ACIT, Circle-48(1), V. Avinash Monga,

ITSSA 389/DEL/2005

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7975 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-11-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-05-2011
• Assessment Year: misc
• Appeal Filed On: 03-10-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MX GEETM ALA MOHNANI
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Gift; Search and seizure; Salary income; Loose papers; Document seized; Peak credit; Source of fund; Block assessment; Condonation of delay; Documents seized
• Section: 133(6); 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.389(DEL)2005 BLOCK PERIOD: 1.4.96 TO 27.4.2002 ASSTT.COMMISSIONER OF INCOME TAX, SMT. AVINA SH MONGA, CIRCLE 48(1), NEW DELHI. V. S-1 90, G.K.II, NEW DELHI. C.O. NO. 160(DEL)2008 (IN ITA NO. 389(DEL)05) BLOCK PERIOD: 1.4.96 TO 27.4.2002 SMT. AVINASH MONGA, ASS TT.COMMISSIONER OF I. TAX, S-190, G.K. II, NEW DELHI. V. CIRCLE 48(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI K. SAMPATH, ADVOCATE DEPARTMENT BY: MX. GEETM ALA MOHNANI, CIT/DR ORDER PER A.D. JAIN, J.M. THIS IS DEPARTMENTS APPEAL AND THE ASSESSEES CR OSS OBJECTION FOR THE BLOCK PERIOD FROM 1.4.96 TO 27.4.02, AGAINST THE CI T(A)S ORDER DATED 25.7.05. THE DEPARTMENT HAS TAKEN THE FOLLOWING G ROUNDS IN ITS APPEAL:- 1. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING THE ADDITION OF ` 12,62,707/- WITHOUT APPRECIATING THE FACTS THAT THE SLIPS CONTAINING THE ENTRIES WERE FOUND FROM THE PREMISES OF THE ASSESSEE ITA 389(DEL)05 & CO 160(DEL)08 2 DURING THE COURSE OF SEARCH AND SEIZURE OPERATION U /S 132(1) OF THE I.T. ACT AND WITHOUT CONSIDERING THAT THE ONUS CAST UPON THE ASSESSEE U/S 132(4A) OF THE ACT WAS NOT DISCHARGED. 2. ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 12,62,707/- WHILE HIMSELF ACKNOWLEDGING IN THE APPELLATE ORDER THE FIGURES AND NOTINGS IN VARIOUS SLIPS WERE INDICATIVE OF THE COST OF GOLD, THE LABOUR CHARGES AND SALES TAX LEVIABLE ETC. 3. THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETI NG THE ADDITION OF ` 91,770/- ON ACCOUNT OF AN UNEXPLAINED INVESTMENT W ITHOUT APPRECIATING THE FACT THAT THE PAPER CONTAINING THE EXPENSES WAS FOUND FROM THE PREMISES OF THE ASSESSEE DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AND THE ONUS CAST UPON THE AS SESSEE IN TERMS OF SECTION 132(4A) WAS NOT DISCHARGED. 4. ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 91,770/- WITHOUT CONSIDERING THE FACT THAT ENTRY OF ` 2100/- PERTAINS TO SCHOOL FEES AND ALSO IN CORRELAT ING THAT THE EXPENDITURE HAVE BEEN MADE BY URJA GAS COMPANY. 5. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF ` 4 LAKHS ON ACCOUNT OF UNEXPLAINED INVESTMENT WITHOUT CONSIDERING THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE WHERE NO LOAN FROM SATVANTI MONGA IS REFLECTED. 6. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETIN G THE ADDITION OF ` 34,631/- WITHOUT APPRECIATING THE FACT THAT THE ASS ESSEE HAS FAILED TO EXPLAIN THE INVESTMENT IN FDR. 7. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETIN G THE ADDITION OF ` 7,05,988/- BEING CREDIT ENTRIES IN BANK ACCOUNT NO. 9984 WITH CENTRAL BANK OF INDIA TREATED AS UNDISCLOSED INCOME BY THE AO WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT CO- RELATED AND EXPLAINED THE ENTRIES IN THE BANK ACCOUNT AND FAILE D TO SUBSTANTIATE THE SAME. ITA 389(DEL)05 & CO 160(DEL)08 3 2. THE ASSESSEE HAS TAKEN THE FOLLOWING CROSS OBJEC TION:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AUTHORITIES BELOW ERRED IN CONCLUDING AND IN MAINTA INING THE ASSESSMENT U/S 158BC OF THE INCOME TAX ACT, 1961 OF THE APPELLANT WHEN, IN FACT, ADMITTEDLY NEITHER ANY SEARCH WAS CA RRIED OUT NOR ANY SEARCH WARRANT WAS EXECUTED ON THE APPELLANT. THE ASSESSMENT ORDER THUS BEING WITHOUT JURISDICTION DESERVES TO BE QUAS HED IN LIMINE. 3. AT THE OUTSET, THE LD. DR HAS CONTENDED THAT THE CROSS OBJECTION FILED BY THE ASSESSEE IS TIME BARRED. THIS ASSERTION ON BEHALF OF THE DEPARTMENT IS FOUND TO BE CORRECT. AS PER SECTION 253(4) OF THE I.T. ACT, CROSS OBJECTION CAN BE FILED WITHIN 30 DAYS OF THE RECEIPT OF NOTIC E OF FACTUM OF AN APPEAL HAVING BEEN FILED AGAINST AN ORDER PASSED BY THE CI T(A). SUCH CROSS OBJECTIONS SHALL BE DISPOSED OF BY THE TRIBUNAL AS IF IT WERE PRESENTED WITHIN SIXTY DAYS OF THE DATE OF COMMUNICATION OF THE CIT( A)S ORDER, EITHER TO THE ASSESSEE OR TO THE COMMISSIONER, AS THE CASE MAY BE . IN THE PRESENT CASE, THE APPEAL WAS FILED BY THE DEPARTMENT ON 3.10.05, WHEREAS THE CROSS OBJECTION HAS BEEN FILED ON 22.10.08, I.E., AFTER A GAP OF OVER THREE YEARS. AS RIGHTLY POINTED OUT, NO APPLICATION FOR CONDONATION OF DELAY HAS BEEN FILED TO EXPLAIN THE DELAY IN FILING THE CROSS OBJECTION. 4. THAT BEING SO, THE DELAY OF ABOUT THREE YEARS IN FILING THE CROSS OBJECTION REMAIN UNEXPLAINED. ACCORDINGLY, THE CR OSS OBJECTION IS DISMISSED AS TIME BARRED. ITA 389(DEL)05 & CO 160(DEL)08 4 5. COMING TO THE DEPARTMENTS APPEAL, GROUND NOS. 1 &2 CONCERNED THE DELETION OF THE ADDITION OF ` 12,62,707/-, WHEREAS GROUND NOS. 3&4 ARE RELATED TO DELETION OF THE ADDITION OF ` 91,770/-. THESE ARE AGGREGATES OF VARIOUS FIGURES SCRIBBLED ON LOOSE SLIPS OF TORN PA PERS FOUND DURING THE SEARCH ADDED TO THE INCOME OF THE ASSESSEE AND DELE TED BY THE CIT(A). 6. A SEARCH WAS CONDUCTED U/S 132(1) OF THE I.T. AC T, ON 26.4.02, AT THE RESIDENCE OF THE ASSESSEE INDIVIDUAL, SMT. AVINASH MONGA, VIDE WARRANT OF AUTHORIZATION DATED 22.4.2002, IN THE CASE OF SHRI SURESH MONGA AND SHRI TARUN MONGA, AT M-103, GREATER KAILASH II, NEW DELH I. NO VALUABLE ARTICLES/CASH/JEWELLERY/DOCUMENTS/BULLION WERE SEIZ ED, SINCE THEY WERE APPARENTLY FOUND TO BE WITHIN THE PRESCRIBED LIMITS . HOWEVER, SOME LOOSE SLIPS OF TORN PAPERS CONTAINING SCRIBBLINGS WERE FO UND AND SEIZED. BLOCK RETURN WAS FILED DECLARING NIL UNDISCLOSED INCOME. THE AO ASSESSED THE INCOME AT ` 34,79,087/-, VIDE BLOCK ASSESSMENT ORDER DATED 30.4 .04. 7. AS PER THE BLOCK ASSESSMENT ORDER, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 26.4.02, ON KISHORILAL JOGINDERLAL G ROUP OF CASES, KANPUR; THAT AS A PART OF THAT SEARCH, A SEARCH WAS ALSO CONDUCT ED AT THE BUSINESS AND RESIDENTIAL PREMISES AND THE LOCKERS OF THE IN-LAWS OF SHRI MANISH BHATIA AND SHRI KUNAL BHATIA. THE ASSESSEE, SMT.AVINASH MONG A IS A MEMBER OF THE ITA 389(DEL)05 & CO 160(DEL)08 5 FAMILY IN-LAWS OF SHRI KUNAL BHATIA, SON OF KISHORI LAL BHATIA. SURESH MONGA IS THE HUSBAND OF THE ASSESSEE. 8. THE AO OBSERVED THAT THE ASSESSEE WAS A SCHOOL T EACHER, REGULARLY FILING HER INCOME TAX RETURN AND DECLARING INCOME F ROM SALARY, HOUSE PROPERTY AND OTHER SOURCES; THAT IN THE SEIZED DOCU MENTS ANNEXURE A-I, THE FOLLOWING PAGES REFLECTED EXPENDITURE MADE IN PURCH ASING JEWELLERY:- A-1 PAGE NO. AMOUNT ( ` ) 1 95,000/- 3. 2,00,000/- 4. 43,500/- 5. 24,000/- 6. 13,500/- 7. 57,500/- 8. 72,000/- 9. 38,000/- 10. 27,500/- 11. 31,700/- 12. 28,600/- 13. 5,000/- 14. 1,10,517/- 15. 49,000+22,000+63,950+28,000 17. 25,500 + 38,000/- 18. 48,000/- 19. 32,224/- 20. 15,850/- 21. 17,950/- 22. 42,950/- 23. 1,35,866/- 24. 6,600/- ----------------- 12,72,707/- ========== ITA 389(DEL)05 & CO 160(DEL)08 6 9. ON QUERY IN THIS REGARD BY THE AO, THE ASSESSEE SUBMITTED THAT SHE DID NOT KNOW AS TO WHAT WAS MEANT BY WRITING ON THE PAG ES OF ANNEXURE A-I AND AS TO WHO HAD MADE THE SCRIBBLINGS; THAT THE ASSESS EE HAD GUESTS VISITING HER HOUSE AND LIVING WITH THE FAMILY; THAT THE SLIPS MI GHT HAVE BEEN WRITTEN/SCRIBBLED BY THE GUESTS; AND THAT THE ASSES SEE WAS NOT AWARE OF THE WHEREABOUTS/DETAILS OF SUCH GUESTS. 10. THE AO OBSERVED THAT BY DISOWNING THE SLIPS FOU ND FROM HER RESIDENT, THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST ON HER BY SECTION 132(4A) OF THE I.T. ACT AND WAS TRYING TO ESCAPE THE RESPON SIBILITY OF EXPLAINING THE SOURCE OF PURCHASE OF JEWELLERY. AS SUCH, THE AO TREATED THE FIGURE OF ` 12,72,707/-, WHICH WAS THE TOTAL OF FIGURES APPEARI NG IN THE PAGES OF SEIZED ANNEXURE A-I, AS UNEXPLAINED EXPENDITURE INCURRED B Y THE ASSESSEE ON PURCHASE OF JEWELLERY AND ADDED IT TO THE ASSESSEE S INCOME. 11. THEN, AS PER THE ASSESSMENT ORDER, ACCORDING TO PAGE 11 OF THE SEIZED ANNEXURE A-3, EXPENDITURE IN SALARY, C.A. ETC. OF ` 91,770/- WERE SHOWN. ON QUERY, THE ASSESSEE STATED THAT THE SLIPS AT ANNEXU RE A-11 HAD NOTHING TO DO WITH THE ASSESSEE; THAT SHE DISOWNED THE CONTENT TH EREON; AND THAT IT COULD NOT BE TREATED EITHER AS THE INCOME OR THE EXPENSE OF THE ASSESSEE. ITA 389(DEL)05 & CO 160(DEL)08 7 12. THE AO OBSERVED THAT BY DISOWNING THE CONTENT O F ANNEXURE A-11, THE ASSESSEE HAD NOT DISCHARGED HER OBLIGATION TO EXPLA IN THE EXPENSES CONTAINED IN THE SEIZED DOCUMENTS. THE AMOUNT OF ` 91,770/- WAS THUS TREATED AS UNEXPLAINED EXPENDITURE OF THE ASSESSEE AND ADDED H ER UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 13. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THESE ADDITIONS GIVING RISE TO GROUND NOS. 1 TO 4. 14. CHALLENGING THE IMPUGNED ORDER IN THIS REGARD, THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF ` 12,72,707/- AND ` 91,770/-; THAT WHILE DOING SO, THE LD. CIT(A) HAS F AILED TO TAKE INTO ACCOUNT THE FACT THAT THE SLIPS CONTAININ G THE ENTRIES WERE FOUND FROM THE PREMISES OF THE ASSESSEE DURING THE SEARCH AND SEIZURE OPERATION; THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THAT THE ASSESSEE HAD MISERABLY FAILED TO DISCHARGE THE ONUS CAST UPON HER U/S 132( 4A) OF THE ACT WITH REGARD TO THE SEIZED DOCUMENTS; THAT THOUGH THE LD. CIT(A) HAS HIMSELF ACKNOWLEDGED IN THE IMPUGNED ORDER THAT THE FIGURES AND THE NOTINGS IN VARIOUS SLIPS WERE INDICATIVE OF THE COST OF GOLD, LABOUR CHARGES AND SALES TAX LEVIABLE, ETC. THE LD. CIT(A) HAS STILL GONE ON TO DELETE THE ADDITIONS CORRECTLY MADE; AND THAT APROPOS THE ADDITION OF ` 91,770/-, THE LD. CIT(A) ITA 389(DEL)05 & CO 160(DEL)08 8 FAILED TO CONSIDER THE FACT THAT THE ENTRY OF ` 2100/- PERTAINED TO SCHOOL FEE AND ALSO IN CO-RELATING THAT THE EXPENDITURE WAS MA DE BY URJA GAS COMPANY. 15. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, HAS STRONGLY SUPPORTED THE IMPUGNED ORDER. IT HAS BEEN SUBMITTE D THAT THE ASSESSEE LADY IS A RETIRED SCHOOL TEACHER HAVING PENSION INCOME B ESIDES INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES; THAT IT W AS MERELY BECAUSE THE ASSESSEE IS A MEMBER OF THE FAMILY OF IN-LAWS OF KU NAL BHATIA, SON OF KISHORI LAL BHATIA, OF THE KISHORILAL JOGINDERLAL G ROUP OF CASES, KANPUR ON WHOM, THE MAIN SEARCH OPERATION WAS CARRIED OUT AT KANPUR; THAT THE ASSESSEE WAS SEARCHED, THOUGH WITHOUT COMPLYING WIT H THE CONDITIONS FOR CARRYING OUT A SEARCH OPERATION, AS CONTAINED IN SE CTION 132 OF THE ACT; THAT THE ASSESSEE DID NOT HAVE ANY UNDISCLOSED INCOME WI THIN THE MEANING OF SECTION 158B(B) OF THE ACT; THAT SHE HAD DECLARED A LL HER SOURCES OF INCOME IN THE INCOME TAX RETURN FILED; THAT THE PROVISIONS OF SECTION 158BC ARE NOT APPLICABLE; THAT THE PROVISIONS OF SECTION 132(1) O F THE ACT HAVE NOT BEEN COMPLIED WITH SOFAR AS REGARDS ISSUANCE OF WARRANT OF AUTHORIZATION CONCERNING THE ASSESSEE; THAT AS SUCH, THE SEARCH I S NOT SUSTAINABLE IN LAW AND THE PROVISIONS OF CHAPTER XIV B OF THE ACT ARE NOT APPLICABLE; THAT THE INFORMATION ON THE BASIS OF WHICH THE REASONS HAD B EEN RECORDED BY THE AO, WAS NOT CONFRONTED TO THE ASSESSEE; THAT THE PRESUM PTION U/S 132(4A) OF THE ITA 389(DEL)05 & CO 160(DEL)08 9 ACT IS NOT APPLICABLE AGAINST THE ASSESSEE, AS IN T HE PRESENT CASE, THE SO CALLED DOCUMENTS SEIZED, ARE DUMP DOCUMENTS; THAT THEY DO NOT CONTAIN THE NAME OR ADDRESS OR SIGNATURE OF ANY PERSON OR THE NATURE OF THE FIGURES SCRIBBLED THEREON, OR THE PURPOSE THEREOF, OR THE DATE OR PER IOD CONCERN INDICATED ON THEM; THAT THE AO HAS MISERABLY FAILED TO LINK THES E DOCUMENTS TO THE ASSESSEE; THAT NO MATERIAL EVIDENCE WAS FOUND IN TH E SEARCH, WHICH COULD CORROBORATE THE FIGURES SCRIBBLED ON THE SEIZED PAP ERS; THAT THE ADDITIONS WERE MADE MERELY ON THE BASIS OF SURMISES, CONJECTU RES AND SUSPICION; THAT EVEN OTHERWISE, THE UNITS OF THE FIGURES SCRIBBLED ON THE PAPERS WERE WRONGLY INCREASED BY THE AO; THAT FURTHER, THESE AMOUNTS HA D ALSO BEEN ADDED TO THE INCOME OF SHRI SURESH MONGA, HUSBAND OF THE ASSESSE E, U/S 158 BC OF THE ACT, VIDE ASSESSMENT ORDER DATED 30.4.04 AND AS SUC H, THEY COULD NOT BE TAXED TWICE; THAT AS MAINTAINED BEFORE THE AUTHORIT IES BELOW, THE ASSESSEE HAD NOTHING TO DO WITH THE SEIZED PAPERS OR THE WRI TING THEREON; THAT THE ASSESSEE HAD REGULAR VISITORS/GUESTS IN THE HOUSE W HO WAS STAYING WITH THE ASSESSEE AND HER FAMILY; THAT THE SLIPS MIGHT HAVE BEEN WRITTEN OR SCRIBBLED BY SOME OF THE GUESTS; THAT THE ASSESSEE WAS NOT AW ARE OF THE WHEREABOUTS OR DETAILS OF SUCH GUESTS, AS HAD ALSO BEEN STATED BY HER HUSBAND, SHRI SURESH MONGA, IN HIS STATEMENT; THAT THE JEWELLERY FOUND I N THE HOUSE HAD BEEN PURCHASED OUT OF THE ASSESSEES OWN SOURCES, OR GIF TS FROM RELATIVES, AS ALSO ITA 389(DEL)05 & CO 160(DEL)08 10 STATED BY THE ASSESSEES HUSBAND, SHRI SURESH MONGA , IN RESPONSE TO QUESTION NO. 37, IN HIS STATEMENT; THAT THE JEWELLERY WAS ST RIDHAN OF THE ASSESSEE, RECEIVED AT THE TIME OF HER MARRIAGE AND ON OTHER O CCASIONS, AS ALSO STATED BY SURESH MONGA; AND THAT THE LD. CIT(A) HAS CORRECTLY DELETED BOTH THE ADDITIONS WRONGLY MADE. 16. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISS UE AND HAVE PERUSED THE MATERIAL ON RECORD WITH REGARD THERETO. 17. THE AMOUNTS, AS BELOW, WERE ADDED BY THE AO, TO TAL AMOUNTING TO ` 12,72,707/-, AND FORMING THE BASIS OF GROUND NOS. 1 &2:- ANNEXURE AMOUNT FIGURE/S REMARKS A-1 PAGE NO. ASSUMED AS APPEARING/SCRIBBLING ON UNDISCLOSED THE LOOSE SLIPS/TORN PIECES INCOME IN THE OF PAPER ASSTT. ORDER U/S 158 BC 1. ( ` 95,000) ` 95,000 AGGREGATE OF FOLLOWING HAS BEEN ADDED TO UN- DISCLOSED INCOME. RENU KHANNA 5,000 PRIYANKA 5,000 RENU B 5,000 SHRIYA B 5,000 MRS. MONGA 10,000 MS. MONGA - VEENA BANSAL 10,000 RENU LIKHA INDRA 10,000 MANJULA 5,000 ITA 389(DEL)05 & CO 160(DEL)08 11 SANDEEP 10,000 DR. KAKKAR 10,000 VEENA SEHGAL 5,000 JUHI 5,000 RENU LEEKHA 10,000 THE PERSON WHO HAS SCRIBBLED VARIOUS FIGURES ON THE LOOSE SLIP, PURPOSE, NATURE DATE/PERIOD NOT KNOWN/NOT CORROBORATED. 2. 2,00,000 2,00,000 THE PERSON WHO HAS SCRIBBLED A BOVE ON LOOSE SLIPS, PURPOSE, NATURE, DATE, PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 3. 43,500 43,500 THE PERSON WHO HAS SCRIBBLED ABOV E ON LOOSE SLIPS, PURPOSE, NAT URE, DATE /PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 4. 24,000 240/- I) THE PERSON WHO HAS SCRIBBL ED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE, DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. II) THE FIGURE 240 ON THE LOOSE SLIP HAS BEEN READ AS ` 24,000. 5. 13,500 135.00 I) THE PERSON WHO HAS SCRIBBLE D VARIOUS FIGURES ON THE LOOSE SLIP, PURPOSE, NATURE DATE/PERIOD NOT KNOWN/NOT CORROBORATED. II) THE FIGURE OF 135 ON LOOSE SLIP HAS BEE N READ AS ` 13,500 FOR ADDING TO UNDISCLOSED INCOME. 6. 57,500 57,500 ROUGH ESTIMATE ONLY, NO AD DRESS, NOT KNOWN WHO HAS SCRIBBLED THE FIGURES, WHETHER SALE OR PURCHASE, NOT CORROBORATED. 7. 72,000 720.00 I) THE PERSON WHO HAS SCRIBBL ED VARIOUS FIGURES ON THE LOOSE SLIP, PURPOSE, NA TURE ITA 389(DEL)05 & CO 160(DEL)08 12 DATE/ PERIOD NOT KNOWN/NOT CORROBORATED. II) THE FIGURE OF 720 ON LOOSE SLIP HAS BEE N READ . AS ` 72,000/- FOR ADDING TO UNDISCLOSED. 8. 38,000 38,000 THE PERSON WHO HAS SCRIBBLE D ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 9. 27,500 27.500.00 THE PERSON WHO HAS SCRIBBLED AB OVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 10. 31,700 31.700 THE PERSON WHO HAS SCRIBBLED ABOV E ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 11. 28,600 28.600 THE PERSON WHO HAS SCRIBBLED ABOV E ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 12. 5,000 5,000 ROUGH ESTIMATE ONLY, NO AD DRESS, NOT KNOWN WHO HAS SCRIBBLED THE FIGURES WHETHER SALE OR PURCHASE, NOT CORROBORATED. 13. 1,10,517 1,105.17 I)THE PERSON WHO HAS SCRIB BLED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. II) THE FIGURE OF 1105.17 HAS BEEN READ A S ` 1,10,517 FOR ADDING TO UNDISCLOSED INCOME. 14. 49,000+ 49,000 THE PERSON WHO HAS SCRIBBLED ABO VE ON 22,000+ 22,000 LOOSE SLIPS, PURPOSE, NATURE DATE/P ERIOD 63,950+ 63,950 NOT KNOWN, NO ADDRESS, NO SIG NATURE. 28,000 28,000 15. 25,500+ 25,500 ROUGH ESTIMATE ONLY. NO ADDRESS , NOT ITA 389(DEL)05 & CO 160(DEL)08 13 38,000 38,000 KNOWN WHO HAS SCRIBBLED THE FIGURES, WHETHER SALE OR PURCHASE, NOT CORROBORATED. 16. 48,000 480.00 I) ROUGH ESTIMATE ONLY, NO A DDRESS, NOT KNOWN WHO HAS SCRIBBLED THE FIGURES, WHETHER SALE OR PURCHASE, NOT CORROBORATED. 17. 32,224 32,224 THE PERSON WHO HAS SCRIBBLED ABOV E ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 18. 15,850 158.50 I) THE PERSON WHO HAS SCRIBB LED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. II) THE FIGURE OF 158.50 HAS BEEN READ AS ` 15,850 FOR ADDING TO UNDISCLOSED INCOME. 19. 17,950 179.50 I) THE PERSON WHO HAS SCRIBBL ED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. II) THE FIGURE OF 179.50 HAS BEEN READ AS ` 17,950 FOR ADDING TO UNDISCLOSED INCOME. 20. 42,950 42,950 THE PERSON WHO HAS SCRIBBLED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 21. 135,866 1,35,866.00 THE PERSON WHO HAS SCRI BBLED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. 22. 6,600 NOT LEGIBLE THE PERSON WHO HAS SC RIBBLED ABOVE ON LOOSE SLIPS, PURPOSE, NATURE DATE/PERIOD NOT KNOWN, NO ADDRESS, NO SIGNATURE. ITA 389(DEL)05 & CO 160(DEL)08 14 TOTAL 1272,707 ANNEXURE THE PERSON WHO HAS SCRIBBLED ABOVE ON A-3 91,870 91,770 LOOSE SLIPS, PURP OSE, NATURE DATE/PERIOD PAGE II NOT KNOWN, NO ADDRESS, NO SIGNATURE . 18. THE FOLLOWING AMOUNTS WERE ADDED BY THE AO, TOT AL AMOUNTING TO ` 91,770/-, FORMING THE BASIS OF GROUND NOS. 3&4:- 07.11.2K 21930 SALARY 07.09. 21950 11.10 6700 CLASSIC TUBE/LIGHTS 13.10 6850 PAYMENT DELIVERY VAN 07.09 21450 SALARY 08.09 4000 CA 15.09 6424 DELIVERY VAN 89770 05.10 2100 SCHOOL FEES 91870 19. WHILE MAKING THE ADDITION, THE AO OBSERVED THAT BY DISOWNING THE SLIPS IN QUESTION, THE ASSESSEE HAS TRIED TO ESCAPE THE RESPONSIBILITY OF EXPLAINING THE SOURCE OF PURCHASE OF JEWELLERY. 20. THE ADDITION OF ` 12,72,707/- HAS BEEN DELETED BY THE LD. CIT(A) TO THE EXTENT OF ` 12,62,707/- BY OBSERVING THAT THE SLIP AT PAGE-1 O F ANNEXURE- 1 SHOWED VARIOUS FIGURES, TOTALLING TO ` 95,000/-; THAT THIS SLIP CONTAINED THE NAME OF SMT. MONGA, WITH 10,000/- WRITTEN AGAINST HER NAME; THAT THE SLIP ITA 389(DEL)05 & CO 160(DEL)08 15 DID NOT CONTAIN ANY DETAIL OF THE NATURE OF THE FIG URES; THAT THERE WAS NO INDICATION AS TO THE PURPOSE OF THE ENTRY, WHAT TO TALK OF ANY MENTION OF THE AMOUNT HAVING BEEN UTILIZED FOR INVESTMENT IN JEWEL LERY; THAT IN ANY CASE, IT COULD NOT BE PRESUMED THAT THE ENTIRE AMOUNT HAD BE EN SPENT FOR JEWELLERY PURCHASES, AS OBSERVED BY THE AO; THAT IN ALL LIKEL IHOOD, THE AMOUNTS AGAINST THE VARIOUS NAMES, WHO ALL HAPPENED TO BE LADIES WH O REPRESENTED VARIOUS CONTRIBUTIONS TOWARDS A COMMON ACTIVITY, LIKE A KIT TY PARTY, IN WHICH THE SHARE OF THE ASSESSEE WAS ONLY ` 10,000/-; THAT IN THE OTHER SLIPS, THERE WAS NOTHING TO RELATE THEM TO THE ASSESSEE; THAT SINCE THE ASSESSEE FAILED TO DISCLOSE THE SOURCE OF ` 10,000/- MENTIONED AGAINST HER NAME IN SLIP NO.1, THE ADDITION TO THE EXTENT OF ` 10,000/- ONLY WAS BEING CONFIRMED. 21. WHILE DELETING THE ADDITION RELATING TO THE ENT RIES ON THE OTHER HEADS, THE LD. CIT(A) OBSERVED THAT WITH REGARD TO THE ENT RIES CONCERNING THIS AMOUNT, ON THE SLIPS SEIZED, THE AO HAD ASSUMED THA T THE FIGURES OF ALL THE SLIPS WERE FOR EXPENDITURE OR FOR PURCHASE OF JEWEL LERY; THAT MOST OF THE SLIPS DID NOT CONTAIN ANY NARRATION, EVEN THOUGH SOME SLI PS SUGGESTED THAT THEY RELATED TO JEWELLERY, MAY BE PURCHASE, SALE OR REMA KING THEREOF; THAT THE FIGURES AND NOTINGS IN THE VARIOUS SLIPS WERE INDIC ATIVE OF THE COST OF GOLD, LABOUR CHARGES AND SALES TAX LEVIABLE, ETC., LEADIN G TO THE BELIEF THAT THEY RELATED TO THE PURCHASE OF JEWELLERY; THAT SINCE TH ESE SLIPS WERE FOUND AT THE ITA 389(DEL)05 & CO 160(DEL)08 16 RESIDENCE OF THE ASSESSEE, THE AO HAD HELD THAT THE JEWELLERY WAS PURCHASED BY THE ASSESSEE AND HER HUSBAND AND THE ADDITIONS O F THE AMOUNTS WERE MADE IN THE BLOCK ASSESSMENTS OF BOTH THE ASSESSEE, AS W ELL AS HER HUSBAND; THAT HOWEVER, NONE OF THE JEWELLERY ITEMS MATCHING THE D ESCRIPTIONS GIVEN IN THE LOOSE PAPERS WAS SEIZED IN THE SEARCH; THAT WHERE S OME NARRATION WAS GIVEN IN THE SLIPS, THE AO REMAINED UNABLE TO RELATE THE SAME TO THE ASSESSEE OR TO CORROBORATE IT WITH JEWELLERY OR OTHER ASSETS FOUND DURING THE SEARCH; THAT THE HUSBAND OF THE ASSESSEE IN HIS STATEMENT HAD STATED THAT THE JEWELLERY FOUND IN THE HOUSE HAD BEEN PURCHASED FROM HER OWN SOURCE S OR WAS GIFTED FROM RELATIVES AND THAT THE ENTIRE JEWELLERY WAS THE STR IDHAN OF HIS WIFE, RECEIVED AT THE TIME OF THEIR MARRIAGE AND ON OTHER OCCASION S; THAT IN THE CIRCUMSTANCE OF NO JEWELLERY ITEM MATCHING THE DESCRIPTION GIVEN IN THE LOOSE PAPERS HAVING BEEN SEIZED IN THE SEARCH AND THE AO HAD FAI LED TO RELATE THE JEWELLERY WHERE SOME NARRATION WAS GIVEN, TO THE AS SESSEE, OR TO CORROBORATE THE SLIPS WITH JEWELLERY OR OTHER ASSETS FOUND IN T HE SEARCH, THE SAID STATEMENT OF SHRI SURESH MONGA, THE HUSBAND OF THE ASSESSEE A SSUMED CREDIBILITY; AND THAT THE ADDITION HAD EVIDENTLY BEEN MADE ONLY ON T HE PRESUMPTION THAT THE SLIPS PERTAINED TO THE ASSESSEE AND REPRESENTED UND ISCLOSED EXPENDITURE ON PURCHASE OF JEWELLERY. ITA 389(DEL)05 & CO 160(DEL)08 17 22. SOFAR AS REGARDS THE ADDITION OF ` 91,770/-, THE LD. CIT(A) OBSERVED THAT IT SEEMED THAT THE SLIP NO.11, ANNEXURE A-3 PE RTAINED TO URJA GAS SERVICE, WHERE THE ASSESSEES SON WAS WORKING AS A MANAGER; THAT THIS SLIP COULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE OF THE ASSESSEE; AND THAT IT WAS THEREFORE, THAT THE ADDITION MADE ON THE BASIS OF THIS SLIP WAS BEING DELETED. 23. CONCERNING THE ADDITION OF ` 12,72,707/-, THIS FIGURE REPRESENTED THE TOTAL OF THE FIGURES APPEARING ON PAGES 1 TO 22 OF THE SEIZED ANNEXURE A-1. OUT OF THESE, PAGE 1 OF ANNEXURE A-1 CONTAINED VARI OUS FIGURES, TOTAL AMOUNTING TO ` 95,000/-. THIS SLIP CONTAINED THE NAME OF SMT. MO NGA, WITH 10,000 WRITTEN AGAINST HER NAME. THE LD. CIT(A) SUSTAINED THE ADDITION TO THIS AMOUNT OF ` 10,000/-, WHICH WAS MENTIONED AGAINST THE NAME OF T HE ASSESSEE. WE DO NOT FIND ANY ERROR IN THIS ACTION OF THE LD. CIT(A). THE SEIZED SLIP DID NOT CONTAIN ANY DETAIL OF AS TO WHA T THE FIGURES CONTAINED THEREIN REPRESENTED THE NAMES MENTIONED ON THE SLI P WERE ONLY OF LADIES, LEADING THE CIT(A) TO THE OBSERVATION THAT THE AMOU NTS REPRESENTED SOME SORT OF CONTRIBUTION LIKE A KITTY PARTY. SINCE TH E REMAINING AMOUNTS, TOTALLING TO ` 85,000/- WERE NOT RELATABLE TO THE ASSESSEE, THE AD DITION TO THIS EXTENT WAS RIGHTLY DELETED. ITA 389(DEL)05 & CO 160(DEL)08 18 24. NOW WE TURN TO THE ADDITION OF ` 12,62,707/-. THIS FIGURE REPRESENTS THE AMOUNTS MENTIONED IN PAGES 2 TO 24 OF THE SEIZE D ANNEXURE A-1. AS PER THE LD. CIT(A), SOME OF THE SEIZED SLIPS CONTAINED NARRATIONS THAT THE FIGURES MENTIONED THEREIN RELATED TO THE JEWELLERY. THE R EST OF THE SLIP DID NOT CONTAIN ANY SUCH RECITAL. THE AO ASSUMED THE FIGU RES ON ALL THE SLIPS TO REPRESENT THE EXPENDITURE FOR PURCHASE OF JEWELLERY , EVEN THOUGH NO JEWELLERY RELATABLE TO THE ADDED AMOUNT WAS SEIZED IN THE SEARCH OPERATION, THE AO CONCLUDED THAT THE FIGURES MENTIONED IN THE SEIZED SLIPS REPRESENTED JEWELLERY PURCHASED BY THE ASSESSEE. PERTINENTLY, ADDITION OF THESE AMOUNTS WAS MADE IN THE BLOCK ASSESSMENT OF NOT ONLY THE AS SESSEE, BUT ALSO HER HUSBAND, SURESH MONGA. IT IS ALSO UNDISPUTED THAT THE AO HAS NOT BEEN ABLE TO RELATE THE AMOUNTS TO THE ASSESSEE OR TO CORROBO RATE THE SAME WITH THE JEWELLERY OR OTHER ASSETS DISCOVERED IN THE SEARCH. FURTHER, SURESH MONGA, THE HUSBAND OF THE ASSESSEE IN HIS STATEMENT, HAD S TATED THAT THE JEWELLERY WHICH WAS FOUND IN THE HOUSE WAS THE STRIDHAN OF HI S WIFE, THE ASSESSEE OR PURCHASED FROM THEIR OWN SOURCES. THESE FACTS REM AIN UNCONTROVERTED. 25. THE STAND OF THE DEPARTMENT IN THIS REGARD IS T HAT THE LD. CIT(A) HAS IGNORED THE FACTUM OF THE SLIPS CONTRAINING THE ENT RIES HAVING BEEN FOUND FROM THE PREMISES OF THE ASSESSEE AND THE ASSESSEE HAVING FAILED TO DISCHARGE HER ONUS U/S 132(4A) OF THE ACT WITH REGARD TO SUCH SLIPS. IN THIS REGARD, ITA 389(DEL)05 & CO 160(DEL)08 19 WHEREAS IT IS UNDENIABLE THAT THE ONUS U/S 132(4A) OF THE ACT WAS ON THE ASSESSEE, THE SLIPS SEIZED IN THE SEARCH OPERATION WERE NEITHER IN THE HAND- WRITING OF THE ASSESSEE, NOR DID THEY CONTAIN THE N ATURE OF THE FIGURES MENTIONED THEREIN, NOR AS TO WHETHER THE FIGURES RE PRESENTED GOODS OR MONEY, SALES OR PURCHASE, THE RECEIPT OR PAYMENT, E TC. THEREFORE, THE SEIZED SLIPS WERE NOTHING MORE THAN DUMB DOCUMENTS. AND, MORE PERTINENTLY, NO MATERIAL WAS FOUND DURING THE SEARCH, WHICH COULD BE CO-RELATED TO THESE SEIZED SLIPS. 26. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, THE GRIEVANCE OF THE DEPARTMENT IN THIS REGARD IS ALSO REJECTED. AS SU CH, GROUND NOS. 1 TO 4 ARE REJECTED. 27. APROPOS GROUND NO.5, THE DEPARTMENT HAS CONTEND ED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 4 LAKHS ON ACCOUNT OF UNEXPLAINED INVESTMENT, WITHOUT CONSIDERING THE STA TEMENT OF AFFAIRS FILED BY THE ASSESSEE, WHERE NO LOAN FROM SATWANTI MONGA STA NDS REFLECTED. 28. THE FACTS IN THIS REGARD ARE THAT THE ASSESSEE, IN HER RETURN OF INCOME, DECLARED PURCHASE OF PROPERTY. THE SOURCE OF INVE STMENT IN SUCH PURCHASE WAS STATED TO BE SALE OF PLOT FOR ` 4,50,000/-, PAYMENT FROM BANK ACCOUNT OF SATWANTI MONGA, AMOUNTING TO ` 4 LAKHS AND HOUSING LOAN FROM CENTRAL BANK OF INDIA, AMOUNTING TO ` 10,00,000/-. ITA 389(DEL)05 & CO 160(DEL)08 20 29. AS PER THE AO, THE SALE DEED OF PROPERTY NO. M- 103, GREATER KAILASH- I, DELHI, WAS SEIZED AS ANNEXURE-III, PAGE 54. T HE SALE DEED WAS BETWEEN THE SELLER, S.N. OBEROI AND THE PURCHASER, THE ASSE SSEE. IT WAS EXECUTED ON 5.2.99, AT A CONSIDERATION OF ` 18 LAKHS. SINCE THE PURCHASE OF THE HOUSE BY THE ASSESSEE HAD BEEN DONE IN F.Y. 98-99, IT WAS WI THIN THE BLOCK PERIOD. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE PURCHASE OF THE PROPERTY. THE ASSESSEE SUBMITTED THAT SHE HAD BOUGHT THE FIRS T FLOOR OF THE PROPERTY FOR ` 18 LAKHS, VIDE REGISTRATION DEED DATED 5.2.99 AND H AD PAID STAMP DUTY ALSO, AMOUNTING TO ` 1,44,000/-; AND THAT THIS HAD BEEN SHOWN APPROPRIAT ELY IN THE STATEMENT OF AFFAIRS FOR THE YEAR ENDING 11.3.00, RELEVANT TO ASSESSMENT YEAR 2000-01, FILED BY THE ASSESSEE ALONG WITH THE INCOM E TAX RETURN FOR THAT YEAR; THAT THE SOURCE OF ACQUIRING THE SAID PROPERT Y WAS LOAN FROM BANK, SALE OF GURGAON PLOT OF THE ASSESSEE AND PAST SAVING OF RETIREMENT FUNDS AVAILABLE WITH THE ASSESSEE. THE AO ASKED THE AS SESSEE TO FILE THE SOURCE OF THE INVESTMENT MADE IN THE PROPERTY PURCHASED AND V ERIFICATION THEREOF. THE ASSESSEE SUBMITTED THAT THE SOURCE OF INVESTMEN T WAS AS FOLLOWS:- ` A. SALE OF HUDA(GURGAON)PLOT 4,50,000/- B. LOAN FROM SATWANTI MONGA 4,00,000/- C. LOAN FROM CENTRAL BANK OF INDIA 10,00,000/- ON BEING ASKED TO SPECIFY THE DETAILS OF PAYMENT, T HE ASSESSEE SUBMITTED:- ITA 389(DEL)05 & CO 160(DEL)08 21 1. ` 4,00,000/- - CHEQUE NO.069320 DATED 01.08.98 F ROM BOI FROM ACCOUNT OF SATWANTI MONGA. 2. ` 4,00,000/- - CHEQUE NO. 088955 DATED 2.11.98 FRO M BOI ACCOUNT NO. 11223. 3. ` 10,00,000/- - PAY ORDER NO.008285 DATED 4.2. 99 LOAN FROM CENTRAL BANK OF INDIA. 4. ` 1,44,000/- - COST OF STAMP PAPERS PAID ON C ASH OUT OF CASH WITHDRAWALS FROM BANK IN 1998-99. 30. THE AO OBSERVED THAT THE ASSESSEE HAD THUS CONT RADICTED THE STATEMENT FILED, SINCE THE SALE PROCEEDS OF HUDA PLOT AT GURG AON AT ` 4,50,000/- HAD BEEN CREDITED IN BANK ACCOUNT NO. 16488 IN CENTRAL BANK OF INDIA, KASHMIRI GATE, BUT AN AMOUNT OF ` 4,00,000/- HAD BEEN PAID FROM HER ACCOUNT NO. 11223; THAT IT WAS ALSO NOT CLEAR AS TO WHY THE LOA N FROM SATWANTI MONGA WAS TAKEN AND AS TO WHEN IT WAS REPAID; THAT EVEN I N THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE FOR F.Y. 1998-99, I.E., ASSES SMENT YEAR 1999-00, NO LOAN FROM SATWANTI MONGA HAD BEEN REFLECTED; THAT IN FAC T, IN THE STATEMENT OF AFFAIRS FOR ASSESSMENT YEAR 1998-99, ON THE ASSETS SIDE OF THE BALANCE SHEET, ` 1,60,000/- HAD BEEN SHOWN IN THE NAME OF SMT. SATWA NTI MONGA; THAT THIS WAS A LOAN OF ` 1,60,000/- TAKEN BY SMT. SATWANTI MONGA FROM SMT. AVINASH MONGA, THE ASSESSEE; THAT AS SUCH, IT WAS I NCORRECT TO STATE THAT A LOAN OF ` 4,00,000/- HAD BEEN TAKEN FROM SMT. SATWANTI MONGA; AND THAT IT ITA 389(DEL)05 & CO 160(DEL)08 22 MIGHT HAVE BEEN TRUE THAT THE AMOUNT REFERRED HAD B EEN PAID THROUGH SMT.SATWANTI MONGA, BUT IT WAS NOT UNDERSTANDABLE A S TO WHY SMT. SATWANTI MONGA WOULD MAKE PAYMENT ON BEHALF OF THE ASSESSEE. IN THIS MANNER, THE AO TREATED THE AMOUNT OF ` 4,00,000/- AS UNEXPLAINED INVESTMENT IN PROPERTY BY THE ASSESSEE AND ADDED IT TO THE INCOME OF THE A SSESSEE U/S 69 OF THE I.T. ACT, FOR ASSESSMENT YEAR 1999-00. 31. WHILE DELETING THE AFORESAID ADDITION, THE LD. CIT(A) OBSERVED, INTER ALIA, THAT ADMITTEDLY, THE PAYMENT MADE FROM THE BA NK ACCOUNT OF SMT. SATWANTI MONGA HAD BEEN REPAID TO HER; THAT WHILE A DDING THE AMOUNT AS UNEXPLAINED INVESTMENT BY THE ASSESSEE, THE AO HAD ADMITTED THAT THE LOAN FROM SMT. SATWANTI MONGA HAD BEEN REPAID; THAT IT W AS SEEN THAT THE ASSESSEE HAD PURCHASED THE PROPERTY FOR ` 18,00,000/-, VIDE REGISTRATION DEED DATED 5.2.99 AND HAD PAID STAMP DUTY OF ` 1,44,000/-; THAT THIS HAD BEEN SHOWN IN THE RETURN OF INCOME AND THE STATEMENT OF AFFAIRS FILED WITH THE DEPARTMENT, FOR ASSESSMENT YEAR 2000-01; THAT THE S OURCE OF ACQUIRING THE PROPERTY WAS SALE OF HUDA(GURGAON) PLOT FOR ` 4,50,000/- FROM BANK ACCOUNT OF SMT. SATWANTI MONGA AND HOUSING LOAN OF ` 10,00,000/- FROM CENTRAL BANK OF INDIA, TOTAL AMOUNTING TO ` 18,50,000/-; THAT THE PURCHASE OF THE PROPERTY WAS ADMITTEDLY DECLARED IN THE REGULAR RETURNS FILED BY THE ITA 389(DEL)05 & CO 160(DEL)08 23 ASSESSEE; THAT THE AO HAD ALSO NOT DENIED THAT THE PAYMENT OF ` 4,00,000/- HAD BEEN MADE FROM THE BANK ACCOUNT OF SMT. SATWANT I MONGA, MOTHER-IN- LAW OF THE ASSESSEE, WHICH WAS REPAID TO SMT. SATWA NTI MONGA; AND THAT AT BEST, IT WAS AN ACCOMMODATION LOAN TO THE ASSESSEE BY HER MOTHER-IN-LAW, SMT. SATWANTI MONGA. 32. IN THIS REGARD, THE LD. DR HAS CONTENDED THAT T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 4,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT; THAT WHILE DOING SO, THE LD. CIT(A) HAS IGNORED THE FACT THAT AS PER THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE , NO LOAN FROM SMT. SATWANTI MONGA WAS SHOWN. 33. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN SUBMITTED THAT THE PROPERTY WAS DULY REFLECTED IN THE REGULAR RETURNS FILED BY THE ASSESSEE. 34. HAVING HEARD THE PARTIES ON THIS ISSUE AND HAVI NG PERUSED THE MATERIAL ON RECORD WITH REGARD THERETO, IT IS SEEN THAT IT R EMAINS UNDISPUTED THAT THE PAYMENT OF ` 4,00,000/- HAD BEEN MADE FROM THE BANK ACCOUNT OF S MT. SATWANTI MONGA, MOTHER-IN-LAW OF THE ASSESSEE. IT ALSO REMAINS UNDISPUTED THAT THIS LOAN HAD IN FACT BEEN REPAID BY THE ASSE SSEE TO HER MOTHER-IN-LAW. BESIDES, THE ASSESSEE HAD PURCHASED THE FIRST FLOOR OF HOUSE NO. M-103, ITA 389(DEL)05 & CO 160(DEL)08 24 G.K.II, NEW DELHI, FOR ` 18,00,000/-, VIDE REGISTRATION DEED DATED 5.2.99. STAMP DUTY OF ` 1,44,000/- HAD ALSO BEEN PAID BY THE ASSESSEE. TH IS WAS REFLECTED IN THE RETURN OF INCOME AND THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE WITH THE DEPARTMENT, FOR ASSESSMENT YEAR 2 000-01. THUS, THE PURCHASE OF THE PROPERTY HAD BEEN DULY DECLARED IN THE REGULAR RETURN FILED. DETAILS OF LOAN OF ` 10,00,000/- FROM CENTRAL BANK OF INDIA WERE FILED V IDE PAY ORDER NO. 008285, DATED 4.2.99. THE OTHER AMO UNT OF ` 4,00,000/- FROM BANK OF INDIA WAS THROUGH CHEQUE NO. 088955, DATED 2.11.98 FROM ACCOUNT NO. 11223. 35. THE LD. CIT(A) HAS DULY TAKEN INTO CONSIDERATIO N THE ABOVE FACTS WHILE DELETING THE ADDITION OF ` 4,00,000/-. NOTHING HAS BEEN BROUGHT TO PERSUADE TO DIFFER FROM THE DELETION OF THE ADDITION BY THE LD. CIT(A). ACCORDINGLY, GROUND NO.5 IS REJECTED. 36. APROPOS GROUND NO.6, AS PER THE ASSESSMENT ORDE R, IN THE SEARCH, ANNEXURE A-2, PAGE 21, I.E., A COPY OF FDR WORTH ` 34,631/- WAS SEIZED. THIS FDR WAS IN THE NAME OF K.CHAWLA AND AVI NASH MONGA, THE ASSESSEE. THE ASSESSEE ASKED THE ASSESSEE TO EXPL AIN THE SOURCE OF THE PURCHASE OF THE SAID FDR. THE ASSESSEE SUBMITTED THAT THE FDR HAD BEEN HELD WITH THE BANK DURING 97-98 AND IT WAS ENCASHED DURING 98-99; THAT IT ITA 389(DEL)05 & CO 160(DEL)08 25 HAD BEEN PROPERLY REFLECTED IN THE INCOME TAX RETUR N OF THE ASSESSEE IN THE PAST; AND THAT IT HAD ALSO BEEN DECLARED IN THE STA TEMENT OF AFFAIRS OF THE ASSESSEE DURING 97-98, WITH THE RETURN FILED. 37. THE AO, WHILE DISAGREEING WITH THE REPLY OF TH E ASSESSEE, OBSERVED THAT FROM THE INCOME TAX RETURN OF THE EARLIER YEAR , IT WAS NOT CLEAR AS TO WHICH FDR HAD BEEN DISCLOSED; THAT ON FURTHER QUERY , NO SPECIFIC REPLY HAD BEEN GIVEN BY THE ASSESSEE. IT WAS THEREFORE THAT THE AO TREATED THE FDR AS UNDISCLOSED INVESTMENT AND ADDED THE AMOUNT OF ` 34,631/- U/S 69 A OF THE ACT, FOR ASSESSMENT YEAR 99-00. 38. THE LD. CIT(A) HAVING DELETED THIS ADDITION, GR OUND NO.6 HAS BEEN RAISED BY THE DEPARTMENT. 39. THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HA S ERRED IN DELETING THE ADDITION OF ` 34,631/-; AND THAT WHILE DOING SO, THE LD. CIT(A) E RRED IN IGNORING THE FACT THAT THE ASSESSEE HAD FAILED TO E XPLAIN THE INVESTMENT IN THE FDR. 40. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, HAS, ONCE AGAIN, PLACED STRONG RELIANCE ON THE IMPUGNED ORDER . ATTENTION HAS BEEN DRAWN TO THE COPY OF THE CONCERNED FDR AS PLACED IN THE ASSESSEES PAPER BOOK. IT HAS BEEN CONTENDED THAT THE FDR WAS HELD IN THE JOINT NAMES OF SMT. K.CHAWLA, THE SISTER-IN-LAW OF THE ASSESSEE A ND THE ASSESSEE; THAT THE ITA 389(DEL)05 & CO 160(DEL)08 26 FDR WAS HELD IN THE JOINT NAMES ONLY FOR THE SAKE O F CONVENIENCE; AND THAT THE ASSESSEE WAS ONLY THE SECOND HOLDER THEREOF. 41. IN THE ASSESSMENT ORDER, THE AOS OBJECTION WAS THAT IT WAS NOT CLEAR AS TO WHICH FDR HAD BEEN DISCLOSED IN THE RETURN OF INCOME FOR ASSESSMENT YEAR 97-98 AND THAT THE ASSESSEE HAD NOT GIVEN ANY SPECIFIC REPLY CONCERNING THIS QUERY. IT IS SEEN THAT THIS QUERY OF THE AO S TILL REMAINS UNREPLIED. BEFORE THE CIT(A), THE ASSESSEE MAINTAINED THAT THE FDR IN QUESTION WAS HELD IN THE JOINT NAMES OF SMT. K. CHAWLA, SISTER I N LAW OF THE ASSESSEE AND THE ASSESSEE, AS THE SECOND HOLDER THEREOF; THAT TH E RETURN OF INCOME OF SMT. K. CHAWLA WAS NOT FILED, SINCE SHE WAS A NRI AND HE R INCOME WAS BELOW THE TAXABLE LIMIT FOR THE RELEVANT YEARS, DUE TO WHICH FACT, HER RETURN OF INCOME WAS NOT REQUIRED TO BE FILED; AND THAT THE ASSESSEE BEING ONLY THE SECOND HOLDER OF THE FDR, WHICH WAS HELD JOINTLY ONLY FOR THE SAKE OF CONVENIENCE, IT CANNOT BE TREATED AS BELONGING TO THE ASSESSEE. THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING THAT THERE WAS NO CORROBORATI VE EVIDENCE BROUGHT BY THE ASSESSEE THAT THE FDR BELONGED TO THE ASSESSEE. 42. WE DO NOT FIND ANY JUSTIFICATION IN THE DELETIO N OF THIS ADDITION. ONCE THE ASSESSEE HAS NOT BEEN ABLE TO SHOW AS TO WHICH FDR HAD BEEN DECLARED IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 97-9 8, THE FDR WAS RIGHTLY ITA 389(DEL)05 & CO 160(DEL)08 27 TREATED BY THE AO AS UNDISCLOSED INVESTMENT U/S 69A OF THE ACT. GROUND NO.6 IS, AS SUCH, ACCEPTED. 43. THE LAST GROUND, I.E., GROUND NO.7, PERTAINS TO THE DELETION OF THE ADDITION OF ` 7,05,988/- BEING CREDIT ENTRIES IN BANK ACCOUNT NO. 9984 WITH CENTRAL BANK OF INDIA, TREATED AS UNDISCLOSED INCOM E BY THE AO. 44. AS PER THE ASSESSMENT ORDER, DURING THE SEARCH, VIDE ANNEXURE-V OF PANCHNAMA DATED 26.4.02, CERTAIN BANK ACCOUNTS WHER E THE ASSESSEES NAME FIGURED WERE FOUND, BUT WERE NOT SEIZED:- 1. AVINASH MONGA A/C 9980 CBI, G.K.II 2. AVINASH MONGA & SURESH MONGA A/C 9994 CBI, G. K.II 3. S. MONGA & AVINASH MONGA A/C 16488- CBI, KASHM IRI GATE 4. DR. MEETA MONGA & A.MONGA A/C 9995 CB I, G.K. II 5. AVINASH MONGA A/C 11223, BOI, JANAKPURI 6. MS. MEETA MONGA &A. MONGA A/C 16171, BOI . THE ASSESSEE WAS ASKED TO FURNISH COPIES OF ALL TH E BANK STATEMENTS FOR THE BLOCK PERIOD. THIS WAS, HOWEVER, NOT DONE. THE AO, THEREFORE, OBTAINED THE COPIES OF BANK STATEMENTS U/S 133(6) OF THE ACT . IT WAS OBSERVED THAT AS PER THE BANK STATEMENT OF A/C NO. 16488, STANDING I N THE NAME OF SMT. AVINASH MONGA AND SHRI SURESH MONGA, VARIOUS CREDIT AND DEBIT ENTRIES OF SUBSTANTIAL AMOUNTS, RANGING FROM ` 100/- TO ` 9,29,646/- WERE EXISTING. THE AO ENTERTAINED A DOUBT THAT THE ASSESSEE, WHO WAS A SALARIED EMPLOYEE, ITA 389(DEL)05 & CO 160(DEL)08 28 COULD NOT HAVE CREDIT ENTRIES OF SUCH HIGH VALUE. THE AO REPEATEDLY ASKED THE ASSESSEE TO FURNISH COPY OF BANK STATEMENT ALON G WITH THE NARRATION OF CREDIT AND DEBIT. THIS WAS, HOWEVER, NOT DONE AND ONLY BITS AND PIECES - ONE OR TWO ENTRIES WERE EXPLAINED. AS SUCH, THE A O ASKED THE ASSESSEE TO EXPLAIN THE CREDIT AND DEBIT ENTRIES ABOVE ` 10,000/- IN ALL THE BANK ACCOUNTS HELD BY THE ASSESSEE, EITHER INDIVIDUALLY, OR JOINT LY TO SHOW CAUSE, IF NO SATISFACTORY EXPLANATION WAS OFFERED, AS TO WHY THE SAME BE NOT TREATED AS UNEXPLAINED CASH CREDIT AND ADDED THE ASSESSEES IN COME FOR THE BLOCK PERIOD. THE ASSESSEE, VIDE REPLY DATED 28.4.04, G AVE DETAIL ONLY OF CREDIT ENTRIES OF ACCOUNT NO. 11223. HOWEVER, NO EXPLANAT ION WAS GIVEN WITH REGARD TO THE CREDIT AND DEBIT ENTRIES OF BANK ACCO UNT NO. 16488 AND BANK ACCOUNT NO.9994, IN WHICH TWO ACCOUNTS, THE CREDIT AND DEBIT ENTRIES WERE OF VERY HIGH VALUE AS PER THE AO AND APPEARED PRIMA FA CIE UNEXPLAINED. 45. AS SUCH, THE AO CALCULATED THE PEAK CREDIT BALA NCE APPEARING IN THE BANK ACCOUNT AS FOLLOWS:- PEAK CREDIT BALANCE FOR A/C NO. 16488: F.Y . A.Y . PEAK CREDIT BALANCE REMARKS ` 98-99 99-00 9,30,754/- IGNORING THE PEAK CRED IT BALANCE IS ` 13,23,732/- BECAUSE THIS IS DUE TO ADDITION OF ` 4.5 LAKHS EXPLAINED MONEY. ITA 389(DEL)05 & CO 160(DEL)08 29 99-00 00-01 NIL AS MAX. CREDIT BALANCE IS ` 5,20,399/- WHICH IS EXPLAINABLE FROM CREDIT BALANCE OF F.Y. 98-99. 2000-01 01-02 NIL AS MAX. CREDIT BALANCE IS ` 5,08,921/- WHICH IS EXPLAINABLE FROM CREDIT BALANCE OF F.Y. 98-99. 01-02 02-03 NIL AS MAX.CREDIT BALANCE IS ` 2,13,993/- WHICH IS EXPLAINABLE FROM CREDIT BALANCE OF F.Y. 98-99. PEAK CREDIT BALANCE FOR A/C NO. 9994: F.Y . A.Y . PEAK CREDIT BALANCE REMARKS ` 98-99 99-00 26,920 ---- 99-00 00-01 6,79,066 THE MAX.CREDIT BALAN CE IS ` 7,05,986/-.BUT ` 26,920 IS OF F.Y. 98-99. THEREFORE, DIFFERENCE BETWEEN ` 7,05,986/-& ` 26,920 IS PEAK CREDIT OF THIS YEAR. 2000-01 01-02 NIL AS MAX. CREDIT BALANCE IS ` 6,04,409/- WHICH IS EXPLAIN- ABLE FROM CREDIT BALANCE OF F.Y. 99-00. 01-02 02-03 NIL AS MAX. CREDIT BALANCE IS ` 4,40,581/- WHICH IS EXPLAIN- ABLE FROM CREDIT BALANCE OF F.Y. 99-00. 02-03 03-04 NIL AS MAX. CREDIT BALANCE IS ITA 389(DEL)05 & CO 160(DEL)08 30 ` 3,21,114/- WHICH IS EXPLAIN- ABLE FROM CREDIT BALANCE OF F.Y. 99-00. 46. AS SUCH TOTAL PEAK CREDIT BALANCE FOR THE BLOCK PERIOD IN ACCOUNT NO. 16488 CAME TO ` 9,30,750/- AND THE PEAK CREDIT BALANCE FOR THE BLOC K PERIOD THUS CAME TO ` 7,05,986/-. THIS WAS TREATED AS THE ASSESSEES UNE XPLAINED INCOME FOUND FOR THE BLOCK PERIOD. 47. THE AO OBSERVED THAT SINCE THE ASSESSEE WAS A S CHOOL TEACHER, IT WAS NOT CLEAR AS TO WHY SHE HAD MAINTAINED SO MANY BANK ACCOUNTS; THAT IN BANK ACCOUNT NO.11223, THE CREDIT ENTRIES WERE SALARY RE CEIPTS OR RETIREMENT BENEFITS LIKE GPF WITHDRAWAL, DEPOSITS AND LEAVE EN CASHMENT DEPOSITS; AND THAT THIS BANK ACCOUNT HAD BEEN REFLECTED IN THE ST ATEMENT OF AFFAIRS ACCOMPANYING REGULAR RETURN FILED BY THE ASSESSEE. 48. WHILE DELETING THE ADDITION OF ` 7,05,986/- BEING THE PEAK CREDIT AMOUNT IN SAVINGS BANK ACCOUNT NO. 9994, STANDING I N THE NAME OF THE ASSESSEE AND HER HUSBAND, SHRI SURESH MONGA, WITH C ENTRAL BANK OF INDIA, G.K.II, NEW DELHI, THE LD. CIT(A) OBSERVED THAT THE FOLLOWING WERE THE ENTRIES IN THIS BANK ACCOUNT:- A/C NO. 9994 AVINASH MONGA/SURESH MONGA: 09.11.00 500000 FROM CBI, LOAN 07.10.98 175000 SECURITY FROM THE TENANT ITA 389(DEL)05 & CO 160(DEL)08 31 11.11.01 200000 NO SUCH ENTRY EXIST IN THE A/C. 25.11.99 99600 RECEIVED FROM BRIGHT CHIT FUND 29.11.99 88350 RECEIVED FROM BRIGHT CHIT FUND 29.11.99 55563 RECEIVED FDR ENCASHED 02.12.99 75300 RECEIVED FROM BRIGHT CHIT FUND 02.12.99 55563 FDR ENCASHED 03.12.99 200000 TRANSFER FROM A/C NO. 16488 27.12.99 175000 SECURITY FROM VINESH KOCHAR TOWARD S RENT. 49. THE LD. CIT(A) OBSERVED THAT A BARE LOOK AT THE ENTRIES MADE CLEAR THAT THEY WERE IN THE NORMAL COURSE OF MAINTAINING A BAN K ACCOUNT; THAT EVEN SO, THE ASSESSEE HAD EXPLAINED THE CREDIT ENTRIES IN TH E ACCOUNT AT THE TIME OF HEARING, WHICH HAD NOT BEEN CONSIDERED BY THE AO; A ND THAT THESE ACCOUNTS HAD BEEN ADEQUATELY AND PROPERLY DECLARED IN THE RE TURNS FILED BY THE ASSESSEE OVER THE YEARS. THE LD. CIT(A) OBSERVED THAT AS SUCH, THEY COULD NOT BE CONSIDERED AS UNDISCLOSED. 50. THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HA S ERRED IN DELETING THE ADDITION OF ` 7,05,986/- BEING CREDIT ENTRIES IN BANK ACCOUNT NO. 9994, MAINTAINED BY THE ASSESSEE ALONG WITH HER HUSBAND, SHRI SURESH MONGA, WITH CENTRAL BANK OF INDIA, GK II, NEW DELHI; THAT WHILE DOING SO, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAD NOT CO-RELATED AND EXPLAINED THE ENTRIES IN THE BANK ACCOUNT AND HAD FAILED TO SUBST ANTIATE THE SAME. 51. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, HAS STRONGLY STOOD BY THE ORDER PASSED BY THE LD. CIT(A) IN THIS REGARD. HE HAS SUBMITTED ITA 389(DEL)05 & CO 160(DEL)08 32 THAT AS CORRECTLY NOTED BY THE LD. CIT(A), THE ASSE SSEE HAD DULY EXPLAINED THE CREDIT ENTRIES IN THE ACCOUNT; THAT HOWEVER, THE AO HAD NOT CONSIDERED THE EXPLANATION OFFERED BY THE ASSESSEE; AND THAT MORE- OVER, THESE ACCOUNTS HAD BEEN DECLARED IN THE RETURNS FILED BY THE ASSESSEE OVER THE YEARS. 52. IN THIS REGARD, IT IS SEEN THAT THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION THE ENTRIES IN BANK ACCOUNT NO. 9994, MAINTAINED BY THE ASSESSEE ALONG WITH HER HUSBAND, SHRI SURESH MONGA. BESIDES, IT HAS ALSO BEEN TAKEN INTO ACCOUNT, THAT ALL THE ACCOUNTS MAIN TAINED BY THE ASSESSEE WERE DECLARED IN THE RETURN FILED BY THE ASSESSEE O VER THE YEARS. 53. IN THESE FACTS, WE DO NOT FIND ANY ERROR IN THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF ` 7,05,986/-. ACCORDINGLY, GROUND NO.7 IS REJECTED. 54. IN THE RESULT, ITA NO. 389(DEL)2005 FILED BY TH E DEPARTMENT IS PARTLY ALLOWED, WHEREAS C.O. NO. 160(DEL)2008 IS DISMISSE D FOR LIMITATION. ORDER PRONOUNCED IN THE OPEN COURT ON 8.11.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) PRESIDENT JUDICIAL MEMBER DATED: 8.11.2011 *RM ITA 389(DEL)05 & CO 160(DEL)08 33 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR