ACCOUNT OF MARRIAGE EXPENSES WERE DELETED BY THE LD. CIT(A) AFTER HAVING FOLLOWING OB SERVATIONS :- 3.9.4 THERE IS SUFFICIENT MERIT IN THE CONTENTION OF THE APPELLANT IN THIS BEHALF. THE AO HAS FAILED TO BRING EVEN IOTA OF EVIDENCE IN HIS ASSESSMENT ORDER LINKING SUCH ESTIMATE OF EXPENDITURE TO ANY DOCUMENTS OR EVIDENCE FOUND IN COURSE OF SEARCH & SEIZURE OPERATION NOR IS THERE ANY MENTION ABOUT ADMISSION OF SPENDING OF UNDISCLOSED INCOME IN THIS -: 89: - 89 BEHALF. HENCE, SUCH ADDITION IS NOT FOUND TO BE SUSTAINABLE BOTH IN FACTS AND IN LAW AND IS ACCORDINGLY DIRECTED TO BE DELETED. 59. ADDITION MADE ON ACCOUNT OF MARRIAGE EXPENSES IN T HE HANDS OF NANDLAL VALECHA, GANGARAM VALECHA AND JAMN ADAS VALECHA WERE DELETED BY THE LD. CIT(A) BY RECORDING A FINDING TO THE EFFECT THAT NO EVIDENCE WERE FOUND PERTAINING T O INCURRING OF SUCH EXPENDITURE IN SEARCH AND SEIZURE OPERATION AND ADMISSION OF SUCH EXPENSES, THE ADDITION COULD NOT BE SUSTAINED BEYOND THE SCOPE OF UNDISCLOSED INCOME AS DEFINED U/S 158B(B) OF THE INCOME-TAX ACT, 1961. 60. NOTHING WAS BROUGHT TO OUR NOTICE BY THE LD. SENIO R D.R. SO AS TO PERSUADE US TO DEVIATE FROM THE FINDI NGS RECORDED BY THE LD. CIT(A). WE, ACCORDINGLY, DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE CIT(A) FO R DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY ESTIMATIN G EXPENSES ON MARRIAGE OF THE DAUGHTERS, WHERE NO INCRIMINATIN G DOCUMENTS WERE FOUND DURING SEARCH TO INDICATE THAT THE ASSESSEE HAD ACTUALLY SPENT ANY MONEY ON SUCH MARRI AGES. -: 90: - 90 FURTHER, THE MARRIAGE WAS SOLEMNIZED IN DIFFERENT Y EARS. IN ADDITION TO THE WITHDRAWALS, THERE WAS SUFFICIENT F UND FOR EXPLAINING THE EXPENSES IF ANY INCURRED ON SUCH MAR RIAGES. ACCORDINGLY, GROUND RAISED BY REVENUE WITH REGARD T O DELETION OF ADDITION ON ACCOUNT OF MARRIAGE EXPENSES IN RESP ECT OF ALL THE ASSESSEES ARE HEREBY DISMISSED. 61. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED, WHEREAS APPEALS OF THE REVENUE ARE ALLOW ED IN PART IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2011. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29 TH JUNE, 2011. CPU* 2729