Lakshman G Chugani, Hyderabad V. ACIT, Circle - 10(1), Hyderabad

ITSSA 5/HYD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0484 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-07-2011
• Assessment Year: misc
• Appeal Filed On: 31-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Unexplained investment; Capital asset; Gift; Search and seizure; Document seized; Opportunity of being heard; Peak credit; Source of fund; Deemed to accrue or arise in india; Cost of acquisition; Corroborative evidences; Valuation report; Block assessment; Retraction; Documents seized
• Section: 80C; 133A; 68; 69; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER IT(SS)A.NO. BLOCK PERIOD APPELLANT RESPONDENT 1/H/2011 1987-88 TO 1996-97 & 01.04.96 TO 03.10.96 MS. SHOBHA R. CHUGANI, HYDERABAD AAIPC3408Q ACIT, CIRCLE 10(1), HYDERABAD 2/H/2011 MS. ROSHINI K. CHUGANI, HYDERABAD. PAN AGCPC4137C 3/H/2011 SHALU C. CHUGANI, HYDERABAD. PAN AEYPC6858C 4/H/2011 MANISH A. CHUGANI, HYDERABAD. 5/H/2011 LAKSHMAN G. CHUGANI, HYDEABAD. PAN AAJPC5052H 6/H/2011 GULABRAI D. CHUGANI, HYDERABAD PAN 7/H/2011 ANITHA C. CHUGANI, HYDERABAD PAN 2 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 8/H/2011 1987-88 TO 1996-97 & 01.04.96 TO 03.10.96 KUNJBAI G. CHUGANI HYDERABAD PAN ACIT, CIRCLE 10(1), HYDERABAD 9/H/2011 RAMESH G. CHUGANI, HYDERABAD PAN 10/H/2011 ASHOK G. CHUGANI, HYDERABAD PAN 11/H/2011 LATE CHANDRU G. CHUGANI, L/R RAJESH G. CHUGANI, HYDERABAD PAN 12/H/2011 KISHORE G. CHUGANI, HYDERABAD PAN 13/H/2011 RAMESH SALES CORPORATION, HYDERABAD PAN AADFR9495D 14/H/2011 RAMESH WATCH SERVICES, HYDERABAD PAN AAJPC5052H 15/H/11 RAMESH WATCH COMPANY, HYDERABAD PAN AAJPC5052H 3 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. P. SOMASEKHAR REDDY DATE OF HEARING : 15.09.2014 DATE OF PRONOUNCEMENT : .12.2014 ORDER PER BENCH : THESE ARE GROUP OF APPEALS FILED BY INDIVIDUAL ASSE SSEES AND FIRMS AGAINST THE ORDERS OF A.O. DATED 29.12.20 10. ORIGINALLY, SEARCH AND SEIZURE OPERATIONS WERE COND UCTED UNDER SECTION 132 ON 03.10.1996 IN THE RESIDENTIAL AND BUSINESS PREMISES OF MR. GULAB RAI CHUGANI AND HIS FAMILY MEMBERS. IN THE COURSE OF SEARCH, SOME INCRIMINATIN G DOCUMENTS WERE FOUND AND ASSESSEES ALSO FURNISHED V ARIOUS BANK ACCOUNTS AND OTHER DETAILS IN THE COURSE OF PO ST-SEARCH ENQUIRIES. SURVEY OPERATIONS WERE ALSO CONDUCTED IN THE PREMISES OF THE FIRMS AND INVENTORY OF STOCK WAS TA KEN. BASED ON THE FINDINGS IN THE SEARCH, ASSESSMENTS WERE COM PLETED UNDER SECTION 158BC/158BD IN THE GROUP CASES ON 31.12.1997. AGGRIEVED BY THE ASSESSMENT ORDERS, AS SESSEES PREFERRED APPEAL BEFORE THE ITAT, AS THE APPEALS AR E DIRECTLY RESTS WITH ITAT WITHOUT THE BENEFIT OF ADJUDICATION BY CIT(A) AS PER THE PROVISIONS THEN EXISTING. THE TRIBUNAL VIDE ITS ORDER DATED 28.12.2006 RESTORED THE ASSESSMENTS TO THE A. O. OBSERVING AS UNDER : WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES. CHAPTER XIVB WAS INTRODUCED WITH EFFECT FROM 01.07. 1995. THE SEARCH IN THE PRESENT CASE WAS CONDUCTED ON 03.10.1996 I.E., JUST A LITTLE OVER A YEAR SINCE TH E INTRODUCTION OF THE NEW PROCEDURE. THE ASSESSMENTS WERE COMPLETED ABOUT A YEAR AFTER THE DATE OF SEARCH I.E ., SOME TIME IN THE LATER PART OF 1997. AT LEAST TILL THAT TIME AND 4 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. EVEN LATER MANY LEGAL ISSUES CROPPED UP WHICH REMAI NED IN THE GREY AREA FOR A QUITE A LONG TIME. MUCH WATER H AS FLOWN SINCE THEN. OVER THE LAST DECADE, THE LAW RELATING TO BLOCK ASSESSMENT HAS MORE OR LESS BEEN STREAMLINED ON THE BASIS OF EXPERIENCE AND SEVERAL JUDICIAL PRONOUNCEMENTS. IN THIS BACKDROP, WHILE WE VIEW THE SUBMISSIONS MADE BY THE LEARNED COUNSEL, WE FIND THEM BE QUITE TRUE. AS AN ILLUSTRATION, ONE OF THE REASONS GIVEN FOR MAKING A DDITION ON ACCOUNT OF UNEXPLAINED CASH IS THAT ..THE WITHDRA WALS ARE SO MEAGER THAT THE ADDITIONAL AMOUNTS DRAWN FRO M THE BANK MIGHT HAVE BEEN TOTALLY SPENT AWAY ON DOMESTIC EXPENDITURE.. NOW, SUCH REASONS CAN GENERALLY BE TAKEN IN REGULAR ASSESSMENTS ONLY AND NOT IN BLOCK ASSESSMENTS. AGAIN, ADDITION FOR UNEXPLAINED INVEST MENT IN BOMBAY FLAT BY LACHMAN CHUGANI HAS BEEN MADE ON THE BASIS OF THE DVOS REPORT AND NOT ON THE BASIS OF A NY MATERIAL FOUND IN THE COURSE OF SEARCH. SIMILARLY, THE ASSESSING OFFICER HAS MENTIONED IN THE ASSESSMENT O RDER THAT THE MATERIAL SEIZED THROWS A DEFINITE INDICATI ON AND EVIDENCE ABOUT THE NATURE OF TRANSACTIONS AND INVOL VEMENT OF THE ASSESSEE IN PAYING ON-MONEY TO THE VENDOR. B UT HE FAILS TO SPELL OUT OR SPECIFY THOSE SEIZED MATERIAL . FURTHER, EXCESS STOCK HAS BEEN DETERMINED ON THE BASIS OF ESTIMATING GP RATE RATHER THAN ON THE BASIS OF ANY MATERIAL WHICH MAY INDICATE PURCHASES OUTSIDE THE BOOKS. THE RE ARE NUMEROUS SUCH EXAMPLES, IN ALL THE ASSESSMENT ORDER S RESULTING INTO THE DETERMINATION OF UNDISCLOSED INC OME WHICH MAY BE FAR FROM BEING REALISTIC. ACCORDINGLY, WE FEEL IT TO BE QUITE JUSTIFIED TO RESTORE THE MATTER BACK TO THE FILE OF THE A.O. WITH THE DIRECTION TO REFRAME THE ASSESSME NTS AFTER GIVING THE OPPORTUNITY OF BEING HEARD TO THE ASSESS EES. THE ASSESSEES SHALL ALSO BE AT LIBERTY TO ADDUCE ANY EV IDENCE AS DEEMED NECESSARY. CONSIDERING THE FACT THAT THE MATTERS ARE VERY OLD, THE A.O. SHALL NOT MAKE ROVIN G ENQUIRIES WHICH MAY BE PRACTICALLY DIFFICULT FOR TH E ASSESSEE TO EXPLAIN AND PUT THEM INTO UNDUE HARDSHI P. IN OTHER WORDS, THE A.O. AS FAR AS POSSIBLE CONFINE HI MSELF TO THE ADDITIONS ALREADY MADE IN THE PRESENT ASSESSMEN T ORDERS. WHILE MAKING THE REASSESSMENTS, THE A.O. SH ALL KEEP IN VIEW THE RELEVANT PROVISIONS OF LAW AND THE JUDICIAL PRONOUNCEMENTS AS WELL. CONSIDERING THE FACT THAT T HE MATTERS ARE VERY OLD, THE A.O. SHALL EXPEDITE THE PROCEEDINGS AND PASS THE ASSESSMENT ORDERS AS EARLY AS POSSIBLE.. 5 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE TRIBUNAL FURTHER DECIDED VIDE ORDER DT.22.06.20 09 THAT: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE UNDISCLOSED INCOME HAS TO BE COMPUT ED ON THE BASIS OF THE MATERIAL FOUND AS A RESULT OF SEAR CH OR THE INFORMATION AVAILABLE WITH THE A.O. AND RELATABLE T O THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATIO N. THIS IS THE MANDATORY PROVISION CONTAINED IN SEC. 158BB( 1) OF THE INCOME TAX ACT. THEREFORE, THE A.O. IS BOUND TO GIVE A SPECIFIC FINDING HOW THE UNDISCLOSED INCOME IS RELA TABLE TO THE SEARCH MATERIAL. IN CASE THE A.O. RELIES UPON T HE INFORMATION OBTAINED DURING POST-SEARCH ENQUIRY, HE HAS TO GIVE A SPECIFIC FINDING HOW SUCH INFORMATION IS REL ATABLE TO THE SEARCH MATERIAL. IN THE ABSENCE OF SUCH FINDING IN THE ASSESSMENT ORDERS, AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE AND THE LEARNED DEPARTMENTAL REPRESENTATIVE, IN OUR OPINION, THE MATTER NEEDS TO BE RECONSIDERED BY THE A.O. IN THE LIGHT OF THE MATERI AL FOUND DURING THE COURSE OF SEARCH OPERATION. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THE MATTER BACK TO THE FILE OF THE A.O. THE A.O. SHALL EXAMINE THE ISSUE AFRESH AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. WE MAKE IT CLEAR THAT THE A.O. SHA LL BRING ON RECORD THE ENTIRE FACTS AND GIVE A SPECIFIC FIND ING HOW THE UNDISCLOSED INCOME IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH. IN CASE THE A.O. RELIE S UPON THE INFORMATION OBTAINED IN THE ENQUIRY MADE AFTER THE SEARCH, HE SHALL GIVE A SPECIFIC FINDING HOW SUCH INFORMATI ON IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE O F SEARCH. 2. CONSEQUENTLY, THE ASSESSMENTS WERE AGAIN COMPLETED UNDER SECTION 158BC/158BD DETERMINING THE TOTAL INCOME. IN SPITE OF CLEAR DIRECTIONS IF ITAT, ADDIT IONS MADE IN THE FIRST ROUND OF ASSESSMENTS WERE REPEATED BY THE A.O. IN THE PRESENT ORDERS AS WELL. SINCE SMALL ADDITIONS ARE M ADE WHICH REQUIRE VERIFICATION BY A.O., SUBMISSIONS OF ASSESS EE ALONG WITH NECESSARY EVIDENCE FILED BEFORE US WERE REFERR ED TO THE A.O. THROUGH THE D.R. FOR VERIFICATION AND REPORTIN G ON THE FACTUAL ASPECTS. ACIT, CIRCLE 10(1), HYDERABAD VIDE REMAND 6 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REPORT DATED 10.07.2014 SUBMITTED THROUGH THE CIT-D R-I, HYDERABAD HOWEVER, DID NOT UNDERTAKE ANY VERIFICATI ON AND SENT THE REPORT WITH THE REMARKS REITERATING WHAT W AS MENTIONED IN THE ASSESSMENT ORDER. IT WAS THE CONTE NTION OF ASSESSEE THAT MANY OF THE AMOUNTS WERE DECLARED IN THE RETURNS OR HAVE BEEN SHOWN IN THE WEALTH TAX RETURN S AND SOURCES FOR MANY OF THE FUNDS WERE WITHDRAWALS FROM THE FIRMS OR TRANSFERS FROM THE BANK ACCOUNTS. APART FROM THA T, ON MAJOR ADDITIONS DETAILED SUBMISSIONS WERE MADE. AS STATED ABOVE A.O. DID NOT EXAMINE ANY OF THE ISSUES BUT SENT THE SAME REMARKS AS WERE MADE IN THE ASSESSMENT ORDER. THE I TAT RESTORED THE MATTER EARLIER TO THE A.O. TO SPECIFIC ALLY MENTION ABOUT THE BASIS OF SEARCH MATERIAL WHILE MAKING SUC H ADDITIONS. IN SPITE OF CLEAR DIRECTIONS, A.O. DID N OT MENTION ANY OF THOSE THINGS AND REPEATED THE SAME ADDITIONS AGA IN WITHOUT ANY VERIFICATION. EVEN IN REMAND THROUGH THE DR, AO DID NOT DO ANY VERIFICATION OF EVIDENCE FILED/ SUBMISSIONS MADE. IN VIEW OF THIS, WE ARE CONSTRAINED TO DECIDE ON THE B ASIS OF SUBMISSIONS. THESE ORDERS HAVE BEEN PASSED AFTER CO NSIDERING ASSESSEES SUBMISSIONS/ AOS REMARKS. WE HAVE HEARD THE LD. COUNSEL AND LD. D.R. AND PERUSED THE EVIDENCE PLACE D ON RECORD. 3. SEARCH AND SEIZURE OPERATIONS WERE CONDUC TED AT THE PREMISES OF SRI GULAB RAI CHUGANI AND HIS FAMILY MEMBERS RESIDING AT H.NO.I-II-252/11A , MOTILAL NAGAR, SECUNDERABAD. THE WARRANT OF AUTHORISATION U/S. 132 OF THE I.T. ACT WAS ISSUED IN THE NAME OF SRI GULAB RAI CHUGANI. ANOTHER WARRANT OF AUTHORISATION WAS ISSUED IN THE CASE OF SRI GULAB RAI CHUGANI TO SEARCH THE PREMISES OF SRI LACHMAN G. CHUGANI AT FLAT NO.L, BALAJI NIVAS, P.G. ROAD, SECUNDERABAD. T HE 7 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SEARCH PROCEEDINGS WERE INITIATED ON 3.10.1996 AND CONTINUED FURTHER ON 18.10.1996 AT BOTH THE PLACES MENTIONED ABOVE. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS, THE AUTHORITIES SEIZED GOLD JEWELLERY OF THE VALUE OF RS.6,57,073 AND RS.18,60,756 OUT OF THE TOTAL VALUE OF RS.57,55,091. THE AUTHORITIES ALSO SEIZED CASH OF RS.5 LAKHS OUT OF CASH FOUND OF RS.5,72,165 AT BOTH THE PLACES. SURVEY U/S 133A WERE ALSO CONDUCTED AT THE PREMISES OF (1) RAMESH WATCH SERVICES; (2) RAMESH SALES CORPORATION AND (3) RAMESH WATCH COMPANY. THE BOOKS OF ACCOUNT OF THESE CONCERNS WERE SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS AT THE RESIDENTIAL PREMISES. 4. ASSESSMENTS IN ALL CASES OF ASSESSEES WERE COMPLETED EITHER U/S 158BC OR U/S 158BD . PRIMARY CONTENTION OF ASSESSEES ARE A S THE SEARCH PROCEEDINGS WERE CONDUCTED AT THEIR RESIDENTIAL PREMISES AND AS THEY WERE SEARCHED UNDER THE PROVISIONS OF SEC.132 OF THE IT. ACT, ASSESSMENTS SHOULD HAVE BEEN COMPLETED U/S 158BC OF THE I.T. ACT. IN THIS REGARD, ASSESSEE SUBMITS THAT THE HIGH COURT OF ANDHRA PRADESH IN TH E CASE OF DR. RAVINDRA REDDY, HYDERABAD IN ITIA NO.35 OF 2001 HELD THAT WHERE A PERSON IS SEARCHED, THE ASSESSMENT IS TO BE COMPLETED U/S 158BC OF THE LT. ACT AND NOT U/S 158BD. IF THE ASSESSMENT U/S 158BC HAS TO BE COMPLETED ONLY IN THE CASE OF THE PERSONS AGAINST WHOM THE SEARCH PROCEEDINGS WERE INITIATED, THEN THE ASSESSMENT U/S 158BC CAN BE COMPLETED IN THE CASE OF SRI GULAB RAI CHUGANI ALONE AND NOT IN OTHER MEMBERS OF THE FAMILY. HOWEVER, THE ASSESSING 8 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OFFICER COMPLETED THE ASSESSMENT U/S 158BC IN THE CASES OF MR. RAMESH G. CHUGANI AND LACHMAN G. CHUGANI. IN THE CIRCUMSTANCES, THE ASSESSMENT PROCEEDINGS ITSELF ARE INVALID. THE ASSESSING OFFIC ER ALSO ISSUED NOTICES U/S 158BD TO SOME OF THE MINOR CHILDREN AND COMPLETED THE ASSESSMENT U/S 158BD OF THE I.T. ACT. THE ASSESSEE, BEFORE THE ITAT SUBMITT ED THAT ALL THE ADDITIONS WERE MADE BASED ON THE DEPOSITS WITH BANK ACCOUNTS AND THAT THE SAID ADDITIONS DO NOT ARISE OUT OF THE SEIZED MATERIAL. THE ITAT ALLOWED THE APPEALS AND CANCELLED THE SAID ASSESSMENTS MADE IN THE HANDS OF THE MINORS U/S 158BD OF THE I.T. ACT. 5. ASSESSEE SUBMITTED EXPLANATIONS WITH REGARD TO THE AVAILABILITY OF CASH; AVAILABILITY OF STOCKS AND GOLD JEWELLERY BESIDES EXPLAINING THE DEPOSITS MADE WITH BANK BOTH IN SAVINGS BANK ACCOUNT AND INVESTMENT IN FIXED DEPOSITS. MAJOR ISSUES ON WHICH A.O. MADE ADDITIONS IS WITH REFERENCE TO CASH SEIZE D, JEWELLERY INVENTORIED, STOCKS FOUND, GIFT RECEIVED. HOWEVER, A.O. MADE VARIOUS ADDITIONS ON THE BASIS O F TRANSACTION IN BANK ACCOUNTS AND ALSO DENIED THE DEDUCTION CLAIMED. THESE ARE DEALT WITH AS UNDER. 6. AS BRIEFLY STATED ABOVE, THERE ARE SEARCH AND SEIZURE PROCEEDINGS IN THE COMMON RESIDENTIAL PREMI SES OF ASSESSEE. AS BRIEFLY STATED ABOVE, SEARCH WAS INITI ATED IN THE CASE OF MR. GULABRAI CHUGANI, MR. LAKSHMAN CHUGANI AND MR. RAMESH CHUGANI AND WARRANT OF AUTHORISATION WERE EX ECUTED IN THEIR NAMES. THEREFORE, A.O. IS CORRECT IN COMPL ETING THE PROCEEDINGS UNDER SECTION 158BC IN THOSE THREE CASE S. IN REST 9 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OF THE CASES A.O. HAS, IN OUR OPINION, CORRECTLY IN ITIATED THE PROCEEDINGS UNDER SECTION 158BD. THE PROVISIONS OF SECTION 158BD ARE AS UNDER : '158BD. UNDISCLOSED INCOME OF ANY OTHER PERSON.WHE RE THE AO IS SATISFIED THAT ANY UNDISCLOSED INCOME BEL ONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO W HOM SEARCH WAS MADE UNDER S. 132 OR WHOSE BOOKS OF ACCO UNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER S. 132A, THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENT S OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON AND T HAT AO SHALL PROCEED AGAINST SUCH OTHER PERSON AND THE PRO VISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY.' CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER S. 132, OR DOCUMENT S OR ASSETS HAVE BEEN REQUISITIONED UNDER S. 132A. THE S AID PROVISION WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER S. 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER S . 132A. SEC. 158BD, HOWEVER, PROVIDES FOR TAKING RECOURSE T O A BLOCK ASSESSMENT IN TERMS OF S. 158BC IN RESPECT OF ANY O THER PERSON, THE CONDITIONS PRECEDENT WHERE FOR ARE : (I ) SATISFACTION MUST BE RECORDED BY THE AO THAT ANY UNDISCLOSED INC OME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH R ESPECT TO WHOM SEARCH WAS MADE UNDER S. 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR R EQUISITIONED HAD BEEN HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON; AND (III) THE AO HAS PROCEEDED UNDER S. 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF S. 158BD, THUS, ARE REQU IRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHO SE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND O THER 10 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSETS HAD BEEN REQUISITIONED UNDER S. 132A OF THE ACT. THESE PRINCIPLES ARE ESTABLISHED BY THE DECISION OF HONB LE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT 289 ITR 341. IN THE PRESENT CASE, SINCE THE PERSON SEARCHED HAPP ENED TO BE ONLY THREE PERSONS, 158BC PROCEEDINGS WERE CORRECTL Y INITIATED IN THEIR CASES. WHEREAS, IN OTHER CASES, THE MATTER PERTAINS TO PROCEEDINGS UNDER SECTION 158BD ONLY BECAUSE THEY A RE NOT PERSON SEARCHED AGAINST WHOM THE WARRANT WAS NOT IS SUED. HOWEVER, INCRIMINATING MATERIAL WAS PRESENT. THEREF ORE, PROCEEDINGS WERE CORRECTLY INITIATED IN THEIR CASES . THERE IS NO OBJECTION THAT SATISFACTION HAS NOT BEEN RECORDED I N THESE CASES. THE ONLY OBJECTION IS THAT, SINCE, THEY ARE ALSO SEARCHED BEING THE RESIDENTS OF THE SAME PREMISES, PROCEEDIN GS COULD HAVE BEEN INITIATED UNDER SECTION 158BC ALONE. THIS IS NOT THE LAW AS PROVIDED UNDER THE ACT AND ASSESSEES CONTEN TIONS CANNOT BE ACCEPTED. ASSESSEE RELIED ON THE DECISION OF HONBLE A.P. HIGH COURT IN THE CASE OF DR. RAVINDRA REDDY V S. ACIT, HYDERABAD IN ITTA.NO.35 OF 2001 DATED 03.07.2013 FO R THE PROPOSITION THAT SINCE THE ASSESSEES THEREIN WERE C OVERED BY SEARCH PROCEEDINGS UNDER SECTION 158BC COULD HAVE B EEN DONE. THESE PROPOSITIONS AS CANVASSED BY ASSESSEE C ANNOT BE ACCEPTED FOR THE SIMPLE FACT THAT IN THE CASE OF DR . RAVINDRA REDDY THERE WAS SEARCH IN HIS OWN NAME. THERE IS AC TUALLY A FINDING BY HONBLE A.P. HIGH COURT. THE FINDING IS AS UNDER : THE LD. COUNSELS CONTENTION THAT IT IS CONTINUATI ON OF SEARCH CONDUCTED IN THE HOUSE OF DR. S.S. REDDY AND IT WAS NOT AN INDEPENDENT ONE IS NOT ACCEPTABLE TO THE COURT AS WE HAVE FOUND THAT TWO SEPARATE SEARCH WARRANTS WERE ISSUED. THEREFORE, WHERE, IT IS A CONTINUATION OR OTHERWISE, HARDLY MATTERS. THE FACT REMAINS, THAT T HE SEARCH WAS CONDUCTED IN THE HOUSE OF THE APPELLANT ON THE STRENGTH OF SEPARATE WARRANTS AND MATERIAL COLLECTE D DURING THE SEARCH AND SEIZURE WAS RELIED ON DURING THE BLOCK ASSESSMENT. THEREFORE, IT IS INCORRECT THAT T HE SEARCH 11 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. WAS CONDUCTED FOR THE BLOCK ASSESSMENT. THEREFORE, THIS CASE, CANNOT BE COME WITHIN THE PURVIEW OF SECTION 158BD. THUS, AS CAN BE SEEN THE FACTS IN THE ABOVE REFERRE D CASE ARE THAT THERE WERE INDEPENDENT WARRANTS EXECUTED ON DR . RAVINDRA REDDY AND ON THE STRENGTH OF THAT FACT, TH E HONBLE A.P. HIGH COURT HELD THAT PROCEEDINGS IN 158BC COUL D HAVE BEEN DONE BUT NOT PROCEEDINGS UNDER SECTION 158BD. HOWEVER, THE PRESENT GROUP OF CASES OTHER THAN THE ABOVE THR EE PERSONS, THERE WERE NO WARRANTS EXECUTED IN THEIR NAMES EVEN THOUGH THEY ARE RESIDING IN THE SAME PREMISES. ACCORDINGLY , PROCEEDINGS UNDER SECTION 158BD WERE CORRECTLY INIT IATED. IN THE LIGHT OF THE ABOVE, THE OBJECTIONS RAISED BY AS SESSEE ON THE ISSUE OF PROCEEDINGS ARE NOT SERIOUSLY CONSIDERED A S WE HAVE TO EXAMINE THE ISSUE IN THE LIGHT OF MATERIAL IMPOUNDE D/SEIZED IN THE COURSE OF SEARCH IN ORDER TO JUSTIFY VARIOUS AD DITIONS, THAT TOO BEING SECOND ROUND OF APPEAL PROCEEDINGS. FURTH ER, AS ALREADY DIRECTED BY ITAT, A.O. WAS SPECIFICALLY DIR ECTED TO EXAMINE AND SPECIFY THE SEARCH MATERIAL OR POST-SEA RCH ENQUIRIES CONSEQUENT TO THE INCRIMINATING MATERIAL SEIZED, NO SUCH EXERCISE WAS DONE BY A.O. IN FACT, MANY OF THE ADDITIONS MADE ARE WITH REFERENCE TO BANK ACCOUNTS SUBMITTED BY ASSESSEE WHICH ARE ALREADY DISCLOSED TO THE DEPARTM ENT. MOREOVER, SOME OF THE ITEMS LIKE GIFTS RECEIVED, JE WELLERY BROUGHT TO TAX WERE ALREADY DISCLOSED IN THE BOOKS OF ACCOUNTS OR IN THE WEALTH TAX RETURNS. EVEN THOUGH IT WAS SP ECIFICALLY DIRECTED BY ITAT, A.O. HAS NOT GIVEN ANY FINDING AB OUT THE INCRIMINATING MATERIAL SEIZED IN THE COURSE OF SEAR CH WHILE REPEATING THE ADDITIONS. 6.1. THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. JUPITOR BUILDERS P. LTD., 287 ITR 287 HAS HELD THAT 12 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT PROCEEDINGS UNDERTAKEN UNDER CHAPTER XIV B ARE ONLY IN RESPECT OF UNDISCLOSED INCOME, THAT IS THAT INCOME WHICH HAS NOT BEEN, OR WOULD HAVE NOT BEEN DISCLOSE D AND WHICH HAS BEEN UNEARTHED AS A RESULT OF THE SEARCH OR REQUISITION. IT IS EVIDENT FROM CLAUSES(A) AND (B) OF SECTION 158BB OF THE I.T. ACT, 1961, THAT ANY ASSESSMENT PR OCEEDINGS UNDER CHAPTER XIVB, ASSESSMENTS COMPLETED UNDER SEC TION 143 OR 144 OR 147 CANNOT BE REOPENED. CONSEQUENTLY, THOSE ELEMENTS OF INCOME WHICH ALREADY STAND DISCLOSED IN THE RELEVANT ASSESSMENT YEARS FALL WITHIN THE BLOCK PER IOD MUST BE EXCLUDED WHILE COMPUTING THE UNDISCLOSED INCOME UND ER THE ACT. 6.2. LIKEWISE, IN THE CASE OF CIT VS. RAJENDR AKUMAR 178 TAXMAN 208 (MP) (HC) THE HONBLE MADHYA PRADESH HIG H COURT HAS HELD THAT WHERE ASSESSEE HAS MAINTAINED R EGULAR BOOKS OF ACCOUNTS AND THE RETURNS OF INCOME WERE FI LED REGULARLY BEFORE THE DATE OF SEARCH AND NO INCRIMIN ATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH, A DDITION ON ACCOUNT OF PEAK CREDIT OF FORMERS ACCOUNT WAS B EYOND THE SCOPE OF BLOCK ASSESSMENT AND LIABLE TO BE DELETED. 6.3 THE HONBLE ORISSA HIGH COURT IN THE CASE OF CIT VS. UTKAL ALLOYS LTD., 319 ITR 339 HAS HELD THAT WHERE NO INCRIMINATING DOCUMENTS FOUND DEPICTING SALE OR PUR CHASE OUTSIDE THE BOOKS AND NO DEFECT FOUND IN THE BOOKS OF ACCOUNTS MAINTAINED BY ASSESSEE IN REGULAR COURSE O F BUSINESS, NO ADDITION TO THE INCOME OF ASSESSEE AS UNDISCLOSED INCOME COULD BE MADE MERELY ON THE BASIS OF DISCREP ANCY WORKED OUT ON ESTIMATION OF STOCK. KEEPING IN VIEW, THESE PRINCIPLES ALREADY LAID DOWN IN THE CASES OF BLOCK ASSESSMENTS, WE EXAMINE EACH OF THE MAJOR ISSUES. 13 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 6. A) AVAILABILITY OF CASH: DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS THE AUTHORITIES FOUND TOTAL CASH OF RS.3,94,705 AT THE HOUSE OF GULAB RAI CHUGANI. AT S RI LACHMAN G. CHUGANIS RESIDENCE CASH OF RS.1,77,460 WAS FOUND. IN SO FAR AS THE CASH FOUND WITH SRI GUL AB RAI CHUGANI IS CONCERNED, THE AUTHORITIES SEIZED CA SH OF RS.3,50,000 WHEREAS FROM THE PREMISES OF SRI LACHMAN G. CHUGANI RS.1,50,000 WAS SEIZED. THE ASSESSEE, DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS INITIALLY DECLARED AN UNDISCLOSED INCOME OF RS.7 LAKHS. LATER, EXPLANATION WAS FILED BEFORE THE AUTHORITIES MENTIONING THAT SUCH DECLARATION WAS NO T CORRECTLY MADE. 6.A.2. THE ASSESSEE AND OTHER FAMILY MEMBERS WERE ASKED TO EXPLAIN THE CASH AVAILABLE AT THE RESIDENCE AND AT THE BUSINESS PREMISES OF THE CONCERNS IN WHICH THE FAMILY MEMBERS ARE INTERESTED . THE ASSESSEE AND OTHER FAMILY MEMBERS HAVE EXPLAINED THE SOURCES FOR THE CASH AVAILABLE AS UND ER : A) IT WAS SUBMITTED THAT THE CASH IS EITHER AVAILABLE AT THE RESIDENCE WHERE ALL THE OTHER FAMILY MEMBERS EXCEPT LACHMAN G. CHUGANI WERE STAYING OR IS AVAILABLE AT THE BUSINESS PREMISES. SUCH AMOUNT FOUND AT THE RESIDENCES OF SRI GULAB RAI CHUGANI AND THE BUSINESS PREMISES IN WHICH THE PERSONS ARE INTERESTED WAS RS.5,72,165. IT IS SUBMITTED THAT THE CASH BELONGING TO ALL THE CONCERNS AND ALL THE FAMILY MEMBERS WAS KEPT AT THE RESIDENCE. THUS, THE 14 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. TOTAL OF SUCH CASH AVAILABLE OF RS.5,72,165 IS EXPLAINED AS UNDER : I) CASH BOOKS OF 8 CONCERNS INCLUDING THE NEGATIVE BALANCE IN FOUR OF THE CONCERNS SHOWED A BALANCE RS.1,46,988. II) AMOUNTS DRAWN BY THE FAMILY MEMBERS IN THE IMMEDIATE PAST AND WAS AVAILABLE WITH THE FAMILY MEMBERS AS ON THE DATE OF SEARCH. 10.06.1996 INDIAN BANK-CHANDRU RS.25,000 10.06.1996 INDIAN BANK RAMESH RS.25,000 10.06.1996 INDIAN BANK GULAB RAI RS.25,000 10.06.1996 INDIAN BANK LACHMAN RS.25,000 27.08.1996 INDIAN BANK LACHMAN RS.25,000 17.09.1996 INDIAN BANK LACHMAN RS.25,000 10.08.1996 INDIAN BANK CHANDRU RS.25,000 10.08.1996 GRINDLAYS BANK RS.25,000 26.03.1996 GRINDLAYS GULAB RAI RS.25,000 16.08.1996 GRINDLAYS ASHOK RS.25,000 16.08.1996 GRINDLAYS KISHORE RS.25,000 IN THIS REGARD IT WAS SUBMITTED THAT THE BANK ACCOUNT CLEARLY INDICATE THAT THE CASH WAS WITHDRAW N FROM THE RESPECTIVE BANK ACCOUNTS ON THE DATES MENTIONED. DURING THE COURSE OF SEARCH, NO INFORMATION WAS FOUND THAT THE CASH SO WITHDRAWN WAS SPENT FOR ANY OTHER PURPOSES. IN VIEW OF THE FA CT THAT THE FAMILY MEMBERS HAD WITHDRAWN THE CASH AND NO EXPENDITURE WAS INCURRED UPTO THE DATE OF SEARCH , IT WAS SUBMITTED THAT THE CASH WAS AVAILABLE AS ON THE 15 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. DATE OF SEARCH. IN THIS REGARD THE ASSESSEE RELIED ON THE DECISION OF THE KERALA HIGH COURT IN THE CASE O F CIT VS K. SRIDHARAN REPORTED IN 201 ITR 1010 WHEREIN IT IS HELD THAT IF THE AMOUNT IS AVAILABLE IN THE PAST, THE SAME HA S TO BE CONSIDERED AS AVAILABLE UNLESS THERE IS EVIDENCE TO SHOW THAT THE SAME WAS SPENT. IN THIS VIEW OF THE MATTER, THE AMOUNT OF RS.2,75,000 IS TO BE CONSIDERED AS AVAILABLE WITH THE ASSESSEE. III) AN AMOUNT OF RS. 1 LAKH WAS LEFT WITH SMT. ROSHINI K. CHUGANI BY HER BROTHER SRI PAVAN SADARANGANI OF MUMBAI. IT WAS SUBMITTED THAT SRI SADARANGANI VISITED HYDERABAD FOR OBTAINING THE AGENCY FOR THE FANS MANUFACTURED BY M/S PLF. AS THE SAID CONCERN POSTPONED THE GRANT OF AGENCY THE SAID SRI SADARANGANI LEFT THE AMOUNT WITH SMT. ROSHINI K. CHUGANI. AN AMOUNT OF RS.1 LAKH WAS AVAILABLE AT THE PREMISES OF THE ASSESSEE FROM THE ABOVE SOURCE. (IV) MRS. SUNITHA IS THE DAUGHTER OF SRI RAMESH G. CHUGANI. JUST BEFORE HER MARRIAGE, AN AMOUNT OF RS.1 LAKH WAS WITHDRAWN FROM HER BANK ACCOUNT WITH DEVELOPMENT CO-OP. BANK LTD., MUMBAI. SHE SPENT AN AMOUNT OF RS.40 THOUSAND FROM OUT OF THE SAID AMOUNT FOR HER PERSONAL PURPOSES. THE BALANCE OF RS.60,000 WAS IN THE HOUSE. MRS. SUNITHA LEFT FOR UK IMMEDIATELY AFTER HER MARRIAGE AND SHE DID NOT RETURN TO INDIA BEFORE THE DATE OF SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED. THEREFORE, THE 16 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AMOUNT OF RS.60,000 WAS AVAILABLE AT THE PREMISES OF THE ASSESSEE. V) IT WAS SUBMITTED THAT THERE ARE IN ALL 20 FAMILY MEMBERS. OUT OF THEM 16 MEMBERS ARE THE INCOME-TAX ASSESSEES. THE INCOMES DERIVED INCLUDE THE PROPERTY INCOMES AND OTHERS. ALL THE PERSONS ARE STAYING TOGETHER IN THE SAID HOUSE. EVEN IF THE AVAILABLE CASH FOR EACH OF THE PERSON WERE TO BE TAKEN AT RS.2,000, AN AMOUNT OF RS.40,000 WOULD BE AVAILABLE. THE AGGREGATE OF THE ITEMS MENTIONED AT S.NO. (I) T O (V) ABOVE WORKS OUT TO RS.6,21,988. 6.A.3. THE CASH AS PER THE SEARCH RECORD SHOWS AN AMOUNT OF RS.5,72,165 AND IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT NO ADDITION ON ACCOUNT O F CASH FOUND AT THE RESIDENCE OF SRI GHULAB RAI CHUGA NI BE INCLUDED. 6.A.4. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION AND ADDED THE FOLLOWING AMOUNTS ON ACCOUNT OF EITHER DEFICIT CASH OR EXCESS CASH FOUND : A) RAMESH WATCH COMPANY -(DEFICIT CASH) RS.L,05,458 B) RAMESH SALES CORPORATION - (DEFICIT CASH) RS. 23,638 C) LACHMAN G. CHUGANI (EXCESS CASH) RS. 1,30,000 D) GHULAB RAI CHUGANI RS. 70,000 E) CHANDRU G. CHUGANI RS. 70,000 F) KISHORE G. CHUGANI RS. 70,000 G) ASHOK G. CHUGANI RS. 70,000 H) RAMESH G. CHUGANI RS. 70,000 17 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE ASSESSING OFFICER SIMPLY CONSIDERED THE ADMISSI ON MADE AT THE TIME OF SEARCH WITHOUT TAKING INTO CONSIDERATION THE RETRACTION OF THE ADMISSION AND T HE EXPLANATIONS SUBMITTED. IN VIEW OF THE ABOVE EXPLANATIONS, THE ASSESSING OFFICER IS NOT JUSTIFIE D IN MAKING ANY SUCH ADDITION IN THE ASSESSMENT. 6.A.5. WITHOUT PREJUDICE TO THE ABOVE, IT WAS SUBMITTED THAT THE CASH AVAILABLE AT THE BUSINESS CONCERNS AS PER THE BOOKS OF ACCOUNT DULY CONSIDERING THE DEFICIT CASH AMOUNTED TO RS.1,46,98 8. IF THE ASSESSING OFFICER WERE TO CONSIDER DEFICIT C ASH SEPARATELY, THE POSITIVE BALANCE OF CASH AS PER THE BOOKS OF ACCOUNT AMOUNTS TO RS.2,37,500 . THE ASSESSING OFFICER DID NOT CONSIDER THE AMOUNT AVAILABLE AS PER CASH BOOK. 6.A.6. WITH REGARD TO THE DEFICIT CASH IT IS EXPLAINED CLEARLY THAT THE CASH BELONGING TO ALL TH E BUSINESS CONCERNS AND THE INDIVIDUALS BEING OPERATE D FROM THE SAME PREMISES I.E. THE RESIDENCE OF SRI GULAB RAI CHUGANI. IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THE AVAILABILITY OF CASH. IN SO FAR AS THE ADDITION U/S . 69 IS CONCERNED, THE AO ADDED RS.70,000 EACH IN THE ASSESSMENT OF THE BROTHERS. THEREFORE, FOR THE PURPOSE OF MAKING ADDITION U/S. 69 HE ACCEPTED THE EXPLANATION THAT THE CASH AVAILABLE BELONGS TO ALL THE FAMILY MEMBERS BUT WHEN THERE IS A DEFICIT CASH BALANCE WITH SOME OF THE CONCERNS, THE AO DID NOT ACCEPT THE EXPLANATION. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE ASSESSING OFFICER SHOULD NOT HAV E 18 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. MADE ADDITION EITHER ON ACCOUNT OF EXCESS CASH FOUN D DURING THE COURSE OF SEARCH OR DEFICIT CASH AS PER THE BOOKS OF ACCOUNT OF THE TWO OF THE BUSINESS CONCERN S MENTIONED ABOVE. 6.A.7. WE HAVE CONSIDERED ASSESSEES EXPLANATION AND THE ACTION OF A.O. IN ALL ORDERS. AS FAR AS EXC ESS CASH AVAILABLE IN THE COURSE OF SEARCH IS CONCERNED , THE CASH IS EXPLAINABLE AS PER THE SUBMISSIONS MADE BY ASSESSEE ABOVE. CONSIDERING THAT ASSESSEES HAVE OWN CASH BALANCES, WITHDRAWALS AND PROPER EXPLANATIONS FOR THE MONIES AVAILABLE ON THE DAY TO THE EXTENT OF CASH FOUND ON THE DAY AT RS.5,72,165, ASSESSEES EXPLANATIONS ARE ACCEPTABLE. HOWEVER, THE DEFICIT CASH IN THE FIRMS WILL BE DEALT WITH SEPARA TELY WHEN THE ISSUE IS DEALT WITH IN RESPECTIVE APPEALS. THEREFORE, TO THE EXTENT OF CASH AVAILABILITY ON TH E DAY OF SEARCH IS CONCERNED, ASSESSEES EXPLANATION WERE ACCEPTABLE. TO THAT EXTENT, INDIVIDUAL ADDITIONS MA DE IN INDIVIDUAL HANDS ARE TO BE DELETED. 6. B. ADDITION ON ACCOUNT OF GOLD JEWELLERY: THE AUTHORITIES VALUED THE GOLD JEWELLERY FOUND AT THE PREMISES AT RS.57,31,287. FOR ARRIVING AT SU CH VALUE, THE AUTHORITIES VALUED THE JEWELLERY AS ON 19.10.1996 @ RS, 5,150 PER 10 GRAMS OF 24 CARAT GOLD. ALL THE ASSESSEES TOGETHER HAVE FILED EXPLANATIONS ON VARIOUS OCCASIONS BEFORE THE ASSESSING AUTHORITIES AND THE ADIT. ASSESSEES AS A GROUP EXPLAINED THE AVAILABILITY OF THE GOLD JEWELLERY. THE EXPLANATION S SUBMITTED ARE AS UNDER: 19 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. (1) THE GOLD JEWELLERY AVAILABLE AT THE PREMISES BELONGS TO ALL THE FAMILY MEMBERS OF SRI GULAB RAI CHUGANI, SRI RAMESH G. CHUGANI; SRI LACHMAN G.CHUGANI, SRI CHANDRU G. CHUGANI, SRI ASHOK G. CHUGANI AND SRI KISHORE G. CHUGANI AND THEIR FAMILY MEMBERS. ALL THE FAMILY MEMBERS EXCEPT LACHMAN G. CHUGANI LIVE TOGETHER IN ONE HOUSE. (2) IT WAS SUBMITTED THAT THE FOLLOWING PERSONS WERE FILING THE RETURN OF WEALTH UPTO AND INCLUDING ASSESSMENT YEAR 1992-93 AND THEY ADMITTED THE GOLD JEWELLERY EVEN PRIOR TO 1.4.1986. THE VALUE AS ADOPTED IN THE ASSESSMENT FOR THE ASSESSMENT YEAR 1987-88 (AS ON 31.3.1987) ARE PROVIDED IN THE STATEMENT FURNISHED. THE AGGREGATE VALUE OF THE JEWELLERY ADMITTED WAS RS.18,22,595. THE MARKET VALUE OF 24 CARAT GOLD AS ON 31.3.1987 WAS RS.2,560 WHEREAS THE MARKET VALUE OF 24 CARAT GOLD AS ON 31.3.1996 WAS RS.5,150. IF AN ADJUSTMENT IS MADE TAKING INTO CONSIDERATION THE INCREASE IN THE RATE, THE MARKET VALUE OF THE GOLD JEWELLERY ADMITTED WOULD BE RS.36,46,107. (3) IT IS FURTHER SUBMITTED THAT FOR THE PURPOSES OF WEALTH TAX THE VALUE OF THE GOLD JEWELLERY IS REDUCED BY 15%. THE ACTUAL VALUE OF THE GOLD JEWELLERY WOULD, THEREFORE, BE (RS.36,46,107 X 100/85=) RS.42,89,538. THIS VALUE IS TO BE CONSIDERED AS ADMITTED IN THE WEALTH TAX RETURNS AS ON 31.3.1987. (4) DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS, THE INCOME-TAX AUTHORITIES FOUND VALUATION REPORTS IN RESPECT OF GOLD JEWELLERY BELONGING TO THE CHILDREN AND THE VALUE AS PER THE SAID VALUATION REPORTS AS ON THE VALUATION DATES MENTIONED THERE ARE AS UNDER : 20 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. S.NO. NAME OF THE MINOR DATE OF VALUATION VALUE (RS.) VALUE AS ON 3.10.1996 (RS.) 01. SUNITHA R. CHUGANI 20.07.1986 26,651 64,137 02. VEENA R. CHUGANI 20.07.1986 24,839 59,776 03. NAMRATHA L. CHUGANI 31.03.1980 24,272 93,986 04. MONA R. CHUGANI 20.07.1986 23,655 56,927 05. MEENA L. CHUGANI 31.03.1980 20,645 79,941 06. POONAM L. CHUGANI 31.03.1980 24,097 93,308 07. RESHMA L. CHUGANI 31.03.1980 19,413 75,171 08. RAJESH C. CHUGANI 21.07.1986 25,978 62,517 09. SACHIN C. CHUGANI 21.07.1986 21,870 52,630 10. ROHIT K. CHUGANI 31.03.1986 12,392 29,822 THE DETAILS OF GOLD JEWELLERY HELD BY MISS. LAVINA MR. SANDEEP, MR. RAHUL AND MR. AMIT ARE NOT AVAILABLE. ON AN ESTIMATE, THE VALUE OF GOLD JEWELLERY HELD BY THEM IS TAKEN AT RS.25,000. 25,000 TOTAL RS.6,93,215 THE MARKET VALUE AS ON 3.10.1996 BY ADJUSTING THE VALUE BY INCREASING THE RATES WAS RS.6,78,215. THEREFORE, THE SAID VALUE IS TO BE CONSIDERED AS AVAILABLE WITH SMT. ANITHA G. CHUGANI. (5) IT IS SUBMITTED THAT SMT. ESWARI S. KRISHNANI, MOTHER OF SMT. ANITHA G. CHUGANI DIED ON 7.12.1995. ANITHA'S BROTHER KUMAR KRISHNANI WAS IN HONG KONG. SMT. ESWARI S. KRISHNANI LEFT 21 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 800 GRAMS OF GOLD JEWELLERY LISTED HEREUNDER : I) TWO PIECES OF GOLD CHAIN/PENDENTS II) TWO PAIRS OF GOLD BANGLES III) ONE PIECE OF GOLD BRACELET IV) ONE SET OF GOLD NECKLACE / EAR RINGS V) ONE SET OF GOLD DIAMOND NECKLACE AND EAR RINGS VI) TWO PAIRS OF OLD EAR RINGS VII) TWO PIECES OF GOLD AND DIAMOND RINGS VIII) TWO PIECES OF GOLD GUINNES IX) ONE PIECE OF GOLD DOLLAR CHAIN X) ONE PIECE OF GOLD DOLLAR CHAIN XI) ONE PIECE OF GOLD OUNCE COIN THESE ITEMS WERE FOUND AT THE PREMISES OF SMT. ANITHA K. CHUGANI, WIFE OF LACHMAN G. CHUGANI. THE ASSESSEE SUBMITTED COPY OF THE LETTER OF SRI KUMAR KRISHNANI, BROTHER OF SMT. ANITHA G. CHUGANI CONFIRMING THE ABOVE FACTS. THE VALUE OF THE SAID 800 GRAMS OF GOLD JEWELLERY AS ON 3.10.1996 WAS RS.4 LAKHS. (6) SMT. VARSHA MIRPURI, DAUGHTER OF SRI GULAB RAI, WHO WAS STAYING OUTSIDE INDIA LEFT 230.70 GRAMS OF GOLD JEWELLERY WITH HER FATHER. THE VALUE OF THE SAID JEWELLERY WAS RS.94,657 . A LETTER OF CONFIRMATION OF SMT. VARSHA MIRPURI WAS SUBMITTED. (7) IT IS SUBMITTED THAT SMT. MOHINI TAHILRAM, WIFE OF SRI TAHILRAM TIHAMDAS THANDANI IS THE GRAND MOTHER OF SMT.MANISHA A. CHUGANI LEFT A DEED OF 22 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SETTLEMENT SETTLING 376.3 GRAMS OF GOLD JEWELLERY IN FAVOUR OF SMT.MANISHA A. CHUGANI. THE SAID GOLD JEWELLERY WAS RECEIVED BY SMT. MANISHA A. CHUGNAI ON THE DEATH OF SMT. MOHINI TAHILRAM. THE VALUE OF THE SAID GOLD JEWELLERY OF 376.3 GRAMS WAS RS.1,77,646 . (8) IT IS FURTHER SUBMITTED THAT THERE WERE FOUR MORE MEMBERS OF THE FAMILY I.E. SANDEEP A.CHUGANI; RAHUL CHUGANI, AMIT CHUGANI AND MISS LAVEENA. THE PROBABLE GOLD JEWELLERY AVAILABLE WITH THEM AS PER THE CBDT CIRCULAR IS TAKEN, THE MARKET VALUE OF SUCH JEWELLERY WOULD BE RS.2,59,645. THE AGGREGATE OF THE ABOVE MENTIONED ITEMS (1) TO (9) ARE TO BE CONSIDERED AS EXPLAINED GOLD JEWEL LERY AND THE VALUE OF THE SAID GOLD WOULD BE RS.58,99,70 0. 6.B.1 BESIDES, THE ASSESSEE ALSO SUBMITTED THE EXPLANATIONS WITH REFERENCE TO THE WEIGHTS AND EVEN AS PER THE SAID EXPLANATION THE JEWELLERY AVAILABLE WA S PROPERLY EXPLAINED. IN THE CIRCUMSTANCES, IT WAS SUBMITTED THAT THE ASSESSING OFFICER IS NOT JUSTIFI ED IN MAKING ANY ADDITION ON THIS GROUND. 6.B.2. CONSIDERING THE EXPLANATIONS AND THE DOCUMENTS PLACED ON RECORD ALONG WITH WEALTH TAX RECORDS AND SUBSEQUENT VALUATIONS, WE ARE OF THE OPINION THAT THE JEWELLERY AVAILABLE WITH ASSESSEES ON THE DAY OF SEARCH ARE EXPLAINABLE AND SO SEPARATE ADDITIONS IN THE INDIVIDUAL HANDS DOES NOT ARISE. 23 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 6. C. ADDITION ON ACCOUNT OF STOCKS: C.1. IT WAS SUBMITTED THAT- (1) THERE WERE EIGHT DIFFERENT CONCERNS WHICH WERE COVERED U/S 133A OF THE I.T. ACT ON 03.10.1996 AND THERE WERE FIVE CONCERNS AT THE PREMISES OF 127-128, PARKLANE, SECUNDERABAD. (2) A COMMON LIST SHOWING THE STOCKS WAS PREPARED BY THE AUTHORITIES FOR THE FIVE CONCERNS WHICH WERE CARRYING ON DIFFERENT BUSINESS ACTIVITIES AT THE SAID PREMISES; (3) THE DEPARTMENTAL AUTHORITIES, WHILE ARRIVING AT THE VALUE OF THE STOCKS CONSIDERED THE 'TAG PRICE' AND NOT THE 'COST PRICE'. THERE IS DIFFERENC E BETWEEN THE COST PRICE; SALE PRICE AND THE TAG PRICE. THE TAG PRICE IS THE MAXIMUM PRICE. (4) THE TAG PRICE IS THE PRICE AFFIXED TO THE ARTIC LE. SALE PRICE IS THE PRICE AT WHICH THE ARTICLE IS SOL D AFTER ALLOWING DISCOUNT ETC. THE COST PRICE IS THE PRICE AT WHICH THE ASSESSEE PURCHASES THE GOODS. (5) THE AUTHORITIES DID NOT CONSIDER THE WATCHES RECEIVED ON CONSIGNMENT BASIS IN SPITE OF THE FACT THAT THERE WERE EVIDENCES TO THIS EFFECT. THE GOOD RECEIVED ON CONSIGNMENT WERE NOT PAID FOR BY THE ASSESSEE AND SUCH COST CANNOT BE CONSIDERED. (6) THE PROFIT ELEMENT ALONE IS REDUCED BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE FACT THAT THERE IS A DIFFERENCE BETWEEN THE SALE PRICE 24 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AND THE TAG PRICE REPRESENTING DISCOUNTS ETC. (7) IT IS ALSO SUBMITTED THAT IN THE CASE OF CLOCK SPECIALITIES, THE SALE PRICE, COST PRICE AND TAG PRICE ARE SEPARATELY PROVIDED WHERE THERE IS A VARIANCE BETWEEN THE COST PRICE AND SALE PRICE AND THE SALE PRICE AND THE TAG PRICE. (8) THE ASSESSING OFFICER ALSO DID NOT CORRECTLY WORK OUT THE COST PRICE; 6.C.2. AS CAN BE SEEN FROM THE INVENTORIES AND EXPLANATION GIVEN BY ASSESSEE A.O. HAS NOT DONE PROPER VERIFICATION OF THE TAG PRICE, SALE PRICE AN D COST PRICE. GENERALLY ASSESSEE VALUES THE STOCK AT COST PRICE OR MARKET PRICE WHICHEVER IS LESS IN THE BOOK S OF ACCOUNTS AND THIS METHOD OF VALUATION IS AN APPROVE D METHOD OF VALUATION. THERE IS NO DISPUTE THAT THE INVENTORY PREPARED BY THE DEPARTMENT IS ON THE TAG PRICE WHICH IS GENERALLY HIGHER THAN THE SALE PRICE AND CERTAINLY MORE THAN THE COST PRICE. ASSESSEE HAS PROVIDED THE DETAILS TO THE A.O. BUT THESE ARE NOT ACCEPTED. IN VIEW OF THIS, WE ARE OF THE OPINION TH AT A SEPARATE ADDITION ON EXCESS VALUE OF THE STOCK DOES NOT ARISE UNLESS THERE ARE EXCESS PIECES IDENTIFIED WHICH ARE NOT INVENTORIED. NO SUCH CASE WAS MADE OU T BY A.O. THAT THE QUANTITATIVE TALLY IS NOT MATCHING . THEREFORE, WE ARE OF THE OPINION THAT ADDITION OF DIFFERENCE IN PRICE DOES NOT ARISE IN THESE CASES. 25 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 6. D. BANK ACCOUNTS: IN ALL THE CASES, ASSESSING OFFICER, DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, CALLED FOR TH E LIST OF BANK ACCOUNTS AND THE SOURCES FOR THE DEPOS ITS MADE. ASSESSEES FURNISHED SUCH DETAILS WITH REFEREN CE TO EACH OF THE DEPOSIT MADE. ASSESSEES ALSO FURNISH ED THE DETAILS OF WITHDRAWALS EFFECTED FROM EACH BANK ACCOUNT AND THE PURPOSE OF WITHDRAWAL. THE ASSESSIN G OFFICER DISBELIEVED SOME OF THE EXPLANATIONS AND ADDED THE AMOUNTS. 6.D.1. IN THIS REGARD, ASSESSEES SUBMITS AS UND ER: (1) THE BANK ACCOUNTS WERE FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALONG WITH EXPLANATIONS AND DO NOT EMANATE FROM THE SEIZED MATERIAL; (2) THE BANK ACCOUNTS WERE ALL ADMITTED IN THE RETURNS OF INCOME AND THE RETURNS OF WEALTH (FILED UP TO ASSESSMENT YEAR 1992-93) ALREADY FILED. THEREFORE, THEY DO NOT REPRESENT THE UNDISCLOSED ASSETS OF ASSESSEES. (3) ASSESSEES HAVE EXPLAINED EACH OF THE DEPOSIT IN DETAIL. IT WAS ALSO STATED THAT THE BOOKS OF ACCOUNT WERE MAINTAINED BY THE PARTNERSHIP FIRMS, INDIVIDUAL CONCERNS AND ALSO BY THE INDIVIDUALS WHICH WERE SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS. SUCH BOOKS OF ACCOUNT WERE AVAILABLE WITH THE ASSESSING OFFICER. 26 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. (4) IN SO FAR AS THE INTEREST FROM THE BANK ACCOUNTS ARE CONCERNED, THE CREDITS INCLUDE THE INTEREST DERIVED FROM SB ACCOUNT, INTEREST CREDITED TO THE SB ACCOUNT FROM OUT OF THE INTERESTS ON FDRS. ASSESSEE SUBMITTED THAT THE AMOUNTS WERE ADMITTED BASED ON THE CREDITS IN THE BANK ACCOUNTS. THEREFORE, THE ASSESSEE SUBMITS THAT NO ADDITION COULD HAVE BEEN MADE. (5). IT WAS SUBMITTED THAT THE NSCS ON THEIR MATURITY WERE DEPOSITED IN THE BANK ACCOUNT ALONG WITH INTEREST; WHEREAS THE INTEREST WAS ADMITTED IN THE RETURNS OF INCOME FILED. THE ENTIRE AMOUNT OF INTEREST FOR ALL THE SIX YEARS WAS RECEIVED AT THE TIME OF REALIZATION. THE ASSESSING OFFICER SIMPLY BY VERIFYING THE REGULAR RETURNS OF INCOME AND THE AMOUNTS FOUND CREDITED IN THE STATEMENT OF BANK ACCOUNTS FURNISHED ADDED THE DIFFERENCE. (6). THE ASSESSING OFFICER ALSO TOOK INTO CONSIDERATION THE DEPOSITS MADE BY THE MINORS AND THE INTEREST EARNED BY THEM. IN SO FAR AS THE DEPOSITS IN THE BANK ACCOUNTS OF THE MINORS ARE CONCERNED, SUCH AMOUNTS WERE MOSTLY RECEIVED AS A GIFT FROM GULABRAI G.CHUGANI, GRAND FATHER OR FROM OTHERS. (7). IT WAS ALSO EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT SOME OF THE MINORS' ASSESSMENTS WERE SEPARATELY MADE U/S 158BD OF THE ACT. ALL THE ADDITIONS MADE AS UNDISCLOSED 27 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INCOMES IN THE ASSESSMENTS OF THE MINOR CHILDREN WERE DELETED BY THE HON'BLE ITAT ON THE GROUND THAT THE ADDITIONS DO NOT EMANATE FROM THE SEIZED MATERIAL. IT CAN BE SEEN THAT IN SO FAR AS THE BANK ACCOUNTS ARE CONCERNED, THE ASSESSEE RELIES ON THE DECISION OF THE HON'BLE ITAT IN THE CASES OF THE MINORS. (8). THERE IS ALSO NO INFORMATION TO THE EFFECT THAT THE PARENTS HAVE DEPOSITED THE AMOUNTS FROM OUT OF THEIR INCOMES IN THE BANK ACCOUNTS OF THE MINORS. FURTHER, THE PROVISIONS U/S 64(LB) WERE NOT APPLICABLE UP TO THE ASSESSMENT YEAR 1993-94. THEREFORE, THE DEPOSITS MADE INTO THE BANK ACCOUNT OF THE MINORS AND THE INTEREST RECEIVED BY THE MINORS FROM THE SAID ACCOUNTS ARE NOT ASSESSABLE IN THE ASSESSMENT OF THE PARENTS WHILE COMPLETING THE ASSESSMENTS U/S. 158BD OF THE ACT. (9). IN SO FAR AS THE INTEREST FROM THE BANK ACCOUNTS ARE CONCERNED, THE ASSESSING OFFICER RESORTED TO ESTIMATION OF SUCH INTEREST FROM THE FDRS; COMPARED THE EARLIER AMOUNTS WITH THE INCOME ADMITTED IN THE RETURNS OF INCOME FILED AND ADDED THE DIFFERENCE. THIS IS NOT CORRECT. THE ASSESSEES SUBMITS THAT ALL THE DETAILS WERE PROVIDED. THEY FURNISHED ALL THE DETAILS OF THE FDRS ALONG WITH THE MATURED VALUE. THE ASSESSEES ALSO FURNISHED THE RETURNS OF INCOME ALREADY FILED WHICH INDICATE THE ACTUAL AMOUNT OF INTEREST CREDITED TO THE RESPECTIVE BANK 28 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ACCOUNTS AND THE FD ACCOUNT. THEREFORE, IT IS SUBMITTED THAT THERE IS NO DIFFERENCE AND THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. (10). THE ASSESSEE, THEREFORE, SUBMITS THAT THE ASSESSING OFFICER SHOULD NOT HAVE MADE ANY ADDITION ON ACCOUNT OF THE DEPOSITS MADE INTO THE BANK ACCOUNT PARTICULARLY IN VIEW OF THE FACT THAT THE BANK ACCOUNTS WERE ALREADY DISCLOSED TO THE DEPARTMENT EITHER IN THE RETURNS OF INCOME OR IN THE RETURNS OF WEALTH OR IN BOTH. 6.D.2. AS ALREADY DISCUSSED ABOVE, A.O. HAS MADE SMALL-SMALL ADDITIONS IN VARIOUS YEARS OF THE AMOUN TS WHICH ARE CREDITED INTO BANK ACCOUNTS. THERE IS NO INCRIMINATING MATERIAL TO CONSIDER THOSE AMOUNTS IN BLOCK ASSESSMENTS. ASSESSEES OBJECTIONS ARE THAT THESE BANK ACCOUNTS ARE SUBSEQUENTLY FURNISHED TO A.O. THE TRANSACTIONS THEREIN ARE ALREADY ACCOUNTED FOR. MANY OF THE INCOMES HAVE ALREADY BEEN OFFERED ON ACCRUAL BASIS AND MANY OF THE ENTRIES HAVE BEEN ALREADY DISCLOSED TO THE DEPARTMENT. THESE ASPECTS WHICH WERE FACTUALLY TO BE VERIFIED WERE REFERRED T O A.O. BUT A.O. CHOOSE NOT TO COMMENT ABOUT INDIVIDUAL ENTRIES BUT RELIED ON THE SAME EXPLANATI ON. WE ARE OF THE OPINION THAT MAJORITY OF THE ADDITION S MADE ON THIS ACCOUNT DOES NOT SURVIVE. HOWEVER, INDIVIDUAL ADDITIONS MADE IN RESPECTIVE CASES HAVE BEEN SEPARATELY DEALT WITH. SUFFICE TO SAY, THAT TH E ADDITIONS FROM EXPLAINED SOURCES OR WHERE ASSESSEE HAS FURNISHED PROPER EXPLANATION ARE TO BE DELETED. 29 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 6. E. ADDITIONS U/S 80CC, 80CCA & 80CCD THE ASSESSING OFFICER MADE TWO DIFFERENT TYPES OF ADDITIONS: (1) THE ASSESSING OFFICER FOUND THAT THERE WERE DEPOSITS IN THE BANK ACCOUNT REPRESENTING MATURED VALUE OF THE MUTUAL FUNDS AND TREATED THE SAME AS THE INCOME OF THE ASSESSEE. (2) A SSESSEES CLAIMED DEDUCTIONS U/S 80C OR U/S 88 AGAINST PAYMENT OF LIC, PPF, NSC AND OTHERS. THE ASSESSING OFFICER IS OF THE VIEW THAT SOME WERE PAID FROM OUT OF THE LOAN FUNDS AND NOT FROM THE INCOMES AND, THEREFORE IS OF THE VIEW THAT THE SAME ARE NOT ALLOWABLE. 6.E.1 ASSESSEES ARE OBJECTING BOTH THESE TYPE S OF ADDITIONS MADE BY MAKING FOLLOWING SUBMISSIONS : 1. IT IS SUBMITTED THAT SUCH ADDITIONS ARE TO BE MADE IN VIEW OF THE SECTIONS CONTAINED IN CHAPTER VIA OF THE I.T. ACT. AT THE RELEVANT POINT OF TIME, ACCORDING TO THE COMPUTATION OF 'UNDISCLOSED INCOME' IT IS TO BE MADE THE INCOME IN ACCORDANCE WITH CHAPTER IV. EVEN AT THE TIME OF COMPLETION OF THE ASSESSMENTS, THE DEFINITION OF THE PROCEDURE FOR ARRIVING AT THE 'UNDISCLOSED INCOME' WAS THE SAME. WHEN THE PROVISIONS HAVE CLEARLY STATED THAT INCOME DETERMINED IN ACCORDANCE WITH CHAPTER IV, THE ASSESSING OFFICER APPLIED THE PROVISIONS CONTAINED IN CHAPTER VIA AND MADE THE ADDITIONS. ASSESSEES 30 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SUBMITTED THAT SUCH ADDITIONS ARE NOT JUSTIFIED AS THE DEFINITION OF THE UNDISCLOSED INCOME DOES NOT INCLUDE THE ADDITIONS AS CONTEMPLATED IN CHAPTER-VIA OF THE I.T. ACT. THE SAID PROVISION IS AMENDED RETROSPECTIVELY BY THE FINANCE ACT, 2002. HOWEVER, AT THE TIME OF COMPLETION OF THE ORIGINAL ASSESSMENT THE COMPUTATION HAD TO BE CONFINED TO CHAPTER IV WITHOUT CONSIDERING CHAPTER VIA OF THE ACT. 2. WITHOUT PREJUDICE IT IS SUBMITTED THAT THE CLAIMS WERE MADE IN THE RETURNS OF INCOME AND THE AMOUNTS REALIZED ARE CREDITED IN THE BANK ACCOUNT WHICH WERE ALREADY DISCLOSED TO THE DEPARTMENT. THE AMOUNTS CAN NOT BE CONSIDERED AS UNDISCLOSED INCOME AS ALL THE INFORMATION CONCERNING THE CLAIM AND THE REFUND ARE AVAILABLE WITH THE AUTHORITIES. FURTHER, THE ADDITION MADE DO NOT EMANATE FROM THE SEIZED MATERIAL. 3. THE MATURED VALUES ARE NORMALLY RECEIVED AFTER FIVE YEARS AND NO SUCH CLAIMS WERE MADE IN THE EARLIER PAST. IT IS SUBMITTED THAT THE ASSESSING OFFICER ADDED THE ENTIRE AMOUNT. HOWEVER, THE AMOUNT CLAIMED AND ALLOWED IN THE ASSESSMENTS WERE MUCH LESSER. CONSIDERING THE ABOVE FACTS, ASSESSEES SUBMITS THAT SUCH ADDITIONS SHOULD NOT HAVE BEEN MADE BY THE ASSESSING OFFICER. 31 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 4. IN SO FAR AS THE CLAIMS FOR DEDUCTION IX] S 80C OR 88 ARE CONCERNED, IT IS SUBMITTED THAT THE PAYMENTS WERE MADE TOWARDS NSCS, PPF OR LIC FROM THE BANK ACCOUNT. ASSESSEES ARE DEPOSITING THE INCOME IN THE SAME BANK ACCOUNT. IN FACT ALL THE TRANSACTIONS ARE TAKING PLACE THROUGH THE BANK ACCOUNT. THEREFORE, IT CAN NOT BE SAID THAT THE AMOUNTS WERE NOT PAID FROM TAXED INCOME. 5. IT IS SUBMITTED THAT THE INFORMATION IS ALREADY AVAILABLE ON RECORD AND THE CLAIMS WERE MADE IN THE RETURNS OF INCOME FILED. AT THE RELEVANT POINT OF TIME, THE PROVISIONS OF CHAPTER VIA WERE NOT APPLICABLE FOR DETERMINING THE UNDISCLOSED INCOME. 6. IT IS SUBMITTED THAT IN SO FAR AS 80C IS CONCERNED, 100% OF THE AMOUNT PAID WAS NOT ALLOWED BUT ONLY PART OF THE SAME WAS ALLOWED IN THE RESPECTIVE YEAR. THE ASSESSING OFFICER, HOWEVER, ADDED THE AMOUNTS DEPOSITED WITHOUT CONSIDERING THE AMOUNTS CLAIMED BY THE ASSESSEE OR ALLOWED BY THE ASSESSING OFFICER. IT IS SUBMITTED THAT ALL THE INDIVIDUALS WERE HAVING SUBSTANTIAL INCOME FOR MAKING PAYMENTS. 7. WITH REGARD TO THE CLAIM U/S.88 OF THE ACT, SUCH CLAIMS WERE NOT FROM THE GROSS TOTAL INCOME OF THE ASSESSEE BUT THE CLAIM WAS FROM TAX DETERMINED. THE PROVISIONS U/S 158BC/158BD NEVER CONTEMPLATE THE DISALLOWANCE OF TAX RELIEF CLAIMED IN THE RETURNS OF INCOME FILED. THEY 32 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CONTEMPLATE DETERMINATION OF UNDISCLOSED INCOME. THEREFORE, IT IS SUBMITTED THAT SUCH ADDITIONS COULD NOT HAVE BEEN MADE AND THE AMOUNTS SHOULD NOT HAVE BEEN TREATED AS UNDISCLOSED. 6.E.2. THESE ARE VARIOUS DEDUCTIONS CLAIMED IN THE RETURN BUT NOT ALLOWED BY A.O. ON THE PRETEXT THAT THE AMOUNTS ARE PAID OUT OF LOAN FUND AND NOT FROM INCOMES. THIS ISSUE IS NO LONGER VALID AS WHAT IS IMPORTANT IS WHETHER ASSESSEE HAS INVESTED IN VARIO US SCHEMES AS APPROVED UNDER THE ACT FROM HIS FUNDS AND HAS INCOMES JUSTIFYING THE INVESTMENTS. MOREOV ER THERE IS NO INCRIMINATING MATERIAL TO CONSIDER THEM IN BLOCK ASSESSMENTS. IN VIEW OF THIS, WE ARE OF THE OPINION THAT VARIOUS DISALLOWANCES/ADDITIONS MADE I N THIS COUNT CANNOT BE SUSTAINED. 6.F. ADDITION ON ACCOUNT OF GIFTS RECEIVED: 6.F.1 IT IS SUBMITTED THAT SMT. VARSHA MIRPURI JA I KUMAR IS THE DAUGHTER OF SRI GULAB RAI CHUGANI. SHE IS STAYING IN BANGKOK, THAILAND. HERSELF AND HER HUSBAND SRI JAI KUMAR ARE CARRYING ON BUSINESS IN THE SAME AND STYLE OF 'TULARAM (THAILAND) CO. LTD.,THAILAND. BESIDES, THEY WERE HAVING BUSINESS ACTIVITY AT OTHER PLACES. SHE SENT AMOUNTS TO THE B ANK ACCOUNT OPENED BY HER IN INDIA. OUT OF THE AMOUNTS DEPOSITED IN THE SAID BANK ACCOUNT SHE GIFTED AMOUN TS TO THE FAMILY MEMBERS OF SRI GULAB RAI CHUGANI. THESE AMOUNTS WERE RECEIVED INTO BANK ACCOUNTS MAINTAINED IN INDIA THROUGH BANKING CHANNELS. THE GIFTS WERE MADE TO THE FAMILY MEMBERS THROUGH 33 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CHEQUES ISSUED BY HER FROM HER BANK ACCOUNT IN INDI A. THE SAID AMOUNTS WERE DEPOSITED WITH THE RESPECTIVE BANK ACCOUNTS OF THE DONEES WITH INDIAN BANK. THE SAID BANK ACCOUNTS WERE ALREADY ADMITTED IN THE WEALTH TAX RETURNS AND THE INTEREST FROM BANK WERE ADMITTED IN THE RETURNS OF INCOME. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUI RED THE ASSESSEE TO STATE THE REASONS AS TO WHY THE SAI D AMOUNTS SHOULD NOT BE TREATED AS UNDISCLOSED INCOME . THE ASSESSEE SUBMITTED DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER. THE SAID EXPLANATIONS WERE REJECTED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER TREATED THE GIFTS RECEIVED FROM HER AS THE INCOME OF THE ASSESSEES CONCERNED. IN THIS REGARD THE SUBMISSIONS OF THE ASSESSEES ARE : (1) AN EXPLANATION FOR EACH OF THE ITEM IS SUBMITTED WHILE FILING THE SUBMISSIONS IN EACH CASE WHICH MAY KINDLY BE CONSIDERED. (2) SMT. VARSHA MIRPURI JAI KUMAR VIDE HER LETTER DATED 20.9.1997 CONFIRMED THAT SHE GIFTED IN ALL AN AMOUNT OF RS.42,16,665. SHE ALSO PROVIDED THE BANK ACCOUNT THROUGH WHICH THE AMOUNTS HAVE BEEN REMITTED INTO INDIA. (3) COPIES OF THE CHEQUES WERE ALSO PROVIDED; (4) SHE MENTIONED THAT SHE IS CARRYING ON THE BUSINESS IN BANGKOK AND THAT THE AMOUNTS WERE WITHDRAWN FROM THE BUSINESS CONCERN AND WERE PAID TO HER RELATIVES IN INDIA. THE SAID AMOUNTS WERE DEPOSITED IN THE BANK ACCOUNT OF SMT. VARSHA MIRPURI IN INDIA IN FOREIGN EXCHANGE AND THE AMOUNTS WERE GIFTED TO THE DONEES THROUGH CHEQUES. 34 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. (5) THE ASSESSING OFFICER ISSUED NOTICE U/S 158BD OF THE I.T. ACT TO HER. SHE FURNISHED THE RETURN OF INCOME IN RESPECT OF EACH OF THE DEPOSIT. THE ASSESSING OFFICER DROPPED THE PROCEEDINGS. THEREFORE, THE ASSESSEE SUBMITTED THAT THE ASSESSEE PROVED THE GENUINENESS OF THE GIFTS RECEIVED, THE CONFIRMATION THAT THE AMOUNTS WERE RECEIVED FROM THE DONOR AND ALSO PROVED THE SOURCE FOR THE DONOR FOR MAKING THE GIFTS. THE GIFTS WERE MADE THROUGH BANK ACCOUNT WHICH WAS DISCLOSED TO THE DEPARTMENT. THEREFORE, THE ASSESSEE SUBMITS THAT NO ADDITION BE MADE U/S 68 OF THE I.T. ACT WHILE COMPLETING THE BLOCK ASSESSMENT. 6.F.2 CONSIDERING THE SUBMISSIONS OF ASSESSEES WITH REFERENCE TO THE GIFTS ALSO, IT IS FOUND THESE ARE ACCOUNTED TRANSACTIONS AND PROCEEDINGS INITIATED IN THE CASE OF SMT. VARSHA MIRPURI WERE DROPPED. THEREFORE, THE MONIES TRANSFERRED FROM HER ACCOUNT, WHATEVER MAY BE THE REASON, IS EXPLAINABLE AS THE SOURCE FOR THE AMOUNTS RECEIVED. UNLESS THERE IS EVIDENCE THAT THE AMOUNTS ARE ASSESSEES OWN INCOMES, THE GIFTS RECEIVED FROM HER CANNOT BE BROU GHT TO TAX IN INDIVIDUAL HANDS, AS THAT ASSESSEE HAS EXPLANATION FOR HER SOURCE AND AMOUNT HAVE BEEN WITHDRAWN FROM THE BUSINESS CONCERNS AND ALSO ROUTED THROUGH BANKING CHANNELS. MOREOVER THERE IS NO INCRIMINATING MATERIAL TO JUSTIFY ADDITION IN BL OCK ASSESSMENTS. IN VIEW OF THIS, ADDITIONS IN THIS AL SO DOES NOT SURVIVE. 7. COMING TO THE INDIVIDUAL CASES OF ASSESSEES, THE GROUNDS, EXPLANATIONS AND FINDINGS ARE CONSIDER ED KEEPING THE ABOVE DISCUSSION IN MIND. THE REASONS STATED THERE IN ARE IN ADDITION TO THE DISCUSSION A BOVE. 35 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THESE ARE ENCLOSED AS ANNEXURES TO THIS ORDER AND THESE SHOULD BE TREATED AS PART OF THIS ORDER. 8. CONSEQUENTLY, APPEALS OF ASSESSEES ARE DECIDED AS UNDER: ITA.NO. BLOCK PERIOD NAME OF ASSESSEE RESULT 01/HYD/2011 1987-88 TO 1996-97 01.04.1996 TO 03.10.1996 MS. SHOBHA R. CHUGANI PARTLY ALLOWED 02/HYD/2011 MS. ROSHINI K. CHUGANI PARTLY ALLOWED. 03/HYD/2011 SHALU C. CHUGANI PARTLY ALLOWED. 04/HYD/2011 MANISH A. CHUGANI PARTLY ALLOWED. 05/HYD/2011 LAKSHMAN G. CHUGANI PARTLY ALLOWED. 06/HYD/2011 GULABRAI D. CHUGANI PARTLY ALLOWED 07/HYD/2011 MS. ANITHA L. CHUGANI PARTLY ALLOWED 08/HYD/2011 KUNJBAI G. CHUGANI PARTLY ALLOWED 09/HYD/2011 RAMESH G. CHUGANI PARTLY ALLOWED 10/HYD/2011 ASHOK G. CHUGANI PARTLY ALLOWED 11/HYD/2011 LATE CHANDRU G. CHUGANI L/R. RAJESH G. CHUGANI PARTLY ALLOWED 12/HYD/2011 KISHORE G. CHUGANI PARTLY ALLOWED 13/HYD/2011 RAMESH SALES CORPORATION PARTLY ALLOWED 14/HYD/2011 RAMESH WATCH SERVICES ALLOWED 15/HYD/2011 RAMESH WATCH COMPANY PARTLY ALLOWED 36 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ORDER PRONOUNCED IN THE OPEN COURT ON 10.12.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH DECEMBER, 2014. VBP/- COPY TO 1. MS. SHOBHA R. CHUGANI MR.S. RAMA RAO ADVOCATE FLAT NO. 102 SHRIYAS RESIDENCY ROAD NO.9 HIMAYATNAGAR HYDERABAD. 2. MS. ROSHNI K. CHUGANI 3. SHALU C. CHUGANI 4. MS. MANISHA K. CHUGANI 5. MR. LACHMAN G. CHUGANI 6. MR. GULABRAI D. CHUGANI 7. MS. ANITHA L. CHUGANI 8. MR. KUNJBAI G. CHUGANI 9. MR. RAMESH G. CHUGANI 10. MR. ASHOK G. CHUGANI 11. MR. CHANDRU G. CHUGANI (LATE) 12. MR. KISHORE G. CHUGANI 13. MR. RAMESH SALES CORPORATION 14. RAMESH WATCH SERVICES 15. RAMESH WATCH COMPANY 16. ACIT, CIRCLE 10(1), HYDERABAD. 17. CIT, HYDERABAD 18. D.R. ITAT A BENCH, HYDERABAD. 37 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-1. IT(SS)A NO.1/HYD/2011 MS. SHOBHA R.CHUGANI , HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 ASSESSMENT YEAR: 1987-88 GROUND NO. & AMOUNT ADDED (RS.) DETAILS OF ADDITION EXPLANATION BY ASSESSEE REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1 TO 7 & 55 GENERAL IN NATURE 8. RS.900 CASH DEPOSITED ON 15-4- 1986 IS TREATED AS UNDISCLOSE D INCOME. THE AVAILABLE OPENING CASH BALANCE WAS DEPOSITED IN THE INDIAN BANK ON 02-04-1986. INDIAN BANK ACCOUNT NO. 6190 CLEARLY SHOWS THAT THE ASSESSEE DEPOSITED AN AMOUNT OF RS. 900/- ON 2.4.1986 ITSELF. THE DEPOSIT OF RS. 900/- APPEARING AGAINST DATE 15.4.1986 REPRESENTS THE INTEREST RECEIVED FROM SBI MUTUAL FUND. AN AMOUNT OF RS.900/- WAS DEPOSITED IN CASH IN BANK ACCOUNT NO.6190 WHICH THE ASSESSEE COULD NOT EXPLAIN. HENCE TREATED AS UNDISCLOSED INCOME. IN VIEW OF THE EXPLANATION WHICH WAS NOT CONTROVERTE D BY AO, THE ADDITION STANDS DELETED. 9. RS.5342 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPTS OR INTEREST RECEIVED. RS.5,000/- WAS TRANSFERRED FROM INDIAN BANK A/C NO.6190 TO A/C NO.8883. RS.342/- IS A PART OF INTEREST CREDITED TO THE ACCOUNT BY THE BANK. THEY DO NOT REPRESENT RENT. THE AMOUNT OF RS. 342/- WAS OFFERED TO TAX IN THE ASST. YEAR 1987- 88. THE A.O. FOUND THAT THERE WAS A DEPOSIT OF RS.5,000/- ON 5.1.87 IN THE JOINT BANK A/C NO.8883 IN INDIAN BANK WITH SMT. ANITHA. THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT WAS TRANSFERRED FROM INDIAN BANK A/C NO.6190 WAS FOUND TO BE INCORRECT. FURTHER, AN AMOUNT OF RS.342/- WAS FOUND CREDITED AS INTEREST WHICH WAS NOT DECLARED IN RETURN. THEREFORE, THE TOTAL AMOUNT OF RS.5342/- IS TREATED AS UNDISCLOSED INCOME. IN VIEW OF THE EXPLANATION WHICH WAS NOT CONTROVERTE D BY AO, THE ADDITION STANDS DELETED 38 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 10. RS.20,000 ADDITION TREATING THE GIFT RECEIVED AS UNDISCLOSE D INCOME. THE ASSESSEE RECEIVED A GIFT OF RS.20,000/- FROM SRI LAL DAYAL DASANI, NRI, GIBRALTOR ON 19-1-1987. LETTER OF CONFIRMATION WAS SUBMITTED (PAGE NO. 16) ANNEXED TO THE EXPLANATION SUBMITTED (PAGE NO. 13 OF THE PAPER BOOK). THIS DOES NOT EMANATE FROM THE SEIZED DOCUMENTS. THE AMOUNT WAS RECEIVED THROUGH BANKING CHAN NELS. THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT. THEREFORE, THE ADDITION SHOULD NOT HAVE BEEN MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. IT WAS FOUND FROM THE SEIZED MATERIAL THAT THE BANK OF CREDIT AND COMMERCE GIBRALTOR AUTHORIZED BANK OF INDIA FOR PAYMENT OF RS.20,000/- ON 19.1.87. THE AMOUNT WAS NEITHER DECLARED IN REGULAR RETURN OF INCOME NOR THE ASSESSEE SUBMITTED GIFT TAX RETURN. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. AS THE AMOUNT WAS NOT DISCLOSED IN STATEMENTS EARLIER, THE SAME CAN BE CONSIDERED IN BLOCK ASSESSMENT . AS THE OCCASION FOR GIFT IS NOT EXPLAINED, CREDIT IS CONFIRMED AS UNEXPLAINE D. ASSESSMENT YEAR: 1988-89 11. RS.1392 ADDITION ON ACCOUNT OF SHORT DECLARATION OF INTEREST. THIS AMOUNT PERTAINS TO INTEREST FROM INDIAN BANK A/C NO.8883 OF RS.582/- ON 5-5-87 AND RS.811/- ON 10- 11-87. THE APPELLANT IS ENTITLED FOR 50% OF THE SAID AMOUNT AND NOT THE ENTIRE AMOUNT. EVEN IF THE 50% WERE TO BE ADDED THE SAID AMOUNT WOULD BE DEDUCTIBLE U NDER SEC. 80L OF THE ACT. THEREFORE, NO ADDITION NEED BE MADE. THE ADDITION DELETED. THIS AMOUNT OF RS.1392/- WAS NOT DECLARED BY THE ASSESSEE IN THE REGULAR I.T.RETURN. HENCE, TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. SINCE ELIGIBLE FOR DEDUCTION U/S 80L AMOUNT STANDS DELETED. ASSESSMENT YEAR: 1989-90 12. RS.2,573 RS.4,800 INTEREST AND DEPOSIT IN BANK ACCOUNT TREATED AS UNDISCLOSE D INCOME. WITH REGARD TO RS.2,573/-, THE ASSESSEE SUBMITS THAT RS.600/- WAS RECEIVED AS GIFT FROM DAYANAND. BALANCE RS.1973/- IS INTEREST ON INDIAN BANK ACCOUNT NO.8883. OUT OF THE INTEREST OF RS. 1,973, THE APPELLANT IS ENTITLED ONLY FOR 50% AS THE BALANCE 50% RELATES TO SMT.ANITHA. IT IS FURTHER SUBMITTED THAT THE ADDITION DOES NOT EMANATE FROM ANY SEIZED MATERIAL AND HENCE (A)ASSESSEE RECEIVED RS.1515/- FROM A/C 6190/- AND RS.1975/- FROM A/C NO.8883 BUT DECLARED RS.917/- ONLY IN RETURN. HENCE BALANCE OF RS.2573/- IS TREATED AS UNDISCLOSED INCOME. B)RS.4800/- CASH DEPOSITED IN A/C NO.6190 ON 16-4-98. ASSESSEES EXPLANATION THAT INTEREST RECEIVED CONSIDERING THE EXPLANATION AMOUNTS ARE DELETED. 39 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. NO ADDITION CAN BE MADE. EVEN OTHERWISE, THE SAID AMOUNT WOULD BE EXEMPT UNDER SEC. 80L OF THE ACT. WITH REGARD TO THE DEPOSIT OF RS.4,800/, THE INTEREST RECEIVED ON NSC WAS DEPOSITED ON 9-4-99 FROM NSC IS NOT ACCEPTABLE AS INTEREST ON NSC IS PAID AT THE TIME OF MATURITY ONLY. 13. RS.1,200 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL. RENT ACCOUNT STATEMENT WAS FILED BEFORE THE ASSESSING OFFICER(PAGE NO. 13 OF THE PAPER BOOK). IT IS NOT CORRECT TO SAY THAT RENT IS SHORT SHOWN. FURTHER, THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. RS.20,400/- WAS DEPOSITED IN JOINT A/C NO.8883. ASSESSEES SHARE IS RS.10,200/- BUT SHE DECLARED RS.9000/- ONLY AS RENTAL RECEIPTS IN RETURN. HENCE RS.1200/- IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. ENTIRE RENT CAN NOT BE ADDED AS THE INCOME IS TO BE COMPUTED UNDER THE HEAD HOUSE PROPERTY. MORE OVER AMOUNT IS CORRECTLY DISCLOSED AS EXPLAINED. HENCE DELETED. 14. RS.4,800 ADDITION TREATING THE DEPOSIT AS UNDISCLOSE D DEPOSIT. THIS GROUND IS ALREADY EXPLAINED AT SRL.NO.12 ABOVE. RS.4800/- CASH DEPOSITED IN A/C 6190 ON 16-4-98. ASSESSEES EXPLANATION THAT INTEREST RECEIVED FROM NSC IS NOT ACCEPTABLE AS INTEREST ON NSC IS PAID AT THE TIME OF MATURITY. DELETED 15. RS.45,000 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT THE NARRATION OF THIS GROUND IS WRONG. A COPY OF THE NOTE SUBMITTED BEFORE THE ASSESSING OFFICER REGARDING ADDITIONS UNDER SEC.80CCA AND 80 CCB IS ANNEXED FOR READY REFERENCE. IN VIEW OF THE DETAILED EXPLANATION SUBMITTED, THE ADDITION MAY KINDLY BE DELETED. THE APPELLANT CLAIMED DEDUCTION UNDER SEC. 80C OF RS. 45,000 AND BECAME ELIGIBLE FOR DEDUCTION OF RS. 20,200. THE CLAIM WAS MADE IN THE IT WAS FOUND THAT THE INVESTMENTS IN NSC HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS 40 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RETURN OF INCOME FILED. THE DISALLOWANCE DOES NOT EMANATE FROM THE SEIZED MATERIAL. FURTHER, THE EFFECTIVE CLAIM WAS ONLY RS. 10,000. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION OF RS. 45,000. FURTHER, THE CONTENTION OF THE ASSESSING OFFICER THAT THE AMOUNT WAS PAID OUT OF THE LOANS IS NOT JUSTIFIED. THE APPELLANT PAID THE AMOUNTS FROM THE BANK ACCOUNTS AND THE INCOMES WERE ALSO CREDITED IN THE SAME BANK ACCOUNT. THEREFORE, THE APPELLANT SUBMITS THAT THE CLAIM MADE IS JUSTIFIED AND THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. ASSESSMENT YEAR: 1990-91 16. RS.3,600 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENT. THE APPELLANT ADMITTED RENTAL INCOME OF RS. 9,000 FROM THE JOINT PROPERTY IN THE REGULAR RETURN OF INCOME. THE ASSESSING OFFICER IS OF THE VIEW THAT THERE IS SUPPRESSION IN THE RENTAL INCOME. IT IS SUBMITTED THAT THERE IS NO SUCH SUPPRESSION AND THERE IS NO SEIZED MATERIAL TO SUGGEST THAT THERE IS ANY SUPPRESSION. THEREFORE, NO ADDITION CAN BE MADE. A STATEMENT SHOWING THE RECEIPT OF RENTS YEAR WISE AND THE DIVISION AMONG THE JOINT OWNERS IS SUBMITTED AS AN ANNEXURE TO THE PRESENT SUBMISSIONS. AN AMOUNT OF RS.25,200/- WAS DEPOSITED IN JOINT A/C NO.8883. ASSESSEES SHARE IS RS.12,600/- BUT SHE DECLARED ONLY RS.9000/- AS RENTAL RECEIPTS IN RETURN FILED. THEREFORE, THE BALANCE OF RS.3600/- WAS TREATED AS UNDISCLOSED INCOME. ENTIRE RENT CAN NOT BE ADDED AS THE INCOME IS TO BE COMPUTED UNDER THE HEAD HOUSE PROPERTY. MORE OVER AMOUNT IS CORRECTLY DISCLOSED AS EXPLAINED. HENCE DELETED 17. RS.5,400 ADDITION ON ACCOUNT OF SHORT DECLARATION OF INTEREST THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME. NO FURTHER COMMENTS ARE OFFERED ADMITTED IN BLOCK RETURN. GROUND REJECTED. 18. RS.4,800 ADDITION HOLDING THE WITH REGARD TO RS.4,800/- THE SAME PERTAINS TO INTEREST INTEREST ON NSC IS PAID AT THE TIME OF SINCE AMOUNTS 41 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. (19-4-89 RS.2,700 (20-4-89) RS.2,400 (1-1-90) DEPOSITS AS UNDISCLOSE D INCOME. RECEIVED FROM NSC. WITH REGARD TO THE ADDITION OF RS.2,700/-, NO SUCH ENTRY EXISTS IN THE BANK ACCOUNT WITH REGARD TO RS.2,400/- THIS REPRESENTS THE INTEREST RECEIVED FROM NSC. NO EXPLANATION FROM AO ABOUT THE ENTRY IN BANK ACCOUNT. OTHER AMOUNTS ACCOUNTED. MATURITY ONLY. HENCE THE CLAIM OF THE ASSESSEE THAT THESE AMOUNTS PERTAINS TO INTEREST RECEIVED FROM NSC IS NOT ACCEPTABLE. ARE DISCLOSED, THE SAME ARE DELETED. 19. RS.22,000 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT THE AMOUNTS WERE PAID THROUGH BANK ACCOUNT NO. 6190 WITH INDIAN BANK. ALL THE INCOMES OF THE APPELLANT OR RECEIPTS WERE ALSO CREDITED TO THE SAID ACCOUNT. THEREFORE, THE AOS OBSERVATION IS NOT CORRECT. FURTHER, THE SAID AMOUNTS WERE CLAIMED AS DEDUCTION UNDER SEC. 80C AND 80CC WHILE FILING THE RETURN OF INCOME FILED. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THEREFORE, SUCH AN ADDITION SHOULD NOT HAVE BEEN MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. IT IS FURTHER SUBMITTED THAT THE CLAIM MADE WAS ONLY RS. 10,000 UNDER SEC. 80CC AND RS. 880 UNDER SEC. 80C OF THE ACT. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. THE STAND OF AO IS NOT JUSTIFIED. HENCE DELETED. IT WAS FOUND THAT THE INVESTMENTS IN PPF AND MUTUAL FUND HAVE BEEN MET FROM BORROWED FUNDS. REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. ASSESSMENT YEAR: 1991-92 20. RS.1250 ADDITION ON GROUND OF SHORT DECLARATION OF RENTAL RECEIPT. THIS AMOUNT PERTAIN TO INTEREST RECEIVED FROM BANK ACCOUNT IN THE JOINT NAMES OF THE APPELLANT AND SMT. ANITHA CHUGANI. 50% OF THE SAID AMOUNT IS IN THE HANDS OF THE ASESSEE AND THE BALANCE BELONGS TO SMT.ANITA CHUGANI. IT IS INTEREST RECEIVED FROM BANK A/C NO.8883 IS ADDED AS THE ASSESSEE HAS NOT DECLARED THE SAME IN RETURN. SINCE ELIGIBLE FOR DEDUCTION U/S 80L AMOUNT STANDS DELETED 42 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ALREADY EXPLAINED THAT THIS AMOUNT REPRESENT INTEREST RECEIVED FROM BANK ACCOUNT IN THE JOINT NAMES OF THE ASSESSEE AND SMT. ANITHA CHUGANI. 50% OF THE SAID AMOUNT BELONGS TO THE ASSESSEE AND THE BALANCE TO SMT. ANITHA CHUGANI. THE ASSESSEES SHARE OF INTEREST HAS BEEN OFFERED TO TAX IN THE ORIGINAL RETURN OF INCOME FILED. 21. RS.3,600 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT. THE INFORMATION IS IN THE ANNEXURE. IT CAN BE SEEN THAT THERE IS NO SHORT DECLARATION OF RENT AND THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION. IT IS FURTHER SUBMITTED THAT SUCH AN ADDITION IS MADE PURELY ON ESTIMATION AND ON ASSUMPTIONS. THERE IS NO INFORMATION IN THE SEIZED MATERIAL. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. HOWEVER, WITHOUT PREJUDICE, THE APPELLANT SUBMITS THAT SHE POSSESS ONLY 50% RIGHT IN THE SAID PROPERTY AND HENCE 50% OF THE AMOUNT AFTER DEDUCTING THE STATUTORY DEDUCTION HAS TO BE TREATED AS THE INCOME OF THE APPELLANT. THE DETAILS ARE FURNISHED IN THE PAPER BOOK FURNISHED AT PAGE NO. 54. COPY OF THE SAME IS ENCLOSED. THERE IS NO INFORMATION IN THE SEIZED MATERIAL SUGGESTING AN ADDITION. RS.25,200/- DEPOSITED IN JOINT A/C NO.8883. ASSESSEES SHARE IS RS.12,600/- BUT DECLARED ONLY RS.9000/- AS RENTAL RECEIPTS IN THE RETURN ENTIRE RENT CAN NOT BE ADDED AS THE INCOME IS TO BE COMPUTED UNDER THE HEAD HOUSE PROPERTY. MORE OVER AMOUNT IS CORRECTLY DISCLOSED AS EXPLAINED. HENCE DELETED 22. RS.5,894 ADDITION ON THE GROUND OF UNDISCLOSE D INTEREST FROM NSC THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. NO FURTHER COMMENTS. ADMITTED IN BLOCK RETURN. GROUND REJECTED 23. RS.12,000 ADDITION ON ACCOUNT THE NARRATION OF THIS GROUND IS WRONG AND THE APPELLANT IT WAS FOUND THAT THE INVESTMENTS IN PPF AS ASSESSEE IS 43 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OF SHORT DECLARATION OF RENTAL RECEIPT/ DIS- ALLOWANCE OF CLAIM IS SUBMITTING A MODIFIED GROUND FOR THE YEAR UNDER CONSIDERATION WHICH MAY KINDLY BE CONSIDERED. THE APPELLANT SUBMITS THAT THE CLAIM FOR DEDUCTION WAS MADE DURING THE YEAR IN THE REGULAR RETURN OF INCOME. SUCH AN AMOUNT CANNOT BE DISALLOWED WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. FURTHER, THE APPELLANT SUBMITS THAT SHE POSSESSED THE REQUIRED FUNDS. FURTHER, THE REASON FOR DISALLOWANCE IS NOT CORRECT. THEREFORE, SUCH AN ADDITION CANNOT BE MADE. AND MUTUAL FUND HAVE BEEN MET FORM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. ASSESSMENT YEAR: 1992-93 24. RS.1500 ADDITION ON THE GROUND OF SHORT DECLARATION OF LIC MUTUAL FUND. THE NARRATION OF THE RECEIPTS IS AT PAGES 83-84 OF THE PAPER BOOK. THE AMOUNT OF RS. 2,000 REPRESENTS INTEREST RECEIPT AND WHEREAS THE BALANCE OF RS. 1,500 RECEIVED IS MENTIONED AS REFUND. THEREFORE, THE AMOUNT OF RS. 1500 CANNOT BE ADDED AS UNDISCLOSED INCOME. FURTHER, THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL AND CANNOT BE CONSIDERED AS UNDISCLOSED INCOME. THE AMOUNTS ARE RECORDED IN THE BANK ACCOUNTS, WHICH WERE DISCLOSED TO THE DEPARTMENT. THEREFORE, SUCH AN ADDITION CANNOT BE MADE. ASSESSEE RECEIVED AN AMOUNT OF RS.3500/- FROM LIC MUTUAL FUND. OUT OF THIS SHE DECLARED ONLY RS.2000/- IN THE REGULAR RETURN OF INCOME. THE BALANCE OF RS.1500/- TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. AMOUNT BEING REFUND THE SAME STANDS DELETED. 25. RS.1,081 ADDITION ON THE GROUND OF SHORT DECLARATION OF INTEREST. THIS AMOUNT PERTAIN TO INTEREST RECEIVED FROM THE JOINT ACCOUNT WITH SMT. ANITHA. THE SUBMISSIONS MADE FOR THE IMMEDIATELY PRECEDING YEAR MAY KINDLY BE CONSIDERED. IT IS SUBMITTED THAT ONLY 50% OF THE SAID AMOUNT IS ASSESSABLE IN THE HANDS OF AN AMOUNT OF RS.4833/- WAS RECEIVED AS INTEREST FROM BANK A/C NO.8883 AND 6190. ASSESSEE DECLARED ONLY RS.3752/- IN THE RETURN. THEREFORE, THE BALANCE OF RS.1081/- TREATED AS UNDISCLOSED STAND DELETED FOR REASONS STATED EARLIER ON SIMILAR ADDITION. 44 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE ASESSEE AND THE BALANCE BELONGS TO SMT.ANITA CHUGANI. IT IS FURTHER SUBMITTED THAT SUCH AN ADDITION IS SUBJECT TO DEDUCTION UNDER SEC. 80 L OF THE ACT. INCOME. 26. RS.15,000 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT THE NARRATION OF THIS GROUND IS WRONG. A REVISED GROUND OF APPEAL IS SUBMITTED WHICH MAY KINDLY BE CONSIDERED. THIS REPRESENTS INVESTMENT AND CLAIM MADE BEFORE THE ASSESSING OFFICER IN THE REGULAR RETURN OF INCOME FILED. THEREFORE AND FOR THE REASONS SUBMITTED FOR THE IMMEDIATELY PRECEDING YEAR, THE APPELLANT SUBMITS THAT THE SAID ADDITION SHOULD NOT HAVE BEEN MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158BD OF THE ACT. IT WAS FOUND THAT THE INVESTMENTS IN PPF AND MUTUAL FUND HAVE BEEN MET FORM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. ASSESSMENT YEAR: 1993-94 27. RS.1833 ADDITION ON ACCOUNT OF SHORT DECLARATION OF INTEREST THIS AMOUNT PERTAINS TO INTEREST RECEIVED FROM THE JOINT ACCOUNT OF THE APPELLANT AND SMT. ANITHA. THE APPELLANT SUBMITTED A NOTE FOR THE IMMEDIATELY PRECEDING YEAR IN THIS REGARD.. AN AMOUNT OF RS.18373/- WAS RECEIVED AS INTEREST FROM BANK A/C NO.8883 AND 6190. ASSESSEE DECLARED AN AMOUNT OF RS.16540/- ONLY IN THE RETURN. THEREFORE, BALANCE OF RS.1833/- IS TREATED AS UNDISCLOSED INCOME. DELETED FOR THE REASONS STATED FOR SIMILAR ADDITION ABOVE. 28. RS.1512 ADDITION TREATING THE INTEREST RECEIVED ON MUTUAL FUND AS UNDISCLOSE D INCOME. THIS IS ADMITTED IN THE BLOCK RETURN OF INCOME FILED. THIS GROUND OF APPEAL IS NOT PRESSED. NO FURTHER COMMENTS. NOT PRESSED BY THE ASSESSEE. GROUND REJECTED 45 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 29 RS.40,000 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT/ CLAIM DISALLOWED. THIS AMOUNT REPRESENTS INVESTMENT IN PPF AND A CLAIM WAS MADE UNDER SEC. 88 OF THE ACT. THIS WAS NOT CLAIMED AS A DEDUCTION FROM THE TOTAL INCOME. THIS CLAIM IS ONLY AS A RELIEF FROM THE TAX PAYABLE. THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING THE SAID AMOUNT. NOTE SUBMITTED AT COL. NO. 4 MAY KINDLY BE PERUSED. FOR THE REASONS STATED THEREIN, FOR THE DETAILED EXPLANATION SUBMITTED FOR EARLIER YEARS, THE ADDITION MADE MAY KINDLY BE DELETED. IT WAS FOUND THAT THE INVESTMENTS I N PPF HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. ASSESSMENT YEAR: 1994-95 30. RS.1200 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPTS. RENT IS NOT SHORT DECLARED. A STATEMENT OF RENT RECEIVED WAS ALREADY SUBMITTED BEFORE THE ASSESSING OFFICER (PAGE NO.95 TO 103 OF THE PAPER BOOK.). THE APPELLANT IS ALSO SUBMITTING A COPY OF THE STATEMENT SHOWING THE DIVISION OF RENT BETWEEN THE APPELLANT AND SMT. ANITHA CHUGANI. A VERIFICATION OF THE SAID FIGURES WOULD REVEAL THAT THERE IS NO UNDISCLOSED INCOME. RENT IS NOT SHORT DECLARED. RS.27,600/- DEPOSITS WERE MADE IN JOINT A/C NO.8883 WHICH ARE AGAINST RENTAL RECEIPTS. ASSESSEE SHARE IS RS.13,800 BUT DECLARED ONLY RS.12,600/- IN THE RETURN. THEREFORE, RS.1200/- IS TREATED AS UNDISCLOSED INCOME. ENTIRE RENT CAN NOT BE ADDED AS THE INCOME IS TO BE COMPUTED UNDER THE HEAD HOUSE PROPERTY. MORE OVER AMOUNT IS CORRECTLY DISCLOSED AS EXPLAINED. HENCE DELETED 31. RS.11,966 ADDITION ON ACCOUNT OF SHORT DECLARATION OF INTEREST/RE NTAL RECEIPTS. THE ASSESSING OFFICER DID NOT CORRECTLY WORK OUT THE ACTUAL AMOUNT RECEIVED. THE APPELLANT ADMITTED THE BANK ACCOUNTS IN THE RETURNS OF INCOME FILED. THE AMOUNTS ACTUALLY CREDITED TO THE BANK ACCOUNTS WERE TAKEN INTO CONSIDERATION AS INTEREST WHILE FILING THE RETURN OF INCOME. THERE IS RS.20,804 AND RS.6010 INTERESTS WERE RECEIVED FROM BANK A/C NO.8883 AND 6190. ASSESSEE DECLARED ONLY RS.14,848/- IN THE RETURN. THEREFORE, BALANCE OF RS.11,966/- IS TREATED AS UNDISCLOSED INCOME. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON 46 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. NO SHORT DECLARATION OF INTEREST FOR THE YEAR. IT IS FURTHER SUBMITTED THAT THE ADDITION DOES NOT EMANATE FROM THE SEIZED DOCUMENT AND THE AMOUNT CANNOT BE CONSIDERED AS THE UNDISCLOSED INCOME. FURTHER, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER HAS NO BASIS FOR SUCH WORKING. . ACCRUAL BASIS, THE EXPLANATIO N IS ACCEPTED. AMOUNT DELETED. 32. RS.5210 ADDITION ON ACCOUNT OF UNDISCLOSE D INTEREST FROM NSC THIS AMOUNT REPRESENTS INTEREST FROM NSC. THE SAID INTEREST IS ADMITTED IN THE REGULAR BOOKS OF ACCOUNT WHICH MAY PLEASE BE PERUSED. THIS AMOUNT REPRESENTS INTEREST FROM NSC. AMOUNT CREDITED IN BANK A/C NO.6190 IS RS.19010/- BUT SHE DECLARED RS.13800/- AS INTEREST FROM NSC. THE ASSESSEE SIMPLY STATED THAT THIS REPRESENTS NSC INTEREST. THEREFORE, THE BALANCE OF RS.5210/- IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON ACCRUAL BASIS, THE EXPLANATIO N IS ACCEPTED. AMOUNT DELETED 33. RS.40,000 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT THE NARRATION OF THIS GROUND IS WRONG AND A MODIFIED GROUND IS BEING SUBMITTED. THIS AMOUNT REPRESENTS INVESTMENT IN PPF AND A CLAIM WAS MADE UNDER SEC. 88 OF THE ACT. THIS WAS NOT CLAIMED AS A DEDUCTION FROM THE TOTAL INCOME. THIS CLAIM IS ONLY AS A RELIEF FROM THE TAX PAYABLE. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED FOR THE REASONS STATED EARLIER ON SIMILAR ISSUE. 34. RS.28,243 ADDITION OF THE REGISTRATIO N CHARGES INCURRED ON ACQUISITION OF PLOT AT THE PROPERTY CONSISTS OF 5 DIFFERENT PLOTS OF 416.5 SQ.YDS. SITUATED AT THOKATTA VILLAGE, SECUNDERABAD. THESE WERE PURCHASED BY SMT.SOBHA R.CHUGANI ALONGWITH 4 OTHERS. A DETAILED NOTE CLEARLY SRI RAMESH CHUGANI DURING SEARCH ADMITTED IN HIS SWORN STATEMENT THAT ADDITIONAL CONSIDERATION OF RS.1 LAC WAS PAID OUTSIDE BOOKS FOR 5 PLOTS THE AMOUNTS ARE CONFIRMED AS THERE IS INCRIMINATI NG MATERIAL. EXPLANATION 47 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THOKATTA VILLAGE, SECUDERAB AD MENTIONING THE SOURCES FOR INVESTMENT BY THE APPELLANT WAS SUBMITTED BEFORE THE ASSESSING OFFICER (PAGE NO.43 AND 44 OF THE PAPER BOOK). THE SOURCE FOR THE INVESTMENT IS PROPERLY EXPLAINED BY THE APPELLANT AND THEREFORE, THE ADDITION MAY KINDLY BE DELETED. WHICH WAS OFFERED AS UNDISCLOSED INCOME. FURTHER AN AMOUNT OF RS.7760/- WAS SPENT TOWARDS REGISTRATION CHARGES OUTSIDE BOOKS, BUT THE SAME WAS NOT DECLARED BY THE ASSESSEE IN HER BLOCK RETURN. THEREFORE, THE SAME IS TREATED AS UNDISCLOSED INVESTMENT OF THE ASSESSEE. OF ASSESSEE REJECTED. 35. RS.27,760 ADDITION OF THE REGISTRATIO N CHARGES INCURRED ON BALAMRAI PROPERTY NO SUCH ADDITION IS MADE BY THE ASSESSING OFFICER AND HENCE THE GROUND IS REDUNDANT. NO FURTHER COMMENTS. THE GROUND IS REDUNDANT. GROUND REJECTED 36. CHARGING TAX AT 60%. REG. COMPLETING THE ASSESSMEN T U/S 158 BD AND CHARGING TAX AT 60%. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 158BD. IT IS SUBMITTED THAT THE APPELLANT IS STAYING AT 1-11-252/1A, MOTILAL NAGAR, BEGUMPET, HYDERABAD ALONG WITH HIS FATHER SRI GULABRAI CHUGANI. THE DEPARTMENT ISSUED A WARRANT OF AUTHORIZATION TO SEARCH THE PREMISES OF DOOR NO.1-11-252/1A, MOTILAL NAGAR, BEGUMPET, HYDERABAD. THIS CLEARLY INDICATES THAT THE PREMISES OF THE APPELLANT WAS SEARCHED AND, THEREFORE, THE PROVISIONS U/S 158BC SHOULD HAVE BEEN APPLIED. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 158BD OF THE ACT. IT IS SUBMITTED THAT THE A.P. HIGH COURT IN THE CASE OF DR. RAVINDER REDDY HELD THAT THE PROVISIONS U/S 158BC WERE TO BE APPLIED AND NOT 158BD. AS PER THE DECISION OF THE HONBLE A.P. HIGH MATTER OF RECORD. REJECTED AS STATED IN THE MAIN ORDER. 48 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. COURT, IN THE CASE OF DR. RAVINDER REDDY, THE PROVISIONS OF SEC. 158BC SHOULD HAVE BEEN APPLIED IN THIS CASE INSTEAD OF THE PROVISIONS OF SEC. 158BD. ASSESSMENT YEAR: 1995-96 37. RS.885 ADDITION ON ACCOUNT OF SHORT DECLARATION OF INTEREST. THE TOTAL INTEREST RECEIVED WAS RS.12,428/- FROM A/C NO.6190 AND 8883. THE SAME WAS RETURNED. FURTHER, IT IS SUBMITTED THAT SUCH AN ADDITION CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. THE ASSESSING OFFICER CANNOT TREAT THIS AMOUNT AS UNDISCLOSED INCOME AS THE SAME WAS OFFERED TO TAX IN THE ORIGINAL RETURN OF INCOME FILED. ASSESSEE RECEIVED AN INTEREST OF RS.13,316/- FROM BANK A/C NO.8883 AND 6190 BUT DECLARED ONLY RS.12429/- IN THE RETURN. THEREFORE, THE BALANCE AMOUNT OF RS.885/- IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON ACCRUAL BASIS, THE EXPLANATION IS ACCEPTED. AMOUNT DELETED 38. RS.15340 ADDITION HOLDING THAT INTEREST FROM SBI AND LIC MUTUAL FUND REPRESENT UNDISCLOSE D INCOME. THE APPELLANT OFFERED INTEREST ON MUTUAL FUNDS AT RS. 3,500 IN THE RETURN OF INCOME FILED. FOR ALL THE ASSESSMENT YEARS, THE APPELLANT OFFERED SUCH INTEREST ON ACCRUAL BASIS. THE ASSESSING OFFICER, ON THE OTHER HAND, ARRIVED AT THE AMOUNT REALIZED AND AFTER DEDUCTING THE PRINCIPAL AMOUNT ADDED THE DIFFERENCE AS INTEREST. THIS IS NOT CORRECT. FIRSTLY, SUCH INTEREST CANNOT BE TAXED ON RECEIPT BASIS AND SECONDLY SUCH AN ADDITION CANNOT BE MADE WHILE COMPLETING THE BLOCK ASSESSMENT. EVERY YEAR THE ASSESSEE IS OFFERING THE INTEREST ON ACCRUAL BASIS. THE SAID INTERESTS CANNOT BE ASSESSED TO TAX ON RECEIPT BASIS. ASSESSEE RECEIVED RS.26,200/-, RS.16557/- AND RS.12583/- ON VARIOUS DATES AND STATED THAT THE AMOUNTS WERE RECEIVED FROM LIC AND SBI MUTUAL FUNDS WITH PRINCIPLE AMOUNTS. THE INTEREST SO RECEIVED FROM THESE INVESTMENTS WORKS OUT TO RS.15340/- WHICH WAS NOT DECLARED BY THE ASSESSEE IN THE REGULAR IT RETURN OR BLOCK RETURN. HENCE, TREATED AS UNDISCLOSED INCOME FOR THE AY 95- 96. SINCE AMOUNTS ARE RECONCILED THE ADDITION STANDS DELETED. 39. RS.55,000 ADDITION ON THE GROUND THAT PART OF THIS CONSISTS OF TWO FIXED DEPOSITS MADE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER IS OF IT WAS FOUND BY THE AO THAT THERE WAS A DEBIT OF RS.33,000/- AND RS.25,000/- THROUGH AO ACCEPTS PART OF DEPOSIT WHERE AS WE 49 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FDR NOT PROPERLY EXPLAINED. THE VIEW THAT SUCH DEPOSITS HAVE NO PROPER SOURCES. IN THIS REGARD IT IS SUBMITTED THAT: FDR NO.415788 FOR RS.30,000/- DATED 29-5-95 WAS OUT OF REINVESTMENT OF THE FDR ORIGINALLY MADE BY DRAWING AMOUNT FROM INDIAN BANK VIDE CH.NO.505618 DATED 4-5-91 (PAGE NO. 106 OF THE PAPER BOOK). SIMILARLY, FDR NO.415787 FOR RS.25,000/- DATED 29-5- 94 WAS ALSO OUT OF REINVEST OF THE FDR ORIGINALLY PURCHASED DRAWING AMOUNT FORM INDIAN BANK VIDE CH.NO.505619 DATED 9-12- 91. (PAGENO.106 OF THE PAPER BOOK.) DETAILS OF INVESTMENT IN THE BANK DEPOSITS EXPLAINING THE SOURCES ARE FURNISHED IN THE PAPER BOOK SUBMITTED AT PAGE NO. 106, WHICH MAY KINDLY BE PERUSED. DETAILED NOTE SUBMITTED AT COL. NO. 4 OF THIS NOTE MAY ALSO BE PERUSED. THE ADDITION WAS NOT MADE BY THE ASSESSING OFFICER ON A PROPER FOOTING. CHEQUES NO.505619. NO DETAILS WERE PROVIDED WITH REGARD TO THE PERSON TO WHOM THE CHEQUES WAS ISSUED, THE PURPOSE OF PAYMENT, DATE OF PAYMENT OR THE REALIZATION ETC. THEREFORE, IN THE ABSENCE OF PROPER EXPLANATION THE INVESTMENT IN FDR CANNOT BE LINKED TO THE WITHDRAWAL MADE. THEREFORE, THE INVESTMENT IS TREATED AS UNDISCLOSED INCOME. HOWEVER, THE EXPLANATION OF THE ASSESSEE REGARDING FDR WITH GRINDLAYS BANK WAS ACCEPTED. ARE OF THE OPINION THAT SOURCES FOR THE ENTIRE ADDITION MADE STANDS EXPLAINED. HENCE DELETED. 40. RS.30,000 ADDITION ON THE GROUND THAT THE AMOUNT REPRESENT THE REFUND OF THE AMOUNT CLAIMED DEDUCTION U/S 80CCA OR 80 CCB THE SAID AMOUNT REPRESENT THE MATURITY VALUE OF THE MUTUAL FUNDS. SUCH AN ADDITION CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT, PARTICULARLY IN VIEW OF THE FACT THAT ALL THE INFORMATION IS MADE AVAILABLE IN THE RETURNS OF INCOME FILED. THE APPELLANT FURTHER SUBMITS THAT EITHER AT THE TIME OF FILING THE RETURN OF INCOME IN FORM 2B OR AT THE TIME OF COMPLETION OF THE ASSESSMENT PROCEEDINGS THE PROVISIONS CONTAINED IN CHAPTER VIA WERE APPLICABLE TO THE BLOCK ASSESSEE RECEIVED AN AMOUNT OF RS.20,000 AND RS.10,000 FROM LIC AND SBI MUTUAL FUNDS. THE AMOUNTS WERE INVESTED BY THE ASSESSEE IN LIC AND SBI MUTUAL FUNDS IN THE A.Y.91-92 AND 92- 93 AND CLAIMED DEDUCTION U/S 80CCB. THE AMOUNTS RECEIVED ON INVESTMENTS ARE TAXABLE IN THE YEAR OF RECEIPT. SINCE, THE ASSESSEE HAS NOT OFFERED IN THE RETURN HENCE, THE AMOUNT OF RS.30,000/- IS TREATED NOT PART OF SEIZED MATERIAL. ACCEPTING ASSESSEE EXPLANATION DELETED. 50 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. PERIOD ASSESSMENT. THE APPELLANT CLAIMED DEDUCTIONS UNDER SEC. 80CC OF RS. 10,000 FOR THE YEAR 1990-01; RS. 10,000 UNDER SEC. 80CCB FOR THE ASSESSMENT YEAR 91-92; AND RS. 10,000 UNDER SEC. 80CCB FOR THE ASSESSMENT YEAR 92-93. THE APPELLANT SUBMITS THAT THE INFORMATION WAS AVAILABLE ON RECORD. THE INFORMATION DOES NOT EMANATE FROM THE SEIZED MATERIAL. FURTHER, THE AMOUNTS WOULD BE REFUNDED ONLY AFTER A CERTAIN PERIOD AND COULD NOT HAVE BEEN RECEIVED DURING THE YEAR. THEREFORE, THE AO IS NOT JUSTIFIED IN MAKING ADDITION OF RS. 30,000. FOR THE DETAILED REASONS STATED THEREIN THE ADDITION CANNOT BE MADE INVOKING THE PROVISIONS OF SEC. 158BD OF THE I.T. ACT. AS UNDISCLOSED INCOME. 41. RS.40,000 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT. A REVISED GROUND IS SUBMITTED FOR PERUSAL. THIS AMOUNT REPRESENTS INVESTMENT IN PPF AND A CLAIM WAS MADE UNDER SEC. 88 OF THE ACT. THIS WAS NOT CLAIMED AS A DEDUCTION FROM THE TOTAL INCOME. THIS CLAIM IS ONLY AS A RELIEF FROM THE TAX PAYABLE. THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING THE SAID AMOUNT. A REVISED GROUND IS SUBMITTED FOR PERUSAL. THIS AMOUNT REPRESENTS INVESTMENT IN PPF AND A CLAIM WAS MADE UNDER SEC. 88 OF THE ACT. THIS WAS NOT CLAIMED AS A DEDUCTION FROM THE TOTAL INCOME. THIS CLAIM IS ONLY AS A RELIEF FROM THE TAX PAYABLE. THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING THE SAID AMOUNT. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED FOR THE REASONS STATED EARLIER ON SIMILAR ISSUE. 51 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR: 1996-97 42. RS.3324 ADDITION ON ACCOUNT OF INTEREST ACCRUED ON FDR. BANK INTEREST SHORT DECLARED. THE INTEREST FROM A/C NO.6190 IS RS.2971/- AND FROM A/C NO.8883 IS RS.7370/-. IT IS SUBMITTED THAT 50% INTEREST FROM ACCOUNT NO. 8883 ONLY CAN BE CONSIDERED FOR THE APPELLANT AND THE BALANCE IS TAXABLE IN THE ASSESSMENT OF SMT. ANITHA. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER ASSESSEE RECEIVED TOTAL INTEREST OF RS.16540/- FROM BANK A/C NO.8883 AND 6190 WHEREAS DECLARED ONLY RS.13,306/- IN THE RETURN. THEREFORE, THE BALANCE OF RS.3324/- IS TREATED AS UNDISCLOSED INCOME. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON ACCRUAL BASIS, THE EXPLANATION IS ACCEPTED. AMOUNT DELETED 43. RS.17,000 ADDITION ON THE GROUND FDR WAS NOT PROPERLY EXPLAINED. THIS AMOUNT IS DEPOSITED BY WITHDRAWING THE AMOUNT FROM ANDHRA BANK A/C NO.14211 BELONGING TO SMT. SUNITHA, THE APPELLANTS DAUGHTER. AN EXPLANATION FURNISHED IN THIS REGARD IS AT PAGE NO.113 OF THE PAPER BOOK. THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION, PARTICULARLY WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE ASSESSEE CLAIMED THAT SMT.SUNITHA, HER DAUGHTER HAS TRANSFERRED THE AMOUNT FROM HER ACCOUNT. HOWEVER, NO SUCH WITHDRAWAL WAS FOUND IN THE ACCOUNT OF THE DAUGHTER. FURTHER, ASSESSEE IS NOT HAVING ANY ACCOUNT IN ANDHRA BANK. IN THE ABSENCE OF ANY MATERIAL EVIDENCE REGARDING WITHDRAWAL OR TRANSFER IN THE ACCOUNT DURING THE PERIOD THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. DELETED ACCEPTING THE EXPLANATION OF ASSESSEE 44. RS.500000 ADDITION ON THE GROUND THAT THE AMOUNT RECEIVED FROM VARSHA MEERPURI IS UNDISCLOSE D INCOME. THE ADDITION OF RS.5,00,000 WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT.VARSHA JAIKUMAR MIRPURI. THIS AMOUNT WAS RECEIVED THROUGH CHEQUE DATED 4-8-95. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. NO INCRIMINATING MATERIAL WAS THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. MOREOVER THE FOR THE DETAILED REASONS GIVEN IN MAIN ORDER, ADDITION STANDS DELETED. 52 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. WITHOUT PREJUDICE, THE APPELLANT SUBMITS THAT SMT.VARSHA MIRPURI IS THE RESIDENT OF BANGKOK, THAILAND AND SHE IS THE SISTER OF THE APPELLANT. SHE MAINTAINED A BANK ACCOUNT WITH INDIAN BANK, SECUDERABAD, A COPY OF WHICH IS SUBMITTED AT PAGE NOS.18 OF THE PAPER BOOK. THE APPELLANT FILED BANK ACCOUNT IN INDIA, LETTER OF CONFIRMATION FROM VARSHA MIRPURI. IT IS ALSO CONFIRMED BY HER THAT SHE DEPOSITED THE AMOUNTS WITH THE INDIAN BANK MUCH EARLIER AND SHE ISSUED CHEQUES IN FAVOUR OF THE APPELLANT AND OTHER BROTHERS AND THE AMOUNT WAS WITHDRAWN. THEREFORE, THE DONOR IS IDENTIFIED, SOURCES ARE IDENTIFIED AND SHE CONFIRMED THE FACT THAT THE AMOUNT WAS GIFTED BY HER. SHE ALSO CONFIRMED THE FACT THAT SHE GIFTED THE AMOUNT THROUGH BANKING CHANNEL. THE ASSESSING OFFICER ISSUED A NOTICE U/S 158BD TO MRS.VARSHA MIRPURI PROPOSING TO TAX THE AMOUNT DEPOSITED INTO THE SAID BANK ACCOUNT AND THE SAID SMT.VARSHA MIRPURI EXPLAINED THE SOURCE FOR SUCH DEPOSIT AND THEREAFTER THE PROCEEDINGS U/S 158BD WERE CLOSED. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION U/S 68 OF THE ACT. ASSESSEE COULD NOT PRODUCE ANY IT RETURN COPY OF THE RELATIVE NOR ANY BALANCE SHEET DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 45. RS.50,000 ADDITION ON ACCOUNT OF SHORT THE NARRATION OF THIS GROUND IS WRONG. THERE IS A MISTAKE IN THE GROUND AND A REVISED IT WAS FOUND THAT THE INVESTMENTS IN PPF HAVE BEEN MET FROM DELETED FOR THE REASONS STATED 53 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. DECLARATION OF RENTAL RECEIPT GROUND IS BEING SUBMITTED. THE APPELLANT CLAIMED THE RELIEF UNDER SEC. 88 AND NOT AS A DEDUCTION FROM THE TOTAL INCOME. THEREFORE, THE ASSESSING OFFICER CANNOT MAKE SUCH AN ADDITION IN THE ASSESSMENT MADE. THE APPELLANT CLAIMED THE RELIEF UNDER SEC. 88 AND NOT AS A DEDUCTION FROM THE TOTAL INCOME. THEREFORE, THE ASSESSING OFFICER CANNOT MAKE SUCH AN ADDITION IN THE ASSESSMENT MADE. BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. EARLIER ON SIMILAR ISSUE. 46. RS.25,000 (1988-89) RS.45,000 (1989-90) RS.22,000 (1990-91) RS.12,000 (1991-92) RS.15,000 (1992-93) RS.40,000 (1993-94) RS.40,000 (1994-95) RS.40,000 (1995-96) RS.50,000 (1996-97) ADDITION TREATING INVESTMENT S MADE IN PPF AS UNDISCLOSE D INCOME. THESE ADDITIONS ARE EXPLAINED IN THE RESPECTIVE ASSESSMENT YEARS. THERE IS NO INFORMATION BEFORE TO ASSESSING OFFICER TO SHOW THAT THE CONTRIBUTIONS WERE MADE OUT OF BORROWED FUNDS. THE DEPOSITS INTO THE PPF A/C. ARE EXPLAINED IN THE RESPECTIVE ASST. YEARS. THE ADDITIONS MADE MAY PLEASE BE DELETED. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED FOR THE REASONS STATED EARLIER ON SIMILAR ISSUE. 47. RS.61,050 ADDITION HOLDING THAT THE AMOUNT DEPOSITED REPRESENTS UNDISCLOSE D INCOME THIS DEPOSIT REPRESENTS THE PROCEEDS RECEIVED ON MATURITY OF THE EARLIER FDRS FOR RS.30,000/- AND RS.25,000/-. A DETAILED EXPLANATION WAS SUBMITTED AT PAGE NO.106 OF THE PAPER BOOK. THE AMOUNT WAS CREDITED TO BANK A/C NO.6190 ON 11.6.96. THE ASSESSEE STATED THAT THIS WAS OUT OF MATURITY AMOUNT FROM LIC. HOWEVER, THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL EVIDENCE TO PROVE THAT THE AMOUNT REPRESENTS THE PROCEEDS RECEIVED ON MATURITY FROM LIC. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. DELETED ACCEPTING ASSESSEE EXPLANATION . 54 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 48. RS.13,000 ADDITION HOLDING THE AMOUNT DEPOSITED REPRESENTS UNDISCLOSE D INCOME. THE SAID AMOUNT WAS DEPOSITED ON 2-9-1996. THE APPELLANT MAINTAINED BOOKS OF ACCOUNT. THE AMOUNT IS RECEIVED FROM THE JOINT BANK ACCOUNT NO. 8883. FURTHER SUCH AN ADDITION CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. THE ASSESSEE SUBMITS THAT THE PREVIOUS YEAR DID NOT END BY THE DATE OF SEARCH. HENCE, THIS ADDITION CANNOT BE TAKEN INTO CONSIDERATION DURING THE BLOCK ASSESSMENT YEARS. THE AMOUNT WAS CREDITED IN THE BANK ACCOUNT NO.6190 ON 2.6.96. THE ASSESSEE STATED THAT THIS WAS TRANSFERRED FROM A/C NO.8883. HOWEVER, THERE IS NO SUCH DEBIT ENTRY IN A/C NO.8883. THE EXPLANATION OF THE ASSESSEE WAS FOUND TO BE INCORRECT. HENCE, RS.13,000/- IS TREATED AS UNDISCLOSED INCOME. DOES NOT PERTAIN TO ASSESSMENT YEAR, HENCE DELETED. 49. RS.35,000 ADDITION ON THE GROUND THAT THE ADVANCE GIVEN TO MD.ISMAIL & SONS IS UNDISCLOSE D INCOME, THIS AMOUNT WAS PAID THROUGH INDIAN BANK ACCOUNT NO. 6190 (PAGE NO. 90 OF THE PAPER BOOK) THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT. THE FINANCIAL YEAR DID NOT END. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. FURTHER ALL THE CREDITS IN THE INDIAN BANK ARE PROPERLY EXPLAINED BY THE APPELLANT AND THEREFORE, THE ASSESSING OFFICER CANNOT TREAT THE SAID AMOUNT AS UNDISCLOSED INCOME THIS AMOUNT REPRESENTS THE MONEY ADVANCED TO M/S MOHD. ISMAIL & SONS. IN THE ABSENCE OF ANY EXPLANATION THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. SINCE IT IS AN ADVANCE THROUGH BANK ACCOUNT AND NOT PERTAINING TO YEAR UNDER CONSIDERATIO N , DELETED 50. RS.423703 ADDITION ON THE GROUND OF EXCESS JEWELLERY THE ASSESSEE SUBMITTED A DETAILED EXPLANATION AT PAGE NOS.25 TO 41 OF THE PAPER BOOK. IN VIEW OF THE SAID EXPLANATION, THE ADDITION MAY KINDLY BE DELETED. AS STATED IN COL.4, A DETAILED EXPLANATION WAS FURNISHED AT PAGE NOS. 25 TO 41 OF THE PAPER BOOK. THE EXPLANATION OFFERED IS SELF- EXPLANATORY. IN VIEW OF THE SAID EXPLANATION, THE ADDITION MADE MAY KINDLY BE DELETED. DURING SEARCH THE JEWELLERY OF RS.11,75,666 WAS FOUND BELONGING TO THE ASSESSEE AND HER HUSBAND SRI RAMESH. THE ASSESSEE DECLARED RS.4,32,875 AND HER HUSBAND DECLARED RS.1,20,696 IN THEIR WEALTH TAX RETURNS FOR THE A.Y.92-93. THE ASSESSEE STATED IN PAPER BOOK THAT HER MINOR DAUGHTERS HAD FOR THE DETAILED REASONS STATED IN MAIN ORDER, ADDITION IS DELETED. 55 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SEPARATE JEWELLERY FOR THEMSELVES BUT IT WAS FOUND THAT THEY ARE NOT PART OF THE WEALTH TAX RETURNS OF THE ASSESSEE. CONSIDERING THE SOCIAL STATUS OF THE FAMILY, RS.60,000 HAS BEEN DEDUCTED FROM THE EXCESS JEWELLERY. THE ASSESSEE DID NOT FURNISH ANY QUANTITATIVE DETAILS OF JEWELLERY IN THE WEALTH TAX RETURNS. THEREFORE, THE JEWELLERY FOUND CANNOT BE COMPARED IN THE QUANTITATIVE WAY AND HAS TO BE BASED ON MARKET VALUE ONLY. 51. RS.175000 RS.33333 ADDITION ON THE GROUND THAT THE PAYMENT MADE TO RK CONSTRUCTI ON AS THE EXPENDITUR E INCURRED BY THE ASSESSEE. AN AMOUNT OF RS.1,75,000 WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME. DETAILED EXPLANATION IS SUBMITTED AT COL. 4. FOR THE REASONS STATED THEREIN, IT IS REQUESTED THAT THE ADDITION MADE MAY KINDLY BE DELETED. THE ASSESSING OFFICER MENTIONS THAT HE WOULD ESTIMATE THE UNDISCLOSED INCOME AT RS.2,00,000 AND FURTHER ADDED RS.33,333. IN THIS REGARD IT IS SUBMITTED THAT THE AMOUNT OF RS.1,69,341 REPRESENTS THE MATERIAL PURCHASED BY THE BUILDER AND NOT BY THE ASSESSEE. FURTHER, THE ASSESSEE OFFERED AN (I)SRI RAMESH CHUGANI DURING SEARCH ADMITTED IN HIS SWORN STATEMENT THAT AN AMOUNT OF RS.9,90,000 WAS PAID AS ON MONEY FOR 6 FLATS PURCHASED IN THE NAME OF THE ASSESSEE AND HER 5 DAUGHTERS-IN-LAW. FURTHER ADDITIONAL AMOUNT OF RS.60,000 WAS ADMITTED TOWARDS FIXTURES TO THE FLAT OUTSIDE BOOKS OF ACCOUNTS. THUS OUT OF TOTAL AMOUNT OF RS.10.50 LAKHS THE SHARE OF THE PRESENT ASSESSEE COMES TO RS.1.75 LAKHS. THE ASSESSEE ADMITTED THE AMOUNT FOR AY 94- 95 WHEREAS THE BUILDER SRI R.K.SURANA CONFIRMED THAT THE ON SINCE ADMITTED BY ASSESSEE, BUT IN A DIFFERENT YEAR, AO IS DIRECTED TO ACCEPT THE SAME AND FURTHER ADDITION IS DELETED. 56 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ADDITIONAL INCOME OF RS.1,75,000 TO COVER THE DEFICIENCIES. THEY INCLUDE THE COST OF MATERIAL USED IN ADDITION TO THE NORMAL MATERIAL USED BY THE BUILDER. THERE IS NO INFORMATION IN THE SEIZED MATERIAL TO THE EFFECT THAT THE ASSESSEE INCURRED MORE THAN THE AMOUNT OFFERED PLUS THE AMOUNT RECORDED IN THE BOOKS OF ACCOUNT. THE BILLS FOUND DURING THE SEARCH REVEAL THAT THE BILLS WERE ISSUED IN FAVOUR OF R.K. CONSTRUCTIONS. THE AMOUNT PAID BY THE APPELLANT, TO THE EXTENT NOT EXPLAINED, WAS ALREADY ADMITTED IN THE RETURN OF INCOME FILED. THE BALANCE OF THE AMOUNT WAS INCURRED BY THE BUILDER. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. MONEY WAS PAID IN FY 96-97. 52. RS.10,521 ADDITION ON ACCOUNT OF INTEREST ACCRUED ON FDRS. THIS GROUND IS REDUNDANT AS NO SUCH ADDITION IS MADE IN THE ASSESSMENT ORDER. NO FURTHER COMMENTS. THESE GROUNDS ARE REDUNDANT AS NO SUCH ADDITION IS MADE IN THE ORDER. GROUND REJECTED. 53. RS.40,000 (1994-95) RS.40,000 (1995-96) RS.50,000 (1996-97) ADDITION HOLDING THE INVESTMENT S MADE IN PPF REPRESENT UNDISCLOSE D INCOME THESE ADDITIONS ARE ALREADY EXPLAINED IN THE RESPECTIVE ASSESSMENT YEARS. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED FOR THE REASONS STATED EARLIER ON SIMILAR ISSUE. 57 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXUERE-2 IT(SS)A.NO.2/HYD/2011 SMT. ROSHINI K.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 ASSESSMENT YEAR 1987-88 GROUND NO. AND AMOUNT ADDED DETAILS OF ADDITION EXPLANATION REMARKS OF A.O. IN REMAND REPORT DECISION 1 TO 4, 34A & 36. GENERAL IN NATURE 5. RS.9,200 CASH DEPOSIT IN INDIAN BANK ADDED AS UNEXPLAINED. THE ASSESSEE DEPOSITED RS.900 ON 2-4-87, RS.6,500 ON 18-8-87 AND RS.1800 ON 10-11-87 AGGREGATING TO RS.9,200. DURING THE YEAR THE APPELLANT DERIVED AN INCOME OF RS.44,976 WHICH INCLUDES THE COMMISSION FROM MONEY LENDING OF RS.11,726. IT CAN BE SEEN THAT THE INDIAN BANK ACCOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT. IN VIEW OF THE FACT THAT THE APPELLANT WAS HAVING INCOMES DURING THE YEAR AND IN VIEW OF THE FACT THAT THE REGULAR BOOKS ARE MAINTAINED BY THE APPELLANT WHICH WERE SEIZED BY THE DEPARTMENT, IT WAS SUBMITTED THAT SUCH AN ADDITION SHOULD NOT HAVE BEEN MADE BY THE ASSESSING OFFICER. IN THE REMAND REPORT, THE ASSESSING OFFICER SIMPLY SAYS THAT THE APPELLANT DOES NOT HAVE ANY SURPLUS FUNDS FROM THE EARLIER YEARS. THE AMOUNTS DO NOT RELATE TO THE YEAR UNDER CONSIDERATION. THE ASSESSEE DID NOT HAVE ANY SURPLUS FUNDS FROM EARLIER YEARS TO BE DEPOSITED IN THE BANK AND HENCE, THE AMOUNT OF RS.9,200 REMAINS UNEXPLAINED. CONSIDERING THE EXPLANATION OF ASSESSEE, WE HOLD THAT ASSESSEE HAD SOURCES FOR CASH DEPOSITS. MOREOVER AO WRONGLY CONSIDERED IN AY 87- 88. HENCE DELETED. 58 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 6 RS.30,000 ADDITION TREATING THE GIFT RECEIVED AS UNDISCLOSED INCOME. THIS AMOUNT REPRESENTS GIFT RECEIVED BY THE ASSESSEE FROM LAL DAYAL DASAN, A CLOSE RELATIVE OF THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER THERE WAS AN AUTHORIZATION FROM BANK OF CREDIT AND COMMERCE GIBRALTOR TO MAKE PAYMENT OF RS.30,000 TO THE ASSESSEE ON 19-1-87. THIS FURTHER REITERATES THE FACT THAT THE NRI SRI LAL DAYAL DASANI GIFTED AN AMOUNT OF RS.30,000 TO THE APPELLANT HEREIN. IT MAY PLEASE BE SEEN THAT THE AMOUNT WAS GIFTED BY THE NRI AND THE PAYMENT WAS ORDERED FROM OUT OF THE COUNTRY. THEREFORE, GIFT TAX IS NOT PAYABLE IN INDIA. OTHERWISE, THE ASSESSING OFFICER, WHEN THE DETAILS ARE FURNISHED, COULD HAVE INITIATED GIFT TAX PROCEEDINGS, BUT NO SUCH PROCEEDINGS WERE INITIATED. IT IS FURTHER SUBMITTED THAT THE GIFT IS EXPLAINED AND THE SOURCE OF THE RECEIPT OF THE AMOUNT IS CLEAR FROM THE SEIZED MATERIAL ITSELF. THEREFORE, THE APPELLANT SUBMITS THAT THE ADDITION IS NOT JUSTIFIED. IT WAS FOUND FROM THE SEIZED MATERIAL THAT THE BANK OF CREDIT AND COMMERCE GIBRALTOR AUTHORIZED BANK OF INDIA FOR PAYMENT OF RS.30,000 ON 19/01/1987. THE AMOUNT WAS NEITHER DECLARED IN REGULAR RETURN OF INCOME NOR THE ASSESSEE SUBMITTED GIFT TAX RETURN. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. SINCE SEIZED MATERIAL ITSELF CONFIRMS CREDIT FROM ABOVE PERSON THE SAME CAN BE ACCEPTED AS GENUINE. HENCE DELETED. 7. RS.13,773 ADDITION AS UNDISCLOSED INCOME UNDER THE HEAD INCOME FROM MONEY LENDING. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE, THE ADDITION MAY KINDLY BE DELETED. THE INTEREST FROM MONEY LENDING AND BANK INTEREST DECLARED AMOUNTS TO RS.13950 WHEREAS THE INTEREST CREDITED IN THE BANK ACCOUNT WAS RS.27,723. THEREFORE, THE DIFFERENCE OF RS.13,773 IS TREATED AS UNDISCLOSED INCOME. ADMITTED INCOME. IF THERE IS DOUBLE ADDITION AO IS DIRECTED TO DELETE. 59 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 8. RS.35,000 ADDITION AS DEEMED INCOME U/S 80C(II)(B) OF THE I.T. ACT. THE ASSESSEE PAID RS. 35,000 THROUGH INDIAN BANK ACCOUNT NO. 7273 ON 21-3-1987. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. THE AMOUNTS RECEIVED FROM THE PARTNERSHIP FIRMS IN WHICH THE APPELLANT IS A PARTNER ARE ALSO DEPOSITED IN THE BANK ACCOUNT. THE PARTNERSHIP INCOMES ARE TAXABLE FOR THE YEAR UNDER CONSIDERATION. THEREFORE, IT IS NOT CORRECT TO MENTION THAT THE AMOUNT WAS NOT FROM OUT OF THE INCOME ADMITTED. IN FACT, THE AMOUNT WAS PAID THROUGH CHEQUES DRAWN ON THE INDIAN BANK ACCOUNT NO.7273 ON 21.3.1987. FURTHER THE APPELLANT CLAIMED ONLY RS.20,200 INCLUSIVE OF PAYMENT OF LIC OF RS.4985. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION OF RS.35,000. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. ADDITION STANDS DELETED AS ASSESSEE HAS OWN FUNDS AND FURTHER, AO IS NOT CORRECT IN ADDING THE AMOUNT OF INVESTMENT WHEN THE CLAIM WAS ONLY FOR LESSER AMOUNT. ASSESSMENT YEAR 1988-89 9. RS.7,200 ADDITION TREATING THE DEPOSIT IN THE BANK AS UNEXPLAINED. FOR THE ASSESSMENT YEAR 1988-89, THE APPELLANT RECEIVED COMMISSION FROM MONEY LENDING OF RS.19,143 AND ALSO OTHER INCOMES. THE AMOUNT DEPOSITED IN MONEY LENDING WAS ONLY RS.7,200. THEREFORE, IT CANNOT BE SAID THAT THE DEPOSIT MADE INTO THE BANK ACCOUNT REPRESENTS UNDISCLOSED INCOME. FURTHER THE BANK ACCOUNT IS ALREADY DISCLOSED FOR WEALTH TAX RETURN (PAGE NO.62 OF THE PAPER BOOK). IN VIEW OF THE ABOVE, THE APPELLANT THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL IN SUPPORT OF THE DEPOSITS IN BANK ACCOUNT. HENCE, TREATED AS UNDISCLOSED INCOME. AMOUNT STAND DELETED AS DEPOSIT IN BANK ACCOUNT IS FROM KNOWN SOURCES. 60 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SUBMITS THAT THE GROUND MAY KINDLY BE ALLOWED. 10. RS.33,000 ADDITION AS DEEMED INCOME U/S 80C(II)(B) OF THE I.T. ACT THE ASSESSEE PAID RS. 32,000 THROUGH INDIAN BANK ACCOUNT NO. 7273 ON 17-2-1988 AND A FURTHER SUM OF RS. 1,000 WAS PAID IN CASH. THE ASSESSING OFFICER MADE AN ADDITION OF RS.33,000/- BEING THE AMOUNT OF NSCS CLAIMED IN THE REGULAR RETURN OF INCOME. THERE IS NO SEIZED MATERIAL FOR MAKING ANY SUCH ADDITION U/S 158BD OF THE ACT. OUT OF RS.33,000, RS.32,000 WAS PAID THROUGH INDIAN BANK ACCOUNT IN WHICH ALL THE INCOMES WERE DEPOSITED. THEREFORE, IT IS NOT CORRECT TO SAY THAT THE AMOUNTS REPRESENT BORROWED FUNDS. IT CAN ALSO BE SEEN THAT THE APPELLANT CLAIMED ONLY RS.19,394 AS DEDUCTION U/S 80C WHICH INCLUDES LIC PAYMENT OF RS.4985. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. ADDITION STANDS DELETED AS ASSESSEE HAS OWN FUNDS AND FURTHER, AO IS NOT CORRECT IN ADDING THE AMOUNT OF INVESTMENT WHEN THE CLAIM WAS ONLY FOR LESSER AMOUNT. ASSESSMENT YEAR 1989-90 11. RS.35,000 ADDITION ON ACCOUNT OF DEEMED INCOME. THE ASSESSING OFFICER MADE AN ADDITION OF RS.35,000 BEING THE AMOUNT OF NSCS CLAIMED IN THE REGULAR RETURN OF INCOME. THE CLAIM WAS MADE UNDER SEC. 80C OF THE ACT. THE AMOUNTS WERE PAID THROUGH INDIAN BANK ACCOUNT. ALL THE RECEIPTS WERE DEPOSITED IN THE SAID BANK ACCOUNT. THE APPELLANT CLAIMED DEDUCTION OF RS. 20,200 UNDER THE SAID SECTION. THE TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION AMOUNTED T O RS. 56,834. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. ADDITION STANDS DELETED AS ASSESSEE HAS OWN FUNDS AND FURTHER, AO IS NOT CORRECT IN ADDING THE AMOUNT OF INVESTMENT WHEN THE CLAIM WAS ONLY FOR LESSER AMOUNT. 61 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. MAKING ANY SUCH ADDITION. ASSESSMENT YEAR 1990-91 12. RS.842 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM BANK. ACCORDING TO THE ASSESSING OFFICER, THE APPELLANT DERIVED INTEREST FROM ANDHRA BANK ACCOUNT NO. 25164 AND THE SAME WAS NOT ACCOUNTED FOR. IN THIS REGARD IT IS SUBMITTED THAT THE APPELLANT DID NOT MAINTAIN ANY ACCOUNT WITH ANDHRA BANK. HOWEVER, THERE IS A KIDDY BANK ACCOUNT IN THE NAME OF MINOR CHILDREN LAVEENA AND ROHIT. THE INTEREST DERIVED IS NOT INCLUDIBLE AS THE PROVISIONS OF SEC. 64(1A) WAS MADE APPLICABLE ONLY FROM THE ASSESSMENT YEAR 1993- 94. THEREFORE, THE SAID AMOUNT CANNOT BE TREATED AS THE INCOME OF THE ASSESSEE. THE INTEREST EARNED ON BANK ACCOUNT NO.25164 WITH ANDHRA BANK WAS NOT DISCLOSED IN THE RETURN. DELETED FOR THE REASONS AS EXPLAINED BY ASSESSEE. 13. RS.45,000 ADDITION ON THE GROUND OF DEEMED INCOME. THE ASSESSEE SUBMITS THAT FOR THE YEAR UNDER CONSIDERATION, THE TOTAL INCOME AGGREGATED TO RS.62,017. THE AMOUNTS PAID TOWARDS PPF WAS RS.25,000 AND TOWARDS SBI MUTUAL FUND WAS RS.20,000 IT CANNOT BE SAID THAT THE SAID AMOUNTS WERE FROM THE BORROWED FUNDS PARTICULARLY IN VIEW OF THE FACT THAT THE AMOUNT WERE PAID THROUGH INDIAN BANK ACCOUNT NO.7273 IN WHICH ACCOUNT THE APPELLANT DEPOSITED HER INCOME. THE APPELLANT CLAIMED A DEDUCTION OF RS. 20,200 CONSIDERING THE PAYMENTS TO LIC; PPF AND IN TEREST ON NSCS. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. ADDITION STANDS DELETED AS ASSESSEE HAS OWN FUNDS AND FURTHER, AO IS NOT CORRECT IN ADDING THE AMOUNT OF INVESTMENT WHEN THE CLAIM WAS ONLY FOR LESSER AMOUNT. 62 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. MAKING SUCH AN ADDITION. IT IS FURTHER SUBMITTED THAT THE INFORMATION WAS ALREADY DISCLOSED TO THE DEPARTMENT AND CANNOT BE CONSIDERED AS THE UNDISCLOSED INCOME. 14. RS.6,000 ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK. THE ASSESSEE SUBMITS THAT DURING THE YEAR UNDER CONSIDERATION SHE DERIVED PROPERTY INCOME OF RS.7,200. A FLAT WAS PURCHASED DURING THE YEAR AND WAS LET OUT FOR RENT OF RS.1800. THE APPELLANT ADMITTED 1/3 RD SHARE OR RS.7,200 DURING THE YEAR. THE SAID AMOUNTS WERE DEPOSITED IN THE BANK ACCOUNT. THEREFORE, IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO MENTION THAT THERE IS NO SOURCE FOR THE AMOUNT. IT IS ALSO SUBMITTED THAT THE APPELLANT REALIZED BOTH NSCS AND THE INTEREST ON NSCS. TAKING ALL THESE FACTORS INTO CONSIDERATION IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO MENTION THAT THE AMOUNT OF RS.6,000/- IS NOT EXPLAINED BY THE APPELLANT. THE BANK ACCOUNT IS DISCLOSED IN THE WEALTH TAX RETURN. (PAGE 65 OF THE PAPER BOOK). IN ORIGINAL ASSESSMENT THE ASSESSEE TRIED TO EXPLAIN THE AMOUNT AS INTEREST RECEIVED FROM NSC BUT INTEREST ON NSC IS NOT PAID IN PIECE MEAL AND IS PAID ON MATURITY ONLY. SUBSEQUENTLY, THE ASSESSEE REFERRED TO PAGE 4 OF PAPER BOOK BUT IT CONTAINS ONLY A NOTE ON INTEREST ON FDR. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. DELETED FOR THE REASONS AS EXPLAINED BY ASSESSEE. ASSESSMENT YEAR 1991-92 15. RS.2,746 ADDITION AS UNDISCLOSED INTEREST FROM BANK. DURING THE YEAR THE INTEREST DERIVED WAS RS.1637 AND THE AMOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT. THEREFORE, IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO MAKE ADDITION OF RS.2746. THE ASSESSEE HAS RECEIVED INTEREST FROM A/C WITH BANK OF INDIA AND ANDHRA BANK WHICH HAS NOT BEEN DISCLOSED IN THE RETURN. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON ACCRUAL 63 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. BASIS, THE EXPLANATION IS ACCEPTED. AMOUNT DELETED 16 RS.6,000 ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK. THE ASSESSING OFFICER MENTIONED THAT SUCH DEPOSIT WAS MADE WITH ANDHRA BANK ACCOUNT. IT IS SUBMITTED THAT ACCOUNT NO. 7273 IS WITH INDIAN BANK AND THE AMOUNT IS RECORDED IN THE BOOKS OF ACCOUNT. THE APPELLANT ALSO SUBMITS THAT THE ACCOUNT WAS DISCLOSED TO THE DEPARTMENT AND ALSO IN THE BOOKS OF ACCOUNT. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. IT IS SUBMITTED THAT THE BANK ACCOUNT WAS ALREADY DISCLOSED IN THE WEALTH TAX RETURN. THE ASSESSEE REFERRED TO PAGE 4 OF THE PAPER BOOK WHERE NO SUCH EXPLANATION WAS FOUND. DELETED FOR THE REASONS AS EXPLAINED BY ASSESSEE. 17 RS.1,200 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME FROM MONEY LENDING. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME FILED. AMOUNT ALREADY ADMITTED IN BLOCK RETURN. IF THERE IS DOUBLE ADDITION, THE SAME STANDS DELETED. 18 RS.25,000 ADDITION ON ACCOUNT OF DEEMED INCOME THE ASSESSEE PAID RS. 25,000 THROUGH INDIAN BANK ACCOUNT NO. 7273 ON 28-2-1991 RS. 10,000 TOWARDS LIC AND ON 28/3/1991. RS. 15,000 TOWARDS PPF. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. THE AMOUNTS RECEIVED FROM THE PARTNERSHIP FIRMS IN WHICH THE APPELLANT IS A PARTNER ARE ALSO DEPOSITED IN THE BANK ACCOUNT. THE PARTNERSHIP INCOMES ARE TAXABLE FOR THE YEAR UNDER CONSIDERATION. THEREFORE, IT IS NOT CORRECT TO MENTION THAT THE AMOUNT WAS NOT IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. 64 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FROM OUT OF THE TAXABLE INCOME. FURTHER IT IS SUBMITTED THAT SUCH ADDITIONS CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. ADDITION DELETED. ASSESSMENT YEAR 1992-93 19. RS.3,989 ADDITION AS UNDISCLOSED INTEREST FROM BANK. THE ASSESSING OFFICER MENTIONED THAT THE APPELLANT RECEIVED RS. 1837 FROM BANK OF INDIA. THIS IS NOT CORRECT. THE APPELLANT RECEIVED ONLY RS. 475 FOR THE YEAR UNDER CONSIDERATION. IN SO FAR AS THE ANDHRA BANK ACCOUNT IS CONCERNED, THE APPELLANT WAS NOT HAVING ANY SUCH BANK ACCOUNT. THE APPELLANTS MINOR CHILDREN WERE HAVING ACCOUNT WITH ANDHRA BANK. IT IS HUMBLY SUBMITTED THAT THE PROVISIONS OF SEC. 64(1A) WAS NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION, PARTICULARLY IN VIEW OF THE FACT THAT SUCH AN ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE APPELLANT ADMITTED RS.1637 IN THE REGULAR RETURN OF INCOME. IT IS SUBMITTED THAT BOTH THE INDIAN BANK ACCOUNT AND BANK OF INDIA ACCOUNT WERE DECLARED IN THE WEALTH TAX RETURN FILED. THE APPELLANT SUBMITS THAT IN SO FAR AS ANDHRA BANK ACCOUNT IS CONCERNED, IT RELATES TO THE MINOR CHILDREN AND THE ASSESSEE HAS NOT DECLARED INTEREST RECEIVED FROM A/C WITH BANK OF INDIA AND ANDHRA BANK. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON ACCRUAL BASIS, THE EXPLANATION IS ACCEPTED. AMOUNT DELETED 65 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. PROVISION U/S 64(1A) WERE NOT APPLICABLE FOR THE A.Y. 1992-93. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. 20. RS.35,000 ADDITION ON ACCOUNT OF DEEMED INCOME. THE ASSESSEE PAID RS. 25,000 THROUGH INDIAN BANK ACCOUNT NO.7273 ON 17-2-1992 RS.10,000 TOWARDS SBI MUTUAL FUNDS AND ON 24-3-1992. RS. 15,000 TOWARDS PPF. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. THE AMOUNTS RECEIVED FROM THE PARTNERSHIP FIRMS IN WHICH THE APPELLANT IS A PARTNER ARE ALSO DEPOSITED IN THE BANK ACCOUNT. THE PARTNERSHIP INCOMES ARE TAXABLE FOR THE YEAR UNDER CONSIDERATION. THEREFORE, IT IS NOT CORRECT TO MENTION THAT THE AMOUNT WAS NOT FROM OUT OF THE TAXABLE INCOME. THE SAID AMOUNT WAS PAID TOWARDS SBI MUTUAL FUND FROM INDIAN BANK ACCOUNT. ALL THE INCOMES OF THE ASSESSEE ARE DEPOSITED IN THE SAME ACCOUNT. IN SO FAR AS PAYMENT TO PPF OF RS.25,000 IS CONCERNED THE SAME WAS CLAIMED U/S 88 OF THE IT ACT AND NOT AS A DEDUCTION FROM THE INCOME. THEREFORE, IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO ADD THE AMOUNT OF RS.35,000. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FORM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. ASSESSMENT YEAR 1993-94 21. RS.5,516 ADDITION AS UNDISCLOSED INCOME FROM BANK. THE ASSESSING OFFICER ESTIMATED THE INTEREST FROM BANK ACCOUNT AT RS. 19,396. IT IS HUMBLY SUBMITTED THAT THE ASSESSING OFFICER DID NOT ASSESSEE HAS NOT DECLARED INTEREST RECEIVED FROM THREE BANK ACCOUNTS. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE 66 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. PROVIDE DETAILS FOR SUCH FIGURE. THE APPELLANT IS ADMITTING INTEREST IN THE RETURNS OF INCOME AS AND WHEN THE INTEREST IS CREDITED. FURTHER, SUCH AN ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. FURTHER, IT IS SUBMITTED THAT INTEREST FROM INDIAN BANK IS RS. 1967 AND FROM BANK OF INDIA RS. 254. THE AGGREGATE WORKS OUT TO RS. 2221. THE APPELLANT ADMITTED RS. 1637. AT BEST, THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE BALANCE ALONE. ASSESSEE ACCOUNTS INTEREST ON ACCRUAL BASIS, THE EXPLANATION IS ACCEPTED. AMOUNT OF DIFFERENCE ONLY IS TO BE TAXED. GROUND PARTLY ALLOWED. 22. RS.15,000 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM FDR THE GROUND IS NOT PRESSED AS SUCH ADDITION IS NOT MADE IN THE ASSESSMENT ORDER. NO FURTHER COMMENTS. NOT PRESSED BY THE ASSESSEE. REJECTED 23 RS.40,000 ADDITION AS DEEMED INCOME THE ASSESSEE PAID RS.40,000 THROUGH INDIAN BANK ACCOUNT NO.7273 ON 24-2-1993 RS.40,000 TOWARDS PPF. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. THE AMOUNTS RECEIVED FROM THE PARTNERSHIP FIRMS IN WHICH THE APPELLANT IS A PARTNER ARE ALSO DEPOSITED IN THE BANK ACCOUNT. THE ASSESSEE CLAIMED DEDUCTION U/S 88 OF THE IT ACT AND NOT DEDUCTION FROM THE INCOME. THEREFORE, THE AO IS NOT JUSTIFIED IN TREATING THE AMOUNT AS UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS SOURCE OF FUNDS FROM THIS YEARS INCOME. 67 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1994-95 24. RS.20,200 ADDITION ON ACCOUNT OF DEEMED INCOME. THE AMOUNT WAS REFUNDABLE AFTER A PERIOD OF 5 YEARS AND NO CLAIM WAS MADE UP TO THE ASSESSMENT YEAR 1999- 2000 AND, THEREFORE, IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO TREAT THE AMOUNT OF RS.20,200 AS THE INCOME OF THE APPELLANT. IT IS FURTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 1990-91, A CLAIM WAS MADE OF RS.12,000 BEING 50% OF THE SBI MUTUAL FUND. SIMILARLY, A CLAIM WAS MADE FOR RS.10,000 FOR THE ASSESSMENT YEAR 1991-92. THESE AMOUNTS WERE NOT REFUNDED BY 1994-95 AND, THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION. AS VERIFIED FROM THE INDIAN BANK ACCOUNT, AN AMOUNT OF RS.20,200/- IS THE REALIZATION OF SBI MUTUAL FUNDS WHICH IS TAXABLE IN THE YEAR OF REALIZATION WHICH THE ASSESSEE HAS NOT DISCLOSED. REFUND OF INVESTMENT IN EARLIER YEAR IS NOT TAXABLE UNLESS CLAIMED AS DEDUCTION. ASSESSEE EXPLANATION IS ACCEPTED. AMOUNT DELETED. 25 RS.40,000 ADDITION ON ACCOUNT OF DEEMED INCOME THE ASSESSEE PAID RS. 40,000 THROUGH INDIAN BANK ACCOUNT NO. 7273 ON 1-2-1994 RS. 40,000 TOWARDS PPF. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. THE APPELLANT SUBMITS THAT SHE CLAIMED RELIEF UNDER SEC. 88 FROM THE TAX PAYABLE AND NOT A DEDUCTION FROM THE INCOME. THEREFORE, THE AMOUNT CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE APPELLANT. FURTHER, AS SUBMITTED IN COL. 4, THE AMOUNTS WERE PAID FROM THE BANK ACCOUNT WHERE THE INCOMES WERE DEPOSITED. THEREFORE, THE AO IS NOT JUSTIFIED IN MENTIONING THAT THE AMOUNTS WERE PAID FROM THE LOAN FUNDS. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AMOUNT STAND DELETED ACCEPTING EXPLANATION OF ASSESSEE. 68 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 26. RS.2744 RS.16,201. ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON FDR AND BANK ACCOUNT. THE APPELLANT ADMITTED RS.31,556 IN THE RETURN OF INCOME FILED. THE APPELLANT ADMITTED THE AGGREGATE OF THE INTEREST CREDITED BY THE BANKS TO HER ACCOUNTS. THE ASSESSING OFFICER ON THE OTHER HAND RESORTED TO ESTIMATION OF INTEREST. THE APPELLANT HUMBLY SUBMITS THAT WHILE COMPLETING THE ASSESSMENT UNDER SEC.158 BD, THE ASSESSING OFFICER CANNOT MAKE SUCH AN ADDITION ON ESTIMATE BASIS WITHOUT REFERENCE TO THE SEIZED MATERIAL. THEREFORE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. (I) ASSESSEE HAS NOT DECLARED INTEREST OF RS.2744 RECEIVED FROM ACCOUNT WITH ANDHRA BANK. II) THE ASSESSEE WAS HOLDING FDRS OF RS.1,90,000 THROUGHOUT THE YEAR AND RS.35,000 FOR 10 MONTHS. THE INTEREST COMPONENT WORKS OUT TO RS.26,300 THE FDR INTEREST DECLARED BY THE ASSESSEE WAS RS.10099. THEREFORE, THE AMOUNT OF RS.6201 IS THE UNDISCLOSED INCOME FOR THE A.Y.1994-95. RECEIPTS AND ACCRUAL CAN NOT BE TAXED AT THE SAME TIME. SINCE ASSESSEE ACCOUNTS INTEREST ON ACCRUAL BASIS, THE EXPLANATION IS ACCEPTED. AMOUNT DELETED ASSESSMENT YEAR 1995-96 27 RS.11,683 ADDITION ON ACCOUNT OF DEEMED INCOME. IN THIS REGARD, IT IS SUBMITTED THAT IN THE EARLIER YEARS NO SUCH CLAIM WAS MADE EXCEPT FOR THE ASSESSMENT YEAR 1992- 93. THEREFORE, SUCH AN ADDITION CANNOT BE MADE. FURTHER, THE PROVISIONS CONTAINED IN CHAPTER VIA WERE NOT APPLICABLE FOR THE ASSESSMENT UNDER SEC. 158 BD BOTH AT THE TIME OF FILING THE RETURN OF INCOME AND AT THE TIME OF COMPLETING OF THE REGULAR ASSESSMENT. THE ADDITION IS ALSO NOT EMANATED FROM THE SEIZED MATERIAL. THEREFORE, NO SUCH ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. AS VERIFIED FROM THE INDIAN BANK ACCOUNT, AN AMOUNT FOR RS.12,583 IS THE REALIZATION OF LIC MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALISATION WHICH THE ASSESSEE HAS NOT DISCLOSED. DELETED ACCEPTING THE ASSESSEE EXPLANATION. 69 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RS.40,000 THE ASSESSEE PAID RS. 40,000 THROUGH INDIAN BANK ACCOUNT NO. 7273 ON 25-2-1995 TOWARDS PPF. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. THE AMOUNTS RECEIVED FROM THE PARTNERSHIP FIRMS IN WHICH THE APPELLANT IS A PARTNER ARE ALSO DEPOSITED IN THE BANK ACCOUNT. THE PARTNERSHIP INCOMES ARE TAXABLE FOR THE YEAR UNDER CONSIDERATION. FURTHER IT IS SUBMITTED THAT SUCH ADDITIONS CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALISATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. 28. RS.17,766 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON FDRS THE ASSESSING OFFICER MERELY ESTIMATED THE INTEREST AND ADDED THE SAME. THE ASSESSEE ON THE OTHER HAND ADMITTED THE INCOME ON RECEIPT BASIS. THEREFORE, THE ADDITION MAY KINDLY BE DELETED. THE ASSESSEE WAS HOLDING FDRS OF RS.1,00,000 THROUGHOUT THE YEAR AND RS.55,000 FOR 6 MONTHS. THE INTEREST COMPONENT WORKS OUT TO RS.20,100. THE FDR INTEREST DECLARED BY THE ASSESSEE WAS RS.7611. ASSESSEE ALSO RECEIVED INTEREST ON ACCOUNTS WITH INDIAN BANK AND ANDHRA BANK AMOUNTING TO RS.5277. THUS THE DIFFERENCE OF RS.17,766 IS THE UNDISCLOSED INCOME FOR THE A.Y.1995-96. ASSESSEE EXPLANATION ACCEPTED. IF AMOUNTS ARE OFFERED ON RECEIPT BASIS THE SAME MAY BECOME DOUBLE ADDITION IF TAXED ON ACCRUAL BASIS. DELETED. 29. RS.12,583 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME ON MATURITY OF MUTUAL THE GROUND IS NOT PRESSED AS NO SUCH ADDITION IS MADE BY THE ASSESSING OFFICER. NO FURTHER COMMENTS. NOT PRESSED BY THE ASSESSEE. REJECTED 70 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FUND. ASSESSMENT YEAR 1996-97 30. RS.1628 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM BANK. THE ASSESSING OFFICER IS OF THE VIEW, THAT THE APPELLANT DERIVED INTEREST FROM ANDHRA BANK AND SUCH INTEREST WAS NOT DISCLOSED. IT IS HUMBLY SUBMITTED THAT THE APPELLANT DID NOT MAINTAIN ANY SUCH ACCOUNT WITH ANDHRA BANK. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ASSESSEE HAS NOT DECLARED INTEREST RECEIVED FROM ANDHRA BANK ACCOUNT. IN A CASE WHERE ASSESSEE DOES NOT HAVE ACCOUNT IN ANDHRA BANK, HOW AMOUNT WAS TAXABLE WAS NOT ANSWERED BY AO. AMOUNT STAND DELETED. 31 RS.12,000 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON FDRS THE ASSESSING OFFICER ESTIMATED THE INTEREST RECEIVABLE FROM THE FIXED DEPOSITS. HE CONSIDERED THE FIXED DEPOSITS HELD BY THE APPELLANT JOINTLY WITH THE MINORS AND OTHERS. THE APPELLANT ADMITTED RS. 1220 IN THE RETURN OF INCOME FILED. THE APPELLANT ADMITTED THE AGGREGATE OF THE INTEREST CREDITED BY THE BANKS TO HER ACCOUNTS. THE ASSESSING OFFICER ON THE OTHER HAND RESORTED TO ESTIMATION OF INTEREST. THE APPELLANT HUMBLY SUBMITS THAT WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD, THE ASSESSING OFFICER CANNOT MAKE SUCH AN ADDITION ON ESTIMATE BASIS WITHOUT REFERENCE TO THE SEIZED MATERIAL. THEREFORE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. THE ASSESSEE WAS HOLDING FDRS OF RS.1,00,000 THROUGHOUT THE YEAR. THE INTEREST COMPONENT WORKS OUT TO RS.12,000 WHICH IS THE UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 1996-97 AS THE SAME HAS NOT BEEN DECLARED IN THE RETURN. ASSESSEE EXPLANATION ACCEPTED. IF AMOUNTS ARE OFFERED ON RECEIPT BASIS THE SAME MAY BECOME DOUBLE ADDITION IF TAXED ON ACCRUAL BASIS. DELETED. 71 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 32. RS.50,000 ADDITION AS DEEMED INCOME U/S 80C THE ASSESSEE PAID RS.50,000 THROUGH INDIAN BANK ACCOUNT NO.7273 ON 26-3-1996 TOWARDS PPF. THE APPELLANT DEPOSITED ALL THE INCOMES IN THE SAID BANK ACCOUNT. FURTHER IT IS SUBMITTED THAT SUCH ADDITIONS CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC.158 BD OF THE ACT. THE SAID AMOUNT WAS CLAIMED AS A DEDUCTION U/S 88 OF THE I.T. ACT AND NOT AS A DEDUCTION FROM THE INCOME. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS SOURCE OF FUNDS FROM THIS YEARS INCOME. ASSESSMENT YEAR 1997-98 33. RS.28,679 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN POOJA APARTMENTS IT IS SUBMITTED THAT THE APPELLANT AND FIVE OTHERS ALREADY ADMITTED RS. 10,50,000 AS UNDISCLOSED INCOME ON THIS ACCOUNT. THE APPELLANT SUBMITTED THAT RS. 60,000 IS TOWARDS EXTRA FITTINGS AND RS. 9,90,000 TOWARDS EXTRA PAYMENTS TO THE BUILDER. THE ASSESSING OFFICER ADDED THE AMOUNT OF RS. 1,75,000 AS ADMITTED BY THE APPELLANT. BESIDES, THE ASSESSING OFFICER MENTIONS THAT CERTAIN BILLS FOR PURCHASES MADE BY R.K. CONSTRUCTIONS FROM HEMANT ENTERPRISES; OM TRADING COMPANY WERE FOUND AND THAT SUCH AN AMOUNT WORKS OUT TO RS. 1,72,076. THE ASSESSING OFFICER ADDED 1/6 OF SUCH AMOUNT. IN THIS REGARD, IT IS SUBMITTED THAT THE PURCHASES WERE EFFECTED BY R.K. CONSTRUCTIONS. THIS IS EVIDENCED FROM THE INVOICES FOUND. THE APPELLANT OFFERED RS. AS PER SEIZED MATERIAL PURCHASE BILLS IN THE NAME OF R.K. CONSTRUCTIONS THE BUILDER OF THE FLAT AMOUNTING TO RS.1,72,076 WERE FOUND FROM THE RESIDENCE WHICH ARE FOR PURCHASE OF EXTRA FITTINGS. NO EXPLANATION WAS OFFERED. THEREFORE, 1/6 TH (6 FLAT OWNERS) WHICH COMES TO RS.28,679 SHARE OF THE ASSESSEE IS THE UNDISCLOSED INVESTMENTS. AMOUNT DELETED AS ASSESSEE ADMITTED INCOME ON THIS ISSUE AS EXPLAINED. 72 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 9,90,000 AS ADDITIONAL PAYMENT TO R.K. CONSTRUCTIONS, BESIDES ACCEPTING RS. 60,000 FOR ADDITIONAL FITTINGS. THEREFORE, THE AMOUNT OF RS. 1,72,076 HAS TO BE TELESCOPED WITH THE AMOUNT ALREADY OFFERED BY THE APPELLANT. THEREFORE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. 34. RS.1,75,000 ADDITION AS UNDISCLOSED INVESTMENT IN POOJA APARTMENTS WITHOUT PREJUDICE TO THE CONTENTION, IT IS SUBMITTED THAT THE ASSESSEE OFFERED AN AMOUNT OF RS.1,75,000 TOWARDS THE AMOUNT PAID TO THE BUILDERS IN EXCESS OF THE PRICE AS PER THE AGREEMENT. THE SAID AMOUNT WAS ALREADY ADMITTED IN THE RETURN OF INCOME.. AS THE ASSESSEE ALREADY OFFERED THE AMOUNT OF RS.1,75,000, THE ADDITION MAY PLEASE BE DELETED. SRI RAMESH CHUGANI DURING SEARCH ADMITTED IN HIS SWORN STATEMENT THAT AN AMOUNT OF RS.9,90,000 WAS PAID AS ON MONEY FOR 6 FLATS PURCHASED IN THE NAME OF THE ASSESSEE AND HER 5 DAUGHTERS-IN-LAW. FURTHER ADDITIONAL AMOUNT OF RS.60,000 WAS ADMITTED TOWARDS FIXTURES TO THE FLAT OUTSIDE BOOKS OF ACCOUNTS. THUS OUT OF TOTAL AMOUNT FOR RS.10.50 LAKHS THE SHARE OF THE PRESENT ASSESSEE COMES TO RS.1.75 LAKHS. THE ASSESSEE ADMITTED THE AMOUNT FOR A.Y.1994-95 WHEREAS THE BUILDER SRI R.K.SURANA CONFIRMED THAT THE ON MONEY WAS PAID IN F.Y.1996-97. SINCE ADMITTED BY ASSESSEE IN BLOCK PERIOD, DOUBLE ADDITION IS NOT WARRANTED. AO IS DIRECTED TO ACCEPT THE AMOUNT DECLARED AS SUCH. 35. CHARGING REG. COMPLETING THE ASSESSING OFFICER COMPLETED THE ASSESSMENT MATTER OF RECORD. REJECTED. 73 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. TAX AT 60% THE ASSESSMENT U/S 158 BD AND CHARGING TAX AT 60%. U/S 158BD. IT IS SUBMITTED THAT THE APPELLANT IS STAYING AT 1- 11-252/1A, MOTILAL NAGAR, BEGUMPET, HYDERABAD ALOGNWITH HIS FATHER SRI GULABRAICHUGANI. THIS CLEARLY INDICATES THAT THE PREMISES OF THE APPELLANT WAS SEARCHED AND, THEREFORE, THE PROVISIONS U/S 158BC SHOULD HAVE BEEN APPLIED. 74 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-3 IT(SS)A NO.3/H/2011 SMT. SHALU C.CHUGANI BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 GROUND NO. & AMOUNT ADDED DETAILS OF ADDITION EXPLANATION REMARKS OF THE AO IN REMAND REPORT DECISION 1 TO 5 & 14 GENERAL IN NATURE 6 RS.600 (1992-93 RS.10,145 (1995-96) BANK INTEREST, MUTUAL FUND INTEREST AND FDR INTEREST ARE ADDED AS UNDISCLOSED INCOME THE AMOUNT OF RS.600 WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED AND HENCE THIS GROUND IS NOT PRESSED. APPELLANT OFFERED INTEREST OF RS. 14,775 FOR THE ASSESSMENT YEAR 1994-95 AND RS. 11,132 FOR THE ASSESSMENT YEAR 95-96. THEREFORE, THE WORKING MADE BY THE ASSESSING OFFICER IS NOT CORRECT. FURTHER, THE ADDITION IS NOT EMANATING FROM THE SEIZED MATERIAL. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH ADDITIONS WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. THE ASSESSING OFFICER IS OF THE VIEW THAT FIXED DEPOSITS MADE WITH VARIOUS BANKS WOULD YIELD INTEREST OF RS.26,561. ACCORDING TO THE ASSESSING OFFICER THERE WERE DEPOSITS OF RS.10,000, RS.75,000 AND RS.25,000 ON 02.06.1994 AND RS.10,000 ON 07.02.1995 AFTER WHICH GROUND NOT PRESSED BY THE ASSESSEE THE TOTAL INTEREST COMPONENT CREDITED TO BANK ON FDR WAS RS.26,561 WHEREAS THE ASSESSEE HAS ADMITTED INTEREST OF RS.16,416 ONLY. THEREFORE, THE DIFFERENCE OF RS.10145 IS THE UNDISCLOSED INCOME FOR THE A.Y.1995-96. REJECTED. SINCE WORKING OF AO IS NOT JUSTIFIED AMOUNT STANDS DELETED. 75 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THERE WERE REALIZATIONS OF RS.49,671 ON 18.10.1994 AND RS.1,01,890 ON 13.02.1995.THE ASSESSING OFFICER IS OF THE VIEW THAT INTEREST REALIZED WOULD BE RS.26,561 AND NOT RS.10,426 AS ADMITTED. IT IS FURTHER SUBMITTED THAT THERE IS NO POSSIBILITY OF DERIVING AN INTEREST OF RS.26,561 FROM OUT OF THE DEPOSITS MADE OF RS.1,20,000 AS NARRATED BY THE ASSESSING OFFICER. IN THE CIRCUMSTANCES, IT IS SUBMITTED THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION ON THIS GROUND. 7. RS.9,900 (1987-88) ADDITION TREATING THE DEPOSIT IN BANK AS UNDISCLOSED INCOME NSC OF RS.9,000 WAS MATURED ON 18-8-1996. THE PRINCIPAL AMOUNT OF RS.9,000 ALONG WITH INTEREST EARNED OF RS.900 AGGREGATING TO RS.9,900 WAS DEPOSITED IN THE BANK. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ASSESSEE DEPOSITED CASH OF RS.9000 ON 18-8-86 AND RS.900 ON 2-4-86 AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. DELETED ACCEPTING ASSESSEE EXPLANATION RS.6,000 (1988-89) WITH REGARD TO RS.6,000 FOR THE ASSESSMENT YEAR 1988- 89, THIS AMOUNT REPRESENTS PARTLY THE INTEREST RECEIVED FROM NSC AND PARTLY CASH DEPOSIT. THE APPELLANT MAINTAINED BOOKS OF ACCOUNT AND THE SAME WERE SEIZED. FOR THE YEAR UNDER CONSIDERATION, THE INCOME FOR THE YEAR UNDER CONSIDERATION AMOUNTED TO RS. 45,065. ASSESSEE DEPOSITED CASH OF RS.6000 IN INDIAN BANK ACCOUNT AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. DELETED ACCEPTING ASSESSEE EXPLANATION RS.6,000 (1989-90) WITH REGARD TO RS.6,000 FOR THE ASSESSMENT YEAR 1989- 90, THIS AMOUNT ASSESSEE DEPOSITED CASH OF RS.6000 IN INDIAN BANK DELETED ACCEPTING ASSESSEE 76 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REPRESENTS THE INTEREST RECEIVED FROM NSC AND CASH DEPOSIT. ACCOUNT AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. EXPLANATION RS.2,700 (1990-91) WITH REGARD TO RS.2,700, THIS CONSISTS OF THE DEPOSIT MADE OF RS.1,000 ON 16- 12-90 OUT OF THE INTEREST RECEIVED FROM SBI MUTUAL FUND, RS.600 ON 12-3-90 FROM OUT OF INTEREST FROM SB ACCOUNT AND RS.1,100 DEPOSITED ON 28-03-90 FROM AVAILABLE CASH IN THE BOOKS OF ACCOUNT . (PAGE NO.84 OF THE PAPER BOOK). THE FACTS AS SUBMITTED ARE NOT REBUTTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. THEREFORE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. THESE ARE INTEREST FROM SBI MUTUAL FUND WHICH ARE NOT DECLARED BY THE ASSESSEE IN THE RETURN. NO EXPLANATION WAS FURNISHED. DELETED ACCEPTING ASSESSEE EXPLANATION RS.6,000 (1990-91) WITH REGARD TO RS.6,000 FOR THE ASSESSMENT YEAR 1990- 91, THIS AMOUNT REPRESENTS THE AMOUNT RECEIVED ON MATURITY OF NSC. FOR THIS REASON AND FOR THE REASONS SUBMITTED IN THE EARLIER PARAGRAPH, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ASSESSEE DEPOSITED CASH OF RS.6,000 IN INDIAN BANK ACCOUNT AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. DELETED ACCEPTING ASSESSEE EXPLANATION RS.1,800 (1991-92) THE DEPOSIT OF RS.1800 IN THE ASSESSMENT YEAR 1991-92 REPRESENTS THE CHEQUE RECEIVED ON MATURITY OF THE NSC. FOR THE REASONS SUBMITTED EARLIER, THE SAID AMOUNT THESE ARE CASH DEPOSITS IN INDIAN BANK ACCOUNT FOR WHICH NO EXPLANATION WAS GIVEN. DELETED ACCEPTING ASSESSEE EXPLANATION 77 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CANNOT BE TREATED AS THE UNDISCLOSED INCOME. 8. RS.20,000 ADDITION DISBELIEVING THE GIFT THIS AMOUNT REPRESENTS GIFT RECEIVED BY THE ASSESSEE FROM LAL DAYAL DASANI, A CLOSE RELATIVE OF THE ASSESSEE. THE AMOUNT WAS TRANSFERRED FROM THE ACCOUNT OF THE DONOR TO THE ASSESSEES ACCOUNT BY WAY OF AN AUTHORIZATION ISSUED BY THE DONOR TO THE BANK OF CREDIT AND COMMERCE. THE CREDIT WAS ALREADY RECORDED IN THE BOOKS OF ACCOUNT AND, THEREFORE, IT CANNOT BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. A LETTER OF CONFIRMATION FROM THE DONOR IS AT PAGE 18 OF THE PAPER BOOK AND THE EXPLANATION IS AT PAGE 17 OF THE PAPER BOOK. IT WAS FOUND FROM THE SEIZED MATERIAL THAT THE BANK OF CREDIT AND COMMERCE, GIBRALTOR AUTHORIZED BANK OF INDIA FOR PAYMENT OF RS.20,000. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. IT WAS FOUND FROM THE SEIZED MATERIAL THAT THE BANK OF CREDIT AND COMMERCE, GIBRALTOR AUTHORIZED BANK OF INDIA FOR PAYMENT OF RS.20,000 ON 19/1/87. THE AMOUNT WAS NEITHER DECLARED IN REGULAR RETURN OF INCOME NOR THE ASSESSEE SUBMITTED GIFT TAX RETURN. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. SINCE SEIZED MATERIAL CONFIRMS GIFT, THE SAME IS ACCEPTED AND AMOUNT DELETED. 9. RS.8,024 (1987-88) ADDITION ON ACCOUNT OF UNDISCLOSED INCOME IT IS NOT CORRECT TO MENTION THAT THE AMOUNT OF RS.8024 WAS PAID FROM OUT OF THE BORROWED FUNDS. THE BANK ACCOUNT FOR THE FINANCIAL YEAR 1986-87 IS AT PAGE NO.83 OF THE PAPER BOOK. THIS CONSISTS OF INTEREST FROM SB ACCOUNT, INTEREST FROM UTI AND AMOUNTS RECEIVED FORM THE PARTNERSHIP FIRM IN WHICH THE APPELLANT IS A PARTNER. THE AMOUNTS RECEIVED FROM PARTNERSHIP FIRMS WERE TAXABLE IN THE IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80CCA / 80CCB THE ADDITION IS DELETED. MOREOVER THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME 78 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RELEVANT PERIOD.. DURING THE YEAR UNDER CONSIDERATION THE APPELLANT PAID LIC OF RS.5086 AND NSC OF RS.35,000. THE AMOUNT OF NSC WAS PAID THROUGH INDIAN BANK; WHEREAS THE LIC OF RS.5,086 WAS PAID THROUGH CHEQUE. THE INCOME FOR THE YEAR UNDER CONSIDERATION WAS RS.45,065. THE CLAIM U/S 80C WAS RS.20,200. IT IS SUBMITTED THAT THE ASSESSING OFFICER IS NOT CORRECT IN ARRIVING AT THE FIGURE OF RS.8,024AND IN TREATING THE SAME AS UNDISCLOSED INCOME. IT IS ALSO SUBMITTED THAT THE CLAIM WAS MADE IN THE RETURN OF INCOME AND THE DETAILS WERE ALREADY AVAILABLE IN THE RECORDS. THEREFORE, THE AMOUNT CANNOT BE CONSIDERED AS THE UNDISCLOSED INCOME. TO THE EXTENT OF INVESTMENT. ADDITION DELETED. RS.20,000 (1988-89) WITH REGARD TO RS.20,000 (1988-89), THE ASSESSEE SUBMITS THAT CHEQUE WAS ISSUED TO POST MASTER, HEAD POST OFFICE, SECUNDERABAD TOWARDS PURCHASE OF NATIONAL SAVINGS CERTIFICATE VIDE CHEQUES NO.819465. THE CHEQUE WAS CLEARED ON 8- 10-1987. (PAGE NO.89 OF THE PAPER BOOK). THEREFORE, IT IS NOT CORRECT TO MENTION THAT THE INVESTMENT IS NOT PROPERLY EXPLAINED. IT IS FURTHER SUBMITTED THAT THE AMOUNT WAS DISCLOSED TO THE DEPARTMENT AND THE ADDITION DOES NOT EMANATE FROM ANY SEIZED MATERIAL. THEREFORE, NO SUCH THE ASSESSEE PURCHASED NSC FOR RS.20,000 AND REFERRED TO PAGE 12 OF PAPER BOOK FOR EXPLANATION BUT NO EXPLANATION WAS FOUND IN PAGE NO.12. CONSIDERING THE ASSESSEE EXPLANATION AMOUNT WAS DELETED. 79 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER, WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158BD OF THE ACT. RS.25,000 (1990-91) WITH REGARD TO RS.25,000 (1990-91), THIS TRANSACTION PERTAINS TO THE HUSBAND OF THE ASSESSEE LATE SRI CHANDRU CHUGANI. THE DETAILS FURNISHED IN THIS REGARD ARE AVAILABLE AT PAGE NO.149 OF THE PAPER BOOK FILED IN THE CASE OF LATE SRI CHANDRU CHUGANI. AS THE TRANSACTION DOES NOT RELATE TO THE APPELLANT AND AS THE TRANSACTION WAS ALREADY DISCLOSED BY SRI CHANDRU CHUGANI, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. IT IS ALSO SUBMITTED THAT SUCH AN ADDITION DOES NOT EMANATE FROM ANY SEIZED MATERIAL. IT WAS ALSO EXPLAINED THAT A SIMILAR ADDITION WAS MADE IN THE ASSESSMENT OF LATE SRI CHANDRU CHUGANI AND, THEREFORE, THE APPELLANT SUBMITTED THAT RS.25,000 CANNOT BE ADDED IN THE ASSESSMENT OF THE APPELLANT HEREIN. THIS ADDITION IS WRONGLY MADE IN THE REASSESSMENT MADE. AS FOUND FROM THE SEIZED MATERIAL RS.25,000 WAS DEPOSITED IN THE FIXED DEPOSIT A/C IN THE ANDHRA BANK. THE INVESTMENT WAS MADE ON 1.3.90 AND THE ASSESSEES EXPLANATION THAT THE INVESTMENT WAS OUT OF AMOUNT WITHDRAWN ON 2.12.91 IS NOT RELEVANT. AMOUNT DELETED ACCEPTING ASSESSEE EXPLANATION. RS.12,000 (1991-92) WITH REGARD TO RS.12,000 (1991-92), IT IS SUBMITTED THAT THE APPELLANT ISSUED CHEQUE NO. 8197819470 FOR RS.10,000 ISSUED TOWARDS INVESTMENT IN LIC MUTUAL FUND AND WAS CLEARED ON 28-2-91 (PAGE NO. 89 OF THE PAPER BOOK). RS.2,000/- WAS PAID IT WAS FOUND THAT THE INVESTMENTS OF RS.12,000 IN PPF AND LIC MUTUAL FUND HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF 80 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. TOWARDS SBI MUTUAL FUND THROUGH CHEQUE CLEARED ON 26-3-1991 FROM INDIAN BANK A/C NO. 5330. TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. INVESTMENT. ADDITION DELETED. RS.42,000 (1992-93) WITH REGARD TO RS.42,000 (1992-93), INVESTMENT OF RS.10,000/- WAS MADE TO SBI MUTUAL FUND BY WITHDRAWING THE AMOUNT FROM INDIAN BANK ON 2/2/1992 VIDE CHEQUE NO. 697304; RS.25,000 WAS INVESTED IN SHORT TERM FIXED DEPOSIT ON 9-12-91 PAID THROUGH CHEQUE NO.697307 INDIAN BANK; INVESTMENT IN PPF OF RS.32,000, WAS PAID THROUGH CHEQUE NO.697305 OF RS. 2,000 AND ANOTHER SUM OF RS.30,000 WAS PAID FROM OUT OF AVAILABLE CASH. FOR THE ASSESSMENT YEAR 1992-93, THE APPELLANT CLAIMED DEDUCTION OF RS.32,000 TOWARDS PAYMENT OF PPF U/S 88 OF THE ACT. SHE CLAIMED RS.10,000 U/S 80CCB OF THE ACT. FOR THE YEAR UNDER CONSIDERATION THE TOTAL INCOME OF THE APPELLANT WAS RS.71,398. IT WAS FOUND THAT THE INVESTMENTS OF RS.42,000 IN PPF AND SBI MUTUAL FUND HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. THE IMMEDIATE SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. RS.40,000 (1993-94) IT IS SUBMITTED THAT THE INVESTMENT OF RS.40,000 (1993-94), WAS MADE FROM OUT OF THE AMOUNT OF RS.1,24,682 AVAILABLE WITH HER DURING THE ASSESSMENT YEAR INCLUSIVE OF AMOUNTS RECEIVED ON MATURITY OF NSCS, INTEREST ON FDRS AND MUTUAL FUNDS APART FROM OPENING CASH BALANCE. IT WAS FOUND THAT THE INVESTMENT OF RS.40,000 IN PPF HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. RS.20,000 (1994-95) THE APPELLANT CLAIMED DEDUCTION OF RS. 10,000 UNDER SEC. 80CC FOR THE THIS IS THE AMOUNT REALIZED FROM SBI MUTUAL FUND WHICH AMOUNT DELETED. 81 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1990-01; RS. 10,000 UNDER SEC. 80CCB FOR THE ASSESSMENT YEAR 1991-92; RS. 10,000 FOR THE ASSESSMENT YEAR 1992-93. THE AMOUNT DEPOSITED IS REFUNDABLE ONLY AFTER 5 YEARS. THEREFORE, THE AMOUNT RECEIVED DURING THE YEAR CANNOT BE TREATED AS THE INCOME AS THE SAME WAS NOT CLAIMED. WITHOUT PREJUDICE, IT IS SUBMITTED THAT EVERY YEAR ONLY AN AMOUNT OF RS. 10,000 WAS CLAIMED FOR THREE YEARS. IS TAXABLE IN THE YEAR OF REALIZATION. THE ASSESSEE HAS NOT DECLARED THE SAME IN THE RETURN. HENCE, TREATED AS UNDISCLOSED. RS.40,000 (1994-95) WITH REGARD TO RS.40,000 (1994-95), THE ASSESSEE SUBMITS THAT THERE WAS AN AMOUNT OF RS.1,22,574 STANDING TO HER CREDIT DURING THE ASSESSMENT YEAR INCLUSIVE OF AMOUNTS RECEIVED ON MATURITY OF NSCS, INTEREST ON FDRS AND MUTUAL FUNDS APART FROM OPENING CASH BALANCE. THE INVESTMENT OF RS.40,000 WAS FROM OUT OF SUCH CREDITS. HENCE, NO ADDITION CAN BE MADE. IT WAS FOUND THAT THE INVESTMENT OF RS.40,000 IN PPF HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. RS.10,000 (1995-96) THE APPELLANT DID NOT CLAIM ANY DEDUCTION OF LIC MUTUAL FUND OR PPF OR NSC AS THERE WAS NO TAXABLE INCOME. EVEN OTHERWISE THE CLAIM WOULD HAVE BEEN U/S 88 AND NOT AS DEDUCTION FROM THE INCOME. THE AMOUNT WAS RECEIVED FROM LIC MUTUAL FUND ON 17- 10-94 WHICH IS CHARGEABLE TO TAX IN THE YEAR OF RECEIPT AMOUNT DELETED ACCEPTING EXPLANATION. RS.40,000 (1995-96) ACCORDING TO THE ASSESSING OFFICER, THE CLAIM FOR DEDUCTION OF PPF IS NOT ALLOWABLE AS THE AMOUNT WAS NOT INVESTED FROM OUT OF THE INCOME. IT WAS FOUND THAT THE INVESTMENTS OF RS.40,000 IN PPF HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT 82 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE APPELLANT DID NOT CLAIM ANY DEDUCTION OF LIC MUTUAL FUND OR PPF OR NSC AS THERE WAS NO TAXABLE INCOME. EVEN OTHERWISE THE CLAIM WOULD HAVE BEEN U/S 88 AND NOT AS DEDUCTION FROM THE INCOME. WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. OF INVESTMENT. ADDITION DELETED. RS.50,000 (1996-97) IN THIS REGARD THE APPELLANT HUMBLY SUBMITS THAT DURING THE YEAR UNDER CONSIDERATION, THE GROSS TOTAL INCOME OF THE APPELLANT WAS RS.49,236 AND ALSO DERIVED FOR THE IMMEDIATELY PRECEDING YEAR. ALL THE TRANSACTIONS OF THE APPELLANT WERE ROUTED THROUGH THE BANK ACCOUNT AND THE AMOUNTS WERE PAID THROUGH THE SAME ACCOUNT. THEREFORE, IT CANNOT BE SAID THAT THE AMOUNTS WERE NOT INVESTED FROM OUT OF THE INCOME EARNED. FURTHER, THE APPELLANT SUBMITS THAT THE APPELLANT DID NOT CLAIM DEDUCTION FROM THE INCOME, AND ALSO NOT CLAIMED TAX RELIEF UNDER SEC. 88 OF THE ACT AS NO TAX PAYABLE FOR THE YEAR UNDER CONSIDERATION. FURTHER, SUCH AN ADDITION COULD NOT HAVE BEEN MADE, WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. IT WAS FOUND THAT THE INVESTMENTS OF RS.50,000 IN PPF HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ADDITION CAN NOT BE MADE ON INVESTMENT MADE FROM KNOWN SOURCES. 10. RS.10,000 (1987-88) ADDITION AS UNDISCLOSED INCOME THE CASH DEPOSIT OF RS.10,000 ON 26-7- 1986 IN RAMESH WATCH SERVICES WAS MADE FROM OUT OF THE CASH AVAILABLE IN THE REGULAR BOOKS OF ACCOUNT. THE FACT CAN BE VERIFIED FROM THE SEIZED BOOKS. IT IS SUBMITTED THAT THE ASSESSEE MADE CASH DEPOSITS OF RS.10,000 ON 20/06/86 WITH RAMESH WATCH SERVICE. THE ASSESSEE DID NOT OFFER ANY EXPLANATION. ADDITION DELETED ACCEPTING ASSESSEE EXPLANATION. 83 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AMOUNT IS ALREADY RECORDED IN THE BOOKS OF ACCOUNT (PAGE 41 OF THE PAPER BOOK). THEREFORE, SUCH AN ADDITION CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT, PARTICULARLY, WHEN NO SEIZED MATERIAL IS AVAILABLE. ASSESSMENT YEAR 1996-97 11. RS.27,000 ADDITION TREATING THE INVESTMENT IN FDR AS UNEXPLAINED IT WAS SUBMITTED THAT THERE WAS A DEPOSIT WITH KIDDY BANK ACCOUNT OF MASTER SACHIN FROM THE YEAR 1981. THE AMOUNTS WERE DEPOSITED FROM THEN AND ONWARD AND THE AMOUNT SO WITHDRAWN WAS DEPOSITED INTO THE FD ACCOUNT. THE ASSESSING OFFICER IN THE REMAND REPORT DID NOT MAKE ANY FURTHER COMMENTS. AS FOUND FROM THE SEIZED MATERIAL ASSESSEE INVESTED RS.27,000 ON 26/3/96 IN FDR IN ANDHRA BANK. THE ASSESSEE EXPLAINED THAT THE INVESTMENT IS OUT OF THE AMOUNTS WITHDRAWN FROM KIDDY BANK ACCOUNT FROM 1981 TO 1996. DELETED ACCEPTING EXPLANATION. ASSESSMENT YEAR 1997 - 98 12. RS.33,333 FURTHER ADDITION ON ACCOUNT OF INVESTMENT IN POOJA APARTMENTS THIS IS AT PARA 7.II OF THE ASSESSMENT ORDER. UNDER THIS HEAD, THE ASSESSING OFFICER ARRIVED AT AN ADDITION OF RS. 28,679, BUT ADDED RS. 33,333. THIS IS A CLERICAL MISTAKE IN THE ASSESSMENT ORDER. IT IS FURTHER SUBMITTED THAT THE APPELLANT AND FIVE OTHERS ALREADY ADMITTED RS. 10,50,000 AS UNDISCLOSED INCOME ON THIS ACCOUNT. THE APPELLANT SUBMITTED THAT RS. 60,000 IS TOWARDS EXTRA FITTINGS AND RS. 9,90,000 TOWARDS EXTRA PAYMENTS TO THE BUILDER. THE ASSESSING OFFICER ADDED THE AMOUNT OF RS. 1,75,000 AS ADMITTED BY THE APPELLANT. BESIDES, THE MATTER AS PER RECORD AO IS DIRECTED TO CORRECT THE CLERICAL MISTAKE. IF ALREADY ADMITTED DOUBLE ADDITION CAN NOT BE MADE. GROUND ALLOWED. 84 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSING OFFICER MENTIONS THAT CERTAIN BILLS FOR PURCHASES MADE BY R.K. CONSTRUCTIONS FROM HEMANT ENTERPRISES; OM TRADING COMPANY WERE FOUND AND THAT SUCH AN AMOUNT WORKS OUT TO RS. 1,72,076. THE ASSESSING OFFICER ADDED 1/6 OF SUCH AMOUNT. IN THIS REGARD, IT IS SUBMITTED THAT THE PURCHASES WERE EFFECTED BY R.K. CONSTRUCTIONS. THIS IS EVIDENCED FROM THE INVOICES FOUND. THEREFORE, THE AMOUNT OF RS. 1,72,076 HAS TO BE TELESCOPED WITH THE AMOUNT ALREADY OFFERED BY THE APPELLANT. THE ASSESSING OFFICER DID NOT MAKE ANY FURTHER COMMENTS IN THE REMAND REPORT. 13. RS.8,05,968 ADDITION ON ACCOUNT OF EXCESS JEWELRY THE APPELLANT SUBMITTED A DETAILED NOTE IN THIS REGARD AT PAGES 21-36. DURING SEARCH THE JEWELLERY OF RS.11,27,020 WAS FOUND BELONGING TO THE ASSESSEE AND HER HUSBAND SRI CHANDRU. THE ASSESSEE DECLARED RS.1,33,072 AND HER HUSBAND DECLARED RS.83,770 IN THEIR WEALTH TAX RETURNS FOR THE ASSESSMENT YEAR 1992 - 93. DELETED AS DISCUSSED IN MAIN ORDER. 85 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-4 IT(SS)A NO.4/H/2011 SMT. MANISHA A.CHUGANI BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10- 1996 ASSESSMENT YEAR: 1987-88 GROUND NO. & AMOUNT ADDED (RS.) DETAILS OF ADDITION EXPLANATION REMARKS OF THE A.O. IN THE REMAND REPORT. DECISION. 1, 45 &46 GENERAL IN NATURE 2. RS.8,550 ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK ACCOUNT. THE SUBMISSION OF THE APPELLANT IS THAT THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL AND CAN NOT BE TREATED AS UNDISCLOSED INCOME U/S 158BD OF THE I.T. ACT. SECONDLY, THE APPELLANT SUBMITTED THAT THE AMOUNT OF RS.6750/- WAS DEPOSITED INTO THE BANK ACCOUNT FROM OUT OF THE CASH OF RS.1800 AVAILABLE IN THE BOOKS OF ACCOUNT AND THE BALANCE OF AMOUNT, THE AMOUNT REALIZED ON MATURITY OF THE NSCS. THEREFORE, THE ASSESSING OFFICERS OBSERVATIONS ARE NOT CORRECT. THE ASSESSEE TRIED TO EXPLAIN THE AMOUNT AS INTEREST RECEIVED FROM NSC BUT INTEREST ON NSC IS NOT PAID IN PIECE MEAL AND IS PAID ON MATURITY ONLY. DELETED. 3. RS.10,193 ADDITION ON ACCOUNT OF UNEXPLAINED INTEREST FROM SB A/C AND FDR THIS AMOUNT WAS ALREADY ADMITTED BY THE ASSESSEE IN THE BLOCK RETURN OF INCOME FILED. THEREFORE, NO ADDITION COULD BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158BC OF THE I.T. ACT. INTEREST RECEIVED FROM BANK SO RS.13,991 WHEREAS THE ASSESSEE DECLARED RS.3798 ONLY., THE DIFFERENCE IS ADDED AS UNDISCLOSED INCOME. IN CASE DOUBLE ADDITION WAS MADE, DELETED. 4. RS.8,940 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM MONEY THIS AMOUNT WAS ALREADY ADMITTED BY THE ASSESSEE IN THE BLOCK RETURN OF INCOME FILED. HENCE THE ASSESSING OFFICER SHOULD THE ASSESSEE RECEIVED INTEREST FROM MONEY LENDING AND UTI WHICH IS TAKEN AS IN CASE DOUBLE ADDITION WAS 86 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. LENDING AND UTI NOT HAVE ADDED THE SAME IN THE ASSESSMENT TREATING THE SAME AS UNDISCLOSED INCOME. UNDISCLOSED INCOME FOR THE BLOCK YEAR. MADE, DELETED. 5. RS.10,000 ADDITION ON ACCOUNT OF GIFT FROM LAL DAYA DASANI CONFIRMATION LETTER FROM LAL DAYAL DASANI, WHO STAYS IN GIBRALTER, SPAIN CONFIRMING THE GIFT WAS PRODUCED ON 19-01-1987. (PAGE NO.47 OF THE PAPER BOOK). THE AMOUNT WAS RECEIVED THROUGH BANK DD. THE ADDITION IS MADE WITH REFERENCE TO SEIZED MATERIAL AND THEREFORE CANNOT BE TREATED AS UNDISCLOSED INCOME. . IT WAS FOUND FROM THE SEIZED MATERIAL THAT THE BANK OF CREDIT AND COMMERCE GIBRALTOR AUTHORIZED BANK OF INDIA FOR PAYMENT OF RS.10,000 ON 19-1- 87. THE AMOUNT WAS NEITHER DECLARED IN REGULAR RETURN OF INCOME NOR THE ASSESSEE SUBMITTED GIFT TAX RETURN. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. SINCE CONFIRMATION WAS AVAILABLE IN SEIZED MATERIAL ITSELF, ACCEPTED. ADDITION DELETED. 6. RS.25,000 ADDITION DISBELIEVING THE CHEQUE RECEIVED FROM RAMESH SALES CORPORATION. THIS AMOUNT REPRESENTS THE CHEQUE RECEIVED FROM RAMESH WATCH SERVICES THROUGH BANK OF INDIA. EARLIER, IT WAS WRONGLY MENTIONED AS RECEIVED FROM ASHOK G.CHUGANI INSTEAD OF RAMESH WATCH SERVICES. THIS FACT WAS ALREADY COMMUNICATED VIDE LETTER DT.20-10-97 VIDE ACK.NO.542072 (PAPER BOOK PAGE NO.11). AS THE RECEIPT OF THE AMOUNT IS PROPERLY EXPLAINED, THE SAME SHOULD NOT HAVE BEEN CONSIDERED AS THE UNDISCLOSED INCOME. NO FURTHER COMMENTS. AMOUNT IS CREDITED IN BANK OF INDIA ACCOUNT. IN ORIGINAL ASSESSMENT ASSESSEE STATED THAT IT WAS RECEIVED FROM ASHOK CHUGANI. LATER, IT WAS STATED THAT THE AMOUNT WAS RECEIVED FROM RAMESH SALES CORPORATION. IN THE ABSENCE OF ANY SUPPORTING DETAILS THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. MATTER OF VERIFICATION ONLY. THE SAME WAS DELETED. 7. RS.5,920 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM RAMESH SALES THIS INTEREST IS EARNED ON THE DEPOSIT OF RS.50,000 MADE WITH RAMESH SALES CORPORATION. THIS AMOUNT WAS DEPOSITED THROUGH CHEQUE NO.216506 DATED THE ASSESSEE HAS EARNED INTEREST FROM RAMESH SALES CORPORATION BUT HAS NOT DECLARED IT IN THE RETURN. DELETED ACCEPTING EXPLANATION. 87 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CORPORATION. 8-9-86 DRAWN ON INDIAN BANK, SECUNDERABAD. THE INTEREST RECEIVED IS ADMITTED IN THE RETURN OF INCOME. THIS FACT WAS ALREADY BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THROUGH LETTER DATED 28-9-1997 (PAGE NO.14 OF THE PAPER BOOK). THE ASSESSING OFFICER SHOULD NOT HAVE MADE THE ADDITION. 8. RS.35,000 (NSC INVESTMENT) ADDITION REPRESENTING UNDISCLOSED INVESTMENT IN NSC. THE APPELLANT FILED THE SOURCES OF INVESTMENT AND IT WAS ACCEPTED BY THE DEPARTMENT. FURTHER, THE ASSESSEE ALSO SUBMITTED NOTE REGARDING ADDITIONS U/S 80CCA AND 80 CCB, A COPY OF WHICH IS AVAILABLE AT PAGE NO.13 OF THE PAPER BOOK. IN VIEW OF THE ABOVE, THE ADDITION MAY KINDLY BE DELETED. THE AMOUNT SHOWN AS DEDUCTION U/S 80CC IS RS.20,200. FURTHER, IT IS NOT CORRECT TO MENTION THAT THE REALISATION OF NSC IS NOT EXEMPT FROM TAX. THE INTEREST FROM NSC IS A TAXABLE AMOUNT AND THE DEPOSIT MADE IN THE NSC WAS FROM OUT OF HER INCOME EARLIER. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ADDITION CAN NOT BE MADE ON INVESTMENT MADE FROM KNOWN SOURCES. ASSESSMENT YEAR: 1988-89 9. RS.750 ADDITION ON ACCOUNT OF UNACCOUNTED INTEREST ON FDRS. THE INTEREST ON FDR OF RS.750 WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. THEREFORE, THE A.O. SHOULD NOT HAVE MADE ADDITION TREATING THE SAME AS UNDISCLOSED INCOME. THE AMOUNT WAS ALREADY ADMITTED IN THE RETURN OF INCOME FILED. ASSESSEE HAS NOT DISCLOSED INTEREST OF RS.750 RECEIVED AGAINST FDR. IN CASE OF DOUBLE ADDITION AMOUNT STAND DELETED. 88 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 10. RS.23,469 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME FROM MONEY LENDING. THE MONEY LENDING BUSINESS WAS DONE THROUGH HER PARENTS AT MADRAS. THE SAID ACTIVITY COMMENCED DURING THE FINANCIAL YEAR 1986-97 RELEVANT FOR THE ASSESSMENT YEAR 1987- 88. THE INITIAL CAPITAL OF RS.47,750 WAS ALREADY DISCLOSED IN THE WEALTH TAX RETURNS (PAGE NO.78 OF THE PAPER BOOK). THE INTEREST DERIVED OF RS.14,031 WAS ALREADY ADMITTED IN THE REGULAR RETURN OF INCOME. THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT TO MAKE ANY FURTHER ADDITION. IT IS ALSO SUBMITTED THAT THE ABOVE IS NOT EMANATED FROM THE SEIZED DOCUMENTS. THE ASSESSEE WAS FOUND TO HAVE BROUGHT IN RS.22,297 FROM UNDISCLOSED SOURCES AND INCREASED THE CIRCULATING CAPITAL USED IN MONEY LENDING BUSINESS. DELETED ACCEPTING EXPLANATION. 11. RS.6,600 ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK. THE ASSESSEE RECEIVED PRINCIPAL AMOUNT OF RS.5,000 ON MATURITY OF NSC ALONG WITH INTEREST OF RS.1,600 AGGREGATING RS.6,600 ON 16-4-87. THE SAID AMOUNT WAS DEPOSITED IN THE BANK. (PAGE NO.92 OF THE PAPER BOOK.) HENCE, THE ADDITION MAY PLEASE BE DELETED. AS THE ASSESSEE SUBMITTED THE EXPLANATION NOW AND AS THE ASSESSING OFFICER DID NOT CONTRADICT THE EXPLANATION, THE ADDITION MAY KINDLY BE DELETED. ASSESSEE DEPOSITED CASH IN INDIAN BANK ACCOUNT ON 14.8.87 BUT THE ASSESSEE DID NOT FILE ANY EXPLANATION. HENCE, TREATED AS UNDISCLOSED INCOME. DELETED ACCEPTING EXPLANATION. 12. RS.35,000 ADDITION ON THE PLEA THAT THE EXEMPTION CLAIMED IS NOT COVERED THE ASSESSEE SUBMITS THAT THE PROVISIONS OF CHAPTER VI WERE NOT APPLICABLE TO THE BLOCK ASSESSMENT PERIOD BOTH AT THE TIME OF FILING THE IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FORM REALIZATION OF NSC OF EARLIER YEARS DELETED ACCEPTING EXPLANATION. 89 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. BY CHAPTER XIVB OF THE I.T. ACT. RETURN OF INCOME AND AT THE TIME OF COMPLETION OF THE ASSESSMENT. THEREFORE, IT SHOULD NOT BE ADDED. THE PROVISIONS OF SEC. 80CCA WERE INTRODUCED ONLY FOR THE ASSESSMENT YEAR 1989-90 AND NO SUCH PROVISION WAS THERE IN THE EARLIER YEARS. THEREFORE, THE ADDITION IS NOT JUSTIFIED. WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FORM INCOME CHARGEABLE TO TAX. ASSESSMENT YEAR: 1989-90 13. RS.31,430 ADDITION TOWARDS INTEREST ON UNDISCLOSED DEBTORS. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE ASSESSING OFFICER WORKED OUT THE SAID FIGURE BASED ON THE WEALTH TAX AND INCOME- TAX RETURNS FILED. THE ASSESSING OFFICER TOOK INTO CONSIDERATION THE TOTAL DEBTORS FOR THE YEAR UNDER CONSIDERATION, DEDUCTED THE DEBTORS FOR THE IMMEDIATELY PRECEDING YEAR AND ARRIVED AT THE DIFFERENCE. INVESTMENT IN MONEY LENDING ARE EXPLAINED IN THE RETURN OF INCOME. BOOKS OF ACCOUNT ARE SEIZED BY THE I.T. AUTHORITIES AND THE INVESTMENT IN MONEY LENDING IS RECORDED IN THE SAID BOOKS OF ACCOUNT. THE SAME IS PROPERLY RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE ALREADY OFFERED OF INTEREST OF RS.36,790 FROM MONEY LENDING. THE INVESTMENTS MADE WERE ADMITTED IN THE WEALTH TAX RETURNS FILED. THEREFORE, THIS THIS AMOUNT REPRESENTS FRESH INTRODUCTION OF MONEY IN THE MONEY LENDING BUSINESS. NO EXPLANATION AS FURNISHED. DELETED ACCEPTING ASSESSEE EXPLANATION. NOT PART OF SEIZED MATERIAL ALSO. 90 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AMOUNT CAN NOT REPRESENT THE UNDISCLOSED INCOME OF THE APPELLANT HEREIN. 14. RS.2,600 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM MONEY LENDING. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE, THE ADDITION MAY PLEASE BE DELETED. THE A.O. SHOULD NOT HAVE TREATED THE SAME AS UNDISCLOSED INCOME. THIS IS INTEREST ON MONEY LENDING DECLARED IN BLOCK RETURN. ADMITTED. INCASE DOUBLE ADDITION, STANDS DELETED. 15. RS.23,450 ADDITION ON ACCOUNT OF UNDISCLOSED DEPOSIT IN THE BANK. THE ASSESSEE GOT REFUND OF THE PRINCIPAL AMOUNTS OF TWO NSCS ON MATURITY OF THE VALUES OF RS.10,000 AND RS.13,450 AGGREGATING TO RS.23,450. THIS AMOUNT WAS DEPOSITED IN THE BANK. THE DETAILS ARE FURNISHED AT PAGE NO.92 OF THE PAPER BOOK. THE A.O. WRONGLY MENTIONED THE PAGE NO. AS 13 OF THE PAPER BOOK. THE ASSESSEE DEPOSITED CASH OF RS.10,200 ON 11.7.88 BUT COULD NOT OFFER EXPLANATION. DELETED AS THE EXPLANATION IS VALID. 16. RS.35,000 ADDITION AS UNDISCLOSED INVESTMENT IN PPF. FOR THE ASSESSMENT YEAR, THE TOTAL AMOUNT DERIVED WAS RS.83,351. THE PAYMENTS TOWARDS NSCS AND LIC WAS RS.40,015 AND AN AMOUNT OF RS.20,200 WAS ALLOWED AS DEDUCTION U/S 80C. THIS DOES NOT EMANATE FROM THE SEIZED DOCUMENTS AND THE SAME IS ADMITTED IN THE RETURN OF INCOME FILED. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FORM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS INCOMES MATCHING THE INVESTMENTS. ASSESSMENT YEAR: 1990-91 17. RS.1600 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM MUTUAL FUND. THIS AMOUNT WAS ADMITTED IN THE BLOCK RETURN OF INCOME FILED. HENCE, THE ADDITION MAY PLEASE BE DELETED. THE ASSESSEE DECLARED INTEREST FROM MUTUAL FUND IN THE BLOCK RETURN. IN CASE OF DOUBLE ADDITION 91 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSING OFFICER SHOULD NOT HAVE RESORTED TO THE ADDITION. DELETED. 18. RS.25,000 ADDITION ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT. THE KIDDY BANK ACCOUNT IN ANDHRA BANK WAS CONVERTED TO FDR. HENCE, THIS BANK DEPOSIT IS PROPERLY EXPLAINED. DETAILS OF THE TRANSACTION ARE AVAILABLE AT PAGE NO.122 OF THE PAPER BOOK INSTEAD OF 119 AS MENTIONED BY THE ASSESSING OFFICER. IT IS SUBMITTED THAT THE DEPOSIT MADE ON 1.3.90 WAS FROM OUT OF THE WITHDRAWAL FROM KIDDY BANK ACCOUNT. THEREFORE, THE SOURCE OF INVESTMENT IS JUSTIFIED AND THE ADDITION MAY KINDLY BE DELETED. AS FOUND FROM THE SEIZED MATERIAL RS.25,000 WAS DEPOSITED IN THE FIXED DEPOSIT A/C IN THE ANDHRA BANK. THE INVESTMENT WAS MADE ON 1-3-90 AND THE ASSESSEES EXPLANATION THAT THE INVESTMENT WAS OUT OF AMOUNT WITHDRAWN ON 2.12.91 IS NOT RELEVANT. NOT TO BE CONSIDERED IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. 19&20 RS.35,000 (PPF) ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PPF. FOR THE ASSESSMENT YEAR, THE TOTAL AMOUNT DERIVED WAS RS.87,229. THE PAYMENTS TOWARDS ACCRUED INTEREST ON NSCS AND LIC WAS RS.18060 AND AN AMOUNT OF RS.43,060 WAS ALLOWED AS DEDUCTION U/S 80C. THIS DOES NOT EMANATE FROM THE SEIZED DOCUMENTS AND THE SAME IS ADMITTED IN THE RETURN OF INCOME FILED. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS INCOMES MATCHING THE INVESTMENTS. ASSESSMENT YEAR: 1991-92 21. RS.2,880 ADDITION ON THE GROUND OF UNDISCLOSED INTEREST FROM UTI THE AMOUNT WAS ADMITTED IN THE BLOCK RETURN OF INCOME FILED. HENCE THE A.O. SHOULD NOT HAVE MADE THE ADDITION. NO FURTHER COMMENTS. THE ASSESSEE DECLARED INTEREST ON UTI IN THE BLOCK RETURN. REJECTED. 22. RS.693 ADDITION ON ACCOUNT OF ADMITTED IN THE BLOCK RETURN OF INCOME FILED. THE ASSESSEE DECLARED INTEREST REJECTED. 92 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. UNDISCLOSED INTEREST FROM LIC MUTUAL FUND. HENCE, THE ADDITION NEEDS TO BE DELETED. HENCE THE A.O. SHOULD NOT HAVE MADE THE ADDITION. NO FURTHER COMMENTS. FROM LIC MUTUAL FUND IN THE BLOCK RETURN. 23. RS.17,800 ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN THE BANK. IT IS CLEARLY EXPLAINED THAT THE AMOUNT OF RS.17,800 CREDITED REPRESENTS THE CHEQUES RETURNED. A SIMILAR CHEQUES FOUND ISSUED (PAGE NO.99 OF THE PAPER BOOK). THE ASSESSING OFFICER IS NOT JUSTIFIED IN MENTIONING THAT NO EXPLANATION WAS SUBMITTED. THE ASSESSEE DEPOSITED 17,800 IN INDIAN BANK A/C ON 16-4-90. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. CHEQUE DEPOSITED, BUT RETURNED. NO ADDITION IS WARRANTED. HENCE DELETED. 24. RS.58,000 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PPF THE AMOUNT CLAIMED WAS ADMITTED IN THE REGULAR RETURN OF INCOME FILED. FOR THE YEAR UNDER CONSIDERATION, THE TOTAL INCOME OF THE ASSESSEE AGGREGATED TO RS.1,02,047 AND EXEMPTION U/S 88 WAS CLAIMED. THE ASSESSEE DID NOT CLAIM ANY DEDUCTION U/S 80C ON ACCOUNT OF DEPOSIT MADE WITH THE LIC OR ACCRUED INTEREST OR PUBLIC PROVIDENT FUND. THEREFORE, THE ASSESSING OFFICERS OBSERVATIONS ARE NOT CORRECT. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. SOURCE OF FUND IS NOT MATERIAL SO LONG AS ASSESSEE HAS INCOME TO THE EXTENT OF INVESTMENT. ADDITION DELETED. 25. RS.2105 ADDITION ON ACCOUNT OF UNDISCLOSED THE INTEREST ON FIXED DEPOSITS WAS OFFERED FOR ASSESSMENT IN THE THE ASSESSEE RECEIVED RS.5105 AS INTEREST BUT ESTIMATED ADDITION IS 93 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INTEREST FROM FDRS. RETURNS OF INCOME REGULARLY FILED. THE ASSESSING OFFICER ESTIMATED THE INTEREST AT RS. 5,105 AGAINST FIXED DEPOSIT OF RS. 25,000. THE WORKING IS MADE ONLY ON ESTIMATE BASIS. DECLARED ONLY RS.3,000 IN THE REGULAR RETURN. DELETED. ASSESSMENT YEAR: 1992-93 26. RS.25,000 RS.5,654 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN FDR AND INTEREST ON FDR. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 25,000 ON THE GROUND THAT THERE IS NO SOURCE FOR INVESTMENT OF RS. 25,000. IT WAS EXPLAINED AT PAGE 119 OF THE PAPER BOOK THAT THE SAID AMOUNT WAS DEPOSITED BY DRAWING FROM THE BANK ACCOUNT. THE ASSESSING OFFICER DID NOT CONSIDER THE EXPLANATION PROPERLY. FURTHER, THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE ASSESSING OFFICER ESTIMATED THE INTEREST ON ACCRUAL BASIS AT RS. 5,654. THIS IS NOT CORRECT AND FURTHER IT IS PURELY ON ESTIMATE BASIS. THE ACTUAL AMOUNT REALIZED BY THE APPELLANT WAS ADMITTED IN THE RETURN OF INCOME. EVEN OTHERWISE, IF THE ADDITIONAL INTEREST IS ADDED THE SAME WOULD ALSO BE COVERED BY DEDUCTION UNDER SEC. 80L OF THE ACT. THEREFORE, THERE IS NO UNDISCLOSED INCOME. THE ASSESSEE INVESTED IN FDR ON 2-12-91 IN ANDHRA BANK AND EXPLAINED THE INVESTMENT AS WITHDRAWN FROM SB ACCOUNT IN ANDHRA BANK. NO SUCH WITHDRAWAL WAS FOUND IN SUCH SB ACCOUNT. THE ASSESSEE RECEIVED INTEREST OF RS.8650 ON FDR BUT DECLARED ONLY RS.2996. HENCE THE DIFFERENCE IS TREATED AS UNDISCLOSED INCOME. NOT BASED ON SEIZED MATERIAL. EVEN ASSESSEE EXPLANATION WAS ACCEPTABLE. HENCE DELETED. 27. RS.15,000 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PPF. THE ASSESSEE DISCLOSED EVERY PROOF WITH EVIDENCE AND CLAIMED THE SAME AS DEDUCTION. THE ASSESSING OFFICER IS NOT CORRECT IN CONSIDERING THIS ISSUE UNDER CHAPTER XIVB OF THE I.T. ACT. IN THIS REGARD IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, DELETED AS ASSESSEE HAS INCOMES MATCHING THE 94 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. A NOTE SUBMITTED BY THE ASSESSEE IS AT PAGE NO.13 OF THE PAPER BOOK. THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. INVESTMENTS. ASSESSMENT YEAR: 1993-94 28. RS.1350 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM FDRS. THE APPELLANT ADMITTED THE INTEREST INCOME CORRECTLY IN THE REGULAR RETURN OF INCOME. THE ASSESSING OFFICER PROCEEDED TO ESTIMATE THE INTEREST INCOME ON THE FIXED DEPOSITS AND ARRIVED AT A HYPOTHETICAL AMOUNT. THIS IS NOT JUSTIFIED PARTICULARLY WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BC OF THE ACT; THE ASSESSEE RECEIVED INTEREST OF RS.6450 AGAINST FDR BUT DISCLOSED ONLY RS.5100 IN REGULAR RETURN. ESTIMATED ADDITION STANDS DELETED. 29. RS.35,000 ADDITION REPRESENTING PPF. THIS ISSUE CANNOT BE CONSIDERED UNDER CHAPTER XIVB OF THE I.T. ACT. THE AMOUNT PAID TOWARDS PPF WAS CLAIMED AS DEDUCTION U/S 88 OF THE I.T. ACT. THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE MADE ANY ADDITION. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS INCOMES MATCHING THE INVESTMENTS. ASSESSMENT YEAR: 1994-95 30. RS.20,200 ADDITION ON ACCOUNT OF DEEMED INCOME RECEIVED FROM MUTUAL FUNDS. THIS ISSUE CANNOT BE CONSIDERED UNDER CHAPTER XIVB OF THE I.T. ACT. THE ASSESSEE DISCLOSED EVERY PROOF WITH EVIDENCE AND CLAIMED THE SAME AS DEDUCTION. THE ASSESSING OFFICER IS NOT CORRECT IN CONSIDERING THIS ISSUE UNDER CHAPTER XIVB OF THE I.T. ACT. IN THIS REGARD A NOTE SUBMITTED BY THE ASSESSEE IS AT PAGE NO.13 OF THE PAPER BOOK. THIS IS THE AMOUNT REALIZED FROM SBI MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALIZATION. THE ASSESSEE HAS NOT DECLARED THE SAME IN THE RETURN. HENCE, TREATED AS UNDISCLOSED. RETURN OF INVESTMENT CAN NOT BE TAXED UNLESS CLAIMED AS DEDUCTION EARLIER. DELETED AS NO SUCH CLAIM WAS MADE IN 95 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE CLAIM FOR DEDUCTION SHOULD HAVE BEEN MADE FOR THE ASSESSMENT YEAR 1989-90. IT CAN BE SEEN THAT NO SUCH CLAIM WAS MADE BY THE ASSESSEE EITHER IN THE ASSESSMENT UP TO 1989-90 OR 1990- 91. THEREFORE, THE APPELLANT SUBMITS THAT THERE IS NO JUSTIFICATION IN MAKING ADDITION OF RS.20,200. FURTHER, THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. EARLIER YEARS. 31. RS.40,000 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PPF. THE ASSESSEE DISCLOSED EVERY PROOF WITH EVIDENCE AND CLAIMED THE SAME AS DEDUCTION. THE ASSESSING OFFICER IS NOT CORRECT IN CONSIDERING THIS ISSUE UNDER CHAPTER XIVB OF THE I.T. ACT. THE DEDUCTION TOWARDS PPF IS MADE U/S 88 OF THE I.T. ACT AND, THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION OF RS.40,000. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS INCOMES MATCHING THE INVESTMENTS. 32. RS.6,666 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON FDRS. THE APPELLANT IS ADMITTING INTEREST AS CREDITED BY THE BANK TO THE ACCOUNT OF THE APPELLANT. THE ASSESSING OFFICER, ON THE OTHER HAND, ESTIMATED THE PROBABLE INTEREST AND ARRIVED AT A HIGHER FIGURE AND ADDED THE DIFFERENCE. SUCH ADDITION IS NOT WORKED OUT WITH REFERENCE TO THE SEIZED MATERIAL. THERE IS NO SCOPE OF ESTIMATIONS WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. THEREFORE, THE ASSESSING THE ASSESSEE RECEIVED RS.8900 AGAINST THE FDR BUT DECLARED ONLY RS.2234 DELETED ACCEPTING ASSESSEE EXPLANATION. 96 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ASSESSMENT YEAR: 1995-96 33. RS.10,000 ADDITION ON ACCOUNT OF UNDISCLOSED DEEMED INCOME IN LIC MUTUAL FUND. THE ASSESSEE FURNISHED PROOF WITH EVIDENCE AND CLAIMED THE SAME AS DEDUCTION IN THE ORIGINAL RETURN OF INCOME FILED. THE ASSESSING OFFICER IS NOT CORRECT IN CONSIDERING THIS ISSUE UNDER CHAPTER XIVB OF THE I.T.ACT. THE CLAIM FOR DEDUCTION SHOULD HAVE BEEN MADE FOR THE ASSESSMENT YEAR 1990-91. IT CAN BE SEEN THAT NO SUCH CLAIM WAS MADE BY THE ASSESSEE EITHER IN THE ASSESSMENT UPTO 1990-91 OR 1991- 92. THEREFORE, THE APPELLANT SUBMITS THAT THERE IS NO JUSTIFICATION IN MAKING ADDITION OF RS.10,200. FURTHER, THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THIS IS THE AMOUNT REALISED FROM LIC MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALIZATION. THE ASSESSEE HAS NOT DECLARED THE SAME IN THE RETURN. HENCE, TREATED AS UNDISCLOSED. RETURN OF INVESTMENT CAN NOT BE TAXED UNLESS CLAIMED AS DEDUCTION EARLIER. DELETED AS NO SUCH CLAIM WAS MADE IN EARLIER YEARS. 34. RS.40,000 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PPF. THE ASSESSING OFFICER CONSIDERED THIS ISSUE WHICH IS NOT COVERED BY CHAPTER XIVB. THE ADDITION MADE IS UNJUST AND ARBITRARY. THE ASSESSEE EXPLAINED THE SOURCES AND CLAIMED THE DEDUCTION RIGHTLY. IT IS SUBMITTED THAT THE RELIEF IS ALLOWED U/S 88 AND NOT AS DEDUCTION FROM THE INCOME. IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN M ET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED AS ASSESSEE HAS INCOMES MATCHING THE INVESTMENTS. 35. RS.8,408 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM FDRS. THE APPELLANT ADMITTED INTEREST INCOME AS AND WHEN CREDITED BY THE BANK. THE ASSESSING OFFICER MERELY ESTIMATED THE INTEREST ON FIXED THE ASSESSEE RECEIVED RS.8900 AGAINST THE FDR BUT DECLARED ONLY RS.492 DELETED ACCEPTING ASSESSEE EXPLANATION. 97 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. DEPOSITS AT AN ESTIMATED RATE AND ARRIVED AT THE DIFFERENCE. THE ADDITION IS NOT BASED ON ANY SEIZED DOCUMENTS. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ASSESSMENT YEAR: 1996-97 36. RS.13,286 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON FDR THE ASSESSEE IS ADMITTING INCOME WHENEVER THE AMOUNT IS CREDITED TO THE ACCOUNT. THE ASSESSING OFFICER MERELY ESTIMATED THE INTEREST ON FIXED DEPOSITS AND ARRIVED AT THE DIFFERENCE. THE ADDITION IS NOT BASED ON ANY SEIZED MATERIAL OR DOCUMENT. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. THE ASSESSEE RECEIVED RS.18000 AS INTEREST BUT DECLARED ONLY RS.6169 IN THE REGULAR RETURN. DELETED ACCEPTING ASSESSEE EXPLANATION. 37. RS.17,536 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM MONEY LENDING BUSINESS. THE AMOUNT OF RS.17,536 WAS INCLUDED IN THE AGGREGATE AMOUNT ADMITTED OF RS.62,716 IN THE BLOCK RETURN OF INCOME. A DETAILED NOTE SUBMITTED IN THIS REGARD IS AT PAGE NO.14, PARA 4 OF THE PAPER BOOK SUBMITTED. THE INTEREST RECEIVED FROM DEVAKI VASUDEV IS PART OF THE INTEREST INCOME ADMITTED OF RS.62,716. IT IS ALREADY EXPLAINED THAT THE AMOUNT OF RS.98,000 GIVEN TO SMT.DEVAKI VASUDEV WAS ALREADY INCLUDED IN THE MONEY LENDING CAPITAL OF THE ASSESSEE (PAGE NO.15 OF THE PAPER BOOK). THEREFORE, NO SEPARATE AS FOUND FROM THE SEIZED MATERIAL ASSESSEE ADVANCED RS.98,000 TO SMT. DEVAKI VASUDEV. NO EXPLANATION WAS FOUND IN THE PAPER BOOK. DELETED ACCEPTING ASSESSEE EXPLANATION. 98 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ADDITION IS TO BE MADE. 38&39. RS.98,000 ADDITION ON ACCOUNT OF ADVANCE MADE OUTSIDE BOOKS OF ACCOUNT. THE AMOUNT OF RS.98,000 GIVEN TO SMT.DEVAKI VASUDEV IS INCLUDED IN THE MONEY LENDING CAPITAL HELD BY THE ASSESSEE. THE DETAILS OF MONEY LENDING CAPITAL HELD BY THE ASSESSEE WERE SUBMITTED AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS. THE DETAILS AS SUBMITTED IN THE LETTER DATED 28-9- 97 AT PAGE NO.15, PARA NO.8 OF THE PAPER BOOK. THE TOTAL MONEY LENDING CAPITAL FOR THE YEAR AMOUNTED TO RS. 3,70,000 AND THE SAID AMOUNT OF RS. 98,000 IS INCLUDED IN THE SAID AMOUNT. AS FOUND FROM THE SEIZED MATERIAL ASSESSEE ADVANCED RS.98,000 TO SMT.DEVAKI VASUDEV. NO EXPLANATION WAS FOUND IN THE PAPER BOOK. DELETED ACCEPTING ASSESSEE EXPLANATION. 40. RS.5,00,000 ADDITION ON ACCOUNT OF UNDISCLOSED DEPOSITS IN BANK TRANSFERRED FROM NRE A/C. THE SAID AMOUNTS WERE RECEIVED FROM THE NRE A/C OF SMT.VARSHA MEERPURI. THE ASSESSING OFFICER IS NOT CORRECT IN HOLDING THAT THE AMOUNT OF RS.5 LAKHS REPRESENTS UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 1996-97. THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LAKHS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. MOREOVER THE ASSESSEE COULD NOT PRODUCE ANY IT RETURN, COPY OF HER RELATIVE NOR ANY BALANCE SHEET DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FOR THE REASONS DISCUSSED IN MAIN ORDER DELETED. 41. RS.50,000 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT THE APPELLANT FILED THE SOURCES OF INVESTMENT AND IT WAS ACCEPTED BY THE DEPARTMENT AT THE IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR DELETED AS ASSESSEE HAS 99 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. IN PPF. - TIME OF ORIGINAL ASSESSMENT. FURTHER, THE ASSESSEE ALSO SUBMITTED A NOTE REGARDING ADDITIONS U/S 80CCA AND 80 CCB, A COPY OF WHICH IS AVAILABLE AT PAGE NO.13 OF THE PAPER BOOK. IN VIEW OF THE ABOVE, THE ADDITION MAY KINDLY BE DELETED. THE CLAIM FOR DEDUCTION OF AMOUNT TOWARDS PPF IS MADE U/S 88 OF THE I.T. ACT. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. FORM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. INCOMES MATCHING THE INVESTMENTS. ASSESSMENT YEAR: 1997-98 42. RS.28,679 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN POOJA APARTMENTS PARA NO.17 OF THE ASSESSMENT ORDER. THE ASSESSEE ALREADY DISCLOSED RS.1,75,000 AS UNDISCLOSED INCOME. THE ASSESSING OFFICER MENTIONS THAT HE WOULD ESTIMATE THE UNDISCLOSED INCOME AT RS.2,00,000 AND FURTHER ADD RS.33,333. IN THIS REGARD IT IS SUBMITTED THAT THE AMOUNT OF RS.1,69,341 REPRESENTS THE MATERIAL PURCHASED BY THE BUILDER AND NOT BY THE ASSESSEE. FURTHER, THE ASSESSEE OFFERED AN ADDITIONAL INCOME OF RS.1,75,000 TO COVER THE DEFICIENCIES. AS PER SEIZED MATERIAL PURCHASE BILLS IN THE NAME OF R.K.CONSTRUCTIONS, THE BUILDER OF THE FLAT AMOUNTING TO RS.172076 WERE FOUND FROM THE RESIDENCE WHICH ARE FOR PURCHASE OF EXTRA FILLINGS . NO EXPLANATION WAS OFFERED. THEREFORE, 1/6 TH (6 FLAT OWNERS) WHICH COMES TO RS.28,679/-. SHARE OF THE ASSESSEE IS THE UNDISCLOSED INVESTMENT . SINCE ASSESSEE OFFERED AN AMOUNT OF RS. 175000, THE SAME CAN BE TELESCOPED. FURTHER ADDITION IS DELETED. 43 & 44. RS.2,62,552 ADDITION ON ACCOUNT OF EXCESS JEWELRY PARA NO.17 OF THE ASSESSMENT ORDER. THE ASSESSEE SUBMITS THAT THE ENTIRE FAMILY OF GULBRAI G. CHUGANI OWN AND POSSESS GOLD JEWELLERY. THE CHILDREN OF THE ASSESSEE POSSESS JEWELLERY WHICH ARE DURING SEARCH THE JEWELLERY OF RS.7,27,272 WAS FOUND BELONGING TO THE ASSESSEE AND HER HUSBAND SRI RAMESH. THE ASSESSEE DECLARED RS.3,15,098 AND HER FOR THE DETAILED EXPLANATION GIVEN AND CONSIDERED IN MAIN ORDER, THE ADDITION IS DELETED. 100 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. VALUED BY A REGISTERED VALUER IN 1980 AND 1986. THE VALUATION MADE BY THE ASSESSING OFFICER AS ON 18-10-1996 IS ERRONEOUS WHEN THE SEARCH WAS CONDUCTED ON 3-10-1996 AND THE PREVIOUS YEAR CONSISTS OF 10 YEARS FROM 1-4-1986 AND ENDING ON 3-10- 1996. THE ASSESSING OFFICER ARRIVED AT THE EXCESS JEWELRY WITHOUT ANY BASIS. THE ENTIRE JEWELRY IN POSSESSION OF THE ASSESSEE WAS DECLARED. THE ASSESSING OFFICER INCLUDED THE JEWELRY BELONGING TO OTHERS IN THE ASSESSMENT OF THE ASSESSEE WHICH IS NOT CORRECT. THE ASSESSEE IS THE WIFE OF SRI ASHOK CHUGANI AND NOT SRI RAMESH CHUGANI. THE APPELLANT SUBMITTED DETAILED NOTE ON THE ADDITION ON ACCOUNT OF JEWELRY WHICH IS AT PAGE NOS.18 TO 35 OF THE PAPER BOOK. IT WAS SUBMITTED CLEARLY THAT THE ENTIRE JEWELRY WAS DISCLOSED TO THE DEPARTMENT AND, THEREFORE, NO ADDITION NEED BE MADE. HUSBAND DECLARED RS.8678 IN THEIR WEALTH TAX RETURNS FOR THE A.Y.92-93. THE JEWELRY DECLARED AS HER WEALTH TAX RETURN IS INCREASED BY 60,000 ON ACCOUNT OF POSSESSION BY THE CHILDREN. THE ASSESSEE DID NOT FURNISH ANY QUANTITATIVE DETAILS OF JEWELLERY IN THE WEALTH TAX RETURNS. THEREFORE, THE JEWELLERY FOUND CANNOT BE COMPARED IN THE QUANTITATIVE WAY AND HAS TO BE BASED ON MARKET VALUE ONLY, THE DIFFERENCE OF WHICH IS TAKEN AS UNDISCLOSED INCOME. 101 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE -5 IT(SS)A NO.5/H/2011 LACHMAN G.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND01-04-1996 TO 03 -10-1996 ASSESSMENT YEAR: 1987-88 GROUND NO. & AMOUNT ADDED (RS.) DETAILS OF ADDITION EXPLANATION REMARKS OF THE A.O. IN THE REMAND REPORT. DECISION 1 TO 5 & 40 GENERAL IN NATURE -- 6 RS.9,500 ADDITION ON ACCOUNT OF AMOUNT ADVANCED TREATING AS UNDISCLOSED INCOME. THE ASSESSEE PAID AN AMOUNT OF RS.9,500- TO SRI GANESH N.TAKUR ON 3/11/86. THE ASSESSEE SUBMITS THAT HE PURCHASED AIR CONDITIONER AND PAID RS.9,500 ON 3-11-86 BY WITHDRAWING AN AMOUNT OF RS.10,000 FROM RAMESH WATCH CO., IN WHICH THE ASSESSEE IS A PARTNER. THE TRANSACTION IS PROPERLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT WHICH ARE PART OF THE SEIZED MATERIAL. THE ASSESSING OFFICER DID NOT CONSIDER THE EXPLANATION SUBMITTED AND ADDED THE AMOUNT. A COPY OF THE ACCOUNT OF THE APPELLANT IN THE BOOKS OF RAMESH WATCH COMPANY ARE SUBMITTED. AS FOUND FROM THE SEIZED MATERIAL ASSESSEE PURCHASED AC FOR RS.9500 THE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM THAT HE HAD WITHDRAWN RS.10,000 FROM RAMESH WATCH CO. DELETED ACCEPTING ASSESSEE EXPLANATION 7 RS.1,076 ADDITION ON ACCOUNT OF SHORT ADMISSION OF INTEREST FROM BANK ACCOUNT. THE SAID AMOUNT WAS ADMITTED IN THE BLOCK RETURN OF INCOME FILED AND HENCE THE GROUND IS NOT PRESSED. NO FURTHER COMMENTS AS THE AMOUNT OF RS.1076 WAS ALREADY ADMITTED IN THE RETURN OF INCOME IN FORM NO.2B. GROUND IS NOT PRESSED REJECTED 102 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR: 1988-89 8 & 9 RS.28,200 RS.10,560 ADDITION TREATING THE RENEWAL OF FIXED DEPOSIT AS UNDISCLOSED INCOME. THE ASSSSEE CONVERTED KIDDY BANK ACCOUNT NO. KAB516576 INTO FDR FOR RS.28,200. THE ASSESSING OFFICER ADDED THE AMOUNT WITHOUT CONSIDERING THE EXPLANATION. FURTHER, THE ADDITION IS NOT BASED ON ANY SEIZED MATERIAL. IN THE CASE OF MEENACHUGANI, A SEPARATE ASSESSMENT U/S 158 BD WAS ALREADY MADE. IT IS FURTHER SUBMITTED THAT THERE IS NO EVIDENCE IN THE SEIZED MATERIAL THAT THE ASSESSEE INVESTED THE AMOUNT FROM OUT OF THE FUNDS IN THE NAME OF HIS DAUGHTER. IT IS ALSO SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE PROVISIONS OF SEC.64(1A) DID NOT EXIST. AS FOUND FROM THE SEIZED ANNEXURE THE ASSESSEE PURCHASED FDR IN ANDHRA BANK IN THE NAME OF HIS MINOR DAUGHTER. THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING EVIDENCE FOR THE CLAIM OF SAVINGS IN THE KIDDY BANK. DELETED ACCEPTING THE EXPLANATION 10 RS.25,000 BANK DEPOSIT TREATED AS UNDISCLOSED INCOME. THE BANK DEPOSIT OF RS.25,000 WAS MADE ON 20-6-87 FROM OUT OF THE AVAILABLE CASH IN THE BOOKS OF ACCOUNT. IT IS A GENUINE TRANSACTION RECORDED IN THE BOOKS OF ACCOUNT. THE SAME CAN BE VERIFIED FROM THE BOOKS OF ACCOUNT UNDER THE CUSTODY OF THE DEPARTMENT. THE ASSESSING OFFICER MADE THE ADDITION WITHOUT VERIFYING THE AVAILABILITY OF CASH. ASSESSEE DEPOSITED CASH IN BANK ACCOUNT WITH INDIAN BANK ON 20-06-87. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. DELETED ACCEPTING THE EXPLANATION 11. RS.1,00,000 AMOUNT RECEIVED FROM NRE A/C OF SMT. VARSHA SAIKUMAR MIRPURI AS UNDISCLOSED INCOME. THE ADDITION OF RS.1,00,000 WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE DELETED FOR THE REASONS STATED IN MAIN ORDER. 103 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. ASSESSMENT YEAR: 1989-90 12 RS.2,31,600 ADDITION ON ACCOUNT OF ESTIMATING THE COST OF PURCHASE OF FLAT AT MUMBAI THIS GROUND OF APPEAL IS REDUNDANT AS NO SUCH ADDITION IS MADE IN THE ASSESSMENT ORDER. NO FURTHER COMMENTS. THE GROUND IS REDUNDANT. REJECTED 13. RS.10,560 (1990-91) BANK DEPOSIT MADE FROM OUT OF THE REFUND OF NSC TREATED AS UNDISCLOSED INCOME. THE SAID AMOUNT REPRESENTS THE AMOUNT RECEIVED ON MATURITY OF NSC ALONG WITH INTEREST ON 9-4-88 AND WAS DEPOSITED INTO THE BANK ACCOUNT NO.6615 OF THE ASSESSEE IN INDIAN BANK, SECUNDERABAD. EXPLANATION SUBMITTED BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT IS PAGE NO.86 OF THE PAPER BOOK. IT IS FURTHER SUBMITTED THAT THE ADDITION IS WITHOUT REFERENCE TO ANY SEIZED DOCUMENT. ASSESSEE DEPOSITED CASH IN BANK ACCOUNT WITH INDIAN BANK ON 19-04-88. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. DELETED ACCEPTING THE EXPLANATION 14. RS.3,384 ACCRUED BANK INTEREST AND INTEREST ESCAPED ASSESSMENT THE FDR OF RS.28,200 RELATES TO MEENA L. CHUGANI, D/O THE APPELLANT HEREIN AND A SEPARATE ASSESSMENT UNDER SEC. 158 BD WAS MADE. FURTHER, THE PROVISIONS OF SEC. 64(1A) HAVE NO APPLICATION FOR THE YEAR UNDER CONSIDERATION AND THEREFORE NO ADDITION ASSESSEE HAS NOT DECLARED INTEREST ON FDR OF RS.28,200 PURCHASED ON 3-3-88. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. DELETED ACCEPTING THE EXPLANATION 104 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. ASSESSMENT YEAR 1990-1991 15. RS.3,33,333 AMOUNT RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI TREATED AS THE INCOME OF THE ASSESSEE THE ADDITION OF RS.3,33,333 WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. DELETED FOR THE REASONS STATED IN MAIN ORDER. 16. RS.7,800 ADDITION ON THE PLEA THAT THE REGISTRATION CHARGES OF THE PROPERTY AT PARKLANE, SECUNDERABAD NOT ACCOUNTED FOR. IT IS SUBMITTED THAT A CHEQUE NO.630021 DATED 16-3-90 FOR RS.8,000 DRAWN ON INDIAN BANK, A/C NO.6615 WAS ISSUED FOR REGISTRATION CHARGES. EXPLANATION SUBMITTED EARLIER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS IS AT PAGE NO.87 OF THE PAPER BOOK. HENCE THE ADDITION MAY KINDLY BE DELETED. ASSESSEE PURCHASED PROPERTY AT PARKLANE, SECUNDERABAD ALONG WITH 4 BROTHERS FOR RS.4.60 LACS BUT THE REGISTRATION CHARGES OF RS.39,000 WAS NOT DISCLOSED. THE ASSESSEE SHARE OF RS.7,800 IS THE UNDISCLOSED INVESTMENT. DELETED ACCEPTING THE EXPLANATION 17. RS.1,800 INTEREST ACCRUED FROM SBI MUTUAL FUND TREATED AS UNDISCLOSED INCOME. THIS AMOUNT WAS ADMITTED IN THE BLOCK RETURN FILED BY THE ASSESSEE. HENCE NO SEPARATE ADDITION NEED BE MADE BY THE ASSESSING OFFICER. IT IS THE INTEREST RECEIVED FROM SBI MUTUAL FUND ADMITTED IN BLOCK RETURN. REJECTED. 105 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 18. RS.3,790 INTEREST ON CDS OF RS.3,790 TREATED AS UNDISCLOSED INCOME. THIS AMOUNT REPRESENTS THE ACCRUED INTEREST ON FDR OF RS.28,200. THE A.O. ESTIMATED THE INTEREST AT RS.3,790 WHICH IS INCORRECT. THE ADDITION DID NOT EMANATE FROM ANY SEIZED DOCUMENT. FURTHER, THE DEPOSIT RELATES TO MEENA CHUGANI, THE MINOR DAUGHTER OF THE APPELLANT. THE PROVISIONS OF SEC. 64(1A) WERE NOT APPLICABLE FOR THE SAID ASSESSMENT YEAR AND THEREFORE CANNOT BE ADDED IN THE ASSESSMENT OF THE ASSESSEE. ASSESSEE HAS NOT DECLARED INTEREST ON FDR OF RS.28,200 PURCHASED ON 3.3.88 WHICH CONTINUED THIS YEAR ALSO. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. DELETED ACCEPTING THE EXPLANATION ASSESSMENT YEAR 1991-92 19. RS.3737 INTEREST ON CDS OF RS.3737 TREATED AS UNDISCLOSED INCOME. AT PARA 19 OF THE ASSESSMENT ORDER. THIS AMOUNT IS ADMITTED IN THE BLOCK RETURN OF INCOME FILED. THEREFORE, ADDITION NEED NOT SEPARATELY BE MADE AND HENCE MAY BE DELETED. NO FURTHER COMMENTS. IT IS THE INTEREST RECEIVED FROM CDS ADMITTED IN BLOCK RETURN. REJECTED 20. RS.4,244 INTEREST ON FDR ACCRUED TREATED AS UNDISCLOSED INCOME. THE ADDITION IS NOT BASED ON ANY SEIZED MATERIAL AND IS PURELY ON ESTIMATE BASIS. THE PROVISIONS OF SEC. 64(1A) WERE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION. ASSESSEE HAS NOT DECLARED INTEREST ON FDR OF RS.28,200 PURCHASED ON 3.3.88 WHICH CONTINUED THIS YEAR ALSO. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. DELETED ACCEPTING THE EXPLANATION 21. RS.5,758 ESTIMATION OF INTEREST ACCRUED ON FDRS NO SUCH ADDITION IS MADE IN THE ASSESSMENT ORDER AND HENCE THE GROUND IS REDUNDANT. NO FURTHER COMMENTS. NO SUCH ADDITION. REJECTED 106 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1991-92 22. RS.6,528 ESTIMATING THE ACCRUED INTEREST ON FDRS THE ADDITION IS MADE PURELY ON ESTIMATE BASIS WITHOUT ANY REFERENCE TO THE SEIZED MATERIAL. THERE IS NO BASIS FOR SUCH FIGURE. THE APPELLANT CONSIDERED THE INTEREST RECEIVED FROM ALL THE DEPOSITS AND ADMITTED IN THE RETURN OF INCOME FILED THE RETURN OF INCOME IS AT PAGE NO. 121 WHEREIN THE INTEREST FROM BANKS OF RS. 10068 WAS ALREADY OFFERED IN THE REGULAR RETURN OF INCOME FILED. THEREFORE, NO ADDITION TO THE UNDISCLOSED INCOME COULD BE MADE. THESE ARE FDR INTEREST NOT DISCLOSED BY THE ASSESSEE. ESTIMATED ADDITIONS CAN NOT BE MADE IN BLOCK. ASSESSEE IS OFFERING ON ACCRUAL BASIS. ADDITION DELETED. ASSESSMENT YEAR 1993-94 23. RS.2,066 ADDITION ON ACCOUNT OF INVESTMENT IN BOMBAY FLAT. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE COURSE OF THE PERIOD ALL THE BROTHERS USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WAS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. THIS IS ASSESSEES SHARE IN THE INVESTMENT IN BOMBAY FLAT. THE FINDINGS ARE AS PER SEIZED MATERIAL. AMOUNT IS MAINTENANCE COST. DELETED ACCEPTING ASSESSEE EXPLANATION. 24. RS.13,177 ADDITION ON ACCOUNT OF INTEREST ESCAPED ASSESSMENT THE ACTUAL INTEREST RECEIVED IS AT PAGE 91 OF THE PAPER BOOK. THE INTEREST ON FIXED DEPOSITS AMOUNTED TO RS. 12,721 AND THE APPELLANT ADMITTED INTEREST INCOME OF RS. 12,975 IN THE RETURN OF IT IS THE INTEREST RECEIVED FROM SB ACCOUNT AND FDR. THE ASSESSEE ADMITTED RS.12,925 ONLY ESTIMATED ADDITIONS CAN NOT BE MADE IN BLOCK. ASSESSEE IS OFFERING ON ACCRUAL 107 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INCOME SUBMITTED. FURTHER, THE ACCOUNT WAS DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS AND THE ADDITION IS MADE ON ESTIMATE BASIS WITHOUT ANY REFERENCE TO THE SEIZED MATERIAL. IN BLOCK RETURN WHEREAS TOTAL INTEREST RECEIVED WAS RS.26,152 THEREFORE THE BALANCE OF RS.13,177 IS TREATED AS UNDISCLOSED INCOME. BASIS. ADDITION DELETED. ASSESSMENT YEAR 1994-95 25. RS.5,000 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME. THERE IS NO SEIZED MATERIAL SUGGESTING THAT THE SAID AMOUNT REPRESENTS THE UNDISCLOSED INCOME. IT IS SUBMITTED THAT AN AMOUNT OF RS.50,000 WAS GIVEN AS A LOAN TO SYNDICATE MARKETING IN MARCH, 1993. ON 30-4-93 AN AMOUNT OF RS.55,000 WAS REPAID BY TITAN BOARD, A SISTER CONCERN OF SYNDICATE MARKETING. THE ASSESSING OFFICER PRESUMED THE EXCESS REPAYMENT AS INTEREST. IT CAN BE SEEN THAT THERE IS ONLY ONE MONTH GAP AND INTEREST CANNOT BE RS. 5,000. THEREFORE, THE SAME CANNOT BE TREATED AS UNDISCLOSED INCOME. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE AMOUNT OF RS.5,000 WAS PAYABLE TO SYNDICATE MARKETING. THE AMOUNT OF RS.5,000 WAS NOT RECEIVED AS INTEREST. IN THE CIRCUMSTANCES, THE AMOUNT CAN NOT BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. ASSESSEE ADVANCED RS.50,000 TO SYNDICATE MARKETING AND RECEIVED RS.55,000 FROM IT. THE DIFFERENCE IS THE INTEREST AMOUNT. DELETED ACCEPTING EXPLANATION 26. RS.9,778 ESTIMATION OF INTEREST ON FDR AND SB A/C THE ADDITION IS PURELY ON ESTIMATE. THE APPELLANT ADMITTED RS.16374 IN THE ASSESSEE RECEIVED INTEREST FROM DELETED ACCEPTING EXPLANATION 108 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REGULAR RETURN OF INCOME. FURTHER, AN AMOUNT OF RS.5,000 WAS ADMITTED IN FORM 2B; THE TOTAL BEING RS.21,374 AND, THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY FURTHER ADDITION. THE TOTAL INTEREST RECEIVED IS RS.21,374. IT CAN BE SEEN THAT THE INTEREST RECEIVED WAS ONLY RS.19016. (PAGE NO.90 OF THE PAPER BOOK). THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.9778. SB AND FDR ACCOUNT AMOUNTING TO RS.26152 BUT DISCLOSED RS.16734 IN THE RETURN. THEREFORE, BALANCE RS.9788 IS TREATED AS UNDISCLOSED INCOME. 27. RS.6,843 INTEREST RECEIVED ON NSC TREATED AS UNDISCLOSED INCOME. PARA 22 OF THE ASSESSMENT ORDER. THIS AMOUNT IS ADMITTED BY THE APPELLANT IN THE BLOCK RETURN OF INCOME. THE AMOUNT IS ADMITTED IN THE BLOCK RETURN. REJECTED 28. RS.20,000 AMOUNT RECEIVED FROM MUTUAL FUND TREATED AS THE INCOME OF THE ASSESSEE THE APPELLANT DID NOT CLAIM 80CCA UPTO THE ASSESSMENT YEAR 1990-91. THE AMOUNT IS REFUNDABLE AFTER A PERIOD OF 5 YEARS. THE SB MUTUAL FUND CLAIM FOR DEDUCTION U/S 80CC WAS FOR THE ASSESSMENT YEAR 1990-91. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.20,000. IT IS FURTHER SUBMITTED THAT THE SAID ADDITION DOES NOT EMANATE FROM THE SEIZED DOCUMENTS. THIS IS AMOUNT RECEIVED FROM SBI MUTUAL FUND AS MATURITY VALUE WHICH SHOULD BE BROUGHT TO TAX. DELETED ACCEPTING EXPLANATION 29. RS.5,404 AMOUNT SPENT ON BOMBAY FLAT TREATED AS UNDISCLOSED INCOME. THE ASSESSEE SUBMITS THAT THE EXPENDITURE WAS INCURRED WHENEVER EITHER THE ASSESSEE OR HIS BROTHERS OR HIS FATHER VISITED MUMBAI. IT WAS THIS IS ASSESSEES SHARE IN THE INVESTMENT IN BOMBAY FLAT. THE FINDINGS ARE AS PER SEIZED MATERIAL. AMOUNT IS MAINTENANCE COST. DELETED ACCEPTING ASSESSEE EXPLANATION 109 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SUBMITTED THAT THE EXPENDITURE ON SUCH VISITS WAS INCURRED FROM THE BUSINESS ACTIVITY OVER A PERIOD OF TIME AND IF IT IS FOR PERSONAL PURPOSE, THE SAME IS INCURRED FROM OUT OF THE DRAWINGS. THIS WAS NOT CONTROVERTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. THEREFORE, THE ADDITION MAY KINDLY BE DELETED. ASSESSMENT YEAR 1995-96 30. RS.7,900 INTEREST ON DEPOSITS WITH LIC MUTUAL FUND TREATED AS UNDISCLOSED INCOME. THIS AMOUNT WAS ADMITTED IN THE BLOCK RETURN FILED BY THE ASSESSEE. NO FURTHER COMMENTS. ASSESSEE RECEIVED RS.9000 AS INTEREST ON LIC MUTUAL FUND BUT ADMITTED ONLY RS.1100 REJECTED 31. RS.26,152 ESTIMATION OF INTEREST ACCRUED ON FDRS. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER MERELY RESORTED TO AN ESTIMATION OF INTEREST AND ARRIVED AT THE TOTAL INTEREST OF RS.26,152 AND ADDED THE ENTIRE AMOUNT. IT CAN BE SEEN FROM THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 1995-96 , THE APPELLANT OFFERED AN AMOUNT OF RS.1613 AS THE SB INTEREST AND FD. THE BANK ACCOUNT ALSO CLEARLY INDICATES THAT THERE ARE ONLY TWO INTERESTS CREDITED. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER (PAGE NO.92 OF THE PAPER BOOK). THESE ARE FDR INTEREST NOT DISCLOSED BY THE ASSESSEE DELETED ACCEPTING EXPLANATION 32. RS.3934 UNDISCLOSED INVESTMENT IN BOMBAY FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE THIS IS ASSESSEES SHARE IN THE INVESTMENT IN BOMBAY FLAT. THE FINDINGS ARE AS PER AMOUNT IS MAINTENANCE COST. DELETED ACCEPTING ASSESSEE EXPLANATION 110 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. COURSE OF THE PERIOD ALL THE BROTHERS SRI RAMESH CHUGANI, SRI LAKSHMANCHUGANI, SRI CHANDRUCHUGANI, SRI KISHORE CHUGANI AND SRI ASHOKICHUGANI AND THEIR FATHER SRI GULABRAICHUGANI USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. THE ASSESSEE SUBMITS THAT THE EXPENDITURE WAS INCURRED WHENEVER EITHER THE ASSESSEE OR HIS FATHER VISITED MUMBAI. IT WAS SUBMITTED THAT THE EXPENDITURE ON SUCH VISITS WAS INCURRED FROM THE BUSINESS ACTIVITY OVER A PERIOD OF TIME AND IF IT IS FOR PERSONAL PURPOSE, THE SAME IS INCURRED FROM OUT OF THE DRAWINGS. THIS WAS NOT CONTROVERTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. THEREFORE, THE ADDITION MAY KINDLY BE DELETED. SEIZED MATERIAL. ASSESSMENT YEAR 1996-97 33. RS.27,652 ESTIMATION OF INTEREST ON FDRS. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER MERELY RESORTED TO AN ESTIMATION OF INTEREST AND ARRIVED AT THE TOTAL INTEREST THESE ARE FDR INTEREST NOT DISCLOSED BY THE ASSESSEE DELETED ACCEPTING EXPLANATION 111 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OF RS.27,652 AND ADDED THE ENTIRE AMOUNT. IT CAN BE SEEN FROM THE RETURN OF INCOME FILED, THE APPELLANT OFFERED INTERESTS RECEIVED OF RS.823 AND RS.883 AGGREGATING TO RS.1706. THE BANK ACCOUNT ALSO CLEARLY INDICATES THAT THERE ARE ONLY TWO INTERESTS CREDITED. 34. RS.2,140 AMOUNT SPENT ON BOMBAY FLAT. THE ASSESSEE SUBMITS THAT THE EXPENDITURE WAS INCURRED WHENEVER EITHER THE ASSESSEE OR HIS BROTHERS OR HIS FATHER VISITED MUMBAI. IT WAS SUBMITTED THAT THE EXPENDITURE ON SUCH VISITS WAS INCURRED FROM THE BUSINESS ACTIVITY OVER A PERIOD OF TIME AND IF IT IS FOR PERSONAL PURPOSE, THE SAME IS INCURRED FROM OUT OF THE DRAWINGS. THIS WAS NOT CONTROVERTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. THEREFORE, THE ADDITION MAY KINDLY BE DELETED. THIS IS ASSESSEES SHARE IN THE INVESTMENT IN BOMBAY FLAT. THE FINDINGS ARE S PER SEIZED MATERIAL. AMOUNT IS MAINTENANCE COST. DELETED ACCEPTING ASSESSEE EXPLANATION ASSESSMENT YEAR 1997-98 35. RS.1,30,000 ADDITION ON ACCOUNT OF UNACCOUNTED FOR CASH DEPARTMENT FOUND CASH OF RS.1,77,460 AT THE PREMISES OF THE APPELLANT. AFTER ALLOWING AVAILABLE CASH OF RS.47,460, THE ASSESSING OFFICER ADDED RS.1,30,000. IN THIS REGARD IT IS SUBMITTED THAT THE RAMESH WATCH ENTERPRISES WAS HAVING CASH BALANCE OF RS.82,798. THIS AMOUNT WAS AVAILABLE WITH THE APPELLANT. THERE WERE CASH WITHDRAWALS OF RS.25,000 ON 10.L6.96, RS.20,000 ON 27.8.96 AND RS.25,000 ON 17.9.96. THE ASSESSING THE CASH FOUND AT THE ASSESSEES PREMISES WAS RS.177460. THE ASSESSEE EXPLAINED THE SAME AS PREVIOUS WITHDRAWALS FROM INDIAN BANK. RS.47460 WAS ACCEPTED AS EXPLAINED AND THE BALANCE OF RS.130000 FOR THE DETAILED EXPLANATION GIVEN AND CONSIDERED IN MAIN ORDER, ADDITION IS DELETED. 112 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OFFICER DID NOT DENY THE WITHDRAWALS OF CASH ON THESE DATES. CONSIDERING THE FACT THAT THE APPELLANT WAS HAVING CASH OF RS.82,798/- IN THE BOOKS OF ACCOUNT OF RAMESH WATCH ENTERPRISES, A PROPRIETARY CONCERN AND CASH WITHDRAWN OF RS.70,000. TO THIS EXTENT IT IS TO BE CONSIDERED AS EXPLAINED. REMAINS UNEXPLAINED. 36 RS.1,25,000 ADDITION ON ACCOUNT OF EXCESS STOCK. NO ADDITION IS MADE IN THE ASSESSMENT AND HENCE IS REDUNDANT. NO COMMENTS. NO SUCH ADDITION. REJECTED 37 RS.30,000 ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BEGUMPET PROPERTY THIS AMOUNT WAS ADMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. A SEPARATE NOTE SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER MAY KINDLY BE PERUSED THE ASSESSEE ADMITTED RS.30000 AS UNDISCLOSED INVESTMENT IN HOUSE AT BEGUMPET. REJECTED 38. RS.16,800 AMOUNT SPENT ON BOMBAY FLAT THE ASSESSEE SUBMITS THAT THE EXPENDITURE WAS INCURRED WHENEVER EITHER THE ASSESSEE OR HIS BROTHERS OR HIS FATHER VISITED MUMBAI. IT WAS SUBMITTED THAT THE EXPENDITURE ON SUCH VISITS WAS INCURRED FROM THE BUSINESS ACTIVITY OVER A PERIOD OF TIME AND IF IT IS FOR PERSONAL PURPOSE, THE SAME IS INCURRED FROM OUT OF THE DRAWINGS. THIS WAS NOT CONTROVERTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. THEREFORE, THE ADDITION MAY KINDLY BE DELETED. THIS IS ASSESSEES SHARE IN THE INVESTMENT IN BOMBAY FLAT. THE FINDINGS ARE AS PER SEIZED MATERIAL. AMOUNT IS MAINTENANCE COST. DELETED ACCEPTING ASSESSEE EXPLANATION 39 RS.3,80,000 PURCHASE OF FLAT AT BALAJI NIVAS THE ASSESSEE SUBMITS THAT HE DID NOT PURCHASE THE SAID FLAT AND THERE IS NO PROOF THAT HE PAID THE SAID AS PER SEIZED MATERIAL THERE IS AGREEMENT OF SALE FOR FLAT AT SINCE THERE IS NO EVIDENCE THAT 113 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AMOUNT. THE ASSESSING OFFICER MENTIONED THAT THE APPELLANT IS STAYING IN A FLAT AT BALAJI NIVAS FOR THE LAST THREE YEARS WITHOUT PAYING RENT. THERE WAS AN AGREEMENT OF SALE AND, THEREFORE, THE ASSESSING OFFICER MENTIONS THAT AN AMOUNT OF RS.3,80,000 WAS INVESTED BY THE APPELLANT. IT IS SUBMITTED THAT THE PROPERTY WAS NOT PURCHASED. THE DOCUMENT WAS NOT SIGNED BY ANY ONE EITHER BY THE APPELLANT OR BY THE PARTY CONCERNED. WHEN THE I.T. AUTHORITIES SOUGHT A CLARIFICATION WITH REGARD TO THE SAID PAPER, IT WAS EXPLAINED THAT THE PROPERTY CONTINUES IN THE NAME OF SMT. JYOTHI BHAVNANI AND WAS NOT PURCHASED BY THE APPELLANT HEREIN. IT IS FURTHER SUBMITTED THAT THE ELECTRICITY BILLS ARE IN THE NAME OF SMT. JYOTHI BHAVNANI. A LETTER OF CONFIRMATION WAS ALSO RECEIVED FROM JYOTHI BHAVNANI VIDE LETTER DATED 23.10.97. IT WAS CONFIRMED BY HER THAT SHE DID NOT SELL THE PROPERTY. WHEN THE ASSESSEE SUBMITTED A DETAILED EXPLANATION AND THE EVIDENCE FROM THE VENDOR, ASSESSING OFFICER WITHOUT EXAMINING THE VENDOR AND WITHOUT ANY INFORMATION TO THE EFFECT THAT THE AGREEMENT WAS EXECUTED AND THE AMOUNT WAS PAID, HE SHOULD NOT HAVE MADE ANY ADDITION. WITHOUT PREJUDICE, THE APPELLANT HUMBLY SUBMITS THAT AS PER THE AGREEMENT, THE AMOUNT WAS PAYABLE IN BALAJI NIVAS IN WHICH THE ASSESSEE IS STAYING FOR LAST 3 YEARS WITHOUT PAYING ANY RENT. THE INVESTMENT IN THE FLAT IS RS.3,80,000. ASSESSEE PURCHASED THE SAID PROPERTY, THE SAME IS DELETED. AO IS FREE TO MAKE ENQUIRIES AND COME TO A CONCLUSION WHETHER THE PROPERTY WAS PURCHASED LATER. 114 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INSTALLMENTS OF RS.20,000 OVER A PERIOD OF TIME AND NO TIME WAS FIXED. NO EVIDENCE WITH REGARD TO PAYMENT OF SUCH INSTALLMENT OF RS.20,000 WAS AVAILABLE IN THE SEIZED MATERIAL. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. 115 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXUERE -6 IT(SS)A NO.6/H/2011 GULABRAI D.CHUGANI , HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10- 1996 ASSESSMENT YEAR: 1988-89 GROUND NO. & AMOUNT ADDED (RS.) DETAILS OF ADDITION EXPLANATION REMARKS OF THE A.O. IN THE REMAND REPORT. DECISION 1 TO 5 AND 26&2 7 GENERAL IN NATURE -- -- 6 RS.2,585 ADDITION TREATING THE BANK INTEREST AS INCOME. THE ASSESSEE FILED THE RETURNS OF INCOME ADMITTING THE INTEREST INCOME OF RS. 3,634 THE ASSESSEE MAINTAINED BOOKS OF ACCOUNT. THE SAID BOOKS OF ACCOUNT WERE SEIZED BY THE DEPARTMENT AND THEY ARE STILL IN THE CUSTODY OF THE DEPARTMENT. THE BANK ACCOUNTS WERE DISCLOSED TO THE DEPARTMENT. THERE IS NO SEIZED MATERIAL TO SUGGEST THAT THE SAID AMOUNT REPRESENTS UNDISCLOSED INCOME. THE ASSESSEE HAS RECEIVED INTEREST OF RS.2585 FROM INDIAN BANK A/C NO.6906 WHICH WAS NOT DECLARED IN THE RETURN. IN THE ABSENCE OF ANY EXPLANATION BY THE ASSESSEE THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. CONSIDERING THE EXPLANATION DELETED. ASSESSMENT YEAR: 1989-90 7. RS.10,000 ADDITION TREATING THE AMOUNT PAID TO N.G.KUM AR ON 1- 7-88 AS UNDISCLOS ED INCOME. LOAN OF RS.10,000/- WAS GIVEN TO SRI N.G. KUMAR ON 10/07/1988. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF IT WAS EXPLAINED THAT THE AMOUNT WAS PAID OUT OF THE CASH AVAILABLE IN THE BOOKS OF ACCOUNT. RS. 10,000 WAS PAID FROM OUT OF THE CASH AVAILABLE. AN AMOUNT OF RS. 10,000 WAS WITHDRAWN FROM THE BANK ON 22-4-1988. THIS CAN BE VERIFIED FROM THE BOOKS OF ACCOUNT SEIZED. THIS INFORMATION IS AVAILABLE AT PAGE NO. 5 OF THE PAPER BOOK FILED. THE FINDINGS AS PER SEIZED MATERIAL IS THAT THE ASSESSEE ADVANCED AN AMOUNT OF RS.10,000 TO SRI K.G. KUMAR ON 11/7/88. THE ASSESSEE HAS NOT EXPLAINED THE SOURCE AND SIMPLY SAID THAT THE AMOUNT IS REFUND FROM SRI N.G. KUMAR. THE EXPLANATION OF THE ASSESSEE IS SELF CONTRADICTORY. CONSIDERING THE EXPLANATION DELETED. 116 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR: 1990-91 8. RS.18,042 ADDITION TREATING THE DEPOSIT WITH THE BANK AS UNDISCLOS ED INCOME. THERE IS NO INFORMATION BEFORE THE ASSESSING OFFICER TO COME TO THE CONCLUSION THAT THERE WAS UNDISCLOSED WITH THE ASSESSEE. THE USUAL PRACTICE WHILE LETTING OUT THE HOUSE PROPERTIES IS THAT ADVANCE RENT WOULD BE COLLECTED FROM THE TENANTS. DETAILS OF THE RENT AND RENT ADVANCES RECEIVED ARE FURNISHED AT PAGE NO. 5 OF THE PAPER BOOK. HENCE THE ASSESSING OFFICER IS NOT CORRECT IN CORRELATING THE AMOUNTS DEPOSITED IN THE BANKS WITH THE ACTUAL RENTS RECEIVED. FURTHER, THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIALS. THE AMOUNTS WERE ALREADY RECORDED IN THE BOOKS OF ACCOUNT AND IN THE BANK PASS BOOKS. HENCE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION. HENCE THE SAME MAY KINDLY BE DELETED. THE RENTAL RECEIPTS DEPOSITED IN ANDHRA BANK AND INDIAN BANK ACCOUNT ISRS.106550 WHEREAS THE NET RENTAL RECEIPT IS RS.88,508 ONLY AS PER RETURN. THUS THE DIFFERENCE AMOUNT OF RS.18,042 IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. CONSIDERING THE EXPLANATION DELETED. ASSESSMENT YEAR: 1991-92 9. RS.26,400 ADDITION ON THE GROUND THAT THE DEPOSIT WITH ANDHRA BANK REPRESENT S UNDISCLOS ED INCOME. AN AMOUNT OF RS.14,400 RECEIVED FROM RAMESH WATCH ENTERPRISES THROUGH CHEQUES ON 16-1-91 AND RS.12,000 RECEIVED FROM KISHORE WATCH CO., ON 27-3-91 AGGREGATING RS.26,400 REPRESENT THE BANK DEPOSIT. A PERUSAL OF THE ACCOUNTS OF THE ABOVE TWO FIRMS WOULD REVEAL THE FACTS AS STATE ABOVE. ASSESSEE DEPOSITED TWO AMOUNTS IN ANDHRA BANK A/C TOTALING RS.26,400 AND THE SOURCE WAS STATED TO BE TRANSFERRED FROM RAMESH WATCH ENTERPRISES AND KISHORE WATCH CO. IN THE ABSENCE OF ANY DEBIT ENTRY IN THE CAPITAL ACCOUNTS OF THE ASSESEE, THE AMOUNT OF RS.26,400 IS TREATED AS UNDISCLOSED INCOME. CONSIDERING THE EXPLANATION DELETED. 117 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR: 1992-93 10. RS.9,967 ADDITION TREATING THE AMOUNT CREDITED WITH INDIAN BANK ON 30-3-92 AS UNDISCLOS ED INCOME. THE ASSESSEE WITHDREW AN AMOUNT OF RS. 30,000 DRAWN FROM ANDHRA BANK ON 15-6- 1991 AND PURCHASED TRAVELLERS CHEQUES. THE CHEQUES AVAILABLE WITHOUT UTILIZATION WERE DEPOSITED IN THE BANK ACCOUNT. THE ASSESSEE HAS FURNISHED EVIDENCE TO SHOW THAT THE AMOUNT OF RS. 9,967 HAS BEEN CREDITED INTO THE INDIAN BANK ACCOUNT THROUGH CHEQUE. THE ASSESSEE COULD NOT EXPLAIN/FURNISH ANY SUPPORTING DETAILS TO EXPLAIN THE AMOUNT CREDITED IN INDIAN BANK A/C. HENCE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. CONSIDERING THE EXPLANATION DELETED. ASSESSMENT YEAR: 1993-94 11. RS.10,000 ADDITION ON ESTIMATIN G INTEREST FROM FIXED DEPOSITS WITH BANK IT IS NOT KNOWN HOW THE ASSESSING OFFICER HAS ARRIVED THE ACCRUED INTEREST ON FDR AT RS. 14,000. THE ASSESSEE HAS RETURNED AN AMOUNT OF RS. 8,628/- AS INTEREST FROM SB & FD FROM BANKS FOR THE ASST. YEAR UNDER CONSIDERATION. THE ADDITION MADE BY THE ASSESSING OFFICER WAS ON PRESUMPTION WITHOUT ANY BASIS. HENCE THE ADDITION MADE MAY KINDLY BE DELETED. THE ACCRUED INTEREST ON FDR OF RS.14,000 BUT THE ASSESSEE HAS SHOWN ONLY RS.4,000 AS INTEREST INCOME IN THE RETURN. HENCE, THE BALANCE IS TREATED AS UNDISCLOSED INCOME. CONSIDERING THE EXPLANATION DELETED. ASSESSMENT YEAR: 1994-95 12. RS.9,453 ADDITION ON ACCOUNT OF EXCESS CREDIT IN THE BANK TREATED AS UNDISCLOS ED INCOME. EACH ITEM OF THE CREDIT IN THE BANK ACCOUNT IS EXPLAINABLE. THE DETAILS ARE SUBMITTED AT PAGE NO.98 AND 99 OF THE PAPER BOOK. THE DETAILS CAN BE VERIFIED FROM THE BOOKS OF ACCOUNT SEIZED. THE ASSESSING OFFICER AGGREGATED THE DEPOSITS MADE INTO THE BANK ACCOUNT AND ALSO AGGREGATED THE RECEIPTS TOWARDS INCOME AND THE DIFFERENCE IS HELD AS UNDISCLOSED INCOME. THE ASSESSING OFFICER PRESUMED INCOME/INTEREST AS PER REGULAR RETURN IS RS.146131 WHEREAS CREDIT IN THE BANK ACCOUNT IS RS.155584. THUS THERE IS EXCESS CREDIT OF RS.9453 WHICH REMAINED UNEXPLAINED. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 118 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THAT THE DEPOSITS REPRESENT INCOME OF THE APPELLANT, WHICH IS NOT CORRECT. THE BASIS FOR THE ASSESSING OFFICER IN ARRIVING AT SUCH AMOUNT IS NOT CORRECT AND HENCE THE APPELLANT SUBMITS THAT THE ADDITION MAY BE DELETED. IN THIS REGARD, THE APPELLANT SUBMITS THAT THE APPELLANT MAINTAINED BOOKS OF ACCOUNT, AND THE SAME WERE SEIZED. 13. RS.22,019 ESTIMATIO N OF INTEREST ACCRUED ON FDRS IT IS NOT KNOWN HOW THE ASSESSING OFFICER ARRIVED AT RS. 30,000 AS THE INTEREST ON FDRS. IN THE RETURN OF INCOME FILED FOR THE ASST. YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED AN AMOUNT OF RS. 13,555 AS INTEREST ON FIXED DEPOSITS BUT NOT RS. 7981 AS STATED BY THE ASSESSING OFFICER. THE ADDITION IS MADE ON THE PRESUMPTION OF THE ASSESSING OFFICER WITHOUT ANY BASIS. HENCE THE SAME MAY KINDLY BE DELETED. THE INTEREST ON FDR COMES TO RS.30,000 WHEREAS THE ASSESSEE DECLARED THE INTEREST OF RS.7981 ONLY. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. ASSESSMENT YEAR: 1995-96 14. RS.20,132 ADDITION ON ACCOUNT OF EXCESS CREDIT FROM BANK IT IS NOT KNOWN HOW THE A.O. PRESUMED THAT THE CREDITS IN THE BANK ACCOUNT SHOULD REPRESENT THE INCOME OF THE ASSESSEE. THE CORRELATION TRIED TO BE MADE BY THE A.O. IS WITHOUT ANY BASIS AND WITHOUT APPRECIATION OF PROPER FACTS. THE ASSESSEE MAINTAINED BOOKS OF ACCOUNT AND ALL THE ENTRIES APPEARING IN THE BANK PASS BOOK WERE REFLECTED IN THE BOOKS OF ACCOUNT. THE BOOKS OF ACCOUNT ARE IN THE CUSTODY OF THE DEPARTMENT. THE ADDITION IS MADE PURELY ON PRESUMPTION WITHOUT ANY BASIS. HENCE IT IS REQUESTED THAT THE ADDITION MADE MAY KINDLY BE DELETED. INCOME/INTEREST AS PER REGULAR RETURN IS RS.99,923 WHEREAS CREDIT IN THE BANK ACCOUNT IS RS.164797. THUS THERE IS EXCESS CREDIT OF RS. 64874 (?) WHICH REMAINED UNEXPLAINED. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 119 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 15. RS.26,187 ADDITION TREATING THE DEPOSIT ON 1/1/95 AS UNDISCLOS ED INCOME. THE ASSESSING OFFICER ADMITS THAT THE DEPOSIT OF RS. 25,000 WAS MADE THROUGH A CHEQUE RECEIVED FROM RAMESH WATCH CO. REGARDING THE INTEREST OF RS. 1187, IT IS SUBMITTED THAT FOR THE ASST. YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED AN AMOUNT OF RS. 11,207 REPRESENTING INTEREST ON SB & FD ACCOUNTS. THE AMOUNT OF RS. 11207 INCLUDE THE AMOUNT OF RS. 1187. WHEN THE ASSESSING OFFICER HIMSELF ADMITS THAT THE AMOUNT OF RS. 25,000 IS RECEIVED THROUGH A CHEQUES AND THE SOURCE FOR RECEIPT OF THE CHEQUES IS IDENTIFIED, THE A.O. IS NOT JUSTIFIED IN TREATING THE SAID DEPOSIT AS AND THE INTEREST EARNED THEREON AS UNDISCLOSED INCOME OF THE APPELLANT. HENCE IT IS REQUESTED THAT THE ADDITION MADE MAY KINDLY BE DELETED. UNEXPLAINED DEPOSIT OF RS.25,000 IN GRINDLAYS BANK ALONG WITH INTEREST OF RS.1187 REMAINED UNEXPLAINED AS NO SUPPORTING MATERIAL FURNISHED. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 16. RS.2,000 ADDITION TREATING THE DEPOSIT WITH DEVELOP MENT CO- OPERATIVE BANK, MUMBAI AS THE UNDISCLOS ED INCOME. THE ASSESSING OFFICER MADE THIS ADDITION WITHOUT ANY BASIS AND ON PRESUMPTIONS. THERE IS NO MATERIAL BEFORE THE A.O. TO ESTABLISH THAT THE SAID AMOUNT REPRESENTS UNEXPLAINED CASH DEPOSIT. THE APPELLANT SUBMITS THAT WHEN THE APPELLANT WAS ON CAMP AT MUMBAI, HE USED TO DEPOSIT THE AMOUNT IN THE SAID BANK ACCOUNT AND UTILIZE THE SAME DURING HIS STAY. THIS REPRESENTS UNEXPLAINED CASH DEPOSITS IN DEVELOPMENT BANK, MUMBAI NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 17. RS.7,000 ADDITION ON ESTIMATIN G THE ACCRUED INTEREST FROM FDRS. THERE IS NO BASIS FOR THE ASSESSING OFFICER TO MAKE THIS ADDITION. THE ASSESSEE HIMSELF OFFERED AN AMOUNT OF RS. 17,255 TOWARDS INTEREST. ON SB & FD A/C. HENCE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THIS ADDITION TREATING AN AMOUNT THE INTEREST ON FDR COMES TO RS.14000 WHEREAS THE ASSESSEE DECLARED THE INTEREST OF RS.7000 ;ONLY. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 120 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OF RS. 7,000 AS UNDISCLOSED INCOME. THE ASSESSING OFFICER ALSO DID NOT STATE IN THE ORDER OF ASSESSMENT AS TO HOW HE ESTIMATED AN AMOUNT OF RS. 14,000 TOWARDS INTEREST AND OUT OF THAT ONLY AND AMOUNT OF RS. 7,000 WAS OFFERED TO TAX. AS THE ADDITION IS MADE PURELY ON SURMISES, THE SAME MY KINDLY BE DELETED. 18. RS.10,000 ADDITION ON ESTIMATIN G THE INCOME FROM MONEY LENDING. THIS GROUND IS REDUNDANT AS THERE IS NO SUCH ADDITION. THIS GROUND IS REDUNDANT. REJECTED ASSESSMENT YEAR: 1996-97 19. RS.17,749 ADDITION TREATING THE GAIN ON SALE OF CAR AS THE INCOME. ACCORDING TO THE ASSESSING OFFICER, THE APPELLANT SOLD A MARUTHI CAR DURING THE YEAR FOR A CONSIDERATION OF RS. 1,95,000 AND WHEREAS THE SAID CAR WAS PURCHASED BY THE APPELLANT AT A COST OF RS. 1,77,251. THE ASSESSING OFFICER IS OF THE VIEW THAT THE DIFFERENCE OF RS. 17,749 REPRESENTS THE TAXABLE INCOME. THE CAR PURCHASED IS NOT A CAPITAL ASSET AS THE SAID CAR IS FOR THE PERSONAL PURPOSES AND IS THEREFORE, NOT A CAPITAL ASSET. THEREFORE, IT CANNOT BE TAXED AS CAPITAL GAIN. THE ASSESSING OFFICER CONSIDERED THE COST OF THE CAR WITHOUT CONSIDERING THE OTHER EXPENDITURE LIKE LICENSE FEE PAID; INSURANCE PAID AND THE COST OF ACCESSORIES. IF SUCH AMOUNTS ARE CONSIDERED, THERE WILL NOT BE ANY GAIN TO THE APPELLANT. THIS REPRESENTS THE PROFIT ON SALE OF MARUTHI CAR. CANNOT BE TAXED, THAT TOO IN BLOCK. EXPLANATION ACCEPTED. ADDITION DELETED. 121 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 20. RS.4,500 ADDITION TREATING THE AMOUNT DEPOSITED WITH DEVELOP MENT CO- OPERATIVE BANK, MUMBAI AS THE UNDISCLOS ED INCOME. THE ASSESSING OFFICER MADE THIS ADDITION WITHOUT ANY BASIS AND ON PRESUMPTIONS. THERE IS NO MATERIAL BEFORE THE A.O. TO ESTABLISH THAT THE SAID AMOUNT REPRESENTS UNEXPLAINED CASH DEPOSIT. DETAILS OF THE DEPOSIT ARE RECORDED IN THE BOOKS OF ACCOUNT WHICH ARE IN THE CUSTODY OF THE DEPARTMENT. THIS REPRESENTS UNEXPLAINED CASH DEPOSITS IN DEVELOPMENT BANK, MUMBAI NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 21. RS.19,640 ESTIMATIO N OF INTEREST ACCRUED FROM FDRS THERE IS NO BASIS FOR THE ASSESSING OFFICER TO MAKE THIS ADDITION. THE ASSESSEE HIMSELF OFFERED AN AMOUNT OF RS. 17,255 TOWARDS INTEREST. ON SB & FD A/C. HENCE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THIS ADDITION TREATING AN AMOUNT OF RS. 19,640 AS UNDISCLOSED INCOME. THE ASSESSING OFFICER ALSO DID NOT STATE IN THE ORDER OF ASSESSMENT AS TO HOW HE ESTIMATED AN AMOUNT OF RS. 24,000 TOWARDS INTEREST AND OUT OF THAT ONLY AND AMOUNT OF RS. 4,360 WAS OFFERED TO TAX. AS THE ADDITION IS MADE PURELY ON SURMISES, THE SAME MY KINDLY BE DELETED. THE INTEREST ON FDR COMES TO RS.24,000 WHEREAS THE ASSESSEE DECLARED THE INTEREST OF RS.4,360 ONLY. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 22. RS.10,000 ESTIMATI NG THE INCOME FROM MONEY LENDING THE GROUND IS REDUNDANT AS NO SUCH ADDITION IS MADE BY THE ASSESSING OFFICER. NO FURTHER COMMENTS. THIS GROUND IS REDUNDANT REJECTED ASSESSMENT YEAR: 1997-98 23. RS.2,000 ADDITION TREATING THE AMOUNT THE APPELLANT ALREADY SUBMITTED A NOTE FOR THE ASSESSMENT YEAR 1995- 96. THE APPELLANT SUBMITS THAT THIS REPRESENTS UNEXPLAINED CASH DEPOSITS IN DEVELOPMENT NO BASIS FOR MAKING ADDITION IN 122 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. DEPOSITED WITH DEVELOP MENT CO- OP BANK, MUMBAI AS UNDISCLOS ED INCOME THE SAID EXPLANATION MAY KINDLY BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION ALSO. BANK, MUMBAI BLOCK. HENCE DELETED. 24. RS.13,108 ADDITION ON ACCOUNT OF GAIN ON SALE OF CAR ACCORDING TO THE ASSESSING OFFICER, THERE IS A PROFIT ON SALE OF MARUTHI CAR. THE APPELLANT PURCHASED A CAR ON 11-4-1996 FOR RS. 2,35,000 AND SOLD THE SAME ON 17/7/1996 FOR A CONSIDERATION OF RS. 2,21,892 FOR A LOSS. THE ASSESSING OFFICER ADDED THE DIFFERENCE AS PROFIT. THE CAR WHICH WAS SOLD DURING THE YEAR OF ACCOUNT WAS USED FOR THE PERSONAL PURPOSES OF THE APPELLANT. IT IS NOT A CAPITAL ASSET OF THE ASSESSEE. HENCE NO CAPITAL GAIN ARISES ON THE SALE OF THE CAR THIS REPRESENTS THE PROFIT ON SALE OF MARUTHI CAR. CANNOT BE TAXED, THAT TOO IN BLOCK. EXPLANATION ACCEPTED. ADDITION DELETED. 25. RS.70,000 ADDITION ON ACCOUNT OF CASH. THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS DEFICIT CASH OF RS.70,000 IN THE POSSESSION OF THE APPELLANT AND ADDED THE SAME AS THE UNDISCLOSED INCOME. IN THIS REGARD, THE APPELLANT SUBMITTED A DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER (PAGE NO.22 OF THE PAPER BOOK). DURING SEARCH TOTAL CASH FOUND WAS RS.5,60,000. OUT OF THIS CASH AMOUNTING TO RS.3,94,705 WAS FOUND AT THE RESIDENCE OF ASSESSEE AND OTHER FAMILY MEMBERS. THE ASSESSEE COULD NOT EXPLAIN THE CASH AVAILABILITY. THEREFORE, RS.3,50,000 IS TAKEN IN THE HANDS OF ALL MALE MEMBERS. THE PROPORTIONATE FOR THE REASONS STATED IN MAIN ORDER, THE ADDITION IS DELETED. 123 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SHARE OF THE ASSESSEE COMES TO RS.70,000 124 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-7 IT(SS)A NO.7/H/2011 SMT.ANITHA L.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 ASSESSMENT YEAR 1987-88 GROUND NO. & AMOUNT ADDED DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1-5 & 31, 33 GENERAL IN NATURE. 6. RS.20000 ADDITION HOLDING THAT THE AMOUNT RECEIVED AS GIFT FROM SRI LAL DAYAL DASANI AS THE UNDISCLOSED INCOME. THIS AMOUNT REPRESENT THE GIFT RECEIVED BY THE ASSESSEE FROM LAL DAYAL DASAN, A CLOSE RELATIVE OF THE ASSESSEE THROUGH D.D.NO.000424 DT.19-1- 87. ACCORDING TO THE ASSESSING OFFICER THERE WAS AN AUTHORIZATION FROM BANK OF CREDIT AND COMMERCE GIBRALTOR TO MAKE PAYMENT OF RS.20,000 TO THE ASSESSEE ON 19-1-87. THIS FURTHER REITERATES THE FACT THAT THE NRI SRI LAL DAYAL DASANI GIFTED AN AMOUNT OF RS.20,000 TO THE APPELLANT HEREIN. IT MAY PLEASE BE SEEN THAT THE AMOUNT WAS GIFTED BY THE NRI AND THE PAYMENT WAS ORDERED FROM OUT OF THE COUNTRY. THEREFORE, GIFT TAX IS NOT PAYABLE IN INDIA. THE ASSESSING OFFICER DID NOT INITIATE GIFT TAX PROCEEDINGS. THE CREDIT WAS ALREADY RECORDED IN THE BOOKS OF ACCOUNT AND, THEREFORE, IT CANNOT BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE APPELLANT IT WAS FOUND FROM THE SEIZED MATERIAL THAT THE BANK OF CREDIT AND COMMERCE GIBRALTOR AUTHORIZED BANK OF INDIA FOR PAYMENT OF RS.20,000 ON 19/1/87. THE AMOUNT WAS NEITHER DECLARED IN REGULAR RETURN OF INCOME NOR THE ASSESSEE SUBMITTED GIFT TAX RETURN. THEREFORE, THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. CONFIRMATION AVAILABLE THAT IT IS A GIFT. CANNOT BE TREATED AS UNEXPLAINED CREDIT. HENCE DELETED. 125 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REQUESTS THAT THE ADDITION BE DELETED. 7 RS.5000 ADDITION HOLDING THAT THE AMOUNT DEPOSITED REPRESENTS THE UNDISCLOSED INCOME. THERE IS NO DEPOSIT OF RS. 5,000 IN THE BANK ACCOUNT OF THE ASSESSEE ON 26/3/1987. FURTHER, ALL THE BANK ACCOUNTS OF THE ASSESSEE WERE DISCLOSED TO THE DEPARTMENT AND THE BOOKS OF ACCOUNT WERE SEIZED DURING THE COURSE OF SEARCH & SEIZURE OPERATIONS. EVEN OTHERWISE THIS ADDITION CANNOT BE MADE UNDER SEC. 158 BD OF THE ACT WITHOUT REFERENCE TO THE SEIZED MATERIALS. IT IS SUBMITTED THAT THE BANK ACCOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT AND THEREFORE, CANNOT BE CONSIDERED AS UNDISCLOSED INCOME. THIS REPRESENTS THE AMOUNT DEPOSITED IN BANK ACCOUNTS. SINCE THERE IS NO DEPOSIT, NOT EVEN DATE OF DEPOSIT STATED BY AO, ADDITION IS DELETED ASSESSMENT YEAR 1988-89 8 RS.14,663 ADDITION HOLDING THAT THE AGGREGATE OF THE DEPOSITS IN THE BANK REPRESENT UNDISCLOSED INCOME. OUT OF THIS, AN AMOUNT OF RS.11,401 WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. WITH REGARD TO THE BALANCE OF RS.3,262/- IS ADMITTED IN THE REGULAR RETURN OF INCOME FILED. HENCE, THIS ADDITION SHOULD BE DELETED. AMOUNT ADMITTED IN BLOCK RETURN. FURTHER AMOUNT OF RS.3262 ALREADY RETURNED ORIGINALLY CAN NOT BE TREATED AS UNDISCLOSED. DELETED TO THAT EXTENT ASSESSMENT YEAR 1989-1990 9. RS.1200 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPTS. THE ADDITION MADE BY THE ASSESSING OFFICER DOES NOT EMANATE FROM SEIZED MATERIAL. RENT RECEIVED WAS DULY ADMITTED IN THE RETURN OF INCOME. NO PART OF THE RENTAL INCOME HAS ESCAPED ASSESSMENT. THE APPELLANT ADMITTED THE RENT RECEIVABLE FOR GROSS RENTAL INCOME DECLARED IN RETURN IS RS.9,000 WHEREAS THE BANK ACCOUNT SHOWS RENTAL RECEIPTS OF RS.20400. ASSESSEE DELETED ACCEPTING ASSESSEE EXPLANATION. 126 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 1,200. HOLDING IS 50%. THEREFORE, SUPPRESSION OF ACTUAL RENT IS RS.1200. ASSESSMENT YEAR 1989-90 9 RS.1200 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPTS. THE ADDITION MADE BY THE ASSESSING OFFICER DOES NOT EMANATE FROM SEIZED MATERIAL. RENT RECEIVED WAS DULY ADMITTED IN THE RETURN OF INCOME. NO PART OF THE RENTAL INCOME HAS ESCAPED ASSESSMENT. THE APPELLANT ADMITTED THE RENT RECEIVABLE FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 1,200. GROSS RENTAL INCOME DECLARED IN RETURN IS RS.9,000 WHEREAS THE BANK ACCOUNT SHOWS RENTAL RECEIPTS OF RS.20400. ASSESSEE HOLDING IS 50%. THEREFORE, SUPPRESSION OF ACTUAL RENT IS RS.1200. DELETED ACCEPTING ASSESSEE EXPLANATION. ASSESSMENT YEAR 1990-91 10 RS.3,600 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPTS. THE ADDITION MADE BY THE ASSESSING OFFICER DOES NOT EMANATE FROM SEIZED MATERIAL. RENT RECEIVED WAS DULY ADMITTED IN THE RETURN OF INCOME. NO PART OF THE RENTAL INCOME HAS ESCAPED ASSESSMENT. A STATEMENT SHOWING THE RECEIPT OF RENTS YEAR WISE AND THE DIVISION AMONG THE JOINT OWNERS IS SUBMITTED AS AN ANNEXURE TO THE PRESENT SUBMISSION. GROSS RENTAL INCOME DECLARED IN RETURN IS RS.9,000 WHEREAS THE BANK ACCOUNT SHOWS RENTAL RECEIPTS OF RS.25,200. ASSESSEE HOLDING IS 50% . THEREFORE, SUPPRESSION OF ACTUAL RENT IS RS.3,600. DELETED ACCEPTING ASSESSEE EXPLANATION. ASSESSMENT YEAR 1991-92 11 RS.3,600 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPTS. THE ADDITION MADE BY THE ASSESSING OFFICER DOES NOT EMANATE FROM SEIZED MATERIAL. RENT RECEIVED WAS DULY ADMITTED IN THE RETURN OF INCOME. NO PART OF THE RENTAL INCOME HAS ESCAPED ASSESSMENT. A STATEMENT SHOWING THE GROSS RENTAL INCOME DECLARED IN RETURN IS RS.9,000 WHEREAS THE BANK ACCOUNT SHOWS RENTAL RECEIPTS OF RS.12,600. DELETED ACCEPTING ASSESSEE EXPLANATION. 127 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RECEIPT OF RENTS YEAR WISE AND THE DIVISION AMONG THE JOINT OWNERS IS SUBMITTED AS AN ANNEXURE TO THE PRESENT SUBMISSIONS. THEREFORE, SUPPRESSION OF ACTUAL RENT IS RS.3,600 12 RS.1750 ADDITION ON ACCOUNT OF MONEY LENDING THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE, THE ADDITION MAY BE DELETED. ASSESSEE RECEIVED INTEREST OF RS.6400 ON MONEY LENDING WHEREAS THE INTEREST SHOWN IS RS.4650. IN CASE OF DOUBLE ADDITION, THE SAME IS DELETED. 13 RS.4520 ADDITION ON ACCOUNT OF MONEY LENDING. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME FOR THE ASSESSMENT YEAR 1992- 93. ADMITTED IN BLOCK RETURN. REJECTED ASSESSMENT YEAR 1992-93 14 RS.1109 ADDITION ON THE GROUND OF UNDISCLOSED INTEREST FROM UTI. THIS AMOUNT WAS ALREADY ADMITTED BY THE ASSESSEE IN THE BLOCK RETURN OF INCOME FILED. THIS REPRESENTS THE DIFFERENCE OF INTEREST RECEIVED FROM UTI AND THAT DECLARED IN THE RETURN. REJECTED ASSESSMENT YEAR 1993-94 15 RS.4,336 ADDITION ON ACCOUNT OF UNDISCLOSED CREDITS IN THE BANK ACCOUNT. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED A TOTAL INCOME OF RS.53,569 ON WHICH TAXES WERE PAID. FROM OUT OF SUCH INCOME AND OTHER RECEIPTS OF THE MINOR, THE ASSESSEE DEPOSITED RS. 4,336 IN THE JOINT ACCOUNT NO.8136 MAINTAINED ALONG WITH HER DAUGHTER MISS. SEEMA IN THE ANDHRA BANK. IT IS SUBMITTED THAT THE APPELLANT MAINTAINED BOOKS OF ACCOUNT AND THE SAID BOOKS OF ACCOUNT WERE SEIZED. THE ADDITION IS NOT BASED ON THIS REPRESENTS THE AMOUNT CREDITED IN ANDHRA BANK A/C FOR WHICH THE ASSESSEE DID NOT HAVE ANY EXPLANATION. CONSIDERING THE EXPLANATION, ADDITION STANDS DELETED 128 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANY SEIZED MATERIAL. THE ASSESSEE, THEREFORE, REQUESTS TO DELETE THE ADDITION. IT IS FURTHER SUBMITTED THAT THERE IS NO EVIDENCE TO SHOW THAT SUCH DEPOSITS REPRESENT THE UNDISCLOSED INCOME OF THE APPELLANT. ASSESSMENT YEAR 1994-95 16 RS.40,000 ADDITION ON THE GROUND THAT THE PAYMENT MADE TO PPF REPRESENT THE UNDISCLOSED INCOME. THIS AMOUNT REPRESENTS INVESTMENT IN PPF AND A CLAIM WAS MADE UNDER SEC. 88 OF THE ACT. THIS WAS NOT CLAIMED AS A DEDUCTION FROM THE TOTAL INCOME. THIS CLAIM IS ONLY AS A RELIEF FROM THE TAX PAYABLE. THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING THE SAID AMOUNT. MATTER OF RECORD. CLAIM MADE IS DISALLOWED. THERE IS NO JUSTIFICATION. HENCE DELETED. ASSESSMENT YEAR 1995-96 17. RS.1,30,000 ADDITION ON THE GROUND THAT FDR NOT PROPERLY EXPLAINED. THE ASSESSING OFFICER FOUND THAT THE APPELLANT ON VARIOUS DATES DEPOSITED AMOUNTS AGGREGATING TO RS. 1,97,177 IN THE FIXED DEPOSITS. ACCORDING TO THE ASSESSING OFFICER, THE APPELLANT COULD EXPLAIN ONLY RS. 67,177 AND THE BALANCE OF RS. 1,30,000 DEPOSITED IS NOT PROPERLY EXPLAINED. THEREFORE, THE ASSESSING OFFICER ADDED THE SAID SUM AS THE UNDISCLOSED INCOME. IN THIS REGARD, THE APPELLANT SUBMITS THAT THE FIXED DEPOSITS WERE ALREADY DISCLOSED TO THE DEPARTMENT. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. FURTHER, THE APPELLANT AS PER THE SEIZED MATERIAL THE ASSESSEE HAD FDR OF RS.1,97,177 IN GRINDLAYS BANK. THERE IS NO WITHDRAWALS FROM ANY BANK ACCOUNT FOR PURCHASING FDRS. CONSIDERING THE EXPLANATION, ADDITION STANDS DELETED. 129 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CLEARLY EXPLAINED AS TO HOW THE FIXED DEPOSITS WERE MADE AND ALSO THE SOURCES FOR EACH OF THE DEPOSIT. WITH REGARD TO SOURCE FOR THE FDRS IN THE GRINDLEYS BANK, THE ASSESSEE SUBMITS THAT - (I) THE FDR NO.1336009 DATED 25-3-95 FOR RS.10,000 WAS DEPOSITED WITH THE CASH AVAILABLE WITH THE APPELLANT. (II) FDR NO.1335809 DATED 25-3-95 FOR RS.25,000/- WAS RENEWAL OF THE EARLIER DEPOSIT OF RS. 25,000 MADE ON 7/1/1992 BY DRAWING FROM THE INDIAN BANK ACCOUNT. (III) FOR FDR NO.1335500 DATED 25-8-95 FOR RS.40,000. THE AMOUNT WAS DRAWN FROM INDIAN BANK VIDE CHEQUES NO.679310 AND CONVERTED TO FDR THE FACE VALUE OF WHICH IS RS. 47,177. (IV) FOR FDR NO.1336001 DATED 07-08-1994 FOR RS.10,000, THE SAID DEPOSIT WAS MADE FROM THE CASH AVAILABLE. (VI) FOR FDR NO.1335802 DATED 7-8-94 FOR RS.25,000, THE AMOUNT WAS DRAWN FROM INDIAN BANK VIDE CHEQUES NO.631799 AND CONVERTED TO FDR. (VII) FOR FDR NO.1335502 130 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. DATED 22-9-94 FOR RS.80,000, THE AMOUNT WAS DRAWN FROM INDIAN BANK VIDE CHEQUE NO. 631792 ON 9-12-1991 AND CONVERTED TO FDR. THE SAID AMOUNT WAS RENEWED. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE APPELLANT FURTHER SUBMITS THAT ALL THE MATERIAL WAS PROVIDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSING OFFICER COULD NOT HAVE MADE SUCH AN ADDITION WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. 18 RS.22,000 ADDITION ON THE GROUND THAT THE DEPOSITS ARE NOT PROPERLY EXPLAINED. THE SAID AMOUNT WAS DEPOSITED WITH ANDHRA BANK A/C NO. 8136 I.E., JOINT ACCOUNT OF THE APPELLANT WITH HER MINOR CHILD SEEMA. THE DEPOSIT WAS MADE FROM THE INCOME EARNED BY HER BESIDES THE GIFTS RECEIVED BY HER MINOR CHILD. THE APPELLANT SUBMITS THAT THE BANK ACCOUNTS WERE ALL DISCLOSED TO THE DEPARTMENT. FURTHER, THE ASSESSING OFFICER DID NOT MAKE SUCH AN ADDITION WITH REFERENCE TO ANY SEIZED MATERIAL. THE ASSESSEE, THEREFORE, REQUESTS TO DELETE THE ADDITION. THESE ARE DEPOSITS IN ANDHRA BANK WHICH REMAIN UNEXPLAINED. CONSIDERING THE EXPLANATION, ADDITION STANDS DELETED. 19 RS.40,000 ADDITION ON THE GROUND THAT THE AMOUNT THERE IS NO SUCH RECEIPT DURING THE YEAR UNDER CONSIDERATION. THE APPELLANT SUBMITS THAT THESE ARE AMOUNTS RECEIVED FROM THE MATURITY OF CONSIDERING THE EXPLANATION, 131 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CREDITED IN THE SB ACCOUNT NO.5289 REPRESENT THE REFUND OF THE AMOUNT CLAIMED AS DEDUCTION U/S 80CCA OR 80CCB ONLY AN AMOUNT OF RS. 26,600 WAS RECEIVED ON 13-8-1994 OUT OF WHICH RS. 6,600 REPRESENTS INTEREST WHICH IS ADMITTED REGULARLY EVERY YEAR. THE SAME CANNOT BE BROUGHT TO TAX AGAIN. FURTHER, THE APPELLANT CLAIMED DEDUCTION OF RS. 10,000 FOR THE ASSESSMENT YEAR 1990- 91 AND NO OTHER AMOUNT WAS CLAIMED. THE ADDITION DOES NOT EMANATE FROM THE SEIZED DOCUMENTS. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION MUTUAL FUNDS DEPOSITS FOR WHICH DEDUCTION U/S 80 CCA AND 80 CCB WAS CLAIMED. THE DEPOSITS ARE TAXABLE IN THE YEAR OF RECEIPT. ADDITION STANDS DELETED. 20. RS.10521 ADDITION ON THE GROUND THAT OUT OF THE TOTAL INTEREST OF RS.13121 DERIVED FROM MUTUAL FUNDS, RS.10521 REPRESENT UNDISCLOSED INCOME. THE ADDITION MADE DOES NOT EMANATE FROM THE SEIZED MATERIAL. IT IS SUBMITTED THAT THE INTEREST ON MUTUAL FUNDS ACCRUED DURING THE RESPECTIVE YEARS WAS ADMITTED. THE INTEREST RELATING TO THE YEAR OF ACCOUNT IS ALREADY DISCLOSED. THE INTEREST RECEIVED ON MATURITY DURING THE YEAR CANNOT BE THE INCOME OF THE YEAR UNDER CONSIDERATION. THE INTEREST RELATING TO THE YEAR ONLY CAN BE CONSIDERED AS INCOME. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH ADDITION. INTEREST CREDITED IN BANK ACCOUNT IS RS.13,121 WHEREAS THE ASSESSEE DECLARED AN AMOUNT OF RS.2,600 ONLY. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION OF THE DIFFERENCE OF RS.10,521. RECONCILIATION OF ACCRUED AMOUNTS AND RECEIVED AMOUNTS SHOULD HAVE BEEN DONE BY AO. AMOUNT CAN NOT BE TAXED ON RECEIPT BASIS AGAIN. HENCE DELETED. ASSESSMENT YEAR 1996-97 21 RS.5,00,000 ADDITION ON THE GROUND THAT THE AMOUNT RECEIVED FROM VARSHA MEERPURI IS THE ADDITION OF RS.5,00,000/- WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI. NO INCRIMINATING MATERIAL THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING FOR THE REASONS STATED IN MAIN ORDER, ADDITION IS DELETED. 132 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. NOT PROVED. WAS FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. WITHOUT PREJUDICE, THE APPELLANT SUBMITS THAT SMT. VARSHA MIRPURI IS THE RESIDENT OF BANGKOK, THAILAND AND SHE IS THE SISTER-IN-LAW OF THE APPELLANT. SHE MAINTAINED A BANK ACCOUNT WITH INDIAN BANK, SECUNDERABAD, A COPY OF WHICH IS SUBMITTED AT PAGE NOS.20 TO 22 OF THE PAPER BOOK. THE APPELLANT FILED BANK ACCOUNT IN INDIA, LETTER OF CONFIRMATION FROM VARSHA MIRPURI. THE ASSESSING OFFICER ISSUED A NOTICE U/S 158BD TO MRS. VARSHA MIRPURI PROPOSING TO TAX THE AMOUNT DEPOSITED INTO THE SAID BANK ACCOUNT AND THE SAID SMT. VARSHA MIRPURI EXPLAINED THE SOURCE FOR SUCH DEPOSIT AND THEREAFTER THE PROCEEDINGS U/S 158BD WERE CLOSED. THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. 22 RS.7489 ADDITION ON THE GROUND THAT THE DEPOSITS IN ANDHRA BANK REPRESENT UNDISCLOSED INCOME. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE DEPOSITS WERE IN THE JOINT ACCOUNT OF THE APPELLANT AND HER DAUGHTER SEEMA. THE AMOUNTS WERE DEPOSITED FROM THE INCOME DERIVED BY HER OF RS. 70,360 AND ALSO FROM THE GIFTS RECEIVED BY THE MINOR DAUGHTER. THEREFORE, NO ADDITION COULD HAVE BEEN MADE BY THE A.O. THESE REPRESENTS DEPOSITS IN ANDHRA BANK ACCOUNT NO.8136. CONSIDERING THE EXPLANATION AMOUNT IS DELETED. 133 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 23. RS.20,455 ADDITION MADE ON THE GROUND THAT THE AMOUNT DEPOSITED IN INDIAN BANK IS NOT PROPERLY EXPLAINED. THE ASSESSING OFFICER IS OF THE VIEW THAT DEPOSIT OF RS. 20,455 MADE BY THE APPELLANT WITH INDIAN BANK ON 14-11-1995 WAS NOT PROPERLY EXPLAINED. IT IS SUBMITTED THAT THE SAID AMOUNT WAS RECEIVED FROM THE JOINT ACCOUNT WITH INDIAN BANK A/C NO. 8883 WITH SOBHA, W/O RAMESH. IN THE SAID BANK ACCOUNT, THE RENT RECEIPTS FROM THE HOUSE PROPERTY HELD JOINTLY ARE DEPOSITED. THE AMOUNTS ARE ENTERED IN THE BOOKS OF ACCOUNT AND ARE ADMITTED IN THE RETURN OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE APPELLANT MAINTAINED THE BOOKS OF ACCOUNT AND SUCH BOOKS OF ACCOUNT ARE SEIZED AND ARE IN THE CUSTODY OF THE DEPARTMENT. FURTHER, THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT AND CANNOT BE CONSIDERED AS UNDISCLOSED. THE ADDITION DOES NOT EMANATE FROM THE SEIZED MATERIAL. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION. THIS AMOUNT WAS DEPOSITED IN INDIAN BANK ON 14-11-95 FOR WHICH NO WITHDRAWAL FROM ANY OTHER BANK ACCOUNT AS CLAIMED BY THE ASSESSEE WAS FOUND. CONSIDERING THE EXPLANATION AMOUNT STAND DELETED. 24. RS.40,000 (1994-95) RS.40,000 (1995-96) RS.50,000 (1996-97) ADDITION ON THE GROUND THAT THE INVESTMENT MADE IN PPF REPRESENT UNDISCLOSED INCOME. THERE IS NO INFORMATION BEFORE TO ASSESSING OFFICER TO SHOW THAT THE CONTRIBUTIONS WERE MADE OUT OF BORROWED FUNDS. THE DEPOSITS INTO THE PPF A/C. ARE EXPLAINED IN THE RESPECTIVE ASST. YEARS. THE ADDITIONS MADE MAY PLEASE BE DE LETED. FURTHER, IT IS SUBMITTED IT WAS FOUND THAT THE INVESTMENTS HAVE BEEN MET FROM BORROWED FUNDS OR FROM REALIZATION OF NSC OF EARLIER YEARS WHICH WERE EXEMPT FROM TAX. SINCE ASSESSEE HAS CLAIMED IN REGULAR RETURNS CAN NOT BE DISALLOWED IN BLOCK. MOREOVER ASSESSEE HAS INCOMES TO MAKE INVESTMENTS. 134 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THAT FOR THE YEARS UNDER CONSIDERATION, THE APPELLANT CLAIMED DEDUCTION UNDER SEC. 88 FROM THE TAX PAYABLE AND NOT A DEDUCTION FROM THE INCOME OF THE APPELLANT. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION ON THIS ACCOUNT. THEREFORE, THE INVESTMENTS ARE NOT FROM INCOME CHARGEABLE TO TAX. DELETED. 25 RS.1584 (1994-95) RS.6711 (1995-96) RS.5476 (1996-97) ADDITION CONSIDERING THE INTEREST ON FDR ACCRUED AS THE UNDISCLOSED INCOME. THE ASSESSING OFFICER WORKED THE INTEREST ON ESTIMATE BASIS, WHEREAS THE APPELLANT ADMITTED THE INTEREST AS AND WHEN CREDITED TO THE ACCOUNT OF THE APPELLANT. THESE ADDITIONS WERE ALREADY EXPLAINED IN THE RESPECTIVE ASSESSMENT YEARS. HENCE, NO FURTHER EXPLANATION IS SUBMITTED. THE INTEREST ACCRUED ON FDR IS RS.13,000 WHEREAS THE INTEREST DECLARED IS RS.7524 ONLY. RECONCILIATION OF ACCRUED AMOUNTS AND RECEIVED AMOUNTS SHOULD HAVE BEEN DONE BY AO. AMOUNT CANNOT BE TAXED AGAIN. HENCE DELETED. ASSESSMENT YEAR 1997-1998 26. RS.44107 ADDITION ON THE GROUND THAT THE DEPOSIT IN INDIAN BANK IS UNDISCLOSED INCOME. THE FINANCIAL YEAR DID NOT EXPIRE. THERE IS NO INFORMATION BEFORE THE ASSESSING OFFICER TO PROVE THAT THE FIXED DEPOSIT IN INDIAN BANK IS FROM OUT OF THE UNDISCLOSED SOURCES. THE AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT. THE FIXED DEPOSITS MADE OF RS. 25,000 AND RS,. 10,000 EARLIER ON 22/9/1994 GOT MATURED DURING THE YEAR OF ACCOUNT AND WAS DEPOSITED IN THE BANK ACCOUNT ON 24-9- 1996.HENCE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION. THE SAME MAY KINDLY BE DELETED. IT IS FURTHER SUBMITTED THAT THIS REPRESENTS THE DEPOSITS IN INDIAN BANK BUT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE. CONSIDERING THE EXPLANATION AMOUNT STAND DELETED. 135 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION AS UNDISCLOSED INCOME AS THE SAID BANK ACCOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT. 27 RS.2748 ADDITION ON THE GROUND THAT THE DEPOSITS AMOUNTING TO RS.2748 REPRESENT UNDISCLOSED INCOME. THE ASSESSEE DEPOSITED RS.1000 ON 4-4-97; RS.950 ON 30-8-97 AND RS.798 ON 1-12-98 IN THE ANDHRA BANK ACCOUNT NO.8136. FROM THE DATES OF DEPOSITS, IT IS SEEN THAT THE ASSESSING OFFICER CONSIDERED THE PERIOD BEYOND THE BLOCK PERIOD FOR ASSESSMENT. IT IS SUBMITTED THAT THE DEPOSITS WERE MADE AFTER THE DATE OF SEARCH AND CANNOT BE CONSIDERED FOR ASSESSMENT UNDER SEC. 158 BD OF THE ACT. THIS REPRESENTS THE DEPOSITS IN INDIAN BANK ACCOUNT FOR THE ASSESSEE COULD NOT EXPLAIN THE SOURCE. CAN NOT BE CONSIDERED IN BLOCK. DELETED. 28 RS.620460 ADDITION ON THE GROUND THAT THE EXCESS JEWELLERY NOT DISCLOSED THE ASSESSEE SUBMITTED A DETAILED NOTE WITH REGARD TO THE ALLEGED EXCESS JEWELLERY WHICH IS AVAILABLE AT PAGE NO.23 TO 45 OF THE PAPER BOOK. IN VIEW OF THE DETAILED SUBMISSIONS, THE ASSESSEE REQUESTS TO DELETE THE ADDITION MADE. DURING SEARCH THE JEWELRY OF RS.11,28,561/- WAS FOUND BELONGING TO THE ASSESSEE AND HER HUSBAND SRI LACHMAN. THE ASSESSEE DECLARED RS.2,79,198 AND HER HUSBAND DECLARED RS.1,24,967 IN THEIR WEALTH TAX RETURNS FOR THE A.Y.92-93. THE ASSESSEE STATED THAT HER CHILDREN HAD SEPARATE JEWELRY FOR THEMSELVES. BUT IT WAS FOUND THAT THEY ARE NOT PART OF THE FOR THE REASONS STATED IN MAIN ORDER, THE ADDITION STANDS DELETED. 136 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. WEALTH TAX RETURNS OF THE ASSESSEE. THE ASSESSEE DID NOT FURNISH ANY QUANTITATIVE DETAILS OF JEWELRY IN THE WEALTH TAX RETURNS. THEREFORE, THE JEWELRY FOUND CANNOT BE COMPARED IN THE QUANTITATIVE WAY AND HAS TO BE BASED ON MARKET VALUE ONLY. 29. RS.28,243 ADDITION OF THE REGISTRATION CHARGES. THIS ADDITION IS REGARDING BALAMRAI PROPERTY JOINTLY PURCHASED BY THE ASSESSEE ALONG WITH 4 OTHERS. THE ASSESSEE SUBMITTED A DETAILED NOTE IN THIS REGARD (PAGE NO.50 OF THE PAPER BOOK). IN VIEW OF THE DETAILED SUBMISSIONS IN THE NOTE AS ABOVE, THE ASSESSEE REQUESTS TO DELETE THE ADDITION MADE. SRI RAMESH CHUGANI DURING SEARCH ADMITTED IN HIS SWORN STATEMENT THAT ADDITIONAL CONSIDERATION OF RS.1 LAC WAS PAID OUTSIDE BOOKS FOR 5 PLOTS WHICH WAS OFFERED AS UNDISCLOSED INCOME. FURTHER, AN AMOUNT OF RS.8243 WAS SPENT TOWARDS REGISTRATION CHARGES OUTSIDE BOOKS. BUT THE SAME WAS NOT DECLARED BY THE ASSESSEE IN HER BLOCK RETURN. THEREFORE, THE SAME IS TREATED AS UNDISCLOSED INVESTMENT OF THE ASSESSEE. NO EVIDENCE EXPECT STATEMENT. ASSESSEE EXPLAINED THAT THE PURCHASE IS FROM A SOCIETY AND PAID BY CHEQUES. HENCE DELETED. 30. RS.1,75,000 ADDITION HOLDING THAT THE PAYMENT MADE TO RK THIS AMOUNT WAS ADMITTED IN THE BLOCK RETURN OF INCOME. HENCE, THE ADDITION SHALL BE AMOUNT ADMITTED IN THE BLOCK RETURN. REJECTED 137 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CONSTRUCTION AS THE EXPENDITURE INCURRED BY THE ASSESSEE DELETED. . 30. RS.28679 UNDISCLOSED INVESTMENT IN POOJA APARTMENTS IT IS SUBMITTED THAT THE APPELLANT AND FIVE OTHERS ALREADY ADMITTED RS. 10,50,000 AS UNDISCLOSED INCOME ON THIS ACCOUNT. THE APPELLANT SUBMITTED THAT RS. 60,000 IS TOWARDS EXTRA FITTINGS AND RS. 9,90,000 TOWARDS EXTRA PAYMENTS TO THE BUILDER. THE ASSESSING OFFICER ADDED THE AMOUNT OF RS. 1,75,000 AS ADMITTED BY THE APPELLANT. BESIDES, THE ASSESSING OFFICER MENTIONS THAT CERTAIN BILLS FOR PURCHASES MADE BY R.K. CONSTRUCTIONS FROM HEMANT ENTERPRISES; OM TRADING COMPANY WERE FOUND AND THAT SUCH AN AMOUNT WORKS OUT TO RS. 1,72,076. THE ASSESSING OFFICER ADDED 1/6 OF SUCH AMOUNT. IN THIS REGARD, IT IS SUBMITTED THAT THE PURCHASES WERE EFFECTED BY R.K. CONSTRUCTIONS. THIS IS EVIDENCED FROM THE INVOICES FOUND. THEREFORE, THE AMOUNT OF RS. 1,72,076 HAS TO BE TELESCOPED WITH THE AMOUNT ALREADY OFFERED BY THE APPELLANT. AS PER SEIZED MATERIAL PURCHASE BILLS IN THE NAME OF R.K. CONSTRUCTIONS, THE BUILDER OF THE FLAT AMOUNTING TO RS.1,72,076 WERE FOUND FROM THE RESIDENCE WHICH ARE FOR PURCHASE OF EXTRA FITTINGS. NO EXPLANATION WAS OFFERED. THEREFORE, 1/6 TH (6 FLAT OWNERS) WHICH COMES TO RS.28,679 SHARE OF THE ASSESSEE IS THE UNDISCLOSED INVESTMENT. EVEN THOUGH THE YEAR OF ADMISSION DIFFERS, AS ASSESSEE OFFERED IN BLOCK, FURTHER ADDITION IS DELETED. 32. CHARGING AT 60% REGARDING COMPLETING ASSESSMENT U/S.158BD AND CHARGING TAX AT 60%. THE A.O. COMPLETED THE ASSESSMENT U/S.158BD. MATTER OF RECORD. REJECTED. 138 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE- 8 IT(SS)A NO.8/H/20110 KUNJUBAI G.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88.TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 ASSESSMENT YEAR: 1987-88 GROUND NO. DETAILS OF ADDITION EXPLANATION REMARKS OF AO IN REMAND REPORT DECISION 1 TO 4 & 30,31 & 32 GENERAL IN NATURE -- 5 RS.5,500 ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. THE APPELLANT MAINTAINED BOOKS OF ACCOUNT. THE BANK A/C NO.6191 IS ALREADY REFLECTED IN THE BOOKS OF ACCOUNT. THE ACCOUNT IS A REGULAR ONE AND THE SAME WAS FURNISHED DURING THE COURSE OF ASSESSMENT U/S 158BD. THE ASSESSING OFFICER SOUGHT CLARIFICATION WITH REGARD TO EACH OF THE RECEIPT AND THE APPELLANT FURNISHED THE SAME. ACCORDING TO THE ASSESSING OFFICER THE AMOUNT CREDITED AND EXPLAINED AS RENT RECEIVED AGGREGATED TO RS.30,500 WHEREAS THE AMOUNT OFFERED FOR ASSESSMENT TOWARDS RENT WAS ONLY RS.25,500. THEREFORE, THE BALANCE WAS ADDED BY THE ASSESSING OFFICER. IT IS SUBMITTED THAT THE ASSESSING OFFICERS WORKING IS NOT CORRECT. THE AMOUNT STATED TO BE RENT IS NOT MORE THAN RS.25,500. THE AGGREGATE OF THE RECEIPTS IS RS.78,717 (PAGE NO.73 OF THE PAPER BOOK) FROM WHICH THE OPENING BALANCE OF RS.3191 AND TOTAL CASH DEPOSITED IN SB ACCOUNT WAS RS.30,500 AND THE ASSESSEE DECLARED GROSS RENTAL RECEIPT OF RS.25,500. THE DIFFERENCE OF RS.5,500 REMAINS UNEXPLAINED. RECONCILIATION OF RECEIPTS COULD HAVE BEEN UNDERTAKEN BY AO. HOWEVER ENTIRE RENT DIFFERENCE CAN NOT BE TAXED UNDER INCOME FROM HOUSE PROPERTY. CONSIDERING EXPLANATION DELETED. 139 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE CASH DEPOSIT OF RS.43661 AND INTEREST OF RS.3691 ARE TO BE REDUCED IN WHICH CASE THE AGGREGATE WOULD NOT BE MORE THAN RS.30,500 AS ARRIVED BY THE ASSESSING OFFICER. FURTHER, SUCH ADDITION CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT U/S 158BD OF THE I.T. ACT. THE RENTAL RECEIPTS WERE RS. 25,500 ONLY. THE DEPOSIT OF RS. 30,500 INCLUDE THE RENTAL RECEIPTS OF RS. 25,500. IT CAN BE SEEN FROM THE BANK ACCOUNT THAT EVEN ON 1-4-1986, AN AMOUNT OF RS. 5,000 WAS RECEIVED TOWARDS RENT AND IN THE FIRST WEEK ITSELF, THE APPELLANT RECEIVED RS. 2,900 TOTALING TO RS. 7,900 AND THE SAID RENT RELATES TO THE EARLIER YEAR. 6 RS.38,450 ADDITION TREATING THE CASH DEPOSIT AS UNDISCLOSED INCOME. ACCORDING TO THE ASSESSING OFFICER, AN AMOUNT OF RS.12,000, RS.6,000, RS.10,000 AND ANOTHER RS.10,000 WERE DEPOSITED IN ACCOUNT NO.6191. THE ASSESSING OFFICER FOUND THAT AN AMOUNT OF RS.12,000 WAS ACCEPTED AS THE UNDISCLOSED INCOME AND, THEREFORE, THE ASSESSING OFFICER ARRIVED AT A FURTHER ADDITION OF RS.38,450. IT IS SUBMITTED THAT THERE IS NO SUCH FIGURE OF RS.12,000 IN THE BANK ACCOUNT. IT CAN BE SEEN FROM PAGE NO.73 OF THE PAPER BOOK THAT THERE THERE IS NO EXPLANATION REGARDING CHEQUES DEPOSITED IN THE SB ACCOUNT. HENCE TREATED AS UNDISCLOSED. AMOUNTS DEPOSITED ARE CHEQUES. CONSIDERING THE EXPLANATION THE SAME IS DELETED. 140 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. WERE DEPOSITS OF RS.6,000, RS.10,000 AND ANOTHER RS.10,000 INTO THE SAID BANK ACCOUNT. OUT OF THE SAID AMOUNT, RS.12,000 WAS OFFERED AS ADDITIONAL INCOME. THE BALANCE OF THE AMOUNT REPRESENTS AS THE OPENING BALANCE. AS SUBMITTED IN THE EARLIER PARAGRAPHS, NO SUCH ADDITION COULD HAVE BEEN MADE WHILE COMPLETING THE ASSESSMENT U/S 158BD OF THE I.T. ACT, PARTICULARLY WHEN NO INFORMATION WAS FOUND DURING THE COURSE OF SEARCH AND THE BANK ACCOUNT WAS ALREADY DISCLOSED IN THE RETURN OF INCOME FILED. ASSESSMENT YEAR 1988-89 7&10 RS.2,200 ADDITION ON THE GROUND UNDISCLOSED INTEREST FROM BANK ACCOUNT. THE INTEREST CREDITED BY THE BANK TO THE ACCOUNT OF THE ASSESSEE IS RS. 1475/- AND THE SAME HAS BEEN DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED. IT IS NOT KNOWN HOW THE ASSESSING OFFICER ARRIVED AT THE FIGURE OF RS. 3,674/-. THE ADDITION MADE BY THE ASSESSING OFFICER DOES NOT EMANATE FROM THE SEIZED MATERIAL. HENCE IT IS REQUESTED THAT THE ADDITION MADE MAY BE DELETED. INTEREST CREDITED IN BANK ACCOUNT IS RS.3674 WHEREAS HE ASSESSEE DECLARED AN AMOUNT RS.1474 ONLY. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION OF THE DIFFERENCE OF RS.2200 NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 8 & 11 RS.10,530 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT. FOR THE ASST. YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED AN INCOME OF RS. 41,100 TOWARDS INCOME FROM PROPERTY. AS PER THE BANK STATEMENT, THE CREDIT IN THE ACCOUNT SHOWS THAT ASSESSEE RECEIVED RENT OF RS.51630 WHEREAS THE ASSESSEE DECLARED NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 141 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SAME COMES TO RS. 32,575. THE DIFFERENCE IS DUE TO THE FACT THAT PROPERTY INCOME IS OFFERED TO TAX ON ACCRUAL BASIS. IT IS NOT KNOWN HOW THE ASSESSING OFFICER ARRIVED AT THE FIGURE OF RS. 51,630 AS RENT RECEIVED. THE DETAILS OF THE RENT RECEIVED WERE ALREADY FURNISHED ALONG WITH THE RETURN OF INCOME. THE ASSESSING OFFICER DID NOT FIND THAT SUCH RENT OFFERED IS LESS THAN THE RENT ACTUALLY RECEIVED. THE DIFFERENCE IS NOT ARISING OUT OF THE SEIZED MATERIAL. HENCE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION. THE SAME MAY KINDLY BE DELETED. RS.41100 IN THE REGULAR RETURN. ASSESSMENT YEAR 1989-90 9 RS.11,430 ADDITION ON ACCOUNT OF DIFFERENCE IN RECEIPT OF RENTAL INCOME. FOR THE ASST. YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED AN INCOME OF RS. 48,300 TOWARDS INCOME FROM PROPERTY. AS PER THE BANK STATEMENT, THE SAME COMES TO RS. 44,850. THE DIFFERENCE IS DUE TO THE FACT THAT PROPERTY INCOME IS OFFERED TO TAX ON ACCRUAL BASIS. IT IS NOT KNOWN HOW THE ASSESSING OFFICER ARRIVED T AT THE FIGURE OF RS. 54,330 . THE DIFFERENCE IS NOT ARISING OUT OF THE SEIZED MATERIAL. HENCE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION. THE SAME MAY KINDLY BE DELETED. CREDIT IN THE SB ACCOUNT SHOWS THAT ASSESSEE RECEIVED RENT OF RS.54330 WHEREAS THE ASSESSEE DECLARED RS.42,900 IN THE REGULAR RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 142 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1990-91 12 RS.567 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST FROM BANK. THIS ADDITION APPARENTLY SEEMS TO BE WRONG. THE INTEREST CREDITED OF RS.1612 IN THE BANK ACCOUNT IS ADMITTED BY THE ASSESSEE. AS MENTIONED BY THE ASSESSING OFFICER THERE IS NO DIFFERENCE BETWEEN THE INTEREST CREDITED TO THE ACCOUNT AND THE INTEREST ADMITTED. THEREFORE, NO ADDITION CAN BE MADE. (PAGE NOS. 77 OF THE PAPER BOOK). THE ASSESSEE SHORT DECLARED THE BANK INTEREST IN THE REGULAR RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. ASSESSMENT YEAR 1991-92 14 RS.11,800 ADDITION ON ACCOUNT OF SHORT RENTAL RECEIPTS. THE ASSESSEE ADMITTED AN AMOUNT OF RS. 50,400 IN THE RETURN OF INCOME TOWARDS RENT RECEIPTS. THE AMOUNT OF DEPOSITS TOWARDS RENT RECORDED IN THE BANK PASS BOOK ARE RS. 49,000 BUT NOT RS. 62,200 AS WAS ADOPTED BY THE A.O. THE AMOUNT OF RS. 50,400 IS ARRIVED AT TAKING INTO CONSIDERATION THE RENT RECEIVABLE AND RECEIVED FOR THE ENTIRE 12 MONTHS. THERE IS NO INFORMATION TO THE EFFECT THAT THE APPELLANT POSSESSED MORE PROPERTIES THAN DISCLOSED IN THE RETURN OF INCOME OR RECEIVED MORE AMOUNT OF RENT THAN DISCLOSED IN THE RETURN OF INCOME. THEREFORE, NO ADDITION CAN BE MADE BY THE ASSESSING OFFICER TOWARDS DEFICIENCY OF RENT. IN SO FAR AS DEPOSITS ARE CONCERNED, THEY ARE RENTAL INCOMES BUT MIGHT NOT HAVE BEEN MADE IN CREDIT IN THE SB ACCOUNT SHOWS THAT ASSESSEE RECEIVED RENT OF RS.62,200 WHEREAS THE ASSESEE DECLARED RS.50,400 IN THE REGULAR RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 143 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE SAME YEAR. IN SO FAR AS THE BANK ACCOUNT IS CONCERNED, THE SAME WAS DISCLOSED IN THE RETURN OF INCOME. THE DIFFERENCE IS NOT ARISING OUT OF THE SEIZED MATERIAL AND, THEREFORE, NO ADDITION CAN BE MADE. 15 RS.3,131 ADDITION REPRESENTING UNDISCLOSED INCOME FROM CDS. THIS WAS ALREADY ADMITTED IN THE BLOCK RETURN BY THE APPELLANT. ADMITTED IN BLOCK RETURN. REJECTED. ASSESSMENT YEAR 1992-93 15 RS.755/- ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON LIC MUTUAL FUND. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME. HENCE, THE ADDITION MAY KINDLY BE DELETED. ADMITTED IN BLOCK RETURN. REJECTED 16 RS.4,547 ADDITION ON THE GROUND THAT THE INTEREST ON FDR IS NOT DISCLOSED. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME. HENCE, THE ADDITION MAY KINDLY BE DELETED. ADMITTED IN THE BLOCK RETURN. REJECTED 17. RS.859 ADDITION AS UNDISCLOSED INTEREST FROM BANK. THE AMOUNT OF RS.3,057 ADMITTED IN THE RETURN OF INCOME TOWARDS INTEREST ON S.B. A/C. INCLUDES 859. HENCE THERE IS NO UNDISCLOSED INCOME. THE ADDITION MAY KINDLY BE DELETED. THIS IS THE DIFFERENCE OF INTEREST CREDITED IN BANK ACCOUNT AND THE INTEREST DECLARED IN THE RETURN. CONSIDERING THE EXPLANATION, AMOUNT DELETED ASSESSMENT YEAR 1994-95 18. RS.17,901 ADDITION ON ACCOUNT OF SHORT DECLARATION OF RENTAL RECEIPT. THE AMOUNT OF RS. 68,301 ADOPTED BY THE ASSESSING OFFICER TOWARDS DEPOSIT OF RENTS IS INCORRECT. ACTUAL DEPOSITS APPEARING TOWARDS RENT DEPOSITS IN THE BANK PASS BOOK IS RS. 50,500. THE AMOUNT OFFERED TO TAX IN THE RETURN OF INCOME TOWARDS CREDIT IN THE SB ACCOUNT SHOWS THAT ASSESSEE RECEIVED RENT OF RS.68301 WHEREAS THE ASSESSEE DECLARED RS.50,400 IN THE REGULAR RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 144 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RENTAL INCOME IS RS. 50,400. HENCE THE A.O. CANNOT MAKE AN ADDITION ON THIS COUNT TOWARDS UNDISCLOSED INCOME. THERE IS NO INFORMATION TO THE EFFECT THAT THE APPELLANT POSSESSED MORE PROPERTIES THAN DISCLOSED IN THE RETURN OF INCOME OR RECEIVED MORE AMOUNT OF RENT THAN DISCLOSED IN THE RETURN OF INCOME. THEREFORE, NO ADDITION CAN BE MADE BY THE ASSESSING OFFICER TOWARDS DEFICIENCY OF RENT. IN SO FAR AS DEPOSITS ARE CONCERNED, THEY ARE RENTAL INCOMES BUT MIGHT NOT HAVE BEEN MADE IN THE SAME YEAR. IN SO FAR AS THE BANK ACCOUNT IS CONCERNED, THE SAME WAS DISCLOSED IN THE RETURN OF INCOME. THE DIFFERENCE IS NOT ARISING OUT OF THE SEIZED MATERIAL AND, THEREFORE, NO ADDITION CAN BE MADE. 19. RS.20,000 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME FROM SBI MUTUAL FUNDS. THE ASSESSING OFFICER CANNOT MAKE SUCH AN ADDITION WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT PARTICULARLY WHEN SUCH AN ADDITION IS NOT WITH REFERENCE TO ANY SEIZED MATERIAL. A DETAILED NOTE WAS SUBMITTED REGARDING ADDITIONS UNDER SEC. 80CCA & 80CCB, COPY OF WHICH IS AVAILABLE AT PAGE NO. 8 OF THE PAPER BOOK. IN THIS REGARD IT IS FURTHER SUBMITTED THAT EXCEPT FOR THE YEAR 1990- 91, THE APPELLANT DID NOT CLAIM SUCH A DEDUCTION THE PRINCIPAL AMOUNT SHOULD HAVE BEEN BROUGHT TO TAX IN THE YEAR OF MATURITY. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 145 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. IN THE EARLIER YEARS. THE AMOUNT IS REFUNDED ONLY AFTER A PERIOD OF 5 YEARS AND HENCE THE AMOUNT ALLOWED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION CANNOT BE ENCASHED FOR THE YEAR UNDER CONSIDERATION. FURTHER, THE ASSESSING OFFICER ALLOWED ONLY RS. 10,000 FOR THE ASSESSMENT YEAR 1990- 91. IN VIEW OF THE ABOVE, THE ADDITION MAY KINDLY BE DELETED. 20 RS.9,407 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME FROM FDR THE GROUND IS REDUNDANT AS SUCH AN ADDITION IS NOT APPEARING IN THE ASSESSMENT ORDER. GROUND IS REDUNDANT. REJECTED 21 RS.28,243 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT ON BALAMRAI PROPERTY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE SUBMITTED A NOTE BEFORE THE ASSESSING OFFICER WHEREIN IT WAS STATED THAT THE PLOTS OF LAND WERE ALLOTTED BY THE COOP. SOCIETY AND THE PRICE WAS FIXED BY THE SOCIETY. DURING THE COURSE OF SEARCH, NO INFORMATION CONCERNING THE PAYMENT TO THE SOCIETY IN ADDITION TO THE ACTUAL PRICE WAS AVAILABLE. THE SEIZED DOCUMENTS SHOW THAT THE TOTAL EXPENDITURE WAS MET BY WITHDRAWING THE AMOUNT FROM THE BANK ACCOUNT. FURTHER, WHEN THE ASSESSING OFFICER WANTED TO MAKE AN ADDITION OF RS. 20,000 BASING ON THE STATEMENT OF THE APPELLANT, NO OTHER ADDITION ON ACCOUNT OF REGISTRATION CHARGES SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. SRI RAMESH CHUGANI DURING SEARCH ADMITTED IN HIS SWORN STATEMENT THAT ADDITIONAL CONSIDERATION OF RS.1 LAC WAS PAID OUTSIDE BOOKS FOR 5 PLOTS AT THOKATTA VILLAGE WHICH WAS OFFERED AS UNDISCLOSED INCOME. FURTHER, AN AMOUNT OF RS.8243 WAS SPENT TOWARDS REGISTRATION CHARGES OUTSIDE BOOKS. BUT THE SAME WAS NOT DECLARED BY THE ASSESSEE IN THE BLOCK RETURN. NO EVIDENCE EXPECT STATEMENT. ASSESSEE EXPLAINED THAT THE PURCHASE IS FROM A SOCIETY AND PAID BY CHEQUES. HENCE DELETED. 146 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1995-96 22. RS.2,583 ADDITION AS UN-DISCLOSED INTEREST FROM LIC MUTUAL FUND. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE, THE SAME SHALL BE DELETED. ADMITTED IN THE BLOCK RETURN. REJECTED 23. RS.10,000 ADDITION AS UNDISCLOSED INVESTMENT IN LIC MUTUAL FUND. THE ASSESSING OFFICER CANNOT MAKE SUCH AN ADDITION WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT PARTICULARLY WHEN SUCH AN ADDITION IS NOT WITH REFERENCE TO ANY SEIZED MATERIAL. A DETAILED NOTE WAS SUBMITTED REGARDING ADDITIONS UNDER SEC. 80CCA & 80CCB, COPY OF WHICH IS AVAILABLE AT PAGE NO. 8 OF THE PAPER BOOK. KINDLY PERUSE THE EXPLANATION SUBMITTED AT COL. NO.4. THE PRINCIPAL AMOUNT SHOULD HAVE BEEN BROUGHT TO TAX IN THE YEAR OF MATURITY. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 24 ADDITION ON ACCOUNT OF UNEXPLAINED FIXED DEPOSIT. THE ASSESSEE DEPOSITED RS.1,80,000 IN THE FIXED DEPOSITS BY WITHDRAWING THE AMOUNT FROM ANZ GRINDLEYS BANK A/C NO.133730 (OUT OF RS.2,70,000 DRAWN ON 18-8-1994 PAGE NO. 88 OF THE PAPER BOOK). THIS HAS ALREADY BEEN EXPLAINED BEFORE THE ASSESSING OFFICER (PAGE NO.88 OF THE PAPER BOOK). THE APPELLANT SOLD LAND AT KAPRA AND DEPOSITED RS. 1,80,000 IN ANZ GRINDLEYS BANK. AS THE SOURCE IS CLEARLY EXPLAINED, THE ADDITION MAY KINDLY BE DELETED. THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING DETAILS TO EXPLAIN THE INVESTMENT IN FDR OF RS.1,80,000 CONSIDERING THE EXPLANATION, AMOUNT IS DELETED 147 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 25. RS.8,944 ADDITION ON ACCOUNT OF ACCRUED INTEREST ON FDRS. THE ASSESSING OFFICER ARRIVED AT SUCH AN ADDITION ON AN ESTIMATE BASIS. IT IS SUBMITTED THAT THE APPELLANT OFFERED INTEREST OF RS. 13,958 IN THE RETURN OF INCOME. THE APPELLANT HUMBLY SUBMITS THAT SUCH AN ADDITION CANNOT BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. THE APPELLANT FILED EVIDENCE FOR THE SOURCES IN MAKING THE BANK DEPOSITS. A COPY OF THE SEPARATE NOTE SUBMITTED BEFORE THE ASSESSING OFFICER IS ANNEXED. THE ASSESSEE DECLARED INTEREST FROM SB AND FDR AMOUNTING TO RS.13958, OUT OF WHICH RS.12556 IS ACCRUED INTEREST ON FDR WHEREAS THE ACCRUED INTEREST ON FDR WORKS OUT TO RS.21500. THE EXPLANATION OF THE ASSESSEE IS SELF EXPLANATORY. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. ASSESSMENT YEAR 1996-97 26 RS.35,000 (FOR A.Y. 1997-98) ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN MONEY LENDING. DURING THE COURSE OF ASSESSMENT ITSELF ON 29.9.1997 THE APPELLANT FILED A LETTER BEFORE THE A.O. WHEREIN IT HAS BEEN STATED THAT THE ASSESSEE HAS NO ACCOUNT WITH CANARA BANK, R.P. ROAD, SECUNDERABAD AND THE CHEQUES MENTIONED IN THE LETTER REFERRED TO BY THE ASSESSING OFFICER REPRESENTS THE CHEQUES ISSUED BY M/S. MOHD. ISMAIL & SONS AND IN FACT THE ASSESSEE ISSUED A CHEQUES NO. 125006 DT. 18.6.1996 DRAWN ON GRINDLAYS BANK, HYDERABAD. HENCE NO PART OF THE AMOUNT TO BE TREATED AS UNDISCLOSED INCOME. HOWEVER, WITHOUT TAKING INTO CONSIDERATION THE SUBMISSIONS OF ASSESSEE, THE A.O. MADE THE ADDITION. THE AMOUNT HAS BEEN PAID TO M/S. MOHD. ISMAIL & SONS THIS AMOUNT REPRESENTS THE MONEY ADVANCED TO M/S MOHD. ISMAIL & SONS. IN THE ABSENCE OF ANY EXPLANATION THE AMOUNT IS TREATED AS UNDISCLOSED INCOME. MONEY ADVANCED CAN NOT BE UNDISCLOSED INCOME, UNLESS UNACCOUNTED. NO SUCH CASE HERE. HENCE DELETED. 148 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THROUGH BANKING CHANNELS. 27. RS.16,767 ADDITION ON ACCOUNT OF UNDISCLOSED ACCRUED INTEREST THE ASSESSEE OFFERED AN AMOUNT OF RS. 4,808 IN THE RETURN OF INCOME FILED. IT IS SUBMITTED THAT THE INTEREST AS CREDITED TO THE ACCOUNT IS OFFERED IN THE REGULAR RETURN F INCOME. THE ESTIMATION OF INTEREST ON FDR AT RS. 21,000 IS ON PRESUMPTION BASIS. HENCE IT IS REQUESTED THAT THE ADDITION MADE MAY KINDLY BE DELETED. THE ASSESSEE DECLARED INTEREST FROM FDR AMOUNTING TO RS.4233 WHEREAS THE ACCRUED INTEREST ON FDR WORKS OUT TO RS.21,000. THEREFORE, THE BALANCE OF RS.16767 IS TREATED AS UNDISCLOSED INCOME. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. ASSESSMENT YEAR 1997-98 28. RS.28,679 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN POOJA APARTMENTS. IT IS SUBMITTED THAT THE APPELLANT AND FIVE OTHERS ALREADY ADMITTED RS. 10,50,000 AS UNDISCLOSED INCOME ON THIS ACCOUNT. THE APPELLANT SUBMITTED THAT RS. 60,000 IS TOWARDS EXTRA FITTINGS AND RS. 9,90,000 TOWARDS EXTRA PAYMENTS TO THE BUILDER. THE ASSESSING OFFICER ADDED THE AMOUNT OF RS. 1,75,000 AS ADMITTED BY THE APPELLANT. BESIDES, THE ASSESSING OFFICER MENTIONS THAT CERTAIN BILLS FOR PURCHASES MADE BY R.K. CONSTRUCTIONS FROM HEMANT ENTERPRISES; OM TRADING COMPANY WERE FOUND AND THAT SUCH AN AMOUNT WORKS OUT TO RS. 1,72,076. THE ASSESSING OFFICER ADDED 1/6 OF SUCH AMOUNT. IN THIS REGARD, IT IS SUBMITTED THAT THE PURCHASES WERE EFFECTED BY R.K. CONSTRUCTIONS. THIS IS EVIDENCED FROM THE AS PER SEIZED MATERIAL PURCHASE BILLS IN THE NAME OF R.K. CONSTRUCTIONS, (THE BUILDER OF THE FLAT) AMOUNTING TO RS.1,72,076 WERE FOUND FROM THE RESIDENCE WHICH ARE FOR PURCHASE OF EXTRA FITTINGS. NO EXPLANATION WAS OFFERED. THEREFORE, 1/6 TH (6 FLAT OWNERS) WHICH COMES TO RS.28,679. SHARE OF THE ASSESSEE IS THE UNDISCLOSED INVESTMENT. ADMITTED AS INCOME EVEN THOUGH IN A DIFFERENT YEAR IN BLOCK. DOUBLE ADDITION IF ANY STANDS DELETED. 149 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INVOICES FOUND. THE APPELLANT OFFERED RS. 9,90,000 AS ADDITIONAL PAYMENT TO R.K. CONSTRUCTIONS, BESIDES ACCEPTING RS. 60,000 FOR ADDITIONAL FITTINGS. THEREFORE, THE AMOUNT OF RS. 1,72,076 HAS TO BE TELESCOPED WITH THE AMOUNT ALREADY OFFERED BY THE APPELLANT. THEREFORE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. 29 RS.1,75,000 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME ON POOJA APARTMENTS. THIS AMOUNT WAS ADMITTED IN THE BLOCK RETURN FILED. HENCE, THE GROUND IS NOT PRESSED. NO FURTHER COMMENTS THIS GROUND IS NOT PRESSED. REJECTED. 150 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-9 IT(SS)A NO.9/H/2011 RAMESH G.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 ASSESSMENT YEAR: 1987-88 GROUND NO. & AMOUNT ADDED (RS. DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1 TO 8; 47 TO 49 GENERAL IN NATURE -- 9 RS.6,625 ADDITION ON THE PLEA THAT THERE IS AN UNACCOUNTED FOR DEPOSIT WITH THE BANK THERE IS NO SUCH AMOUNT OF RS.6,625 DEPOSITED WITH THE INDIAN BANK. THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT THE APPELLANT, DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS FURNISHED DETAILS OF THE BANK ACCOUNTS; COPIES OF THE BANK ACCOUNTS AND DETAILS OF THE DEPOSITS MADE. FURTHER, THE APPELLANT MAINTAINED BOOKS OF ACCOUNT AND THE DEPOSITS ARE RECORDED IN THE BOOKS OF ACCOUNT. THE AMOUNTS OF RS. 3240 AND RS. 3385 ARE NOT APPEARING IN THE BANK STATEMENTS. THE ASSESSING OFFICER DID NOT COMMENT UPON THE EXPLANATION SUBMITTED. THEREFORE, THE APPELLANT SUBMITS THAT THE ADDITION MADE MAY KINDLY BE DELETED. THE ASSESSEE DEPOSITED CASH OF RS.3240 ON 2.4.87 AND RS.3385 ON 24.7.86 THROUGH CHEQUES. NO SUPPORTING MATERIAL SUBMITTED TO THE CLAIM THAT THERE WERE WITHDRAWALS FROM RAMESH WATCH CO. HOW CHEQUE DEPOSITS CAN BE UNEXPLAINED CASH DEPOSIT WAS NOT EXPLAINED BY AO. CONSIDERING THE EXPLANATION, AMOUNT DELETED. ASSESSMENT YEAR 1988-89 10 RS.12,840 ADDITION ON THE PLEA THAT THERE IS AN UNACCOUNTED FOR DEPOSIT WITH THE BANK THE SAID DEPOSIT CONSISTS OF INTEREST ON NSC OF RS.8,640 AND CASH DEPOSIT OF RS.4,200. THE CASH AVAILABLE IN THE BOOKS OF ACCOUNT WAS DEPOSITED IN THE BANK. HENCE THE SAME CANNOT BE TREATED AS UNEXPLAINED INCOME. THE DEPOSITS WERE EXPLAINED. THE ASSESSING OFFICER DID NOT CONTRADICT THESE ARE CASH DEPOSITS IN INDIAN BANK ACCOUNT. NO SUPPORTING EVIDENCE PRODUCED BY THE ASSESSEE. CONSIDERING THE EXPLANATION ADDITION DELETED. 151 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE SUBMISSIONS MADE. 11 RS.1,00,000 ADDITION TREATING THE AMOUNT RECEIVED FROM HIS SISTER SMT.VARSHA JAYAKUMAR MIRPURI AS UNDISCLOSED INCOME. THE ADDITION OF RS.1,00,000 FOR THE ASSESSMENT YEAR 1988-89 WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT.VARSHA JAIKUMAR MIRPURI. NO INCRIMINATING MATERIALS WERE FOUND DURING THE COURSE OF SEARCH AND, THE APPELLANT FILED BANK ACCOUNT IN INDIA, LETTER OF CONFIRMATION FROM VARSHA MIRPURI. IT IS ALSO CONFIRMED BY HER THAT SHE DEPOSITED THE AMOUNTS WITH THE INDIAN BANK MUCH EARLIER AND SHE ISSUED CHEQUES IN FAVOUR OF THE APPELLANT AND OTHER BROTHERS AND THE AMOUNT WAS WITHDRAWN. THE ASSESSING OFFICER ISSUED A NOTICE U/S 158BD TO MRS. VARSHA MIRPURI PROPOSING TO TAX THE AMOUNT DEPOSITED INTO THE SAID BANK ACCOUNT AND THE SAID SMT. VARSHA MIRPURI EXPLAINED THE SOURCE FOR SUCH DEPOSIT AND THEREAFTER THE PROCEEDINGS U/S 158BD WERE CLOSED. THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. MOREOVER THE ASSESSEE COULD NOT PRODUCE ANY IT RETURN COPY OF HER RELATIVE NOR ANY BALANCE SHEET DURING THE COURSE OF ASST. PROCEEDINGS. FOR THE REASONS STATED IN THE MAIN ORDER, ADDITION STANDS DELETED. ASSESSMENT YEAR 1989-90 12. RS.17,340 ADDITION TREATING THE AMOUNT IN THE BANK ACCOUNT AS UNEXPLAINED INVESTMENT. THIS AMOUNT IS THE MATURED VALUE OF THE NSC I.E. PRINCIPAL ALONG WITH INTEREST RECEIVED THROUGH CHEQUE. HENCE THE SOURCE IS EXPLAINED. FURTHER, THE AMOUNT IS DEPOSITED IN THE BANK ACCOUNT ALREADY DISCLOSED TO THE DEPARTMENT. THEREFORE, THE SAID ADDITION CANNOT BE MADE UNDER SEC. 158 BC OF THE ACT. THIS IS CASH DEPOSITED ON 9.4.88. ASSESSEE STATED THAT THIS IS DEPOSITED BY CHEQUES RECEIVED AS NSC INTEREST. HOWEVER, BANK PASS BOOK SHOWS THAT THE AMOUNT WAS DEPOSITED IN NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. 152 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CASH. 13 RS.16,200 ADDITION HOLDING THAT THE PROPERTY AT KHANDOJI BAZAR REPRESENTS UNEXPLAINED INVESTMENT. THE ASSESSEE SUBMITTED THAT THE PROPERTY WAS ACQUIRED BY RAMESH WATCH CO. AND WAS RECORDED IN THE BOOKS OF ACCOUNT OF THE SAID COMPANY. SUCH INFORMATION WAS FILED BEFORE THE ASSESSING OFFICER ON 15.9.97 WHEN THE ASSESSMENTS WERE BEING DONE. THE ASSESSMENT OF RAMESH WATCH CO., A PARTNERSHIP FIRM WAS ALSO COMPLETED U/S 158 BC ALONG WITH THE ASSESSMENT OF THE APPELLANT. THE APPELLANT STATED THAT THE SAID PROPERTY WAS ACQUIRED BY RAMESH WATCH COMPANY BUT NO ADDITION WAS MADE IN THE SAID PARTNERSHIP FIRM. ALL THESE FACTS CLEARLY INDICATE THAT THE PROPERTY WAS ACQUIRED BY RAMESH WATCH CO. AND IS NOT INCLUDABLE IN THE ASSESSMENT OF THE APPELLANT HEREIN. COPY OF THE BALANCE SHEET OF THE PARTNERSHIP IS SUBMITTED TO SHOW THAT THE SAID ASSET WAS DISCLOSED BY THE SAID PARTNERSHIP FIRM. AS SEEN FROM THE SEIZED MATERIAL, THE ASSESSEE PURCHASED THE PROPERTY 1-6-230/2 AT KHANDOJI BAZAR, SECUNDERABA D FOR A CONSIDERATION OF RS.15,000 WITH REGISTRATION CHARGES OF RS.1200. ASSESSEE STATED THAT THE PROPERTY WAS ACQUIRED FROM RAMESH WATCH CO. BUT THE RECORDS REVEAL THERE ARE NO SUFFICIENT WITHDRAWAL FROM RAMESH WATCH CO. TO FUND THE INVESTMENT. THEREFORE, AN AMOUNT OF RS.16200 IS TREATED AS INCOME. NO BASIS FOR MAKING ADDITION IN ASSESSEE HANDS. PROPERTY BELONGS TO FIRM. HENCE DELETED 14. RS.30,000 ADDITION AS UNEXPLAINED INVESTMENT IN BEGUMPET PROPERTY. THE ASSESSEE ADMITTED THE SAME IN THE BLOCK RETURN FILED. THE GROUND IS NOT PRESSED. THE GROUND IS NOT PRESSED. REJECTED. ASSESSMENT YEAR 1990-91 15 ADDITION THE ADDITION OF RS.3,33,333 THE DONOR F OR THE 153 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RS.3,33,333 TREATING THE AMOUNT RECEIVED FROM HIS SISTER SMT.VARSHA JAYAKUMAR MIRPURI AS UNDISCLOSED INCOME. FOR THE ASSESSMENT YEAR 1990-01 WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT.VARSHA JAIKUMAR MIRPURI. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. NO INCRIMINATING MATERIAL WERE FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. REASONS STATED IN THE MAIN ORDER, ADDITION STANDS DELETED. 16 RS.7,800 ADDITION HOLDING THAT THE REGISTRATION CHARGES IN RESPECT OF PARKLANE PROPERTY WAS NOT ACCOUNTED FOR. THE ASSESSEE EXPLAINED THAT AN AMOUNT OF RS.8,000 WAS DRAWN FROM THE INDIAN BANK ACCOUNT NO.5907; OUT OF WHICH RS.7,800 WAS SPENT TOWARDS REGISTRATION CHARGES OF THE PARKLANE PROPERTY. THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT TO MENTION THAT THE AMOUNT OF RS.7,800 IS TO BE ADDED. AS SEEN FROM SEIZED ANNEXURE THE ASSESSEE PURCHASED PROPERTY AT PARK-LANE FOR RS.4,60,000 ALONG WITH HIS CO- BROTHER. THE REGISTRATION CHARGES WAS NOT DISCLOSED. THE 1/5 TH SHARE OF THE ASSESSEE WORKS OUT TO RS.7800 NO BASIS FOR MAKING ADDITION. HENCE DELETED. 17. RS.40,000 ADDITION HOLDING THAT THE INVESTMENT IN THE FIXED DEPOSIT IS OUTSIDE THE BOOKS OF ACCOUNT. THE DEPOSIT AMOUNT OF RS.40,000/- MADE ON 30-11- 1990 REPRESENTS CHEQUES NO.614572 DATED 28/11/1990 ISSUED BY RAMESH WATCH CO. IT IS FURTHER SUBMITTED THAT THE INDIAN BANK ACCOUNT IS REFLECTED IN THE BOOKS OF SAID CONCERN. THE BOOKS SEIZED BY THE I.T. AUTHORITIES ARE STILL IN THEIR CUSTODY. THIS IS INVESTMENT IN FDR WHEREIN THE ASSESSEE EXPLAINED THAT THE AMOUNT OF RS.40,000 WAS ISSUED BY RAMESH WATCH CO. ON 28.11.90 EXPLAINED SOURCE. HENCE DELETED. 154 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. WHICH PERTAINS TO SUBSEQUENT ASSESSMENT YEARS. ASSESSMENT YEAR 1991-92 18. RS.12,000 ADDITION BY DISALLOWING CLAIM MADE U/S 80CCA. THE APPELLANT ISSUED CHEQUE DURING THE PREVIOUS YEAR FOR PURCHASE OF THE MUTUAL FUNDS. THE SAID CHEQUE IS FOUND DEBITED IN THE BANK ACCOUNT ON 2-4-1991. THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION. NO BASIS FOR ADDITION. HENCE DELETED. 19 RS.7,800 ADDITION ON ACCOUNT OF INTEREST ACCRUED NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER PRESUMED THAT THERE WERE DEPOSITS OF RS.40,000 AND RS.25,000 ON 8.2.90. THE INDIAN BANK ACCOUNT FOR THE FINANCIAL YEAR 1989-90 IS AT PAGE NO.122 OF THE PAPER BOOK. RS.25,000 WAS PROVIDED AS A BANK GUARANTEE ON 8.2.90 AND NO FD WAS MADE. FURTHER, THE ASSESSING OFFICER PRESUMED IN THE A.Y.1990-91 THAT THERE WAS A DEPOSIT OF RS.40,000 BUT WAS NOT DISCLOSED IN THE RETURN OF INCOME. A SEPARATE ADDITION OF RS.40,000 WAS MADE IN THE SAID ASSESSMENT YEAR. IT WAS EXPLAINED FOR 1990-91 THAT THERE WAS NO SUCH DEPOSIT. THEREFORE, IT IS SUBMITTED THAT NO DEPOSITS WERE MADE ON 8.2.90 EITHER RS.40,000 OR RS.25,000. THEREFORE, NO INTEREST IS ACCRUED TO THE APPELLANT ON THE SAID DATES. THIS AMOUNT IS INVESTED IN MUTUAL FUND. THE SOURCE OF INVESTMENT REMAINS UNEXPLAINED AS NO WITHDRAWAL IS SEEN FROM THE BANK ACCOUNT. THE ACCRUED INTEREST ON FDRS OF RS.40000 AND RS.25000 WHICH HAS NOT BEEN DISCLOSED BY THE ASSESSEE. NO BASIS FOR MAKING ADDITION IN BLOCK. HENCE DELETED. ASSESSMENT YEAR 1992-93 20. RS.3,000 ADDITION ON ACCOUNT OF WITH REGARD TO THE AMOUNT OF RS.3,000 THE SAME IS RS.3000 IS ADMITTED IN ESTIMATED ADDITION CAN 155 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RS.12,500 ESTIMATION OF ACCRUED INTEREST ON FIXED DEPOSITS. ADMITTED IN THE BLOCK RETURN FILED. WITH REGARD TO THE ADDITION OF RS.12,550 IT IS SUBMITTED THAT THE ASSESSING OFFICERS PRESUMPTION THAT THERE WERE DEPOSITS ON 8.2.90 OF RS.25,000 AND RS.40,000 ARE NOT CORRECT. THE APPELLANT ADMITTED RS.3776 IN THE REGULAR RETURN OF INCOME AND RS.3,000 IN THE BLOCK RETURN. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY FURTHER ESTIMATION AND FURTHER ADDITION OF RS.12,550. THE BLOCK RETURN AS INTEREST FROM FDR. THE ACCRUED INTEREST IN FDR AMOUNTING TO RS.1.85 LAKHS COMES TO RS.12550 WHICH HAS NOT BEEN DECLARED BY THE ASSESSEE. NOT BE MADE IN BLOCK ASSESSMENTS . HENCE DELETED. 21 RS.87,208 ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSITS WITH THE BANKS. AN AMOUNT OF RS.6,360 WAS DEPOSITED ON 5-04-92 FROM OUT OF THE AMOUNT OF NSC AND INTEREST RECEIVED. THE AMOUNT OF RS.13,430 WAS DEPOSITED ON 17-1-92, FROM OUT OF THE REFUND OF EARLIER DEPOSIT. WITH REGARD TO RS.3,000 DEPOSITED ON 3-2-92, THE AMOUNT REPRESENTS THE CHEQUE RECEIVED ON ACCOUNT. A CHEQUES FOR RS.64,418 WAS RECEIVED FROM FOBC 76037 ON 5-3-92 AND THE SAME WAS DEPOSITED. THE ASSESSEE, THEREFORE, EXPLAINED THE SOURCE. IT IS FURTHER SUBMITTED THAT THE BANK ACCOUNT IS DISCLOSED IN THE RETURNS OF INCOME AND RETURNS OF WEALTH FILED. ALL THE ENTRIES ARE IN THE BOOKS OF ACCOUNT MAINTAINED AND SEIZED BY THE DEPARTMENT. NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS. THESE ARE DEPOSITS MADE IN INDIAN BANK ACCOUNTS ON DIFFERENT DATES. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. CONSIDERING THE EXPLANATION, AMOUNT DELETED AS SOURCES ARE EXPLAINED. 156 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THEREFORE, NO ADDITION COULD HAVE BEEN MADE BY THE ASSESSING OFFICER. 22. RS.50,000 ADDITION ON ACCOUNT OF UNEXPLAINED CREDITS IN THE BOOKS OF ACCOUNT. THE ASSESSEE ISSUED A CHEUQE NO. 697321 FOR RS. 1,00,000 IN FAVOUR OF RAMESH WATCH COMPANY ON 16-5-1991. THE PARTNERSHIP FIRM RECORDED THE AMOUNT OF THE CHEQUE IN ITS BOOKS OF ACCOUNT AT RS. 1,50,000. PAGE 75 OF THE PAPER BOOK. IN SO FAR AS THE APPELLANT IS CONCERNED, THE AMOUNT PAID IS MENTIONED AS RS. 1,00,000. IT IS A MISTAKE IN THE BOOKS OF ACCOUNT OF THE PARTNERSHIP FIRM. THE TRANSACTION IS A BANK TRANSACTION AND NOT CASH TRANSACTION. THE AMOUNT WAS THROUGH CHEQUE. THE CHEQUE IS RECORDED IN THE BANK ACCOUNT. THE FIRM ALSO RECORDED THE RECEIPT ONLY AS CHEQUE RECEIVED. THEREFORE, THE AMOUNT CANNOT BE CONSIDERED AS THE UNDISCLOSED AMOUNT OF THE APPELLANT. THE APPELLANTS ACCOUNTS CLEARLY INDICATE THAT THE AMOUNT PAID WAS ONLY RS. 1,00,000 THROUGH CHEQUE AND THEREFORE, CANNOT BE ADDED IN THE ASSESSMENT OF THE ASSESSEE. THE ASSESSEE CREDIT RS.1,50,000 IN HIS CAPITAL ACCOUNT WITH RAMESH WATCH CO. RS.1 LAKH WAS CREDITED FROM THE BANK ACCOUNT. THE ASSESSEE COULD NOT SPECIFICALLY EXPLAIN THE SOURCE OF THE BALANCE OF RS.50,000 CONSIDERING THE EXPLANATION, AMOUNT DELETED. 23. RS.10,000 ADDITION ON ACCOUNT OF UNACCOUNTED FOR INVESTMENT IN MONEY LENDING. THIS INVESTMENT IS THROUGH CHEQUE NO.697323 DATED 14-9-91 FROM INDIAN BANK A/C NO.5907, SECUNDERABAD AND HENCE THE SOURCE IS EXPLAINED. THE ASSESSEE SUBMITS THAT CHEQUES NO.697323 WAS ISSUED ON 24.9.91 BUT IT WAS ENCASHED ON 5.10.91 AND, THEREFORE, THE DEBIT IS RECORDED ON 5.10.91. IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO AS FOUND FROM THE SEIZED MATERIAL THE ASSESSEE ADVANCED RS.10,000 ON 24.9.91. NO DEBIT WAS FOUND IN THE BANK ACCOUNT AS THE ASSESSEE CONSIDERING THE EXPLANATION, DELETED 157 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. MAKE ANY ADDITION ON THIS ACCOUNT. STATED THAT THE AMOUNT WAS PAID FROM THE BANK ACCOUNT. THEREFORE, RS.10,000 REMAINS UNEXPLAINED. 24. RS.12,550 ADDITION ON ACCOUNT OF ACCRUED INTEREST ON FDR THE ASSESSING OFFICER MERELY ESTIMATED THE INTEREST AND ARRIVED AT THE ADDITION WHICH IS NOT JUSTIFIED. THE ASSESSING OFFICER CANNOT RESORT TO ESTIMATION OF INTEREST RECEIPT ON THE DEPOSITS MADE AND MAKE ANY ADDITION ON THE SAID GROUND. THIS IS ACCRUED INTEREST ON FDR WHICH HAS NOT BEEN DECLARED BY THE ASSESSEE. NO BASIS TO MAKE ADDITION IN BLOCK. DELETED. 25. RS.2066 (1993-94) RS.5404 (1994-95) RS.3934 (1995-96) RS.2140 (1996-97) RS.1515 (1997-98) ADDITION ON ACCOUNT OF AMOUNT SPENT ON MUMBAI FLAT MAINTENANCE THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE COURSE OF THE PERIOD ALL THE BROTHERS USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WAS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NOT AN ADDITION TO MAKE IN BLOCK ASSESSMENTS . HENCE DELETED. 26 RS.89329 ADDITION ON ACCOUNT OF DEPOSIT WITH THE BANK WHICH IS NOT DISCLOSED. THE APPELLANT RECEIVED AN AMOUNT OF RS. 1,10,000 FROM M/S ASHOK AND COMPANY, A PARTNERSHIP FIRM IN WHICH THE APPELLANT IS A PARTNER. THE ASSESSEE RECEIVED AN AMOUNT OF RS.1,10,000 FROM ASHOK RECEIPT FROM PARTNERSHIP FIRM WHICH IS ACCOUNTED CAN NOT BE 158 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE ASSESSING OFFICER MENTIONS THAT THERE WAS ONLY A BALANCE OF RS. 20,671 AND THEREFORE, IS OF THE VIEW THAT RS. 1,10,000 WOULD NOT BE PAID BY THE FIRM. THE APPELLANT IS EXPLAINING THE RECEIPTS AS RECORDED IN THE BANK ACCOUNTS. THE, AMOUNTS OF RS. 1,00,000 AND RS. 10,000 WERE EXPLAINED AS RECEIVED FROM M/S ASHOK & COL., THE BOOKS OF THE SAID FIRM WERE ALSO SEIZED BY THE DEPARTMENT. THE APPELLANT IS ONE OF THE PARTNERS OF THE FIRM. THE AMOUNT OF RS. 20,671 WAS AS ON 31-3-1992 AND NOT AS ON 31-3- 1993. AFTERWARDS THERE WERE BUSINESS ACTIVITIES OF THE FIRM. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN CONSIDERING THE OPENING BALANCE FOR THE PURPOSE. AND COMPANY WHEREAS HIS CREDIT BALANCE IN THIS FIRM WAS RS.20671 ONLY. THE PAPER BOOK DID NOT CONTAIN ANY EXPLANATION. CONSIDERED IN BLOCK ASSESSMENTS . DELETED. ASSESSMENT YEAR 1993-94 27. RS.2,873 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME. THIS IS ADMITTED BY THE ASSESSEE IN THE BLOCK RETURN FILED. ADMITTED BY THE ASSESSEE IN THE BLOCK RETURN. REJECTED. 28 RS.5,000 ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST ON ADVANCE FROM TITAN BOARD. IT IS SUBMITTED THAT AN AMOUNT OF RS.50,000 WAS GIVEN AS A LOAN TO SYNDICATE MARKETING IN MARCH, 1993. ON 30-4-93 AN AMOUNT OF RS.55,000 WAS REPAID BY TITAN BOARD, A SISTER CONCERN OF SYNDICATE MARKETING. THE EXCESS REFUND OF RS.5,000 NEEDS TO BE REPAID TO TITAN BOARD. THE ASSESSING OFFICER PRESUMED THE EXCESS REPAYMENT AS INTEREST. IT CAN BE SEEN THAT THERE IS ONLY ONE MONTH GAP AND THE ASSESSEE PAID RS.50,000 TO TITAN BOARD AND RECEIVED BACK RS.55,000. THE DIFFERENCE OF RS.5,000 IS TOWARDS INTEREST. LIABILITY CAN NOT BE INCOME. CAN NOT BE CONSIDERED IN BLOCK. HENCE DELETED 159 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INTEREST CANNOT BE RS. 5,000. THEREFORE, THE SAME CANNOT BE TREATED AS UNDISCLOSED INCOME. A SIMILAR EXPLANATION WAS SUBMITTED IN THE CASE OF LAKSHMAN G. CHUGANI. 29 RS.34000 ESTIMATION OF INTEREST ACCRUED ON DEPOSITS A DETAILED EXPLANATION IN THIS REGARD WAS SUBMITTED FOR THE EARLIER YEARS. THE SAID EXPLANATION MAY KINDLY BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION ALSO. ASSESSEE DID NOT DISCLOSE THE INTEREST ON FDR OF RS.2,85,000. THEREFORE, THE INTEREST IS TREATED AS UNDISCLOSED INCOME. NO BASIS TO MAKE ADDITION IN BLOCK. DELETED. 30 RS.20000 ADDITION ON ACCOUNT OF ESTIMATING THE INTEREST EARNED ON MUTUAL FUNDS. THE ASSESSEE SUBMITS THAT THE PROVISIONS OF CHAPTER VI WERE NOT APPLICABLE TO THE BLOCK ASSESSMENT PERIOD BOTH AT THE TIME OF FILING THE RETURN OF INCOME AND AT THE TIME OF COMPLETION OF THE ASSESSMENT. IT IS FURTHER SUBMITTED THAT THE ADDITION CAN BE MADE U/S 158BD ONLY IN RESPECT OF UNDISCLOSED INCOME ARISING OUT OF SEIZED DOCUMENTS. WITHOUT PREJUDICE, IT IS SUBMITTED THAT THE APPELLANT CLAIMED RS.20,000 U/S 80CCA FOR THE ASSESSMENT YEAR 1990-91 AND NO AMOUNT WAS CLAIMED AT ANY TIME EARLIER. THEREFORE, THESE AMOUNTS COULD NOT BE TREATED AS THE INCOME OF THE APPELLANT. THE ASSESSEE INVESTED RS.20,000 U/S 80CCA AND RECEIVED MATURITY VALUE OF RS.20,160 ON 13.4.92. MATURITY AMOUNT SHALL BE BROUGHT TO TAX. NO BASIS TO MAKE ADDITION IN BLOCK. DELETED. 31. RS.13,500 ADDITION ON THE GROUND THAT THERE IS UNEXPLAINED DEPOSIT WITH RAMESH SALES CORPORATION. THIS GROUND IS NOT PRESSED AS THE ASSESSING OFFICER DID NOT MAKE SUCH AN ADDITION. THIS GROUND IS REDUNDANT. REJECTED. 160 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 32. RS.34,000 ADDITION ON ACCOUNT OF ESTIMATING THE INTEREST ON FDRS. A NOTE ON ACCRUED INTEREST ON FIXED DEPOSITS WAS SUBMITTED BY THE ASSESSEE ON 7-12-1997, A COPY OF WHICH IS ANNEXED. IN VIEW OF THE DETAILED EXPLANATION SUBMITTED FOR THE EARLIER YEARS, THE ADDITION MAY PLEASE BE DELETED. THIS IS THE INTEREST ACCRUED ON FDR WHICH IS TREATED AS UNDISCLOSED INCOME. NO BASIS TO MAKE ADDITION IN BLOCK. DELETED. 33. RS.20,000 ADDITION TREATING THE AMOUNT RECEIVED FROM SBI MUTUTAL FUND THE ASSESSEE SUBMITS THAT THE PROVISIONS OF CHAPTER VI WERE NOT APPLICABLE TO THE BLOCK ASSESSMENT PERIOD BOTH AT THE TIME OF FILING THE RETURN OF INCOME AND AT THE TIME OF COMPLETION OF THE ASSESSMENT. THE APPELLANT STARTED CLAIMING DEDUCTION U/S 80CCA FROM THE ASSESSMENT YEAR 1990-91. REFUNDS WOULD HAVE BEEN RECEIVED ONLY FROM 1995-96 BUT NOT EARLIER. THEREFORE, THE SAME IS NOT TO BE CONSIDERED AS INCOME. FURTHER, FOR THE ASSESSMENT YEAR 1991-92, RS.12,000 WAS CLAIMED AND FOR THE ASSESSMENT YEAR 1992-93, RS.15,000 WAS CLAIMED. FOR THE ASSESSMENT YEAR 1993-94, NO CLAIM WAS MADE U/S 80CCA. FOR THE ASSESSMENT YEAR 1994-95 ALSO NO CLAIM WAS MADE. THEREFORE, THE APPELLANT CLAIMED RS.27,000 ALONE FOR THE ASSESSMENT YEARS 1992- 93 AND 1993-94. THIS AMOUNT WAS RECEIVED FROM SBI MUTUAL FUND AND NOT DECLARED IN THE RETURN OF INCOME. NO BASIS TO MAKE ADDITION IN BLOCK. DELETED. ASSESSMENT YEAR 1995-96 34 RS.24500 ADDITION AS UNDISCLOSED INVESTMENT IN MONEY LENDING THE ASSESSING OFFICER ARRIVED AT THE AMOUNT ON ESTIMATE BASIS WITHOUT TAKING THE FACTS INTO CONSIDERATION. THERE IS NO THIS IS THE CAPITAL INVESTED IN MONEY LENDING NO BASIS TO MAKE ADDITION IN BLOCK. DELETED. 161 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INFORMATION EVEN FROM THE SEIZED DOCUMENTS THAT THE ASSESSEE HAS ANY INVESTMENT IN MONEY LENDING. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE APPELLANT DID NOT ADMIT ANY MONEY LENDING INCOME. THE ASS ESSEE SUBMITS THAT CHEQUE WAS ISSUED FOR RS.20,000 ON 9.11.94 AND FOR RS.5,000 WAS ISSUED ON 6.3.95. THE APPELLANT ALSO ISSUED FURTHER CHEQUES. THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT TO SAY THAT THE APPELLANT DID NOT INVEST IN MONEY LENDING. ACTIVITY ON WHICH THE ASSESSEE HAS DECLARED AN INTEREST OF RS.5400. THE ASSESSEE HAS NOT EXPLAINED THE INVESTMENT ON WHICH THE INTEREST HAS BEEN EARNED. 35 RS.20000 ADDITION BEING THE AMOUNT RECEIVED FROM SBI MUTUAL FUND. THE ASSESSEE SUBMITS THAT THE PROVISIONS OF CHAPTER VI WERE NOT APPLICABLE TO THE BLOCK ASSESSMENT PERIOD BOTH AT THE TIME OF FILING THE RETURN OF INCOME AND AT THE TIME OF COMPLETION OF THE ASSESSMENT. THEREFORE, IT SHOULD NOT BE ADDED. IT IS FURTHER SUBMITTED THAT THE ADDITION CAN BE MADE U/S 158BD ONLY IN RESPECT OF UNDISCLOSED INCOME ARISING OUT OF SEIZED DOCUMENTS. THIS AMOUNT DOES NOT EMANATE OUT OF THE SEIZED DOCUMENTS. THE BANK ACCOUNTS WERE ALREADY SHOWN IN THE BOOKS OF ACCOUNT; IN THE RETURN OF INCOME AND IN THE RETURN OF WEALTH. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. WITHOUT PREJUDICE, IT IS SUBMITTED THAT THE APPELLANT CLAIMED RS.20,000 U/S 80CCA FOR THE ASSESSMENT YEAR 1993-94 AND NO AMOUNT WAS CLAIMED THIS AMOUNT WAS RECEIVED FROM SBI MUTUAL FUND AND NOT DECLARED IN THE RETURN OF INCOME. ALL RECEIPTS CAN NOT BE INCOME. AO HAS NOT ESTABLISHED THAT AMOUNT IS TAXABLE. ASSESSEE EXPLANATION ACCEPTED. AMOUNT DELETED. 162 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AT ANY TIME EARLIER. THEREFORE, THESE AMOUNTS COULD NOT BE TREATED AS THE INCOME OF THE APPELLANT. FOR THE ASSESSMENT YEAR 1990-91, THE APPELLANT CLAIMED DEDUCTION OF RS.10,000 U/S 80C. EARLIER, THE APPELLANT DID NOT MAKE ANY CLAIM U/S 80CCA. 36 RS.5400 ADDITION HOLDING THAT THERE IS ANY INTEREST NOT DISCLOSED. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE NO ADDITION NEED BE MADE. AMOUNT ADMITTED IN THE BLOCK RETURN. REJECTED 37 RS.38653 ADDITION ON THE GROUND THAT THE CREDITS IN THE BANK ACCOUNT ARE NOT EXPLAINED. THE CHEQUE DEPOSITED FOR RS.38,653 WAS DISHONOURED AND NOT CLEARED. HENCE THE SAID AMOUNT WAS NOT CREDITED TO THE ACCOUNT OF THE ASSESSEE. HENCE THERE ARE NO CREDITS IN THE BANK ACCOUNT WHICH ARE NOT EXPLAINED. THEREFORE, THE AMOUNT SHOULD NOT BE ADDED. THIS IS THE CREDIT ENTRY IN BANK A/C NO.5907 ON 18.08.94. THE PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION ON THIS CREDIT ENTRY. THE CHEQUES RECEIVED BY THE APPELLANT WERE DISHONOURED AND, THEREFORE, THE AMOUNT OF RS.38,653 WAS BOTH DEBITED AND CREDITED IN THE BANK ACCOUNT. THE ASSESSING OFFICER OUGHT NOT TO HAVE MADE SUCH AN ADDITION IN BLOCK. DELETED. 38. RS.28000 ADDITION ON ACCOUNT OF ESTIMATION OF INTEREST ON FIXED DEPOSITS ACCRUED. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER MERELY ESTIMATED THE INTEREST RECEIVABLE AND ARRIVED AT THE SAID FIGURE. THE APPELLANT SUBMITTED A DETAILED EXPLANATION FOR THE EARLIER ASSESSMENT YEARS, WHICH MAY KINDLY BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION ALSO. A NOTE ASSESSEE DID NOT DISCLOSE THE INTEREST ON FDR OF RS.2,35,000. THEREFORE, THE INTEREST IS TREATED AS UNDISCLOSED INCOME. ESTIMATION CANNOT BE RESORTED TO IN BLOCK ASSESSMENTS WITHOUT INCRIMINATING MATERIAL. HENCE DELETED. 163 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ON ACCRUED INTEREST ON FIXED DEPOSITS WAS SUBMITTED BY THE ASSESSEE ON 7-12-1997, A COPY OF WHICH IS ANNEXED. IN VIEW OF THE DETAILS SUBMITTED THEREIN, THE ADDITION MAY PLEASE BE DELETED. ASSESSMENT YEAR 1996-97 39 RS.20150 ADDITION ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT UNDISCLOSED. THE CASH DEPOSIT WITH THE BANK OF RS.20,150 WAS FROM OUT OF THE REGULAR BUSINESS ACTIVITY OF THE ASSESSEE. THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNT AND SUCH BOOKS OF ACCOUNT WERE SEIZED BY THE DEPARTMENT. THIS AMOUNT CAN BE SEEN IN THE BOOKS OF ACCOUNT WHICH ARE SEIZED AND STILL UNDER THE CUSTODY OF THE I.T. AUTHORITIES. FURTHER, THE BANK ACCOUNT IS ADMITTED IN THE RETURN OF INCOME SUBMITTED. THE INFORMATION DOES NOT EMANATE FROM THE SEIZED DOCUMENTS. THEREFORE, THE SAID AMOUNT CANNOT BE ADDED AS THE INCOME OF THE APPELLANT. THIS IS CASH DEPOSIT ON 9.9.95 IN BANK A/C NO.5907. THE ASSESSEE COULD NOT SPECIFICALLY EXPLAIN THE SOURCE OF THIS AMOUNT. NO BASIS FOR MAKING ADDITION IN BLOCK. DELETED 40 RS.23530 ADDITION ON ACCOUNT OF ESTIMATION OF INTEREST ON FDRS. A DETAILED EXPLANATION WAS ALREADY SUBMITTED FOR THE EARLIER YEARS, WHICH MAY KINDLY BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION ALSO. THE APPELLANT SUBMITS THAT THE AO ARRIVED AT THE DIFFERENCE ONLY ON ESTIMATE BASIS, WITHOUT ANY BASI S. THEREFORE, THE APPELLANT SUBMITS THAT SUCH AN ADDITION CANNOT BE MADE UNDER SEC. 158 BD OF THE ACT. ASSESSEE DID NOT DISCLOSE THE INTEREST ON FDR O RS.2,35,000. THEREFORE, THE INTEREST IS TREATED AS UNDISCLOSED INCOME. NO BASIS FOR MAKING ADDITION IN BLOCK. DELETED 41 RS.10481 ADDITION ON ACCOUNT OF THE INTEREST ACCRUED OF RS.10,481 WAS FROM THE THIS IS THE INTEREST NO BASIS FOR MAKING 164 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INTEREST ON FDR NOT DISCLOSED. FDR NO.1338002 MAINTAINED JOINTLY BY THE ASSESSEE ALONG WITH HIS WIFE SMT. SOBHA R. CHUGANI. THE SAID INTEREST RECEIVED OF RS.10,481 WAS DULY ADMITTED IN THE RETURN FILED BY HER FOR THE ASSESSMENT YEAR 1996-97. AN EXPLANATION SUBMITTED IN THIS REGARD IS AT PAGE NO.141OF THE PAPER BOOK. RECEIVED FROM FDR OF RS.99,900. THE INTEREST WAS NOT DECLARED IN THE REGULAR RETURN. ADDITION IN BLOCK. DELETED ASSESSMENT YEAR 1997-98 42. RS.70000 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME. THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS AN EXCESS CASH OF RS.70,000 IN THE POSSESSION OF THE APPELLANT AND ADDED THE SAME AS THE UNDISCLOSED INCOME. IN THIS REGARD, THE APPELLANT SUBMITTED A DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER VIDE NOTE FILED ON 17-09-1997 WHICH IS AT PAGE 33 OF THE PAPER BOOK. IT IS SUBMITTED THAT IF THE CASH AS PER THE VARIOUS CASH BOOKS AND CASH WITHDRAWAL IN THE IMMEDIATE PAST WERE TAKEN INTO CONSIDERATION THERE WOULD NOT BE ANY DEFICIENCY IN CASH. AN EXPLANATION WAS SUBMITTED IN THE CASE OF ASHOK G. CHUGANI AND THE SAID EXPLANATION MAY KINDLY BE CONSIDERED FOR THE APPELLANT ALSO. DURING THE SEARCH TOTAL CASH FOUND WAS RS.5,60,000. OUT OF THIS CASH AMOUNTING TO RS.3,94,705 WAS FOUND AT THE RESIDENCE OF ASSESSEE AND OTHER FAMILY MEMBERS. THE ASSESSEE COULD NOT EXPLAIN THE CASH AVAILABILITY. THEREFORE, RS.3,50,000 IS TAKEN IN THE HANDS OF ALL MALE MEMBERS. THE PROPORTIONATE SHARE OF THE ASSESSEE COMES TO RS.70000 FOR THE REASONS STATED IN MAIN ORDER, ADDITION ON THE ISSUE OF CASH FOUND STANDS DELETED. 43 RS.64,82 ADDITION ON ACCOUNT OF DEFICIT CASH THIS GROUND OF APPEAL IS NOT PRESSED AS NO SUCH ADDITION IS MADE. THIS GROUND IS NOT PRESSED. REJECTED. 165 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 44 RS.231600 ADDITION ON THE GROUND THAT ADDITIONAL AMOUNT IS INVESTED IN ACQUIRING MUMBAI FLAT. THIS GROUND OF APPEAL IS NOT PRESSED AS NO SUCH ADDITION IS MADE. THIS GROUND IS NOT PRESSED. REJECTED. 45 RS.110733 ADDITION HOLDING THAT THERE IS INVESTMENT IN PURCHASE OF MATERIAL THE BUILDING MATERIAL WAS PURCHASED BY THE APPELLANT WITH EXPLAINABLE SOURCES. AN AMOUNT OF RS.80,000 WAS PAID THROUGH CHEQUES NO.223715 DT.27-9-1996 DRAWN FROM GRINDLEYS BANK, COPY OF WHICH WAS ALREADY SUBMITTED (PAGE NO.11 OF THE PAPER BOOK). ANOTHER AMOUNT OF RS.30,733 WAS ALSO PAID ON 27-09- 1996 THROUGH CREDIT CARD. HENCE THE SAID INVESTMENT IS GENUINE AND NOT UNDISCLOSED. HENCE, THE ADDITION NEEDS TO BE DELETED. . THIS IS THE VALUE OF SANITARY EQUIPMENTS FOUND AT THE RESIDENCE OF THE ASSESSEE. THE ASSESSEE COULD NOT FURNISH SUPPORTING MATERIAL IN RESPECT OF THE INVESTMENT. CONSIDERING THE EXPLANATION AMOUNT WAS DELETED. 46. RS.6,000 ADDITION ON ACCOUNT OF MEDICAL EXPENDITURE HELD UNDISCLOSED. THE SAID EXPENDITURE WAS INCURRED ON 2-10-1996 WHICH WAS A HOLIDAY. ON THE VERY NEXT DAY THE AUTHORITIES ENTERED THE PREMISES. THEREFORE, THE ASSESSING OFFICER OUGHT TO HAVE EXCLUDED THE ADDITION. AS PER SEIZED ANNEXURE, THE AMOUNT WAS SPENT ON MEDICAL EXPENSES. THE ASSESSEE COULD NOT EXPLAIN THE SOURCE. INCRIMINATING MATERIAL AVAILABLE. SOURCE NOT EXPLAINED. GROUND REJECTED. 166 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. IT(SS)A NO.10/H/2011 ASHOK G.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 0 3-10-1996 ASSESSMENT YEAR: 1987-88 GROUND NO. DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1 TO 5 , 35 & 41 GENERAL IN NATURE. GROUND NO.35 IS NOT ARISE AT ALL AS THE AMOUNT IS NOT CORRECT. -- 6 RS.20,860 ADDITION ON THE PLEA THAT THE APPELLANTS MINOR SON MASTER RAHUL MAINTAINED BANK ACCOUNT NO.8520 WITH INDIAN BANK. THE AO ADDED THE AMOUNT DEPOSITED INTO THE SAID BANK ACCOUNT. THE BANK ACCOUNT NO.8520 RELATES TO MASTER ROHIT K.CHUGANI, SON OF SRI KISHORE G.CHUGANI. THE AMOUNTS ARE EXPLAINED IN THE ASSESSMENT OF SRI KISHORE CHUGANI AND NO ADDITION IS MADE IN THE SAID CASE. THE SAID ACCOUNT DOES NOT RELATE TO THE APPELLANTS MINOR SON AND HENCE CANNOT BE CONSIDERED IN THE ASSESSMENT OF THE APPELLANT. IT IS EXPLAINED THAT THE AMOUNT FOUND DEPOSITED IN THE ACCOUNT OF MASTER ROHIT, SON OF SRI KISHORE CHUGANI AND DOES NOT BELONG TO MASTER RAHUL, SON OF THE ASSESSEE. AS THE BANK ACCOUNT DOES NOT BELONG TO THE ASSESSEE OR HIS MINOR SON, THE ADDITION IS NOT JUSTIFIED. THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER RAHUL. THE DEPOSITS WERE FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENTS. DELETED ACCEPTING ASSESSEES EXPLANATIO N. 167 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 7. RS.6,338 ADDITION ON THE GROUND THAT DE- POSITS WERE MADE WITH ANDHRA BANK ACCOUNT NO.10153 AND INTEREST WAS DERIVED. THERE IS NO SUCH CREDIT IN THE SAID ACCOUNT. THE OPENING BALANCE WAS RS. 34,628AND INTEREST OF RS.285.50 IS FURTHER CREDITED. THE SAID ACCOUNT IS SHOWN FOR THE PURPOSE OF WEALTH TAX AND IS INCLUDED IN THE WEALTH RETURN FILED. THE SAID INTEREST IS INCLUDED IN THE TOTAL INTEREST ADMITTED OF RS. 22407. THESE ARE INTEREST RECEIVED FROM ANDHRA BANK ACCOUNT NO.10153 AND ARE SMALL DEPOSITS, TOTALING RS.6,338 FOR WHICH NO EXPLANATION WAS FURNISHED. NO BASIS FOR MAKING ADDITION. DELETED. ASSESSMENT YEAR 1988-89 8 RS.1,767 ADDITION ON THE GROUND THAT INTEREST IS NOT ADDED. THE AMOUNT REPRESENTS INTEREST FROM ANDHRA BANK 10153. THE SAID INTEREST IS INCLUDED IN THE AMOUNT ADMITTED OF RS. 4,389 IN THE RETURN OF INCOME. THE ACCOUNT IS DECLARED FOR WEALTH TAX. FURTHER, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS. THEREFORE, NO ADDITION NEED BE MADE BY THE ASSESSING OFFICER. THIS IS INTEREST CREDITED IN ANDHRA BANK ACCOUNT NO.10153 TOTALLING RS.1,767 FOR WHICH NO EXPLANATION WAS FURNISHED. NO BASIS FOR MAKING ADDITION. DELETED. 9 RS.2,339 ADDITION ON THE GROUND THAT INTEREST IS NOT ADDED. ADDITION OF RS.2,339 REPRESENTS INTEREST DERIVED BY MASTER RAHUL. IT IS SUBMITTED THAT THE PROVISIONS U/S 64(1A) HAVE NO APPLICATION FOR THE ASSESSMENT YEAR 1988-89. IT IS MADE APPLICABLE W.E.F. THE ASSESSMENT YEAR 1993-94 AND HENCE NO ADDITION COULD BE MADE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THESE ARE INTEREST CREDITED IN THE NAME OF MINOR SO9N FOR WHICH NO EXPLANATION WAS FURNISHED. NO BASIS FOR MAKING ADDITION. DELETED. ASSESSMENT YEAR 1989-90 10 RS.4,015 ADDITION OF INTEREST RELATING TO MINOR SON MASTER RAHUL (AT PARA 14.1 OF THE PROVISIONS U/S 64(1A) HAVE NO APPLICATION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND THEREFORE, THE ADDITION IS NOT JUSTIFIED. IT IS FURTHER SUBMITTED THAT THESE ARE INTEREST CREDITED IN THE NAME OF MINOR SON FOR WHICH NO EXPLANATION NO BASIS FOR MAKING ADDITION. 168 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE ASSESSMENT ORDER.) THERE WAS NO SEIZED MATERIAL BASED ON WHICH SUCH ADDITION WAS MADE. WAS FURNISHED. DELETED. 11 RS.30,000 ADDITION REPRESENTIN G INVESTMENT IN BEGUMPET FLAT. THIS ADDITION WAS ACCEPTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HENCE THE GROUND IS NOT PRESSED. GROUND NOT PRESSED. REJECTED. ASSESSMENT YEAR 1990-91 12 RS.43,680 ADDITION REPRESENTIN G THE AMOUNTS DEPOSITED WITH INDIAN BANK ON VARIOUS DATES. THE ASSESSEE SUBMITS THAT THE INDIAN BANK ACCOUNT IS SHOWN IN THE BOOKS OF ACCOUNT. NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE DEPOSITS WERE ALREADY DISCLOSED IN THE BOOKS OF ACCOUNT AND DO NOT REPRESENT UNDISCLOSED INCOME. THEREFORE, NO ADDITION COULD BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158BC OF THE ACT. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT AN AMOUNT OF RS.10,680/- REPRESENTS THE MATURED VALUE OF THE NSC AS NOTED IN THE SHOW CAUSE LETTER DATED 8-7- 97 (PAGE 159 OF THE PAPER BOOK). THE BALANCE DEPOSITS MADE OF RS.3,000 ON 28-8- 89, RS.5,000 ON 29-8-89 AND RS.25,000 ON 4-10-89 REPRESENTS THE CASH DEPOSITS FROM OUT OF THE CASH AVAILABLE. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. THESE REPRESENT DEPOSITS CASH AND CHEQUE IN INDIAN BANK ACCOUNT FOR WHICH THE ASSESSEE DID NOT OFFER ANY EXPLANATION. NO BASIS FOR MAKING ADDITION. DELETED. 13. RS.17,612 ADDITION REPRESENTIN G THE INTEREST CREDITED IN INDIAN BANK, ANDHRA BANK BY THE ASSESSEE WITH REGARD TO THE INTEREST OF RS.4,386 WITH INDIAN BANK OF MASTER RAHUL, RS.6,430 AND WITH ANDHRA BANK OF MASTER SANDEEP AND RS.2,000. THEY REPRESENT THE INTEREST ON MINORS ACCOUNT. AS SUBMITTED, THE PROVISIONS U/S 64(1A) HAVE NO APPLICATION UP TO THE ASSESSMENT YEAR 1993- THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER RAHUL AND SANDEEP. THE DEPOSITS WERE ACCOUNTED ALREADY AND OFFERED. HENCE, DELETED. 169 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AND ASSESSEES SON MASTER RAHUL AND SANDEEP. 94 AND HENCE THE AMOUNTS SHOULD NOT HAVE BEEN ADDED. INTEREST OF RS.3464 WAS CREDITED AND THE SAID AMOUNT WAS ALREADY OFFERED IN THE INCOME TAX RETURN. HENCE NO ADDITION CAN BE MADE. WITH REGARD TO INTEREST FROM ANDHRA BANK A/C NO.10153 OF RS.3396, THE SAME WAS ALREADY OFFERED IN THE RETURN OF INCOME. FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENTS. 14. RS.12,339 ADDITION REPRESENTIN G INTEREST CREDITED IN INDIAN BANK AND ANDHRA BANK IN THE ACCOUNTS OF RAHUL AND SANDEEP. AS SUBMITTED EARLIER, THE PROVISIONS U/S 64(1A) HAVE NO APPLICATION FOR THE ASSESSMENT YEAR 1991-92. HENCE NO ADDITION CAN BE MADE. THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER RAHUL AND SANDEEP. THE DEPOSITS WERE FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENT. NO BASIS FOR MAKING ADDITION. DELETED. 15. RS.3,131 ADDITION REPRESENTIN G UNDISCLOSED INCOME FROM CDS. THIS WAS ALREADY ADMITTED IN THE BLOCK RETURN (PAGE NOL. 107 OF THE PAPER BOOK) BY THE APPELLANT AND HENCE NO ADDITION COULD BE MADE BY THE ASSESSING OFFICER. ADMITTED IN BLOCK RETURN. REJECTED ASSESSMENT YEAR 1992-93 16 RS.7803 ADDITION REPRESENTIN G THE AMOUNT DEPOSITED AND INTEREST CREDITED IN INDIAN BANK AND ANDHRA ACCORDING TO THE ASSESSING OFFICER, THE INTEREST FROM INDIAN BANK A/C NO. RS.8864 WAS SHORT DECLARED BY RS.1386 AND THE BALANCE AMOUNT OF RS. 6417 REPRESENTS THE INTEREST ARISING TO THE MINOR CHILDREN. IN THIS REGARD, IT IS SUBMITTED THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER RAHUL AND SANDEEP. THE DEPOSITS WERE NO BASIS FOR MAKING ADDITION IN BLOCK. DELETED. 170 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. BANK BY MASTER RAHUL AND MASTER SANDEEP. THAT THE INTEREST DIFFERENCE OF RS.1386 DOES NOT REPRESENT INTEREST FROM INDIAN BANK. THE SAID AMOUNT REPRESENTS INTEREST RECEIVED FROM OUTSIDERS ON LOANS. THE APPELLANT ADMITTED RS.1386 IN THE RETURN OF INCOME AS A PART OF MONEY LENDING INCOME OF RS. 41,236. FURTHER, NO INFORMATION WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS SO AS TO ENABLE THE ASSESSING OFFICER TO MAKE SUCH AN ADDITION UNDER SEC. 158 BC OF THE ACT. IN SO FAR AS THE INTEREST ARISING TO THE MINORS IS CONCERNED, IT IS SUBMITTED THAT THE PROVISIONS U/S 64(1A) HAVE NO APPLICATION FOR THE YEAR UNDER CONSIDERATION AND THE SAID AMOUNTS CANNOT BE ADDED TO THE INCOME ADMITTED. FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENTS. ASSESSMENT YEAR 1993-94 17. RS.1386 ADDITION REPRESENTIN G INTEREST ON CD ACCOUNT IN INDIAN BANK THE APPELLANT OFFERED AN AMOUNT OF RS. 1653 ON THIS ACCOUNT IN THE BLOCK RETURN OF INCOME. HENCE NO ADDITION CAN BE MADE. ADMITTED IN BLOCK RETURN REJECTED 18. RS.13,389 ADDITION ON ACCOUNT OF AMOUNT RECEIVED FROM SRI S.MALLAYYA BEING THE REFUND OF ADVANCE THE SAID AMOUNT INCLUDES RS.2829 BEING INTEREST ON PPF DEPOSIT IN THE NAME OF THE MINOR MASTER SANDEEP. THIS IS EXEMPT U/S 10(15) OF THE I.T.ACT AND CANNOT BE ADDED. THE APPELLANT ALREADY ADMITTED RS.1653IN FROM 2B AT THE TIME OF FILING THE RETURN. INDIAN BANK A/C NO.8520 DOES NOT BELONG TO THE APPELLANT. THE SAME RELATES TO SRI KISHORE G.CHUGANI. THE THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER RAHUL AND SANDEEP. THE DEPOSITS WERE FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ELIGIBLE AMOUNTS UNDER VARIOUS SECTIONS CANNOT BE CONSIDERE D AS UNDISCLOS 171 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AMOUNT OF RS.3755 CANNOT BE ADDED. IN SO FAR AS PPF IS CONCERNED, THE SAME IS EXEMPT U/S 10(15) AND CAN NOT BE ADDED. IN SO FAR AS ANDHRA BANK A/C NO.13082 IS CONCERNED, IT IS SUBMITTED THAT NO INFORMATION WAS FOUND DURING THE COURSE OF SEARCH AND HENCE NO ADDITION COULD BE MADE. FURTHER, CHAPTER VI WAS NOT WITHIN THE SCOPE OF ASSESSMENT UNDER SEC. 158 BC AT THE TIME OF COMPLETION OF ASSESSMENT AND HENCE THE ADDITION CANNOT BE MADE. WITHOUT PREJUDICE, ONLY RS.195/- CAN BE ADDED AND NOT RS.1695/- IN VIEW OF SEC.10(32) OF THE I.T.ACT. INTEREST FROM ANDHRA BANK RS. 523 CANNOT BE ADDED AS IT IS LESS THAN RS.1500. ASSESSMENTS. ED. HENCE, DELETED EXCEPT AN AMOUNT OF RS.195 ADMITTED. 19. RS.2066 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN MUMBAI FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE COURSE OF THE PERIOD ALL THE BROTHERS AND THEIR FATHER SRI GULABRAI CHUGANI USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WAS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION IN BLOCK. DELETED. 172 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1994-95 20. RS.20,000 ADDITION ON THE GROUND THAT DEDUCTION U/S 80 CCA AND 80 CCB EARLIER CLAIMED HAS TO BE WITHDRAWN. IN THIS REGARD THE ASSESSEE HUMBLY SUBMITS THAT THESE AMOUNTS ARE REFUNDED AFTER A PERIOD OF 5 YEARS AND NO CLAIM WAS MADE PRIOR TO 1991. THEREFORE, NO ADDITION CAN BE MADE. FURTHER, NO ADDITION CAN BE MADE WHERE THE AMOUNTS WERE DISCLOSED IN THE RETURN OF INCOME. THIS AMOUNT DOES NOT EMANATE FROM ANY SEIZED MATERIAL AND, THEREFORE, NO ADDITION CAN BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BC OF THE ACT. IT IS FURTHER SUBMITTED THAT ACCORDING TO THE PROVISIONS OF SEC. 158 BB AS THEY STOOD AT THE TIME OF COMPLETING OF ASSESSMENT, THE UNDISCLOSED CAN BE ARRIVED AT ONLY UNDER THE HEADS OF INCOME IN CHAPTER IV OF THE ACT AND NOT UNDER ANY OTHER CHAPTER. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. THE PRINCIPAL AMOUNT SHOULD HAVE BEEN BROUGHT TO TAX IN THE YEAR OF MATURITY. DELETED ACCEPTING ASSESSEES EXPLANATIO N. 21 RS.11,431 ADDITION TREATING THE INTEREST DERIVED BY THE MINOR SONS AS UNDISCLOSED INCOME. AT THE TIME OF FILING THE RETURN OF INCOME IN FORM 2B, THE PROVISIONS U/S 64 WERE NOT CONSIDERED FOR BLOCK PERIOD ASSESSMENT. EVEN AT THE TIME OF COMPLETING THE FIRST ASSESSMENT, NO SUCH PROVISION EXISTED IN 158B OF THE I.T.ACT. THEREFORE, SUCH ADDITION CANNOT BE MADE. FURTHER, THE AMOUNT OF RS.3169 PPF INTEREST IS EXEMPT U/S 10(15) OF THE ACT AND HENCE CANNOT BE ADDED. INDIAN BANK A/C NO.8520 DOES NOT BELONG TO MASTER RAHUL BUT BELONGS TO MASTER ROHIT S/O KISHORE G. CHUGANI THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTE RAHUL AND SANDEEP. THE DEPOSITS WERE FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENT. DELETED FOR THE REASONS GIVEN BY ASSESSEE. 173 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AND HENCE CANNOT BE ADDED IN THE ASSESSMENT OF THE APPELLANT. IN SO FAR AS THE ANDHRA BANK A/C NO.13082 (INTEREST OF RS. 2,781), 14170 (RS. 2423) ARE CONCERNED, THE ASSESSING OFFICER HAS TO ALLOW RS. 1500 EACH EXEMPTION AND THE BALANCE OF RS. 2,592 CAN ONLY BE CONSIDERED. EVEN THIS AMOUNT CANNOT BE ADDED AS ACCORDING TO THE PROVISIONS EXISTING AT THE RELEVANT POINT OF TIME, INCOME DETERMINED UNDER CHAPTER IV ONLY CAN BE CONSIDERED AND NOT UNDER OTHER CHAPTERS. 22 RS.5404 ADDITION ON THE GROUND OF UNDISCLOSED INVESTMENT IN MUMBAI FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE COURSE OF THE PERIOD ALL THE BROTHERS AND THEIR FATHER SRI GULABRAI CHUGANI USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WAS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. DELETED. ASSESSMENT YEAR 1995-96 23 RS.20,000 ADDITION OF THE AMOUNT RECEIVED FROM MD.ISMAIL AGAINST THE ASSESSING OFFICER DISBELIEVED THE RECEIPT OF RS.20,000 FROM MD. ISMAIL AND ADDED THE SAME TO THE INCOME ADMITTED. THE APPELLANT SUBMITS THAT THE THIS AMOUNT REPRESENTS A CREDIT ENTRY IN INDIAN BANK ACCOUNT NO.8864 ON AS EXPLAINED THE REFUND 174 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. LOAN DATED 13-4-94. BANK ACCOUNT NO.8864 WAS ALREADY DISCLOSED. NO MATERIAL WAS FOUND DURING THE COURSE OF SURVEY. IT IS SUBMITTED THAT IN THE BANK ACCOUNT ON 30- 08-93 AN AMOUNT OF RS.20,000 WAS GIVEN THROUGH CHEQUES. THE SAME WAS REFUNDED NOW. THE PAYMENT WAS THROUGH CHEQUES AND THE RECEIPT ALSO IS THROUGH CHEQUES. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. 13-4-94 FOR WHICH THE ASSESSEE COULD NOT FURNISH ANY EXPLANATION. OF EARLIER ADVANCE BY CHEQUE ACCEPTED. AMOUNT DELETED. 24 RS.25,000 ADDITION TREATING THE AMOUNTS DEPOSITED WITH THE INDIAN BANK AS UNDISCLOSED INCOME. THE ASSESSING OFFICER IS OF THE VIEW THAT THE DEPOSITS OF RS.15,000 AND RS.10,000 ON 23-09-94 AND 7-6-94 IN THE BANK ACCOUNT ARE NOT EXPLAINED. THE APPELLANT MAINTAINED REGULAR BOOKS OF ACCOUNT. DURING THE YEAR, THE INCOME EARNED AMOUNTED TO RS.1,65,000/-. FROM OUT OF THE INCOMES, THE SAID DEPOSITS WERE MADE. THERE IS ALSO NO SEIZED MATERIAL AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. 25 RS.20,000 ADDITION BEING DEPOSIT WITH INDIAN BANK ON 20-03-95 THE ASSESSEE SUBMITTED DETAILED EXPLANATION IN COLUMN NO.4. A CHEQUE WAS ISSUED TO SRI MD. ISMAIL ON 20.3.1995 FOR RS.20,000 AND THE SAID WAS DEBITED ON THE SAID DATE AT PAGE NO.90 OF THE PAPER BOOK. AS THE CHEQUE WAS NOT ENCASHED BY MD. ISMAIL, THE SAID AMOUNT WAS RETURNED BACK AS A CREDIT IN THE BANK ACCOUNT ON THE SAME DATE. THEREFORE, IT IS NOT A SEPARATE RECEIPT. THE ASSESSING OFFICER IS NOT CORRECT TO MENTION THAT THE AMOUNT OF RS.20,000 REMAINS UNEXPLAINED. IT IS IN FACT CHEQUE ISSUED BUT NOT ENCASHED. 175 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 26 RS.14,000 & RS.12,883 ADDITION TREATING THE INTEREST FROM LIC MUTUAL FUND AS UNDISCLOSED INCOME. THE ASSESSEE SUBMITS THAT THE PROVISIONS OF CHAPTER VI WERE NOT APPLICABLE TO THE BLOCK ASSESSMENT PERIOD BOTH AT THE TIME OF FILING THE RETURN OF INCOME AND AT THE TIME OF COMPLETION OF THE ASSESSMENT. THEREFORE, IT SHOULD NOT BE ADDED. IT IS FURTHER SUBMITTED THAT THE ADDITION CAN BE MADE U/S 158BD ONLY IN RESPECT OF UNDISCLOSED INCOME ARISING OUT OF SEIZED DOCUMENTS. THIS AMOUNT DOES NOT EMANATE OUT OF THE SEIZED DOCUMENTS. THE BANK ACCOUNTS WERE ALREADY SHOWN IN THE BOOKS OF ACCOUNT; IN THE RETURN OF INCOME AND IN THE RETURN OF WEALTH. THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. WITHOUT PREJUDICE, IT IS SUBMITTED THAT THE APPELLANT CLAIMED RS.10,000 U/S 80CCA FOR THE ASSESSMENT YEAR 1991-92 AND NO AMOUNT WAS CLAIMED AT ANY TIME EARLIER. THEREFORE, THESE AMOUNTS COULD NOT BE TREATED AS THE UNDISCLOSED INCOME OF THE APPELLANT. A DETAILED EXPLANATION WAS SUBMITTED IN COLUMN NO.4. THE APPELLANT SUBMITTED THAT THE PROVISIONS OF SEC.158BD HAVE NO APPLICATION TO THE SAID AMOUNT AND IN THE ALTERNATIVE, IT WAS ALSO SUBMITTED THAT ONLY AN AMOUNT OF RS.10,000 WAS ALLOWED FOR THE ASSESSMENT YEAR 1991-92 U/S 80CCA AND, THEREFORE, AN AMOUNT OF RS.26,883 CANNOT BE ADDED. THE PRINCIPAL AMOUNT SHOULD HAVE BEEN BROUGHT TO TAX IN THE YEAR OF MATURITY. NO BASIS FOR MAKING ADDITION. DELETED. 27. RS.20,674 ADDITION TREATING THE AMOUNT OF THESE AMOUNTS INCLUDE INTEREST ON PPF OF RS. 5,482 WHICH ARE EXEMPT U/S 10(15) 176 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INTEREST CREDITED IN INDIAN BANK AND ANDHRA BANK AS UNDISCLOSED INCOME. OF THE ACT. IN SO FAR AS RS.13479 IS CONCERNED, IT IS IN RESPECT OF BANK ACCOUNT NO.8520 OF ROHIT S/O KISHORE G. CHUGANI AND CANNOT BE ADDED IN THE ASSESSMENT OF THE APPELLANT. THE ACCOUNT OF MASTER RAHUL AT PAGE NO.101 SHOWS THE AMOUNT OF RS.NIL AND NO AMOUNT CAN BE ADDED. IN SO FAR AS THE INTEREST DERIVED BY MASTER SANDEEP IS CONCERNED, THE INTEREST IS RS.1713AND IT CANNOT BE ADDED. OUT OF THIS AMOUNT RS.1500 IS TO BE ALLOWED AS DEDUCTION U/S 10(32) OF THE ACT. FURTHER, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND HENCE CANNOT BE TREATED AS UNDISCLOSED INCOME. 28. RS.3,934 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN MUMBAI PROPERTY. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE COURSE OF THE PERIOD ALL THE BROTHERS AND THEIR FATHER SRI GULABRAI CHUGANI USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WAS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. 177 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 29 RS.25,099 ADDITION HOLDING THAT THERE IS ANY UNDISCLOSED INCOME IN RESPECT OF RENTS RECEIVED. THIS GROUND IS NOT PRESSED AS NO SUCH ADDITION IS MADE. GROUND NOT PRESSED. REJECTED ASSESSMENT YEAR 1996-97 30 RS.45,000 ADDITION OF RS.45,000 ON ACCOUNT OF UNDISCLOSED INCOME THOUGH THE CREDITS ARE ENTERED IN THE BOOKS OF ACCOUNT AND REPRESENT THE AMOUNTS REPAID BY THE SAID CONCERN. INTEREST FROM B.K. ENTERPRISES IS ALREADY ADMITTED IN THE REGULAR RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 1996- 97 (PAGE NO.122 OF THE PAPER BOOK). DETAILS OF THE LOANS AND INTEREST WERE ALSO SUBMITTED AT PAGES NO.69, 71, 73 & 75 OF THE PAPER BOOK AND THE INTEREST RECEIVED FROM MR. CHANDRASEKHARA SETTY IS ALSO DISCLOSED TO THE DEPARTMENT. IT IS SUBMITTED THAT THE ASSESSEE WAS NOT FILING BALANCE SHEET ALONG WITH THE RETURNS OF INCOME FILED AND WAS ONLY ADMITTING INCOMES AS DERIVED BY HIM. THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT TO MENTION THAT THE CAPITAL OF RS.45,000 IS NOT SHOWN IN THE RETURN OF INCOME. IT IS HUMBLY SUBMITTED THAT UP TO THE ASSESSMENT YEAR 1992- 93, THE WEALTH TAX RETURNS WERE FILED AND THE LOANS GIVEN WERE ALREADY ADMITTED FOR WEALTH TAX PURPOSE. HOWEVER, FROM THE ASST. YEAR 1993094, ALL SUCH ASSETS ARE EXEMPT AND NO RETURN OF WEALTH WAS FILED. THIS FACT WAS STATED AND IT WAS SUBMITTED THAT THE AO IS NOT CORRECT TO MAKE ADDITION OF RS.45,000 TO THE INCOME ADMITTED. AS PER THE SEIZED MATERIAL ASSESSEE DOING MONEY LENDING BUSINESS AT CHENNAI. THE ASSESSEE HAS NOT DECLARED CAPITAL OF RS.45,000 IN THE RETURN. ACCEPTING ASSESSEES EXPLANATIO N AMOUNT IS DELETED. 31. RS.22,889 ADDITION ON THE GROUND THAT IT IT IS SUBMITTED THAT RS.22,889 REPRESENTS INTEREST RECEIVED BY THE APPELLANTS AS PER SEIZED MATERIAL, THIS REPRESENTS ACCEPTING 178 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REPRESENTS INTEREST RECEIVED. WIFE SMT. MANISHA CHUGANI. A COPY OF THE RETURN OF INCOME FILED BY HER IS ALSO SUBMITTED. THE NET INCOME AFTER EXPENDITURE WAS ALREADY OFFERED BY HER IN HER RETURN OF INCOME. THEREFORE, THE ASSESSING OFFICERS FURTHER COMMENT IS NOT CORRECT. INTEREST ON MONEY LENDING BUSINESS WHICH HAS BEEN ONLY PARTLY DECLARED. ASSESSEES EXPLANATIO N AMOUNT IS DELETED. 32. RS.58,000 ADDITION HOLDING THAT THE AMOUNT ADVANCED TO DEVAKI VASUDEV AND RECEIVED BY WAY OF CASH REPRESENT THE UNDISCLOSED INCOME. IT IS SUBMITTED THAT AN AMOUNT OF RS.58,000 IN ALL WAS GIVEN TO DEVAKI VASUDEV BY THE APPELLANTS WIFE AND NOT BY THE APPELLANT. THE SAID INFORMATION WAS FURNISHED BEFORE THE ASSESSING OFFICER VIDE LETTER DATED 28-09-1997 BY SMT. MANISHA CHUGANI. THE SAID AMOUNT WAS ADVANCED BY THE APPELLANTS WIFE THROUGH DK ENTERPRISES TO DEVAKI VASUDEV. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION IN THE ASSESSMENT OF THE APPELLANT. AS PER SEIZED MATERIAL THE ASSESSEE HAS GIVEN TEMPORARY LOAN TO DEVAKI BUT COULD NOT FURNISH ANY SUPPORTING MATERIAL TO SHOW THAT THE AMOUNT WAS ADVANCED THROUGH B. K. ENTERPRISE BUT NOT THROUGH ASSESSEE. ACCEPTING ASSESSEES EXPLANATIO N AMOUNT IS DELETED. 33. RS.52,590 ADDITION ON THE GROUND THAT THE AMOUNTS WERE CREDITED WITH INDIAN BANK ACCOUNT OF MASTER RAHUL. IT IS SUBMITTED THAT THE ASSESSING OFFICER IS REFERRING TO ACCOUNT NO.8528. THE SAID ACCOUNT DOES NOT BELONG TO MASTER RAHUL, SON OF THE APPELLANT. IT RELATES TO MASTER ROHIT, SON OF SRI KISHORE G.CHUGANI. THEREFORE ADDITION SHOULD NOT HAVE BEEN MADE IN THE ASSESSMENT OF THE APPELLANT HEREIN. THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER RAHUL. THE DEPOSITS WERE FOUND DURING THE COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENTS. NO BASIS FOR MAKING ADDITION. DELETED. 34. RS.27,701 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME IN THE RENTS RECEIVED NO SUCH ADDITION IS MADE BY THE ASSESSING OFFICER AND HENCE THIS GROUND IS NOT PRESSED. GROUND IS NOT PRESSED BY THE ASSESSEE REJECTED. 179 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT YEAR 1997-98 36. RS.70,000 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME, BEING CASH FOUND AT THE TIME OF SEARCH. THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS AN EXCESS CASH OF RS.70,000 IN THE POSSESSION OF THE APPELLANT AND ADDED THE SAME AS THE UNDISCLOSED INCOME. IN THIS REGARD, THE APPELLANT SUBMITTED A DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER VIDE NOTE FILED ON 17-09-1997 WHICH IS AT PAGES 40 TO 42 OF THE PAPER BOOK. IT IS SUBMITTED THAT IF THE CASH AS PER THE VARIOUS CASH BOOKS AND CASH WITHDRAWAL IN THE IMMEDIATE PAST WERE TAKEN INTO CONSIDERATION, THERE WOULD NOT BE ANY DEFICIENCY IN CASH. DURING SEARCH TOTAL CASH FOUND WAS RS.5,60,000. OUT OF THIS CASH AMOUNTING TO RS.3,94,705 WAS FOUND AT THE RESIDENCE OF ASSESSEE AND OTHER FAMILY MEMBERS. THE ASSESSEE COULD NOT EXPLAIN THE CASH AVAILABILITY. THEREFORE RS.3,50,000 IS TAKEN IN THE HANDS OF ALL MALE MEMBERS. THE PROPORTIONATE SHARE OF THE ASSESSEE COMES TO RS.70,000. FOR THE DETAILED REASONS STATED IN MAIN ORDER, THE ADDITION OF UNEXPLAIN ED CASH IS DELETED. 37. RS.1515 ADDITION TREATING THE PAYMENTS MADE TO THE CO- OPERATIVE SOCIETY FOR MAINTENANC E OF THE BUILDING AS UNDISCLOSED INCOME. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. IT IS SUBMITTED THAT IT IS FLAT AT BOMBAY BEING USED AS A GUEST HOUSE. DURING THE COURSE OF THE PERIOD ALL THE BROTHERS AND THEIR FATHER SRI GULABRAI CHUGANI USED TO VISIT FOR THEIR BUSINESS PURPOSES AT BOMBAY. THE EXPENDITURE INCURRED WAS PAID FROM TIME TO TIME BY THE PERSONS USING THE GUEST HOUSE. THE EXPENDITURE ON VISITS TO BOMBAY WAS DEBITED TO THE BUSINESS ACCOUNT AND ALSO WHENEVER PERSONAL VISITS WERE MADE THE SAME WERE FROM THE PERSONAL DRAWINGS. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. DELETED. 180 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THEREFORE, NO ADDITION ON THIS ACCOUNT SHOULD BE MADE. 38. RS.3,00,000 ADDITION ON ARRIVING AT THE EXCESS STOCK FOUND DURING THE COURSE OF SEARCH THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS EXCESS STOCK OF RS.3,00,000 AND ADDED THE SAME BY APPLYING THE PROVISIONS U/S 69 OF THE I.T. ACT. IT IS SUBMITTED THAT THE ASSESSING OFFICER ARRIVED AT THE STOCK BY CONSIDERING THE DIFFERENCE BETWEEN MAXIMUM RETAIL PRICE ON THE ITEMS OF STOCK AVAILABLE AND THE STOCK AS PER THE BOOKS. THE APPELLANT RECONCILED THE DIFFERENCE. IT WAS SUBMITTED THA T THE MAXIMUM RETAIL PRICE INCLUDE THE TOTAL DISCOUNT, THE PROFIT AND OTHER EXPENSES. A STATEMENT IS PREPARED AND ANNEXED TO THE PAPER BOOK AT PAGE NO.67. IT CAN BE SEEN THAT THE COST AS PER THE BILLS IS MUCH LESS THAN THE MRP RATE AND, THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE MADE AN ADDITION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A DETAILED EXPLANATION WAS PROVIDED MENTIONING THAT THE AUTHORITIES HAVE TAKEN INTO CONSIDERATION THE TAGGED PRICE AND NOT THE COST PRICE. THEREFORE, IF THE COST PRICE IS ADOPTED THERE WILL NOT BE ANY DIFFERENCE AS EXPLAINED BY THE ASSESSEE. ASSESSEE IS PROPRIETOR OF CLOCK ADS INTERNATIONAL DURING SEARCH STOCK WAS VALUED AT RS.4,85,537. THE ASSESSEE REMAINED SILENT DURING ASSESSMENT PROCEEDINGS. FOR THE REASONS STATED IN THE MAIN ORDER THE ADDITION IS DELETED. 39. RS.4,33,000 ADDITION HOLDING THAT THE AMOUNTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI REPRESENT THE UNDISCLOSED THE ADDITION OF RS.1,00,000 FOR THE ASSESSMENT YEAR 1988- 89 AND RS.3,33,000 FOR THE ASSESSMENT YEAR 1990-91 WERE MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. THE SAID BANK ACCOUNT IS ADMITTED 181 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INCOME. IN THE RETURNS OF INCOME FILED. NO INCRIMINATING MATERIALS WERE FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. WITHOUT PREJUDICE, THE APPELLANT SUBMITS THAT SMT. VARSHA MIRPURI IS THE RESIDENT OF BANGKOK, THAILAND AND SHE IS THE SISTER OF THE APPELLANT. SHE MAINTAINED A BANK ACCOUNT WITH INDIAN BANK, SECUNDERABAD, A COPY OF WHICH IS SUBMITTED AT PAGE NOS.48 TO 50 OF THE PAPER BOOK. THE APPELLANT FILED BANK ACCOUNT IN INDIA, LETTER OF CONFIRMATION FROM VARSHA MIRPURI. IT IS ALSO CONFIRMED BY HER THAT SHE DEPOSITED THE AMOUNTS WITH THE INDIAN BANK MUCH EARLIER AND SHE ISSUED CHEQUES IN FAVOUR OF THE APPELLANT AND OTHER BROTHERS AND THE AMOUNT WAS WITHDRAWN. THEREFORE, THE DONOR IS IDENTIFIED, SOURCES ARE IDENTIFIED AND SHE CONFIRMED THE FACT THAT THE AMOUNT WAS GIFTED BY HER. SHE ALSO CONFIRMED THE FACT THAT SHE GIFTED THE AMOUNT THROUGH BANKING CHANNEL. THE ASSESSING OFFICER ISSUED A NOTICE U/S 158BD TO MRS. VARSHA MIRPURI PROPOSING TO TAX THE AMOUNT DEPOSITED INTO THE SAID BANK ACCOUNT AND THE SAID SMT. VARSHA MIRPURI EXPLAINED THE SOURCE FOR SUCH DEPOSIT AND THEREAFTER THE PROCEEDINGS U/S 158BD WERE CLOSED. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION U/S 68 OF THE ACT FOR BOTH THE ASSESSMENT YEARS. . COPIES OF THE SAME ARE SUBMITTED FOR PERUSAL. 182 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 40. CHARGING TAX AT 60% REGARDING COMPLETING THE ASSESSMENT U/S.158BD AND CHARGING TAX AT 60%. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 158BD. MATTER OF RECORD. REJECTED. 183 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-11. IT(SS)A NO.11/H/2011 LATE CHANDRU G.CHUGANI . HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND01-04-1996 TO 03 -10-1996 ASSESSMENT YEAR: 1988-89 GROUND NO. & AMOUNT ADDED DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1TO 5 AND 41 GENERAL IN NATURE -- 6. RS.1,00,000 (1988-89) RS.3,33,333 (1990-91) ADDITIONS HOLDING THAT THE AMOUNTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI REPRESENT THE UNDISCLOSED INCOME. THE ASSESSEE SUBMITS THAT SMT. VARSHA IS THE SISTER OF THE ASSESEE. SHE HAS NECESSARY FUNDS TO PAY THE ASSESSEE AND SHE CONFIRMED THE FACT OF PROVIDING THE AMOUNTS TO THE ASSESSEE. THE ADDITION OF RS.1,00,000 WAS MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LAKHS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. MOREOVER THE ASSESSEE COULD NOT PRODUCE ANY IT RETURN COPY OF HER RELATIVE NOR ANY BALANCE SHEET DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FOR THE DETAILED REASONS STATED IN THE MAIN ORDER, ADDITION IS DELETED. ASSESSMENT YEAR 1989-90 7. RS.30,000 ADDITION ON ACCOUNT OF INVESTMENT IN BEGUMPET FLAT. THIS AMOUNT OF RS.30,000 WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE THE ADDITION IS TO BE DELETED. AMOUNT ADMITTED IN THE BLOCK RETURN. REJECTED ASSESSMENT YEAR 1990-91 8. RS.15,000 (2-8-1989) RS.25,000 (4-10-89) ADDITION ON ACCOUNT OF DEPOSITS IN INDIAN BANK REPRESENT UNDISCLOSED INCOME. THE ASSESSEE SUBMITS THAT FUNDS FOR DEPOSITING THESE AMOUNTS ARE AVAILABLE WITH HIM. A PERUSAL OF THE BOOKS OF ACCOUNT SEIZED BY THE DEPARTMENT WOULD REVEAL THE FACT. HENCE, THE THE AMOUNT REPRESENTS DEPOSITS IN INDIAN BANKS FOR WHICH NO EXPLANATION WAS OFFERED BY THE ASSESSEE. NO BASIS FOR MAKING ADDITION 184 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ADDITION MAY PLEASE BE DELETED. THE APPELLANT FURTHER SUBMITS THAT THE INDIAN BANK ACCOUNT IS ADMITTED IN THE RETURNS OF INCOME AND THE RETURNS OF WEALTH. THE ADDITIONS DO NOT EMANATE FROM THE SEIZED MATERIAL. THE APPELLANT MAINTAINED BOOKS OF ACCOUNT. THE RECEIPTS AND PAYMENTS ARE RECORDED IN THE BOOKS OF ACCOUNT. THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT. THE APPELLANT ADMITTED AN AMOUNT OF RS. 91,563. FURTHER, THE APPELLANT CARRIED ON BUSINESS ACTIVITY IN THE NAME OF CLOCK SPECIALITIES. FURTHER, THE APPELLANT IS ALSO PARTNER IN TWO OTHER FIRMS. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION WHILE COMPLETING THE ASSESSMENT UNDER SEC. 158 BD OF THE ACT. IN BLOCK. HENCE DELETED. 9. RS.25,000 ADDITION ON ACCOUNT OF AMOUNTS DEPOSITED REPRESENT THE UNDISCLOSED INCOME THE SAID DEPOSIT WAS MADE IN THE ACCOUNT OF MASTER SACHIN. THE ASSESSEE HAS MADE INVESTMENTS IN FDR IN ANDHRA BANK FOR WHICH NO DETAILS WERE SUBMITTED REGARDING THE GIFT RECEIVED. NO EXPLA- NATION OF SOURCE. HENCE CONFIRME D. ASSESSMENT YEAR 1991-92 10. RS.50,000 ADDITION ON ACCOUNT OF CREDIT IN INDIAN BANK REPRESENT THE UNDISCLOSED INCOME. THE ASSESSEE SUBMITS THAT AN AMOUNT OF RS.50,000/- WAS DRAWN ON 17-09-1990 FROM M/S CLOCK SPECIALISTS AND DEPOSITED THE SAME IN THE ACCOUNT OF THE ASSESSEE VIDE CHEQUE NO. 33306879. THE EXPLANATION SUBMITTED AT PARA 1 OF THE LETTER DATED THE AMOUNT WAS CREDITED IN INDIAN BANK ON 17.09.90 FOR WHICH THE EXPLANATION WAS INSUFFICIENT. NO BASIS FOR MAKING ADDITION. HENCE DELETED. 185 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. 29-10-1997 MAY KINDLY BE PERUSED. THEREFORE, THE SAID AMOUNT CANNOT BE CONSIDERED AS UNDISCLOSED AMOUNT. ASSESSMENT YEAR 1992-93 11. RS.1000 ADDITION ON ACCOUNT OF DIFFERENCE IN THE INTEREST. THE SAID AMOUNT OF RS.1,000 WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED. HENCE THE ADDITION MAY KINDLY BE DELETED. ADMITTED IN THE BLOCK RETURN. REJECTED ASSESSMENT YEAR 1993-94 12. RS.75,000 ADDITION TREATING THE AMOUNT RECEIVED FROM SRI SANJY SOOD AS UNDISCLOSED INCOME. THE ASSESSEE HUMBLY SUBMITS THAT THE EVIDENCE OF RECEIPT OF THE AMOUNT IS AVAILABLE IN THE SEIZED MATERIAL ITSELF AND THE SAID INFORMATION WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. SRI SANJAY SOOD IS AN NRI. HE DREW AN AMOUNT OF RS.1,10,000 FROM ANZ GRINDLAYS BANK BY USING HIS CREDIT CARD. OUT OF THIS AN AMOUNT OF RS.75,000 WAS GIVEN TO THE ASSESSEE. SRI SANJAY SOOD SUBMITTED LETTER OF CONFIRMATION ON 23-07-1992 TO THIS EFFECT AND THE SAME IS ANNEXED TO THE ASSESSMENT ORDER. THE SAID LETTER OF CONFIRMATION WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS. IT IS MENTIONED CLEARLY THAT THE APPELLANT IS A GOOD FRIEND OF THE DONOR; THAT HE WAS ISSUING A CHEQUE FOR RS. 75,000 AS A GIFT TO THE APPELLANT HEREIN AND THAT THE SAID AMOUNT WAS FROM OUT OF HIS BANK ACCOUNT. IT IS THE SUBMISSION OF THE APPELLANT AND MR. SOOD AS PER SEIZED MATERIAL THIS AMOUNT WAS RECEIVED FROM SANJAY SOOD ON 23.7.92. THE TRANSACTION IS NOT REFLECTED IN THE RETURN. THE ASSESSEE HAD RECEIVED CASH ADVANCES OF 4267 US$ FROM GRINDLAYS BANK ON THE SAME DAY. CONSIDERI NG THE EXPLANATI ON AMOUNT DELETED. 186 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. PAID THE AMOUNT OF RS. 75,000 TO THE APPELLANT AS THE APPELLANT PROMISED THE PROVIDE THE SAID FUNDS FOR THE TREATMENT OF HIS UNCLE. THEREFORE, THE MONEY WAS NEITHER RECORDED IN THE BOOKS OF ACCOUNT OF THE APPELLANT NOR SHOWN AS THE CASH RECEIPT. IT IS AN AMOUNT RECEIVED TO MEET THE MEDICAL EXPENDITURE OF MR. SOODS UNCLE. THEREFORE, THE SAID AMOUNT CANNOT BE TREATED AS THE INCOME OF THE APPELLANT. 13. RS.2066 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN BOMBAY FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. ASSESSMENT YEAR 1994-95 14. RS.2,00,000 ADDITION HOLDING THAT THE AMOUNT PAID BACK BY M/S SYNDICATE MARKETING REPRESENTS THE UNDISCLOSED INCOME. THERE ARE TWO CREDITS AGGREGATING TO RS. 2,00,000 FROM M/S SYNDICATE MARKETING. IT IS SUBMITTED THAT TWO AMOUNTS OF RS.1,00,000 EACH WERE DEPOSITED IN THE INDIAN BANK ACCOUNT ON 5/6/93 AND 7-7-93. THESE AMOUNTS REPRESENT RETURN OF THE EARLIER PAYMENTS. THE APPELLANT, ON 3/4/1993, AS PROPRIETOR OF CLOCK SPECIALISTS ADVANCED RS.1 LAKH EACH BY TWO CHEQUES BEARING NOS.056115 AND 066116 TO SRI VENKATRAMI REDDY OF SYNDICATE MARKETING AN AMOUNT OF RS.4,31,000 WAS FOUND DEPOSITED IN INDIAN BANK ACCOUNT ON DIFFERENT DATES. THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING MATERIAL IN RESPECT OF HIS EXPLANATION. ACCEPTING ASSESSEE' S EXPLANATI ON, ADDITION DELETED. 187 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AND WAS RECORDED IN THE BOOKS OF ACCOUNT OF CLOCK SPECIALISTS. THE APPELLANT RECEIVED BACK THE AMOUNT FROM SYNDICATE MARKETING INTO HIS PERSONAL ACCOUNT. THE SAID AMOUNTS WERE PAID TO THE ACCOUNT OF CLOCK SPECIALISTS IMMEDIATELY. FURTHER, THE BOOKS OF ACCOUNT WERE FOUND AND WERE SEIZED BY THE DEPARTMENT. THE AMOUNTS WERE INITIALLY PAID THROUGH BANK ACCOUNT AND WERE RETURNED THROUGH BANK ACCOUNT. THEREFORE, IT CANNOT BE CONSIDERED AS UNDISCLOSED INCOME. BOTH RECEIPTS AND PAYMENTS WERE RECORDED AT LEDGER FOLIO NO.10 OF THE CLOCK SPECIALITIES. PAGE NO.63 OF THE PAPER BOOK. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MENTIONING THAT THE APPELLANT DID NOT FILE ANY EXPLANATION. 15. RS.2,00,000 ADDITION HOLDING THAT THE AMOUNT RECEIVED FROM SMT.VEENAR.CH UGANI REPRESENT THE UNDISCLOSED INCOME. THE SAID AMOUNT WAS RECEIVED FROM MRS. VEENA R. CHUGANI. (A) 29/11/1993 RS. 1,00,000 AND 21-1-1994 RS. 1,00,000). THE AMOUNT WAS PAID BY MRS. VEENA R. CHUGANI THROUGH CHEQUE NO.1512951 DATED 27/11/1993 AND WERE DEPOSITED IN THE BANK ACCOUNT. THERE ARE DEPOSITS MADE ON 29.11.93 AND 21.1.94 IN INDIAN BANK ACCOUNT FOR WHICH EXPLANATION WAS NOT FOUND CORRECT. ACCEPTING ASSESSEES EXPLANATI ON, ADDITION DELETED. 16. RS.10,000 ADDITION HOLDING THAT THE AMOUNT RECEIVED FROM THE ASSESSEE SUBMITS THAT ON 17-11-1993 A SUM OF RS.10,000/- WAS RECEIVED FROM S. MALLAIAH. THIS THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING EVIDENCE IN RESPECT OF ACCEPTING ASSESSEES EXPLANATI ON 188 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SRI S.MALLAIAH AS THE UNDISCLOSED INCOME. REPRESENTS RETURN OF AMOUNT ADVANCED TO SRI S. MALLAIAH VIDE CHEQUE NO.630020 DATED 28-1- 92. THE WITHDRAWALS MADE FROM THE BANK ACCOUNT FOR THE SAID PERIOD IS AT PAGE 90 OF THE PAPER BOOK. IT CAN BE SEEN FROM THE SAID PAGE 90 THAT THE APPELLANT PAID AN AMOUNT OF RS. 10,000 TO SHRI MALLAYYA AND THE PRESENT RECEIPT IS ONLY A REPAYMENT OF THE AMOUNT. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ADVANCE GIVEN TO SRI S. MALLAIAH. ADDITION DELETED. 17. RS.21,000 ADDITION HOLDING THAT THE DEPOSIT REPRESENT THE UNDISCLOSED INCOME. THE APPELLANT DEPOSITED CASH OF RS.21,000. IT IS SUBMITTED THAT THE BANK ACCOUNT WAS DISCLOSED TO THE DEPARTMENT. THE ADDITION IS NOT MADE BASED ON ANY SEIZED MATERIAL. THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE MADE SUCH AN ADDITION, PARTICULARLY IN VIEW OF THE FACT THAT THE APPELLANT MAINTAINED BOOKS OF ACCOUNT AND DISCLOSED THE BANK ACCOUNT TO THE DEPARTMENT. THE ASSESSEE STATED THAT THIS IS OUT OF RETURN OF SHARE APPLICATION MONEY WHICH IS NOT ACCEPTABLE AS THE SHARE APPLICATION MONEY IF ANY WOULD HAVE BEEN RETURNED BY CHEQUES BY THE COMPANY. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. 18. RS.20,000 ADDITION HOLDING THAT THE REFUND RECEIVED REPRESENT THE REFUND OF THE AMOUNTS CLAIMED AS DEDUCTION U/S 80CCA AND 80CCB THE ASSESSEE SUBMITTED NOTE REGARDING ADDITIONS U/S 80CCA AND 80 CCB, A COPY OF WHICH IS AVAILABLE AT PAGE NO.65 OF THE PAPER BOOK. FURTHER IT CAN BE SEEN THAT FOR THE ASSESSMENT YEAR 1990-91, THE APPELLANT CLAIMED DEDUCTION UNDER SEC. 80CC AND NOT 80CCA OR 80CCB OF THE ACT. THE PROVISIONS OF SEC. 80CC WERE OMITTED WITH EFFECT FROM 1-4-1993 AND ARE NOT THIS IS THE AMOUNT REALIZED FROM SBI MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALIZATION. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. 189 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. APPLICABLE FOR THE YEAR UNDER CONSIDERATION. FURTHER, THE ADDITION IS NOT MADE WITH REFERENCE TO ANY SEIZED MATERIAL. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. 19. RS.5,404 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN MUMBAI FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. ASSESSMENT YEAR 1995-96 GROUND NO.20. RS.5,888 ADDITION ON ACCOUNT OF ACCRUED INTEREST ON FDRS REPRESENT UNDISCLOSED INCOME. IT IS SUBMITTED THAT THE APPELLANT DISCLOSED THE FIXED DEPOSITS TO THE DEPARTMENT. THE INTEREST AS AND WHEN ACCRUED TO THE APPELLANT IS BEING ADMITTED IN THE RETURN OF INCOME FILED. DURING THE YEAR THE AMOUNT DERIVED FROM DEPOSITS WAS ALREADY ADMITTED. THE ASSESSING OFFICER IS NOT JUSTIFIED IN ARRIVING AT THE INTEREST ON FIXED DEPOSITS AT RS. 9256 AND IN MAKING AN ADDITION. INTEREST ON FDR RECEIVED AMOUNTS TO RS.9256 WHEREAS THE AMOUNTS DECLARED IS RS.3368 ONLY. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.21. RS.2,583 ADDITION HOLDING THAT THE INTEREST FROM LIC MUTUAL FUND REPRESENT THE UNDISCLOSED INCOME. IT CAN BE SEEN FROM PAGE 93 OF THE PAPER BOOK THAT THE INTEREST ON LIC MUTUAL FUND IS ONLY RS. 900 AND WAS CORRECTLY ACCOUNTED IN THE RETURN OF INCOME. THE AMOUNT OF RS. 12,583 WAS RECEIVED ON 17-10-1994 AND THE SAID AMOUNT IS REALIZATION OF THE NET ASSET INTEREST FROM LIC MUTUAL FUND RECEIVED AMOUNTS TO RS.3483 WHEREAS THE AMOUNTS DECLARED IS RS.900 ONLY. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. 190 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. VALUE. THE BALANCE WOULD BE DECLARED AS INCOME FROM TIME TO TIME. THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. GROUND NO.22. RS.25,000 (27-6-94) RS.10,000 (17-10-94) ADDITION ON ACCOUNT OF UNDISCLOSED INCOME RECEIVED ON MATURITY OF MUTUAL FUND. THE ASSESSEE SUBMITTED A NOTE REGARDING THE ADDITION MADE BY APPLYING THE PROVISIONS OF SEC.80CCA AND 80CCB, A COPY OF WHICH IS AVAILABLE AT PAGE NO.65 OF THE PAPER BOOK. IT IS SUBMITTED THAT THE INFORMATION IS AVAILABLE ON RECORD. THERE IS NO SEIZED MATERIAL RELEVANT FOR SUCH ADDITIONS. FURTHER THE PROVISIONS OF CHAPTER VIA WERE NOT APPLICABLE FOR COMPLETION OF THE ASSESSMENT UNDER SECTION 158BD BOTH AT THE TIME OF FILING THE RETURN OF INCOME AND AT THE TIME OF COMPLETION OF THE ASSESSMENT PROCEEDINGS. FURTHER, FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED INCOME AT RS. NIL. IT IS SUBMITTED THAT AFTER MAKING THE ADDITION OF RS.35,000, THE TOTAL INCOME WOULD WORK OUT TO RS. NIL. THEREFORE, THERE IS NO UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE, THE ADDITION MAY KINDLY BE DELETED. THIS IS THE AMOUNT REALIZED FROM SBI AND LIC MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALIZATION. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.23. RS.9,000 ADDITION HOLDING THAT THE AMOUNT DEPOSITED ON 25-10-1994 REPRESENT UNDISCLOSED INCOME. THE DEPOSIT OF RS. 9,000 REPRESENTS A RECEIPT THROUGH CHEQUE FROM EAST WEST. THIS IS A PART OF THE BUSINESS TRANSACTION AND IS ENTERED IN THE REGULAR BOOKS OF ACCOUNT. THE AMOUNT WAS RECEIVED THROUGH CHEQUE. FURTHER, THESE ARE DEPOSITS IN BANK A/C NO.6936 FOR WHICH NO EXPLANATION WAS SUBMITTED. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. 191 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT AND THEREFORE, NO SUCH ADDITION CAN BE MADE BY THE ASSESSING OFFICER. GROUND NO.24. RS.27,350 ADDITION HOLDING THAT THE AMOUNT DEPOSITED ON 21-11-94 REPRESENT UNDISCLOSED INCOME. THE ASSESSING OFFICER FOUND THAT A SUM OF RS. 27,350 WAS DEPOSITED IN INDIAN BANK ACCOUNT AND TREATED THE SAID SUM AS THE UNDISCLOSED INCOME OF THE APPELLANT. IT IS SUBMITTED THAT THE BANK ACCOUNT IS DISCLOSED TO THE DEPARTMENT. THE APPELLANT MAINTAINED BOOKS OF ACCOUNT. HE CARRIED ON VARIOUS ACTIVITIES AND THE AMOUNT DEPOSITED IS A PART OF THE DISCLOSED RECEIPT. THERE IS NO SEIZED MATERIAL SUGGESTING THAT THE SAID AMOUNT REPRESENTS THE UNDISCLOSED INCOME. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. THESE ARE DEPOSITS IN BANK ACCOUNT NO.6936 FOR WHICH NO EXPLANATION WAS SUBMITTED. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO. 25. RS.20,520 GROUND NOS. 28, 29, 34 RS.1600 EACH. ADDITION ON ACCOUNT OF PURCHASE OF SHARES ON 6/1/95 REPRESENT UNDISCLOSED INCOME. THE ASSESSEE ISSUED CHEQUE NO.347157 DATED 6-1-95 FOR ALLOTMENT OF SHARES OF SURENDRA SECURITIES. THE SAID CHEQUE DATED 6-1-95 MUST HAVE BEEN PRESENTED FOR COLLECTION SUBSEQUENTLY. THE SAID WERE ALLOTTED TO THE ASSESSEE. HENCE THE PURCHASE OF SHARES IS GENUINE AND ADDITION ON THIS ACCOUNT IS NOT WARRANTED. THE SAID CHEQUE ALONG WITH OTHERS IS DEBITED ON 27.5.95. AS PER THE SEIZED MATERIAL ASSESSEE INVESTED IN SHARES. THE ASSESSEE EXPLAINED THE SAME ARE THROUGH INDIAN BANK ACCOUNT WHICH WAS NOT FOUND ON VERIFYING THE BANK ACCOUNT. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.26. RS.12,883 ADDITION HOLDING THAT THE AMOUNT REPRESENT THE UNDISCLOSED INCOME. THE ASSESSEE SUBMITS THAT THIS AMOUNT WAS NOT CLAIMED BY THE ASSESSEE AS DEDUCTION U/S 80CCA OR 80CCB AS THE SAID CERTIFICATE WAS PURCHASED BY HIS SON FROM OUT OF HIS THESE ARE DEPOSITS IN BANK ACCOUNT WITH INDIAN BANK IN THE NAME OF MINOR SON MASTER SACHIN. THE DEPOSITS WERE FOUND DURING THE NO BASIS FOR MAKING ADDITION. HENCE, DELETED. 192 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. INCOME. EVEN MR. SACHIN DID NOT CLAIM THE SAID AMOUNT AS DEDUCTION FROM HIS TOTAL INCOME UNDER THOSE SECTIONS. THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT IN MAKING SUCH AN ADDITION. COURSE OF SEARCH AND IS COVERED UNDER BLOCK ASSESSMENTS. GROUND NO.27. RS.3,934 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN BOMBAY FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. ASSESSMENT YEAR 1996-97 GROUND NOS.29 & 30. RS.31,364 ADDITION HOLDING THAT THE INTEREST ON FDR IS UNDISCLOSED INCOME. IT IS SUBMITTED THAT THERE IS NO BASIS FOR ARRIVING AT THE INTEREST RECEIVED BY THE APPELLANT. IT IS FURTHER SUBMITTED THAT THE BANK ACCOUNT; THE FIXED DEPOSITS WERE ALL DISCLOSED TO THE DEPARTMENT. WHENEVER THE INTEREST IS CREDITED, THE APPELLANT IS ADMITTING SUCH INTEREST IN THE RETURN OF INCOME FILED. THEREFORE, NO ADDITION CAN BE MADE PARTICULARLY WHEN THERE IS NO SEIZED MATERIAL SUGGESTING THAT SUCH INCOME REPRESENTS THE UNDISCLOSED INCOME. THEREFORE, THE SAID ADDITION MAY KINDLY BE DELETED. ASSESSEE HAS NOT DISCLOSED THE INTEREST ON FDR IN GRINDLAYS BANK. THE CAPITAL ACCOUNT DOES NOT REFLECT ANY DETAILS ON THE INTEREST. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.31. RS.25,527 ADDITION ON ACCOUNT OF ESTIMATION OF INTEREST ON THE ASSESSING OFFICER IS OF THE VIEW THAT AN AMOUNT OF RS.50,527 WAS DEPOSITED IN FDR OUT OF WHICH AN THE ASSESSEE RECEIVED 50527 AS MATURITY VALUE OF FDR IN NO BASIS FOR MAKING ADDITION. 193 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FDRS. AMOUNT OF RS.25,000 REPRESENT THE ORIGINAL DEPOSIT AND THE BALANCE AMOUNT IS ADDED. THIS IS NOT CORRECT AS THE APPELLANT WAS OFFERING INCOME FROM DEPOSITS EVERY YEAR COMMENCING FROM THE ASSESSMENT YEAR 1990-91. IT CAN BE SEEN THAT INTEREST OF RS.11,624 WAS OFFERED FOR THE ASSESSMENT YEAR 1991-92, RS.18,064 WAS OFFERED FOR THE ASSESSMENT YEAR 1992-93, RS.20,432 WAS OFFERED FOR THE ASSESSMENT YEAR 1993-94, RS.9192 WAS OFFERED FOR THE ASSESSMENT YEAR 1994- 95 AND RS.3368 WAS OFFERED FOR THE ASSESSMENT YEAR 1995-96. TAKING ALL THESE FACTORS INTO CONSIDERATION, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. ANDHRA BANK. RS.25000 WAS TAKEN AS UNDISCLOSED IN AY 1990-91 AND BALANCE IS UNDISCLOSED INCOME FOR 1996-97. HENCE, DELETED. GROUND NO.32 RS.2,140 ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN BOMBAY FLAT. IN THIS REGARD THE APPELLANT ALREADY SUBMITTED A DETAILED EXPLANATION FOR THE PRECEDING ASSESSMENT YEARS AND THE SAID EXPLANATION MAY KINDLY BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION ALSO. AS PER SEIZED MATERIAL HE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.33 RS.5,00,000 ADDITION HOLDING THAT THE GIFT RECEIVED THE SAID AMOUNTS WERE RECEIVED FROM THE NRE A/C THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND FOR THE DETAILED REASONS 194 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FROM VARSHA IS UNDISCLOSED INCOME. OF SMT. VARSHA MEERPURI. RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE BLOCK PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. MOREOVER THE ASSESSEE COULD NOT PRODUCE ANY IT RETURN COPY OF HER RELATIVE NOR ANY BALANCE SHEET DURING THE COURSE OF ASSESSMENT PROCEEDINGS. STATED IN MAIN ORDER, THE AMOUNT IS ACCEPTED AND ADDITION IS DELETED. ASSESSMENT YEAR 1997-98 GROUND NO.35. RS.70,000 ADDITION ON ACCOUNT OF UNDISCLOSED INCOME THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS AN EXCESS CASH OF RS.70,000 IN THE POSSESSION OF THE APPELLANT AND ADDED THE SAME AS THE UNDISCLOSED INCOME. IN THIS REGARD, THE APPELLANT SUBMITTED A DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER VIDE NOTE FILED ON 17-09-1997 WHICH IS AT PAGE 33 OF THE PAPER BOOK. IT IS SUBMITTED THAT IF THE CASH AS PER THE VARIOUS CASH BOOKS AND CASH WITHDRAWAL IN THE IMMEDIATE PAST WERE TAKEN INTO CONSIDERATION THERE WOULD NOT BE ANY DEFICIENCY IN CASH. IT IS SUBMITTED THAT FOUR OF THE BROTHERS ARE RESIDING AT DURING SEARCH TOTAL CASH FOUND WAS RS.5,60,000. OUT OF THIS CASH AMOUNTING TO RS.3,94,705 WAS FOUND AT THE RESIDENCE OF ASSESSEE AND OTHER FAMILY MEMBERS. THE ASSESSEE COULD NOT EXPLAIN THE CASH AVAILABILITY. THEREFORE, RS.3,50,000 IS TAKEN IN THE HANDS OF ALL MALE MEMBERS. THE PROPORTIONATE SHARE OF THE ASSESSEE COMES TO RS.70,000. FOR THE DETAILED REASONS STATED IN THE MAIN ORDER, THE AMOUNT IS ACCEPTED AND ADDITION IS DELETED. 195 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE SAME PLACE; THAT THE BUSINESS CONCERNS ORGANIZED BY THE SAID FOUR BROTHERS AND THE PARTNERSHIP FIRMS IN WHICH THEY ARE INTERESTED ARE ALL KEEPING THE CASH AT A PLACE; THAT THE CASH BELONGING TO ALL THE OTHER FAMILY MEMBERS I.E., THE FATHER, MOTHER, WIFE, CHILDREN AND OTHERS WAS ALSO AVAILABLE. THEREFORE, THE APPELLANT SUBMITTED A DETAILED NOTE IN THIS REGARD. THE APPELLANT SUBMITS THAT A FURTHER NOTE WAS SUBMITTED IN THE CASE OF THE OTHER BROTHERS. CONSIDERING THE EXPLANATIONS SUBMITTED, THE APPELLANT REQUESTS THAT THE ADDITION MAY KINDLY BE DELETED. GROUND NO.36. RS.1515 ADDITION ON ACCOUNT OF INVESTMENT IN BOMBAY FLAT. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR DIFFERENT YEARS. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.37. RS.38,890 ADDITION ON ACCOUNT OF EXCESS STOCK FOUND THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THIS ADDITION WITHOUT PROVIDING THE INVENTORY OF THE STOCKS OBTAINED AT THE TIME OF SURVEY U/S 133A O THE I.T. ACT. THE EXPLANATION DURING SURVEY STOCK WAS VALUED AT RS.1,31,759 WHEREAS THE STOCK AS PER BOOKS IS RS.92,890. THE FOR THE DETAILED REASONS STATED IN THE MAIN ORDER, 196 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. SUBMITTED BY THE ASSESSEE VIDE LETTER DATED 25-9-97 IS AT PARA 2, PAGE NO.14 OF THE PAPER BOOK. IT IS FURTHER SUBMITTED THAT THE AUTHORITIES CONSIDERED THE SALE PRICE AND DEDUCTED THE GROSS PROFIT. IN THIS REGARD, THE APPELLANT HUMBLY SUBMITS THAT THERE IS A HUGE VARIATION BETWEEN THE SALE PRICE; AND TAGGED PRICE. THE TAG PRICE AND THE SALE PRICE IS NOT THE SAME. DETAILS ARE SUBMITTED AT PAGE 82 OF THE PAPER BOOK. IT CAN BE SEEN THAT WHEN THE TAGGED PRICE IS RS. 225, THE SALE PRICE IS RS. 150. THE DIFFERENCE IS THE DISCOUNT ALLOWED AT THE TIME OF SALE. SUCH DISCOUNT HAS TO BE EXCLUDED FROM THE TAGGED PRICE. FURTHER, THE APPELLANT HUMBLY SUBMITS THAT THE AUTHORITIES DID NOT FIND ANY DIFFERENCE IN THE PURCHASES; SALES; PURCHASE COST OR THE SALE PRICE. THEREFORE, THE AUTHORITIES CANNOT MAKE ANY ADDITION ON ACCOUNT OF DIFFERENCE IN THE CLOSING STOCK. FURTHER, THE AUTHORITIES DID NOT FIND ANY PURCHASES OUTSIDE THE BOOKS OF ACCOUNT OR SALES OUTSIDE THE BOOKS OF ACCOUNT. THERE IS ALSO NO DIFFERENCE IN THE QUANTUM OF STOCK. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION ON THIS ACCOUNT. THE APPELLANT FILED SEPARATE WRITTEN SUBMISSIONS WITH REGARD TO THE ADDITION ON ACCOUNT OF DIFFERENCE IN STOCKS. THE SAME MAY PLEASE BE ASSESSEE COULD NOT PROVE THE DIFFERENCE IN STOCK. THE AMOUNT IS ACCEPTED AND ADDITION IS DELETED. 197 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CONSIDERED AND THE ADDITION MAY PLEASE BE DELETED. GROUND NO.38 RS.16,800. ADDITION ON ACCOUNT OF INVESTMENT IN BOMBAY FLAT THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. AS PER SEIZED MATERIAL ASSESSEE PAID RS.34,000 TOWARDS REGISTRATION AND RS.70,000 TO THE HOUSINGS SOCIETY AND ALSO RS.50,000 FOR THE PURCHASE OF FURNITURE. THESE AMOUNTS WERE NOT DISCLOSED. THE ASSESSEE SHARE COMES TO RS.16,800. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. GROUND NO.39 & 40. CHARGING TAX AT 60% REGARDING COMPLETING THE ASSESSMENT U/S 158 BD AND CHARGING TAX AT 60% THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 158BD. MATTER OF RECORD. REJECTED. 198 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-12 IT(SS)A.NO.12/H/2011 KISHORE G.CHUGANI, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND 01-04-1996 TO 03-10-1996 ASSESSMENT YEAR: 1987-88 GROUND NO. & AMOUNT ADDED. DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION GROUND NO.1 TO 4, 58&59 GENERAL IN NATURE -- GROUND NO.5. RS.3,600 ADDITION HOLDING THAT THE AMOUNT DEPOSITED ON 2-4-86 REPRESENT UNDISCLOSE D INCOME. IT IS SUBMITTED THAT THE REFUND OF THE NSC WAS RECEIVED DURING MARCH, 1996 AND WAS CREDITED IN BANK ACCOUNT ON 2.4.1986. THEREFORE, IT WAS SUBMITTED THAT THE AMOUNT OF DEPOSIT IS FROM MATURITY VALUE OF THE NSC WHICH INCLUDES INTEREST. IT IS ALSO SUBMITTED THAT THE BANK ACCOUNT WITH INDIAN BANK WAS ALREADY DISCLOSED TO THE DEPARTMENT. CONSIDERING ALL THE FACTS, THE APPELLANT SUBMITS THAT THE AMOUNT CANNOT BE TREATED AS THE UNDISCLOSED INCOME. IT DOES NOT EMANATE FROM THE SEIZED MATERIAL. THE BANK ACCOUNT WAS DISCLOSED BOTH FOR INCOME-TAX AND WEALTH TAX PURPOSES. THEREFORE, THE DEPOSITS MADE CANNOT BE CONSIDERED AS THE UNDISCLOSED AMOUNTS. ASSESSEE DEPOSITED CASH OF RS.3,600 IN INDIAN BANK ACCOUNT AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.6. RS.6,499 ADDITION ON THE GROUND THAT THE AMOUNTS DEPOSITED BY MASTER ROHIT REPRESENT UNDISCLOSE D INCOME. IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO MENTION THAT EXPLANATION WAS NOT SUBMITTED BY THE APPELLANT. IT WAS CLEARLY STATED THAT AN AMOUNT OF RS. 4,855 WAS RECEIVED AS GIFT BY MASTER ROHIT AND WAS DEPOSITED IN HIS BANK ACCOUNT. THE SEIZED MATERIAL DOES NOT INDICATE THAT THE AMOUNT WAS DEPOSITED BY THE APPELLANT IN THE BANK ACCOUNT OF MASTER ROHIT. FURTHER, THE THIS REPRESENTS CASH DEPOSITS IN INDIAN BANK A/C NO.8520 WHICH IS IN THE NAME OF MASTER ROHIT. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. 199 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. AMOUNT WAS NOT RS.6,499/- BUT WAS ONLY RS.4,855/-. FOR THE RELEVANT ASSESSMENT YEAR THE PROVISIONS OF SEC. 64(1A) ARE NOT APPLICABLE AND THEREFORE, THE INCOME ASSESSABLE IN THE ASSESSMENT OF THE MINOR CANNOT BE BROUGHT TO TAX IN THE ASSESSMENT OF THE PARENT. GROUND NO.7. RS.3,940 ADDITION ON ACCOUNT OF UNDISCLOSE D INTEREST THE ACTUAL INTEREST ON SB ACCOUNT IS ONLY RS. 1,650 AND NOT RS. 3,940. IT IS SUBMITTED THAT THE OPENING BALANCE WAS ONLY RS. 76,061 AND THERE IS NO POSSIBILITY TO EARN INTEREST OF RS. 3,940. IN SO FAR AS THE INTEREST FROM ANDHRA BANK IS CONCERNED, THE SAID ACCOUNT IS IN THE NAME OF ROHIT, THE MINOR SON OF THE APPELLANT. THE PROVISIONS OF SEC. 64(1A) HAVE NO APPLICATION FOR THE YEAR UNDER CONSIDERATION. FURTHER, IT IS SUBMITTED THAT THERE IS NO SUCH INTEREST IN THE SAID BANK ACCOUNT EVEN AS PER THE SHOW CAUSE LETTER DT. 29-8-1997 PAGE NO. 119 OF THE PAPER BOOK. THE BANK ACCOUNTS WERE ALREADY DISCLOSED TO THE DEPARTMENT. THIS REPRESENTS THE INTEREST CREDITED IN INDIAN BANK A/C NO. 6801 AND ANDHRA BANK A/C NO.10089. PAPER BOOK DOES NOT CONTAIN ANY EXPLANATION. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.8. RS.10,000 ADDITION ON ACCOUNT OF AMOUNT DEPOSITED WITH INDIAN BANK ON 19-7-86 AT PAGE NO.12 OF THE PAPER BOOK, THE APPELLANT SUBMITTED THE EXPLANATION BEFORE THE ASSESSING OFFICER. COPY OF THE CASH BOOK IS AT PAGE NO.53. ON 18.7.1986, AN AMOUNT OF RS.10,000/- WAS DEPOSITED WITH INDIAN BANK FROM KISHORE WATCH COMPANY ACCOUNT (PAGE NO.57 OF THE CASH BOOK). THE APPELLANT FURTHER SUBMITS THAT THE BOOKS ARE IMPOUNDED BY THE DEPARTMENT. WITHOUT VERIFYING THE CASH BOOK, THE ASSESSING OFFICER MENTIONS THAT NO EXPLANATION WAS SUBMITTED. THIS IS NOT JUSTIFIED. THE ASSESSEE ALSO FILED A COPY OF THE CASH BOOK AT PAGE NO.53 OF THE PAPER BOOK. THEREFORE, IT IS SUBMITTED THAT THE ASSESSEE COULD NOT FURNISH ANY EXPLANATION FOR THE CASH DEPOSIT OF RS.10,000 IN INDIAN BANK ACCOUNT. NO BASIS FOR MAKING ADDITION. HENCE, DELETED. 200 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING SUCH AN ADDITION. ASSESSMENT YEAR 1988-89 GROUND NO.9(A) RS.10,000 PLUS RS.1238 ADDITION ON ACCOUNT OF AMOUNT DEPOSITED BY MASTER ROHIT REPRESENT UNDISCLOSE D INCOME. AN EXPLANATION WAS SUBMITTED IN COLUMN NO.4. THE AMOUNT OF RS.10,000 REPRESENTS GIFT RECEIVED THROUGH BANK AND CHEQUE WAS NOT CLEARED. THEREFORE, THE AMOUNT OF RS.10,000 CANNOT BE ADDED. IT IS SUBMITTED THAT THE CHEQUE NOT CLEARED CANNOT BE SAID TO BE RECEIVED BY THE APPELLANT. THEREFORE, THE AMOUNT CANNOT BE CONSIDERED FOR ASSESSMENT. THE OTHER AMOUNT OF RS. 1,238 ALSO REPRESENTS THE AMOUNT BELONGING TO MASTER ROHIT. THIS IS EXEMPT U/S 10(32) OF THE I.T. ACT AS THE SAME IS LESS THAN RS.1,500 AND ALSO BECAUSE THE PROVISIONS OF SEC.64(1A) HAVE NO APPLICATION FOR THE YEAR UNDER CONSIDERATION. THIS REPRESENTS CASH DEPOSITS IN INDIAN BANK A/C NO.8520 WHICH IS IN THE NAME OF MASTER ROHIT. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITIONS IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.9(B) RS.26,500 ADDITION HOLDING THAT THE AMOUNT DEPOSITED BY MISS LAVEENA REPRESENT UNDISCLOSE D INCOME. THE APPELLANT SUBMITS THAT THE AMOUNT OF RS. 20,000 WAS RECEIVED BY HIS DAUGHTER LAVEENA AND WAS DEPOSITED WITH HER BANK ACCOUNT. THE BALANCE OF RS.6,500 ALSO WAS A GIFT RECEIVED BY HER. THE AMOUNT OF RS.20,000 WAS DRAWN FROM THE ACCOUNT OF SRI GULAB RAI, THE FATHER OF THE APPELLANT AND THE GRANDFATHER OF THE DONE, ON 7.3.1988 FROM HIS BANK ACCOUNT NO.10385 WITH ANDHRA BANK. THE BALANCE OF THE AMOUNT ALSO REPRESENTS THE GIFT RECEIVED FROM OTHER FAMILY MEMBERS. THERE IS NO EVIDENCE THAT THESE AMOUNTS WERE DEPOSITED BY THE APPELLANT HEREIN. FURTHER, THE PROVISIONS OF SEC.64 (1A) WERE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION AND, THEREFORE, THE MINORS INCOME CANNOT BE ADDED TO THE PARENTS INCOME. THIS REPRESENTS CASH DEPOSITS IN INDIAN BANK A/C NO.8520 WHICH IS IN THE NAME OF MISS LAVEENA. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.10. ADDITION ON ACCOUNT THE AMOUNT OF RS.12,000 REPRESENTS DEPOSIT MADE FROM OUT ASSESSEE DEPOSITED CASH NO BASIS FOR MAKING 201 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RS.12,000 OF DEPOSIT IN THE BANK TREATED AS UNDISCLOSE D INCOME. OF THE MATURITY VALUE OF THE NSC. IT CAN BE SEEN THAT EVERY YEAR, THE APPELLANT IS INVESTING IN NSCS TOWARDS END OF MARCH. THE MATURED VALUE WAS RECEIVED AND THE SAME WAS DEPOSITED INTO THE BANK ACCOUNT. IT IS ALSO SUBMITTED THAT THE INDIAN BANK ACCOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT AND, THEREFORE, THE SAME CANNOT BE TREATED AS UNDISCLOSED INCOME. OF RS.12,000 IN INDIAN BANK ACCOUNT AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.11. RS.10,000 ADDITION ON ACCOUNT OF AMOUNT PAID TO AMBA PICTURE PALACE. THE AMOUNT OF RS.10,000 WAS ADVANCED TO AMBA PICTURE PALACE THROUGH CHEQUES AND RS.5,000 EACH ON 24-8-87 AND 25-8-87 THE AMOUNTS WERE DRAWN FROM INDIAN BANK ACCOUNT NO.6801 AND, THEREFORE, IT CANNOT BE CONSIDERED AS THE UNDISCLOSED INCOME. THE BANK ACCOUNTS WERE DISCLOSED TO THE DEPARTMENT. AS PER SEIZED MATERIAL ASSESSEE ADVANCED TO AMBA PICTURE PLACE. EXPLANATION ACCEPTED. AMOUNT DELETED. ASSESSMENT YEAR 1989-90 GROUND NO.12. RS.12,000 ADDITION ON THE GROUND THAT THE DEPOSIT IN ANDHRA BANK IS UNDISCLOSE D INCOME. THE AMOUNT OF RS.12,000 REPRESENTS DEPOSIT MADE FROM OUT OF THE MATURITY VALUE OF THE NSC. IT CAN BE SEEN THAT EVERY YEAR THE APPELLANT IS INVESTING IN NSCS TOWARDS END OF MARCH. THE MATURED VALUE WAS RECEIVED AND THE SAME WAS DEPOSITED INTO THE BANK ACCOUNT. IT IS ALSO SUBMITTED THAT THE INDIAN BANK ACCOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT AND, THEREFORE, THE SAME CANNOT BE TREATED AS UNDISCLOSED INCOME. THE ASSESSEE COULD NOT PRODUCE ANY DETAILS TO THE ARGUMENT THAT THE AMOUNT WAS RECEIVED FROM NSC. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.13. RS.20,000 ADDITION TREATING THE AMOUNT DEPOSITED BY MISS LAVEENA AS UNDISCLOSE D INCOME. THE AMOUNT WAS DEPOSITED FROM OUT OF THE GIFTS RECEIVED FROM SRI GULAB RAI ON 1.3.1989 AND WAS DEPOSITED IN HER BANK ACCOUNT. IT IS NOT CORRECT TO SAY THAT THERE IS NO SPECIFIC EXPLANATION PARTICULARLY WHEN THE ASSESSEE SUBMITTED THAT THE AMOUNT WAS GIFTED BY SRI GULAB RAI CHUGANI THIS REPRESENTS CASH DEPOSITS IN BANK A/C NO.11311 WHICH IS IN THE NAME OF MISS LAVEENA. ASSESSEE HAS NOT GIVEN ANY EXPLANATION ACCEPTED. AMOUNT DELETED. 202 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THROUGH CHEQUE DRAWN ON ANDHRA BANK, PRAKASH NAGAR BRANCH, HYDERABAD ON 1.3.1989 AND WHEN SRI GULAB RAI CHUGANI IS ALSO ASSESSED TO TAX BY THE SAME ASSESSING OFFICER. THEREFORE, IT IS NOT CORRECT TO ADD THE SAID AMOUNT AS THE UNDISCLOSED INCOME. SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. GROUND NO.14. RS.30,000 ADDITION TREATING THE INVESTMENT IN BEGUMPET PROPERTY AS UNDISCLOSE D. THIS AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN FILED BY THE ASSESSEE AND HENCE THE GROUND IS NOT PRESSED. ADMITTED IN THE BLOCK RETURN. REJECTED GROUND NO.15. RS,10,811 RS.6,707 ADDITION TREATING THE INTEREST RECEIVED BY THE ASSESSEES SONS AND DAUGHTERS AS UNDISCLOSE D INCOME. THIS GROUND IS REDUNDANT AND DOES NOT ARISE OF THE ASSESSMENT ORDER. THIS GROUND IS REDUNDANT. REJECTED ASSESSMENT YEAR 1990-91. GROUND NO.16 RS.12,000 CREDIT IN INDIAN BANK TREATED AS UNDISCLOSE D INCOME. THE AMOUNT OF RS.12,000 REPRESENTS DEPOSIT MADE FROM OUT OF THE MATURITY VALUE OF THE NSC. IT CAN BE SEEN THAT EVERY YEAR THE APPELLANT IS INVESTING IN NSCS TOWARDS END OF MARCH. THE MATURED VALUE WAS RECEIVED AND THE SAME WAS DEPOSITED INTO THE BANK ACCOUNT. IT IS ALSO SUBMITTED THAT THE INDIAN BANK ACCOUNT WAS ALREADY DISCLOSED TO THE DEPARTMENT AND, THEREFORE, THE SAME CANNOT BE TREATED AS UNDISCLOSED INCOME. ASSESSEE DEPOSITED CASH OF RS.12,000 IN INDIAN BANK ACCOUNT AND EXPLAINED THAT THEY ARE NSC INTEREST RECEIVED. NSC INTEREST IS RECEIVED ON MATURITY ONLY. THEREFORE, CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. 203 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. GROUND NO.17. RS.659 ADDITION ON ACCOUNT OF UNDISCLOSE D INCOME. IT CAN BE SEEN THAT FOR THE YEAR UNDER CONSIDERATION INTEREST FROM SB ACCOUNT OF RS.8,087 AND INTEREST ON UNITS OF RS.3,996 AGGREGATING TO RS.12,083 IS ADMITTED. THE TOTA L INTEREST AS PER BANK ACCOUNT NO. P-109 WORKS OUT TO RS.10,129. THEREFORE, IT CANNOT BE SAID THAT CORRECT AMOUNT OF INTEREST WAS NOT ADMITTED. FURTHER, ALL THESE FACTS WERE ALREADY ON RECORD AND IT CANNOT ALSO BE SAID THAT THIS REPRESENT UNDISCLOSED INCOME WITHIN THE MEANING OF SEC.158BD OF THE I.T. ACT. ASSESSEE RECEIVED INTEREST FROM UNITS AMOUNTING TO RS.4655 BUT DECLARED ONLY RS.3996 IN THE RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.18. 30,021 AMOUNT DEPOSITED IN PPF ACCOUNT BY MASTER ROHIT AND MISS LAVEENA REPRESENT UNDISCLOSE D INCOME. THE ASSESSING OFFICER MENTIONS THAT NO EXPLANATION WAS SUBMITTED BY THE ASSESSEE. IT IS HUMBLY SUBMITTED THAT OUT OF RS.30,021, AN AMOUNT OF RS.20,000 DEPOSITED WAS NOT CLEARED AND HENCE CANNOT BE TREATED AS A CREDIT. THE AMOUNT OF RS.3,586 REPRESENTS INTEREST DERIVED BY THE ASSESSEES SON MASTER ROHIT AND THIS CANNOT BE ADDED AS THE PROVISIONS OF SEC.64(1A) ARE NOT APPLICABLE FOR THAT YEAR. IN SPITE OF THE EXPLANATION, THE ASSESSING OFFICER MENTIONS THAT NO SPECIFIC INFORMATION WAS FILED. IT IS NOT JUSTIFIED. IT IS HUMBLY SUBMITTED THAT IN VIEW OF THE EXPLANATION SUBMITTED THE ADDITION MAY KINDLY BE DELETED. ANOTHER AMOUNT OF RS. 4,400 ALSO REPRESENTS INTEREST DERIVED BY MASTER ROHIT AND WAS CREDITED TO THE BANK ACCOUNT OF MASTER ROHIT. THIS CANNOT BE TREATED AS THE INCOME OF THE APPELLANT IN VIEW OF THE FACT THAT THE PROVISIONS OF SEC. 64(1A) WERE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION. ANOTHER AMOUNT OF RS. 2035 IS STATED BY THE ASSESSING OFFICER TO BE THE DEPOSIT IN THE ACCOUNT OF LAVEENA, DAUGHTER OF THE APPELLANT. ASSESSEE COULD NOT FURNISH ANY EXPLANATION FOR THE CASH DEPOSITS AMOUNTING TO RS.30,021 IN ANDHRA BANK IN THE NAME OF ROHIT AND LAVEENA NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. 204 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FIRSTLY SUCH AMOUNT IS NOT IN THE SAID BANK ACCOUNT VIDE SHOW CAUSE LETTER DT. 29-8-1997. EVEN OTHERWISE, THE INTEREST AND OTHER INCOMES DERIVED BY HER CANNOT BE INCLUDED IN THE ASSESSMENT OF THE APPELLANT IN VIEW OF THE FACT THAT THE PROVISIONS OF SEC. 64(1A) WERE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION. GROUND NO.19. RS.2,459 ADDITION HOLDING THAT THE INTEREST DERIVED FROM MUTUAL FUNDS IS UNDISCLOSE D INCOME. PARA 15.III OF THE ASSESSMENT ORDER. THIS AMOUNT IS ADMITTED IN THE BLOCK RETURN. NO ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. ADMITTED IN BLOCK RETURN. REJECTED GROUND NO.20. RS.659 ADDITION ON ACCOUNT OF ACCRUED INTEREST RS.659 WAS ALREADY EXPLAINED IN DETAIL AT GROUND NO.17. THE SAME EXPLANATION MAY KINDLY BE CONSIDERED. ASSESSEE RECEIVED INTEREST FROM UNITS AMOUNTING TO RS.4,655 BUT DECLARED ONLY RS.3,996 IN THE RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.21. RS.2,000 ADDITION ON ACCOUNT OF UNDISCLOSE D DEPOSIT IN PPF MADE ON BEHALF OF MASTER ROHIT. THE AMOUNT OF RS.2,000 WAS PAID FROM OUT OF THE CASH AVAILABLE TOWARDS PPF AND WAS CLAIMED IN THE RETURN OF INCOME FIL ED. THEREFORE, THIS CANNOT BE CONSIDERED AS UNDISCLOSED INCOME. NO EXPLANATION WAS FOUND IN THE PAPER BOOK AS CLAIMED BY THE ASSESSEE NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. ASSESSMENT YEAR 1991-92 GROUND NO.22. RS.9,354 ADDITION ON THE GROUND THAT THE TOTAL INTEREST DERIVED ON PARA NO. 16.I OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HELD THAT THE TOTAL INTEREST DERIVED FROM THE INTEREST ON CDS AMOUNT TO RS.9254 (PAGE NO-110 OF PAPER BOOK) AND THE SAID AMOUNT REPRESENTS THE UNDISCLOSED INCOME THE INTEREST AMOUNT IS NOT DECLARED IN THE I.T. RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT 205 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CDS REPRESENTS UNDISCLOSE D INCOME. AS AGAINST THE AMOUNT DECLARED OF RS.5430. CDS IS EXEMPT FROM THE INCOME TAX. HENCE NO ADDITION MAY BE MADE. DELETED. GROUND NO.23. RS.20,000 ADDITION HOLDING THAT THE AMOUNT DEPOSITED WITH INDIAN BANK ON 22-10-90 REPRESENTS UNDISCLOSE D INCOME. THE APPELLANT SUBMITTED THAT WITHDRAWN ON 29.9.1990 FROM CANARA BANK, SECUNDERABAD AND WAS DEPOSITED WITH INDIAN BANK ON 22.10.1990. THE ASSESSING OFFICER SIMPLY MENTIONS THAT NO SPECIFIC DETAILS WERE FILED. THIS IS NOT CORRECT AS ALL THE DETAILS OF THE BANK ACCOUNT WERE PROVIDED AND THE BOOKS OF ACCOUNT ARE WITH THE DEPARTMENT. THE ASSESSEE COULD NOT FURNISH SPECIFIC DETAILS REGARDING THE SOURCE OF THE CREDIT. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.24. RS.38,673 ADDITION ON THE GROUND OF UNDISCLOSE D DEPOSITS IN MINORS BANK ACCOUNTS. PARA NO. 16.III OF THE ASSESSMENT ORDER. THESE DEPOSITS IN MINORS BANK ACCOUNTS CONSISTS OF GIFT RECEIVED OF RS.20,000/- ON 28-4-90 FROM GULABRAI G. CHUGANI, GIFT OF RS.5,800/- ON 17-7-90 FROM RELATIVES, RS.1,735/- TOWARDS INTEREST RECEIVED FROM BANK ACCOUNT ON 7-9-90, GIFT OF RS.9999/- RECEIVED FROM GOPAL DAS VIDE D.D.NO.19086 DT.30-7-90, GIFT OF RS.9999/- RECEIVED FROM SHANTHI GOPAL DAS VIDE CHEQUE NO.493167 DATED 30-7-90, GIFT OF RS.5400/- FROM RELATIVES ON 1 ST BIRTH DAY OF MISS LAVEENA, RS.1,205/- INTEREST FROM BANK, AND GIFT OF RS.2800/- FROM RELATIVES. THE ABOVE AMOUNTS WERE DEPOSITED IN THE BANK ACCOUNTS OF THE MINOR CHILDREN AS THE AMOUNTS WERE RECEIVED BY THEM. IT IS FURTHER SUBMITTED THAT THE PROVISIONS OF SEC. 64(1A) HAVE NO APPLICATION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THERE IS NO SEIZED MATERIAL TO SHOW THAT THE AMOUNTS WERE PAID BY THE APPELLANT FROM OUT OF HIS OWN FUNDS. HENCE THE SAID AMOUNT CANNOT BE ADDED AS THE UNDISCLOSED INCOME OF THE APPELLANT. NO COMMENT IS MADE BY THE AO IN REMAND REPORT. THIS REPRESENTS DEPOSITS IN BANK A/C NO.11311 WHICH IS IN THE NAME OF MISS LAVEENA. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. 206 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. GROUND NO.25. RS.2,000 ADDITION HOLDING THAT THE INTEREST DERIVED FROM MUTUAL FUNDS REPRESENT UNDISCLOSE D INCOME. PARA 16.V OF THE ASSESSMENT ORDER. THE SAID AMOUNT WAS ADMITTED IN THE BLOCK RETURN OF INCOME FILED. ADMITTED IN THE BLOCK RETURN REJECTED GROUND NO.26. RS.2,000 ADDITION HOLDING THAT THE AMOUNT DEPOSITED IN THE NAME OF THE MINORS REPRESENT THE UNDISCLOSE D INCOME. THE AMOUNT OF RS.2,000 WAS PAID TOWARDS PPF IN THE NAME OF MASTER ROHIT. THIS WAS FROM OUT OF THE CASH AVAILABLE AND WAS DEPOSITED FOR CLAIMING EXEMPTION U/S 88 OF THE I.T. ACT. THEREFORE, THIS AMOUNT CANNOT BE TREATED AS THE UNDISCLOSED INCOME. THIS REPRESENTS DEPOSITS IN PPF A/C WHICH IS IN THE NAME OF MASTER ROHIT. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.27. RS.30,000 ADDITION HOLDING THAT THE INVESTMENT IN MUTUAL FUNDS AS UNDISCLOSE D INCOME. NO SUCH ADDITION IS MADE IN THE ASSESSMENT ORDER AND HENCE THE GROUND DOES NOT SUBSIST. NO SUCH ADDITION. HENCE, THE GROUND IS REDUNDANT. REJECTED GROUND NO.28. RS. 20,000 ADDITION ON ACCOUNT OF UNEXPLAINE D DEPOSIT IN THE BANK NO SUCH ADDITION IS MADE IN THE ASSESSMENT ORDER AND HENCE THE GROUND DOES NOT SUBSIST. NO SUCH ADDITION. HENCE, THE GROUND IS REDUNDANT. REJECTED ASSESSMENT YEAR 1992-93 GROUND NO.29. RS.20,000 ESTIMATION OF INTEREST FROM SAVINGS BANK ACCOUNT OF INDIAN BANK AND THIS GROUND IS REDUNDANT AS NO SUCH ADDITION IS MADE IN THE ASSESSMENT ORDER. NO SUCH ADDITION. HENCE THE GROUND IS REDUNDANT. REJECTED 207 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANDHRA BANK GROUND NO.30 RS.15,000 ADDITION OF THE AMOUNT ADVANCED TO SRI MAHENDRA KUMAR PARA 17.IV OF THE ASSESSMENT ORDER. THE ADDITION IS ONLY RS. 15,000. ACCORDING TO THE ASSESSING OFFICER THE AMOUNT ADVANCED TO SHRI MAHENDRA KUMAR REPRESENTS UNDISCLOSED INCOME. IN THIS REGARD IT IS SUBMITTED THAT THE SAID AMOUNT WAS ADVANCED TO SRI MAHENDRA KUMAR FROM THE BOOKS OF KISHORE WATCH COMPANY. THE SAME MAY BE SEEN FROM THE BOOKS OF ACCOUNT IMPOUNDED DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS. THE ASSESSING OFFICER, WITHOUT VERIFICATION OF THE SEIZED DOCUMENTS ADDED THE AMOUNT OF RS. 15,000 AS THE UNDISCLOSED INCOME. FURTHER, THIS DOES NOT EMANATE FROM THE SEIZED MATERIAL AND HENCE NO ADDITION COULD BE MADE. AS PER SEIZED MATERIAL ASSESSEE ADVANCED THIS AMOUNT ON 25/3/91 TO MAHENDRA KUMAR AND THE SAME HAS BEEN STATED TO BE WITHDRAWN FROM KISHORE WATCH CO. THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.31 RS.3,581 ADDITION ON ACCOUNT OF INTEREST EARNED BY MINOR CHILDREN. THE INTEREST EARNED BY MISS LAVEENA OF RS.3,581/- FROM OUT OF THE SAVINGS ACCOUNT AND RS.3,375/- RECEIVED BY MASTER ROHIT. THEY CANNOT BE ADDED AS THE PROVISIONS OF SEC. 64(1A) WERE NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND AS THE SAME ARE EXEMPT FROM TAX U/S 10(15) AND 10(32) OF THE I.T. ACT. THESE ARE INTEREST EARNED IN INDIAN BANK A/C NO.8520 IN THE NAME OF MASTER ROHIT AND SB A/C NO.11311 IN THE NAME OF MISS LAVEENA. THESE AMOUNTS WERE NOT DECLARED IN THE REGULAR OR BLOCK RETURN. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.32 RS.2,000 ADDITION ON ACCOUNT OF DEPOSIT IN PPF ACCOUNT OF MASTER ROHIT. THE AMOUNT OF RS.2,000 WAS PAID TOWARDS PPF IN THE NAME OF MASTER ROHIT. THIS WAS FROM OUT OF THE CASH AVAILABLE AND WAS DEPOSITED FOR CLAIMING EXEMPTION U/S 88 OF THE I.T. ACT. THEREFORE, THIS AMOUNT CANNOT BE TREATED AS THE UNDISCLOSED INCOME. THE ADDITION IS NOT BASED ON ANY SEIZED MATERIAL. THIS REPRESENTS PPF DEPOSITS IN THE NAME OF MASTER ROHIT. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.33. RS.600 ADDITION HOLDING THE INTEREST THE SAID AMOUNT IS ADMITTED IN THE BLOCK RETURN OF INCOME AND HENCE NO ADDITION BE MADE. ASSESSEE RECEIVED INTEREST FROM LIC REJECTED 208 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. RECEIVED FROM LIC MUTUAL FUND AS UNDISCLOSE D. MUTUAL FUND RS.1255 BUT DECLARED RS.755 IN THE BLOCK RETURN. GROUND NOS.34, 35. RS.5,888 RS.21,299 ADDITION ON ACCOUNT OF UNDISCLOSE D DEPOSIT IN ANDHRA BANK IN PARA 17.II THE ASSESSING OFFICER ARRIVED AT ADDITION OF RS. 5,888 AND THE SAID AMOUNT WAS ALREADY ADMITTED IN THE BLOCK RETURN OF INCOME. THE BALANCE OF INTEREST IS WORKED OUT BY THE ASSESSING OFFICER FROM THE DATE OF INVESTMENT. THE APPELLANT WAS DECLARING INTEREST ON ACCRUAL BASIS EVERY YEAR AND THE ASSESSING OFFICER FOR THE YEAR UNDER CONSIDERATION WORKED OUT INTEREST ON BOTH ACCRUAL AND RECEIPT BASIS. THE CORRECT AMOUNT WORKS OUT TO RS. 10,477 (PAGE NO. 78 OF THE PAPER BOOK) AND THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. FURTHER, THE APPELLANT ADMITTED SUCH INTEREST AS PER THE BOOKS OF ACCOUNT. THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE TREATED THE AMOUNT AS THE UNDISCLOSED INCOME. ALL THE DETAILS WERE SUBMITTED IN THE REGULAR RETURN OF INCOME. THE ASSESSING OFFICER MERELY ARRIVED AT THE FIGURES ON PRESUMPTIONS AND WITHOUT REFERENCE TO THE SEIZED MATERIAL. THE ASSESSEE HAS FDRS IN ANDHRA BANK. THE ACCRUED INTEREST WORKS OUT TO RS.20,000; WHEREAS THE ASSESSEE DISCLOSED RS.4589 ONLY IN THE BLOCK RETURN. THEREFORE THE DIFFERENCE OF RS.15411 ALONG WITH THE INTEREST RECEIVED FROM INDIAN BANK ACCOUNT OF RS.5888 IS TREATED AS UNDISCLOSED INCOME. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. ASSESSMENT YEAR 1993-94 GROUND NO.36. RS.10,600 ADDITION HOLDING THAT THE NSC INTEREST IS UNDISCLOSE D INCOME THIS AMOUNT REPRESENTS THE PRINCIPAL AND INTEREST RECEIVED ON MATURITY OF NSC ON 11-6-92. THE DETAILS IN THIS REGARD CAN BE VERIFIED FROM THE BOOKS OF ACCOUNT AVAILABLE WITH THE DEPARTMENT. THE ADDITION IS NOT BASED ON ANY SEIZED DOCUMENT. THE ASSESSING OFFICER ADDED ON THE GROUND THAT THE NSC WOULD BE REFUNDED ONLY THROUGH CHEQUES. THE SAID PRESUMPTION IS NOT CORRECT AND EARLIER, CASH WAS PAID BY THE POST OFFICES. THE AMOUNTS SO RECEIVED WERE CREDITED THIS AMOUNT IS CREDITED IN INDIAN BANK SB A/C. ASSESSEE RELIED UPON A LETTER DT.7/12/97 BUT NO SUCH LETTER WAS PRODUCED FOR VERIFICATION. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. 209 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. IN THE REGULAR BOOKS OF ACCOUNT. WITHOUT VERIFYING THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER ADDED THE SAID AMOUNT AS UNDISCLOSED INCOME. FURTHER, THE AMOUNT IS DEPOSITED WITH INDIAN BANK A/C NO. 6801 WHICH IS DISCLOSED TO THE DEPARTM ENT. HENCE NO SUCH ADDITION CAN BE MADE. GROUND NO.37. RS.37,173 ADDITION TOWARDS ACCRUED INTEREST ACCORDING TO THE ASSESSING OFFICER, THE ESTIMATED INTEREST ON DEPOSITS WORKS OUT TO RS. 55,000. THERE IS NO BASIS FOR THE WORKING MADE BY THE ASSESSING OFFICER. IN FACT THE APPELLANT MAINTAINED BOOKS OF ACCOUNT AND AS PER THE BOOKS, THE ACTUAL AMOUNT OF INTEREST ON SB AND FD WORKED OUT TO RS. 28,062 AND THE SAME IS ADMITTED IN THE RETURN OF INCOME. THE ASSESSING OFFICER IS NOT CORRECT IN WORKING OUT THE INTEREST AT RS. 55,000. THE APPELLANT FILED EVIDENCE FOR THE SOURCES IN MAKING THE BANK DEPOSITS. WITH REGARD TO ACCRUED INTEREST ON FDR OF RS.21,299 A SEPARATE NOTE SUBMITTED BEFORE THE ASSESSING OFFICER ARE AT PAGE NO.52 OF THE PAPER BOOK. HENCE, THE ASSESSING OFFICER MAY PLEASE BE DIRECTED TO DELETE THE ADDITION. IT IS FURTHER SUBMITTED THAT THE ADDITION DID NOT EMANATE FROM THE SEIZED MATERIAL. ALL THE MATERIAL FACTS WERE DISCLOSED TO THE DEPARTMENT AND HENCE NO ADDITION TO THE UNDISCLOSED SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. THE ACCRUED INTEREST ON FDR WORKS OUT TO RS.55,000 WHEREAS THE ASSESSEE ADMITTED INTEREST OF RS.17,927 ONLY IN THE RETURN. THEREFORE, THE DIFFERENCE IS THE UNDISCLOSED INCOME. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. GROUND NO.38. RS.131000 ADDITION HOLDING THAT THE FDRS TO THE EXTENT OF RS.131000 NOT PROPERLY EXPLAINED PARA NO. 18.IV OF THE ASSESSMENT ORDER. THE FDRS TO THE EXTENT OF RS.1,31,000 CONSISTS OF RENEWAL OF 3 DIFFERENT EXISTING FDRS. OF RS.40,500, RS.40,500 AND RS.50,000 THE SOURCES FOR THE SAID DEPOSITS ARE CLEARLY EXPLAINED AT SRL.NOS.4,5 AND 6, PAGE NO.130 OF THE PAPER BOOK. IT WAS SUBMITTED IN THE EXPLANATION THAT THE FDRS AS PER SEIZED MATERIAL THE ASSESSEE HAD FDRS IN INDIAN BANK IN THE NAME OF SRI KISHORE & SMT. ROSHNI. THE ASSESSEE NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATI ON ACCEPTED. AMOUNT 210 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REPRESENT RENEWAL OF DEPOSITS. THEREFORE, THE APPELLANT EXPLAINED THAT NO ADD ITION SHOULD BE MADE. HOWEVER, THE ASSESSING OFFICER MENTIONED THAT THE ORIGINAL DEPOSITS WERE NOT EXPLAINED AND HENCE ADDED THE SAME. IT IS HUMBLY SUBMITTED THAT WHEN THE DEPOSITS WERE NOT MADE DURING THE PREVIOUS YEAR AND THEY REPRESENT ONLY THE RENEWALS, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. COULD NOT EXPLAIN THE SOURCE FOR THE ORIGINAL FDRS. DELETED. GROUND NO.39. RS.7201 ADDITION HOLDING THAT THE PAYMENTS MADE BY MASTER ROHIT FOR CLAIMING DEDUCTION U/S 88 REPRESENT UNDISCLOSE D INCOME. THE AMOUNT OF RS.7,201 INCLUDES CREDIT OF RS.3,180 TO THE PPF ACCOUNT OF THE ASSESSEES MINOR SON. IN SO FAR AS INTEREST AMOUNT OF RS.3,180 IS CONCERNED, THE SAME IS EXEMPT U/S 10(15) OF THE I.T. ACT. THE AMOUNT WAS INVESTED FROM OUT OF THE BANK ACCOUNT NO.8520 OF MASTER ROHIT WITH INDIAN BANK, SECUNDERABAD (PAGE NO.137 OF THE PAPER BOOK). THERE WERE NO CREDITS IN THE SAID BANK ACCOUNT DURING THE FINANCIAL YEAR RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, THE APPELLANT SUBMITS THAT THERE WERE SOURCES FOR THE MINOR SON BEING THE BALANCE IN THE SAID BANK ACCOUNT AND, THEREFORE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY SUCH ADDITION. FROM PAGE-130 OF PAPER BOOK (SL.NO:4,5&6) IT CAN BE SEEN THAT THE ORIGINAL DEPOSITS WERE MADE ON 9/2/86 I.E., PRIOR TO BLOCK PERIOD. THIS REPRESENTS PPF DEPOSITS IN THE NAME OF MASTER ROHIT. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. ASSESSMENT YEAR 1994-95 GROUND NO.40. RS.20,000 ADDITION ON THE GROUND THAT DEDUCTION U/S 80 CCA AND 80 CCB THE APPELLANT SUBMITS THAT FOR THE FIRST TIME, THE CLAIM U/S 80CC OF RS.10,000 WAS MADE FOR THE ASSESSMENT YEAR 1990-91. THE SAID AMOUNT IS REALIZABLE AFTER A PERIOD OF FIVE YEARS. THEREFORE, NO CLAIM WAS MADE PRIOR TO THE YEAR 1990-91. EVEN FOR THE ASSESSMENT THIS IS THE AMOUNT REALIZED FROM SBI MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALIZATION. ALL RECEIPTS ARE NOT TAXABLE. HENCE, DELETED. 211 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. EARLIER CLAIMED HAS TO BE WITHDRAWN. YEAR 1990-91, THE APPELLANT CLAIMED ONLY RS. 10,000 AS DEDUCTION U/S 80CC AND NO CLAIM WAS MADE EITHER U/S 80CCA OR 80CCB OF THE I.T. ACT. THE ADDITION DOES NOT EMINENT FROM THE SEIZED MATERIAL. ALL THE MATERIAL WAS AVAILABLE WITH THE DEPARTMENT. GROUND NO.41. RS.59,868 ADDITION ON ACCOUNT OF ACCRUED INTEREST. THE ASSESSING OFFICER ARRIVED AT INTEREST ON FDRS PURELY ON ESTIMATE. THIS IS NOT JUSTIFIED WHILE COMPLETING THE ASSESSMENT U/S 158BC OF THE I.T. ACT. THE APPELLANT ALREADY ADMITTED AN INCOME OF RS. 6,501 TOWARDS INTEREST ON FDRS. THE SAID AMOUNT WAS REALIZED DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY FURTHER ADDITION IN THIS REGARD PARTICULARLY, IN VIEW OF THE FACT THAT THE ADDITION IS NOT BASED ON SEIZED DOCUMENTS. FURTHER THE AO MERELY TOTALED THE FDRS LISTED WITHOUT CONSIDERING THE LIFE OF FDRS. THE ASSESSEE IS IN POSSESSION OF FDR OF RS.5,46,480. THE ACCRUED INTEREST WORKS OUT TO RS.65577 WHEREAS THE ASSESSEE DECLARED RS.5709 ONLY. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. GROUND NO.42. RS.5,311 ADDITION ON ACCOUNT OF UNDISCLOSE D INTEREST IN MINORS ACCOUNT. AS PER THE ASSESSING OFFICER, THIS AMOUNT CONSISTS OF THREE ITEMS (1) RS.3058 IS NOT APPEARING IN THE ACCOUNT NO.8520 OF MASTER ROHIT. (2) INTEREST AMOUNT OF RS.253 ALSO IS NOT APPEARING IN THE ACCOUNT OF MISS LAVEENA (3) ONLY GIFT RECEIVED OF RS.2,000 IS APPEARING IN HER ACCOUNT. THE AO DID NOT CONTRADICT THE SUBMISSIONS MADE AND HENCE THE ADDITION MAY PLEASE BE DELETED. THIS REPRESENTS DEPOSITS IN BANK A/C NO.8520 AND 11311 WHICH IS IN THE NAME OF MASTER ROHIT AND MISS LAVEENA. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. GROUND NO.43. RS.3,546 ADDITION ON ACCOUNT OF MINORS PPF A/C THE GROUND IS REDUNDANT AND DOES NOT EMANATE OF THE ORDER OF ASSESSMENT. NO SUCH ADDITION. HENCE THE GROUND IS REDUNDANT. REJECTED GROUND NO.44. RS.20,000 ADDITION HOLDING THAT THE THE APPELLANT SUBMITS THAT FOR THE FIRST TIME, THE CLAIM U/S 80CC OF RS.10,000 WAS MADE FOR THE THIS IS THE AMOUNT REALIZED FROM SBI NO BASIS FOR MAKING ADDITION IN 212 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. REFUND REPRESENT THE REFUND OF THE AMOUNT CLAIMED AS DEDUCTION U/S 80 CCA AND 80 CCB ASSESSMENT YEAR 1990-91. THE SAID AMOUNT IS REALIZABLE AFTER A PERIOD OF FIVE YEARS. THEREFORE, NO CLAIM WAS MADE PRIOR TO THE YEAR 1990-91. EVEN FOR THE ASSESSMENT YEAR 1990-91, THE APPELLANT CLAIMED ONLY RS.10,000 AS DEDUCTION U/S 80CC AND NO CLAIM WAS MADE EITHER U/S 80CCA OR 80CCB OF THE I.T. ACT. MUTUAL FUND WHICH IS TAXABLE IN THE YEAR OF REALIZATION. BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. GROUND NO.45. RS.10,413 ADDITION ON THE GROUND THAT REGISTRATIO N CHARGES FOR PURCHASE OF BOWENPALL Y PROPERTY NOT DECLARED. THIS GROUND IS REDUNDANT AS NO SUCH ADDITION IS MADE. THE GROUND IS REDUNDANT REJECTED. ASSESSMENT YEAR 1995-96 GROUND NO.46. RS.32,262 ADDITION ON ACCOUNT OF ACCRUED INTEREST. THE ASSESSING OFFICER ARRIVED AT INTEREST ON FDRS PURELY ON ESTIMATE. THIS IS NOT JUSTIFIED WHILE COMPLETING THE ASSESSMENT U/S 158BC OF THE I.T. ACT. THE APPELLANT ALREADY ADMITTED RS.7,738 TOWARDS INTEREST ON FDRS. THE SAID AMOUNT WAS REALIZED DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ANY FURTHER ADDITION IN THIS REGARD PARTICULARLY, IN VIEW OF THE FACT THAT THE ADDITION OF RS.32,262 IS NOT BASED ON SEIZED DOCUMENTS. DETAILED EXPLANATION IS SUBMITTED IN COLUMN NO.4. THE NET HOLDING OF FDR IS RS.30458. THE ACCRUED INTEREST WORKS OUT TO RS.40,000 WHEREAS THE ASSESSEE DECLARED ONLY RS.7738. NO BASIS FOR MAKING ADDITION IN THE BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.47 RS.25,099 ADDITION DISBELIEVIN G RENTAL INCOME. THE GROUND IS REDUNDANT AS NO SUCH ADDITION IS APPEARING IN THE ASSESSMENT ORDER. THIS GROUND IS REDUNDANT. REJECTED GROUND NO.48. RS.10,727 ADDITION ON ACCOUNT OF THIS CONSISTS OF RS. 4,079 IN THE ACCOUNT OF ROHIT; RS. 657 IN THE ACCOUNT OF LAVEENA; CASH DEPOSIT OF THIS REPRESENTS DEPOSITS IN NO BASIS FOR MAKING ADDITION IN 213 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. UNDISCLOSE D INTEREST AND PPF CONTRIBUTIO N OF MINORS. RS. 3,951 IN THE ACCOUNT OF ROHIT AND RS. 2,040 IN THE PPF ACCOUNT OF LAVEENA. THE AMOUNTS REPRESENT DEPOSITS MADE INTO THE RESPECTIVE ACCOUNTS AND THE INTEREST ARISING OUT OF THE SAID ACCOUNTS. IN SO FAR AS DEPOSITS WITH PPF ARE CONCERNED, THE SAID DEPOSITS ARE FROM OUT OF THE CASH AVAILABLE WITH THE APPELLANT AND FOR THE PURPOSE OF CLAIMING DEDUCTION. THE INTEREST ON PPF IS EXEMPT FROM TAX. IN SO FAR AS DEPOSITS IN THE BANK ACCOUNTS ARE CONCERNED, THE SAID AMOUNTS ARE DEPOSITED FROM THE KNOWN SOURCES OF THE MINOR CHILDREN. THE INTEREST CANNOT BE ADDED AS THE SAME IS LESS THAN RS. 1,500 EACH. THEREFORE, IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO HAVE MADE THE ADDITION EVEN AFTER EXPLANATIONS WERE SUBMITTED. IT IS ALSO SUBMITTED THAT THE ADDITIONS DO NOT EMANATE FROM THE SEIZED DOCUMENTS. THEREFORE, THE APPELLANT REQUESTS THAT THE ADDITION MAY KINDLY BE DELETED. BANK A/C NO.8520 AND 11311 AND PPF A/C WHICH IS IN THE NAME OF MASTER ROHIT AND MISS LAVEENA. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION WITH SUPPORTING EVIDENCES. THE BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.49. RS.10,000 ADDITION HOLDING THAT THERE IS REFUND FROM LIC MUTUAL FUND. FOR THE ASSESSMENT YEAR 1990-91, AN AMOUNT WAS CLAIMED U/S 80CC OF THE I.T ACT AND NOT U/S 80CCD OF THE I.T. ACT. THEREFORE, IT IS NOT CORRECT FOR THE ASSESSING OFFICER TO MAKE ANY ADDITION. THE ASSESSEE HAS RECEIVED 12582 IN INDIAN BANK A/C 6801 FROM LIC MUTUAL FUND WHICH IS MATURITY AMOUNT FORM INVESTMENT U/S 80 CCD. THE PRINCIPAL AMOUNT IS TO BE BROUGHT TO TAX IN THE YEAR OF MATURITY. NO BASIS FOR MAKING ADDITION IN THE BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. ASSESSMENT YEAR 1996-97 GROUND NO.50. RS.31,184 ADDITION HOLDING THAT THE IT WAS SUBMITTED THAT AN AMOUNT OF RS.30,000 WAS INVESTED ON 18.11.1995 IN FDRS BY THIS REPRESENTS THE MATURITY NO BASIS FOR MAKING ADDITION IN 214 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. CREDIT ON 18-3-96 REPRESENTS UNDISCLOSE D INCOME. TRANSFERRING THE AMOUNT FROM ACCOUNT NO.6801 THROUGH CHEQUE NO.571645. THE MATURITY VALUE WAS DEPOSITED ON 18.3.1996. THIS CANNOT BE TREATED AS THE INCOME OF THE APPELLANT. AMOUNT OF FDR. THE ASSESSEE COULD NOT FURNISH THE ORIGINAL FDR PURCHASED ON 18-11-95. BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.51. RS.22,800 ADDITION HOLDING THAT THE AMOUNT REPRESENT THE UNDISCLOSE D INCOME. THIS AMOUNT IS ADMITTED IN THE RETURN OF INCOME IN FORM 2B AND HENCE THE GROUND IS NOT PRESSED. AMOUNT IS ADMITTED IN THE RETURN. REJECTED GROUND NO.52. RS.10,682 ADDITION ON THE GROUND OF ACCRUED INTEREST. THE APPELLANT IS ADMITTING ON INTEREST AS AND WHEN CREDITED BY THE BANK. FURTHER, THE DEPOSITS MADE INTO THE BANK ACCOUNT AND THE OTHER ACCOUNTS WERE ALL DISCLOSED TO THE DEPARTMENT. THE ASSESSING OFFICER ARRIVED AT THE DIFFERENCE ON ESTIMATE AND ON PRESUMPTIONS. THEREFORE, THE ADDITION CANNOT BE MADE. THE APPELLANT FILED EVIDENCE FOR THE SOURCES IN MAKING THE BANK DEPOSITS. WITH REGARD TO ACCRUED INTEREST ON FDR OF RS.21,299/- A SEPARATE NOTE SUBMITTED BEFORE THE ASSESSING OFFICER ARE AT PAGE NO.52 OF THE PAPER BOOK. HENCE, THE ASSESSING OFFICER MAY PLEASE BE DIRECTED TO DELETE THE ADDITION. THE NET HOLDING OF FDR IS RS.1,13,790. THE ACCRUED INTEREST WORKS OUT TO RS.13,000 WHEREAS THE ASSESSEE DECLARED ONLY RS.2,318 NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. GROUND NO.53 RS.12,558 ADDITION ON ACCOUNT OF UNDISCLOSE D PPF CONTRIBUTIO N AND BANK INTEREST OF MINORS. THE ASSESSING OFFICER HELD THAT THE PAYMENTS MADE BY THE ASSESSEES SON MASTER ROHIT A/C NO.1913147 PPF INTEREST RS.12,558/- FROM OUT OF THE KNOWN SOURCES OF THE INCOME FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 88 OF THE I.T. ACT REPRESENTS THE UNDISCLOSED INCOME. THE AMOUNT WAS PAID FROM OUT OF THE KNOWN SOURCES OF INCOME. THE INTEREST IS ON PPF IS EXEMPT FROM TAX. THE AMOUNT WAS DISCLOSED TO THE DEPARTMENT. THEREFORE, THE ADDITION MAY KINDLY BE DELETED. THIS REPRESENTS DEPOSITS IN BANK A/C NO.8520 AND 11311 AND PPF A/C WHICH IS IN THE NAME OF MASTER ROHIT AND MISS LAVEENA. ASSESSEE HAS NOT GIVEN ANY SPECIFIC EXPLANATION NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATION ACCEPTED. AMOUNT DELETED. 215 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. WITH SUPPORTING EVIDENCES. ASSESSMENT YEAR 1997-98 GROUND NO.54. RS.70,000 ADDITION ON ACCOUNT OF UNDISCLOSE D INCOME. THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS AN EXCESS CASH OF RS.70,000 IN THE POSSESSION OF THE APPELLANT AND ADDED THE SAME AS THE UNDISCLOSED INCOME. IN THIS REGARD, THE APPELLANT SUBMITTED A DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER VIDE NOTE FILED ON 17-09-1997 WHICH IS AT PAGES 47 TO 50 OF THE PAPER BOOK. IT IS SUBMITTED THAT IF THE CASH AS PER THE VARIOUS CASH BOOKS AND CASH WITHDRAWAL IN THE IMMEDIATE PAST WERE TAKEN INTO CONSIDERATION THERE WOULD NOT BE ANY DEFICIENCY IN CASH. A DETAILED NOTE IN THIS REGARD IS SUBMITTED IN THE CASE OF ASHOK G. CHUGANI AND THE SAME MAY KINDLY BE CONSIDERED IN THE CASE OF THE APPELLANT ALSO. DURING THE HEARING A SEPARATE SUBMISSION WAS MADE WHICH MAY BE CONSIDERED. DURING SEARCH TOTAL CASH FOUND WAS RS.5,60,000. OUT OF THIS CASH AMOUNTING TO RS.3,94,705/- WAS FOUND AT THE RESIDENCE OF ASSESSEE AND OTHER FAMILY MEMBERS. THE ASSESSEE COULD NOT EXPLAIN THE CASH AVAILABILITY. THEREFORE RS.3,50,000 IS TAKEN IN THE HANDS OF ALL MALE MEMBERS. THE PROPORTIONATE SHARE OF THE ASSESSEE COMES TO RS.70,000 FOR THE DETAILED REASONS STATED IN MAIN PART OF THE ORDER, THE ADDITION OF UNACCOUNTED CASH WAS DELETED. GROUND NO.55. RS.16800 ADDITION TREATING THE PAYMENTS MADE TO THE CO- OPERATIVE SOCIETY FOR MAINTENAN CE OF THE BUILDING AS UNDISCLOSE D INCOME. THIS IS AGAINST THE EXPENDITURE MADE ON THE MAINTENANCE OF THE BUILDING AT MUMBAI. AS PER SEIZED MATERIAL THE ASSESSEE PAID AN AMOUNT OF RS.75,303 TO HOUSING SOCIETY, MUMBAI ALONG WITH HIS BROTHERS. THE PAYMENTS ARE UNACCOUNTED AND REPRESENTS ASSESSEES SHARE FOR NO BASIS FOR MAKING ADDITION IN BLOCK. EXPLANATIO N ACCEPTED. AMOUNT DELETED. 216 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. DIFFERENT YEARS. AS PER SEIZED MATERIAL ASSESSEE PAID RS.34,000 TOWARDS REGISTRATION AND 70,000 TO THE HOUSING SOCIETY AND ALSO RS.50,000 FOR THE PURCHASE OF FURNITURE. THESE AMOUNTS WERE NOT DISCLOSED. THE ASSESSEE SHARE COMES TO RS.16,800 GROUND NO.56. RS.116257 ADDITION ON ARRIVING AT THE EXCESS STOCK FOUND DURING THE COURSE OF SEARCH THE ASSESSING OFFICER IS OF THE VIEW THAT THERE WAS EXCESS STOCK OF RS.1,16,257 AND ADDED THE SAME BY APPLYING THE PROVISIONS U/S 69 OF THE I.T. ACT. IT IS SUBMITTED THAT THE ASSESSING OFFICER ARRIVED AT THE STOCK BY CONSIDERING THE DIFFERENCE BETWEEN MAXIMUM RETAIL PRICE ON THE ITEMS OF STOCK AVAILABLE AND THE STOCK AS PER THE BOOKS. THE APPELLANT RECONCILED THE DIFFERENCE. IT WAS SUBMITTED THAT THE MAXIMUM RETAIL PRICE INCLUDE THE DISCOUNT, THE PROFIT AND OTHER EXPENSES. A STATEMENT IS PREPARED AND ANNEXED TO THE PAPER BOOK AT PAGE NO.67. IT CAN BE SEEN THAT THE COST AS PER THE BILLS IS MUCH LESS THAN THE MRP RATE AND, THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE MADE AN ADDITION. IN THIS REGARD THE NOTE SUBMITTED BY THE ASSESSEE MAY PLEASE BE PERUSED. DURING THE HEARING A SEPARATE SUBMISSION WAS MADE WHICH MAY BE CONSIDERED. THE VALUATION OF STOCK WAS DONE ON TAG PRICE AND THEREAFTER THE COST PRICE OF THE STOCK WAS ARRIVED AT BY REDUCING THE GROSS PROFIT @7% AS DECLARED BY THE ASSESSEE IN PRECEDING YEARS. THUS THE EXCESS STOCK WAS ARRIVED AT. FOR THE DETAILED REASONS STATED IN MAIN PART OF THE ORDER, THE ADDITION IS DELETED. 217 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. GROUND NO.57. 1,50,000 (1988-89) 3,33,333 (1990-91) ADDITION HOLDING THAT THE AMOUNTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI REPRESENT THE UNDISCLOSE D INCOME. THE ADDITION OF RS.1,50,000 FOR THE ASSESSMENT YEAR 1988-89 AND RS.3,33,333 FOR THE ASSESSMENT YEAR 1990-91 WERE MADE DISBELIEVING THE GIFTS RECEIVED FROM SMT. VARSHA JAIKUMAR MIRPURI. IN THIS REGARD, IT IS SUBMITTED THAT THESE ENTRIES WERE MADE IN THE REGULAR BANK ACCOUNT AND THE BOOKS OF ACCOUNT. NO INCRIMINATING MATERIALS WERE FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE AS UNDISCLOSED INCOME. IT IS SUBMITTED THAT THE INFORMATION AVAILABLE AT THE TIME OF SEARCH SHOWS THAT THE AMOUNTS WERE RECEIVED FROM HER MUCH EARLIER; SUCH AMOUNTS WERE DEPOSITED INTO HER BANK ACCOUNT; THAT THE AMOUNTS SO DEPOSITED WERE TRANSFERRED TO THE BANK OF THE APPELLANT AND SUCH BANK ACCOUNTS WERE ALREADY ADMITTED IN THE RETURN OF INCOME FILED BY THE APPELLANT. WITHOUT PREJUDICE, THE APPELLANT SUBMITS THAT SMT. VARSHA MIRPURI IS THE RESIDENT OF BANGKOK, THAILAND AND SHE IS THE SISTER OF THE APPELLANT. SHE MAINTAINED A BANK ACCOUNT WITH INDIAN BANK, SECUNDERABAD, A COPY OF WHICH IS SUBMITTED AT PAGE NOS.48 TO 50 OF THE PAPER BOOK. THE APPELLANT FILED BANK ACCOUNT IN INDIA, LETTER OF CONFIRMATION FROM VARSHA MIRPURI. IT IS ALSO CONFIRMED BY HER THAT SHE DEPOSITED THE AMOUNTS WITH THE INDIAN BANK MUCH EARLIER AND SHE ISSUED CHEQUES IN FAVOUR OF THE APPELLANT AND OTHER BROTHERS AND THE AMOUNT WAS WITHDRAWN. THEREFORE, THE DONOR IS IDENTIFIED, SOURCES ARE IDENTIFIED AND SHE CONFIRMED THE FACT THAT THE AMOUNT WAS GIFTED BY HER. SHE ALSO CONFIRMED THE FACT THAT SHE GIFTED THE AMOUNT THROUGH BANKING CHANNEL. THE ASSESSING OFFICER ISSUED A NOTICE U/S 158BD TO MRS. VARSHA MIRPURI PROPOSING TO TAX THE AMOUNT DEPOSITED INTO THE SAID THE DONOR HAD GIFTED A TOTAL AMOUNT OF AROUND RS.42 LACS TO HER BROTHERS AND RELATIVES DURING THE PERIOD. THE ASSESSEE COULD NOT PROVE THAT THE DONORS FINANCIAL CAPACITY WAS SUFFICIENT TO MAKE GIFT REPEATEDLY TO HER RELATIVES. MOREOVER, THE ASSESSEE COULD NOT PRODUCE ANY IT RETURN COPY OF HER RELATIVE NOR ANY BALANCE SHEET DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FOR THE DETAILED REASONS STATED IN MAIN PART OF THE ORDER, THE ADDITION IS DELETED. 218 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. BANK ACCOUNT AND THE SAID SMT. VARSHA MIRPURI EXPLAINED THE SOURCE FOR SUCH DEPOSIT AND THEREAFTER THE PROCEEDINGS U/S 158BD WERE CLOSED. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION U/S 68 OF THE ACT FOR BOTH THE ASSESSMENT YEARS. THE AO IS NOT JUSTIFIED IN MENTIONING THAT THE DONORS IT PARTICULARS ARE NOT FILED. THE A.O. ISSUED NOTICE U/S-158BD AND DROPPED THE PROCEEDINGS ON RECEIPT OF RETURN OF INCOME. 219 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-13 IT(SS)A NO.13/H/2011 RAMESH SALES CORPORATION, HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND01-04-1996 TO 03 -10-1996 ASSESSMENT YEAR: 1997-98 GROUND NO. & AMOUNT ADDED. DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1 & 3 GENERAL IN NATURE. -- 2. DEFICIT CASH OF RS.26,638. ADDITION MADE HOLDING THAT THERE WAS DEFICIT CASH IN THE BOOKS OF A/C. DURING THE COURSE OF SEARCH PROCEEDINGS SRI RAMESH CHUGANI AND HIS FATHER SRI GULABRAI CHUGANI DECLARED AN AMOUNT OF RS. 7,00,000 AS UNDISCLOSED CASH OF THE ENTIRE FAMILY. THIS DECLARATION WAS MADE TAKING INTO CONSIDERATION DEFICIT CASH FOUND IN THE PREMISES OF THE ASSESSEE AND OTHER SISTER CONCERNS. SRI RAMESH CHUGANI AGREED FOR THE DISCLOSURE AS HE WAS NOT HAVING THE ASSISTANCE OF THE BOOKS OF ACCOUNT AT THE TIME OF DECLARATION. HOWEVER, AS SOON AS THE COPIES OF BOOKS OF ACCOUNT WERE MADE AVAILABLE TO THE ASSESSEE, THE CORRECT POSITION WITH REGARD TO THE AVAILABILITY OF CASH WAS ARRIVED AT AND IT WAS FOUND THAT THERE WAS NO DEFICIT CASH AS WAS ARRIVED AT IN THE BOOKS OF ACCOUNT. A DETAILED NOTE ON THE AVAILABILITY OF CASH WITH THE ASSESSEE WAS SUBMITTED BEFORE THE ASSESSING OFFICER WHILE COMPLETING THE ORIGINAL ASSESSMENT. THE ASSESSING OFFICER DID NOT TAKE INTO CONSIDERATION THE CONTENTS OF THE NOTE SUBMITTED BUT PROCEEDED TO ADD AN AMOUNT OF RS. 26,638 AS DEFICIT CASH FOUND DURING THE COURSE OF SEARCH PROCEEDINGS AND ADDED THE SAME IN THE THE TOTAL CASH AS PER BOOKS ON THE DATE OF SEARCH IN RESPECT OF THE FOUR FIRMS OF THIS GROUP WAS RS.2,00,816 HOWEVER, CASH OF RS.67,865 WAS ONLY FOUND DURING SEARCH. SRI RAMESH CHUGANI IN HIS STATEMENT STATED THAT AN AMOUNT OF RS.5.6 LAKHS IS UNEXPLAINED CASH ON ACCOUNT OF ENTIRE FAMILY MEMBERS FOUND AT THE RESIDENCES. THERE WAS ALSO DEFICIT CASH IN THE BUSINESS CONCERNS AS WELL. THEREFORE, HE WHILE ACCEPTING THE SOURCES FOR EXCESS CASH WITH MEMBERS OF FAMILY, THE DEFICIT CASH IN BOOKS OF ACCOUNT CANNOT BE ACCEPTED. IT MEANS THAT ASSESSEE HAS SOURCES OUTSIDE THE BOOKS FOR SPENDING MONEY IN THE BOOKS OF ACCOUNT. HENCE, THE AMOUNT OF DEFICIT IS CONFIRMED. GROUND REJECTED. 220 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ASSESSMENT. THE PRESENT ASSESSING OFFICER, WHILE COMPLETING THE RE-ASSESSMENT ALSO DID NOT APPRECIATE THE CONTENTS OF THE NOTE BUT PROCEEDED TO COMPLETE THE ASSESSMENT ADDING THE AMOUNT OF RS. 26,638 IN THE ASSESSMENT. THE NOTE SUBMITTED BEFORE THE ASSESSING OFFICER AT THE TIME OF COMPLETION OF THE ORIGINAL ASSESSMENT IS AT PAGE NOS. 9 OF THE PAPER BOOK. FURTHER, DEFICIT CASH CANNOT NOT BE CONSIDERED FOR ADDITION U/S 69 OF THE ACT. THE ADDITION IS RESORTED TO BY THE ASSESSING OFFICER ONLY ON THE BASIS OF THE NOTE SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE APPELLANT SUBMITS THAT IN VIEW OF THE DETAILED EXPLANATION NO ADDITION CAN BE MADE. FURTHER, IN THE CASE OF THE ASSESSEE THE AUTHORITIES FOUND DEFICIT CASH WHICH CANNOT BE TREATED AS THE UNDISCLOSED INCOME. DECLARED TOTAL AMOUNT OF RS.7 LAKHS AS UNDISCLOSED CASH OF THE ENTIRE FAMILY. DURING THE ASSESSMENT PROCEEDINGS HE DENIED THE DECLARATION MADE DURING THE SEARCH. THE ASSESSEE TRIED TO LINKUP THE DEFICIT CASH TO THE EXCESS CASH FOUND IN THE RESIDENCE. THE ASSESSEE COULD NOT EXPLAIN ANY REASONS FOR THE DEFICIT CASH. THEREFORE, THE DEFICIT CASH IS TREATED AS UNDISCLOSED INCOME. 221 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-14 IT(SS)A NO.14/H/2011 RAMESH WATCH SERVICES. HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND01-04-1996 TO 03 -10-1996 ASSESSMENT YEAR: 1997-98 GROUND NO. & AMOUNT ADDED. DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT. DECISION 1&4 GENERAL IN NATURE - - - 2 & 3 RS.88428 ADDITION MADE HOLDING THAT THERE WAS EXCESS STOCK WITH THE ASSESSEE. WITH REGARD TO THE ADDITION OF RS. 88,428 TOWARDS THE ALLEGED EXCESS STOCK FOUND DURING THE COURSE OF SEARCH PROCEEDINGS, IT IS SUBMITTED THAT THE OFFICIALS OF THE DEPARTMENT, WHILE TAKING INVENTORY OF THE STOCK AVAILABLE AT THE PREMISES OF THE APPELLANT VALUED THE STOCK AT RS. 42,21,968. THE STOCK BELONGS TO FOUR CONCERNS SITUATED IN THE SAME PREMISES I.E RAMESH WATCH CO.; KISHORE WATCH CO.; RAMESH WATCH ENTERPRISERS AND RAMESH WATCH SERVICES. THE TOTAL VALUE OF THE STOCK AS PER THE STOCK REGISTERS BELONGING TO THE ABOVE FOUR CONCERNS WAS VALUED AT RS. 34,37,336 AND ARRIVED AT AN EXCESS STOCK OF RS. 4,89,095. FROM OUT OF THIS, THE VALUE OF PROPORTIONATE EXCESS STOCK AS BELONGING TO THE ASSESSEE WAS ARRIVED AT RS. 88,428. WHILE ARRIVING AT THE EXCESS STOCK, THE AUTHORITIES THE VALUATION OF STOCK WAS DONE ON TAG PRICE AND THEREAFTER THE COST PRICE OF THE STOCK WAS ARRIVED AT BY REDUCING THE GROSS PROFIT @7% AS DECLARED BY THE ASSESSEE IN PRECEDING YEARS. THUS THE EXCESS STOCK WAS ARRIVED AT. FOR THE DETAILED REASONS MADE IN THE MAIN PART OF THE ORDER, THE ADDITION ON ACCOUNT OF EXCESS STOCK IS DELETED. 222 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. TOOK INTO CONSIDERATION THE SALE PRICE/TAG PRICE OF EACH OF THE ARTICLE AND DEDUCTED THEREFROM AN ESTIMATED GROSS PROFIT OF 7% AT THE EXCESS STOCK AT RS. 88,428. IN THIS CONNECTION IT IS SUBMITTED THAT THE VALUATION OF CLOSING STOCK BY THE AUTHORITIES IS ERRONEOUS INASMUCH AS THE TAG PRICE INCLUDE THE PROFIT, THE DISCOUNT AND OTHER INCIDENTAL EXPENSES . IT IS THE PRINCIPLE THAT CLOSING STOCK HAS TO BE VALUED EITHER AT COST PRICE OR MARKET PRICE WHICHEVER IS LESS. HENCE THE AUTHORITIES WHILE TAKING INVENTORY SHOULD HAVE ADOPTED THE RATE OF CLOSING STOCK AT COST PRICE, WHICH WOULD ALWAYS BE LOWER THAN THE TAG PRICE. HENCE THE VALUATION OF CLOSING STOCK BY THE AUTHORITIES IS ERRONEOUS AND CONTRARY TO THE PRINCIPLES OF VALUATION OF STOCK. A DETAILED NOTE WITH REGARD TO THE VALUATION OF CLOSING STOCK WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS WHICH IS AT PAGE NOS. 13 TO 18 OF THE PAPER BOOK FILED IN THE CASE OF RAMESH WATCH CO. MAY KINDLY BE PERUSED. WHILE REJECTING THE CONTENTION OF THE ASSESSEE THAT GROSS PROFIT RATE SHOULD BE ADOPTED AT 10%, THE ASSESSING OFFICER WITHOUT ASSIGNING ANY REASONS ADOPTED THE GROSS 223 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. PROFIT RATE AT 7%. HE DID NOT SPECIFY THE BASIS ON WHICH HE ARRIVED AT THE GROSS PROFIT RATE AT 7%. IT IS FURTHER SUBMITTED THAT THE AUTHORITIES DID NOT FIND ANY PURCHASES OR SALES OUTSIDE THE BOOKS OF ACCOUNT. THERE IS ALSO NO DIFFERENCE IN THE QUANTITY OF STOCK. BUT THE DIFFERENCE IS ONLY WITH REFERENCE TO VALUATION OF THE STOCKS. THE AUTHORITIES ALSO DID NOT FIND ANY UNDISCLOSED PURCHASES OR UNDISCLOSED SALES DURING THE COURSE OF SEARCH. EVEN, THE VALUATION OF THE STOCK IS NOT CORRECTLY MADE IN VIEW OF THE EXPLANATION SUBMITTED ABOVE. THEREFORE, NO ADDITION CAN BE MADE. THEREFORE, THE APPELLANT SUBMITS THAT THERE IS NO EXCESS STOCK AVAILABLE AND NO ADDITION SHOULD HAVE BEEN MADE BY THE ASSESSEE. 224 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. ANNEXURE-15 IT(SS)A NO.15/H/2011 RAMESH WATCH CO. HYDERABAD BLOCK PERIOD 1987-88 TO 1996-97 AND01-04-1996 TO 03 -10-1996 ASSESSMENT YEAR: 1997-98 GROUND NO. & AMOUNT ADDED. DETAILS OF ADDITION EXPLANATION REMARKS OF THE ASSESSING OFFICER IN THE REMAND REPORT DECISION 1 & 4 GENERAL IN NATURE - - - 2 & 3 RS.105458 RS.198083 ADDITION MADE HOLDING THAT THERE WAS DEFICIT CASH IN THE BOOKS OF A/C. AND THERE WAS EXCESS STOCK WITH THE APPELLANT. DURING THE COURSE OF SEARCH PROCEEDINGS SRI RAMESH CHUGANI AND HIS FATHER SRI GULABRAI CHUGANI DECLARED AN AMOUNT OF RS. 7,00,000 AS UNDISCLOSED CASH OF THE ENTIRE FAMILY. THIS DECLARATION WAS MADE TAKING INTO CONSIDERATION DEFICIT CASH FOUND IN THE PREMISES OF THE ASSESSEE AND OTHER SISTER CONCERNS. SRI RAMESH CHUGANI AGREED FOR THE DISCLOSURE AS HE WAS NOT HAVING THE ASSISTANCE OF THE BOOKS OF ACCOUNT AT THE TIME OF DECLARATION. HOWEVER, AS SOON AS THE COPIES OF BOOKS OF ACCOUNT WERE MADE AVAILABLE TO THE ASSESSEE, THE CORRECT POSITION WITH REGARD TO THE AVAILABILITY OF CASH WAS ARRIVED AT AND IT WAS FOUND THAT THERE WAS NO DEFICIT CASH AS WAS ARRIVED AT IN THE BOOKS OF ACCOUNT. A DETAILED NOTE ON THE AVAILABILITY OF CASH WITH THE TOTAL CASH AS PER BOOKS ON THE DATE OF SEARCH IN RESPECT OF THE FOUR FIRMS OF THIS GROUP WAS RS.2,00,816. HOWEVER CASH OF RS.67,865 WAS ONLY FOUND DURING SEARCH. SRI RAMESH CHUGANI IN HIS STATEMENT STATED THAT AN AMOUNT OF RWS.5.6 LAKHS IS UNEXPLAINED CASH ON ACCOUNT OF ENTIRE FAMILY MEMBERS FOUND AT THE RESIDENCES. THERE WAS ALSO DEFIC IT CASH IN THE BUSINESS WHILE ACCEPTING THE SOURCES FOR EXCESS CASH WITH MEMBERS OF FAMILY, THE DEFICIT CASH IN BOOKS OF ACCOUNT CANNOT BE ACCEPTED. IT MEANS THAT ASSESSEE HAS SOURCES OUTSIDE THE BOOKS FOR SPENDING MONEY IN THE BOOKS OF ACCOUNTS. HENCE, THE AMOUNT OF DEFICIT IS CONFIRMED. GROUND REJECTED. 225 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. THE ASSESSEE WAS SUBMITTED BEFORE THE ASSESSING OFFICER WHILE COMPLETING THE ORIGINAL ASSESSMENT. THE ASSESSING OFFICER DID NOT TAKE INTO CONSIDERATION THE CONTENTS OF THE NOTE SUBMITTED BUT PROCEEDED TO ADD AN AMOUNT OF RS. 1,05,458/- AS DEFICIT CASH FOUND DURING THE COURSE OF SEARCH PROCEEDINGS AND ADDED THE SAME IN THE ASSESSMENT. THE PRESENT ASSESSING OFFICER, WHILE COMPLETING THE RE-ASSESSMENT ALSO DID NOT APPRECIATE THE CONTENTS OF THE NOTE BUT PROCEEDED TO COMPLETE THE ASSESSMENT ADDING THE AMOUNT OF RS. 1,05,458/- IN THE ASSESSMENT. THE NOTE SUBMITTED BEFORE THE ASSESSING OFFICER AT THE TIME OF COMPLETION OF THE ORIGINAL ASSESSMENT IS AT PAGE NOS. 9 TO 12 OF THE PAPER BOOK. IT IS CLEARLY EXPLAINED THAT AS TO WHY THE CASH DEFICIT/EXCESS SHOULD NOT BE ADDED. THE REASONS AS EXPLAINED IN THE SAID NOTE MAY KINDLY BE CONSIDERED. IT IS SUBMITTED THAT DEFICIT CASH CANNOT BE ADDED AS INCOME U/S 69 OF THE ACT. WITH REGARD TO THE ADDITION OF RS. 1,98,083/- TOWARDS THE ALLEGED EXCESS STOCK CONCERNS AS WELL. THEREFORE, HE DECLARED TOTAL AMOUNT FOR S.7 LAKHS AS UNDISCLOSED CASH OF THE ENTIRE FAMILY. DURING ASSESSMENT PROC3EDINGS HE DENIED THE DECLARATION MADE DURING THE SEARCH. THE ASSESSEE TRIED TO LINK UP THE DEFICIT CASH TO THE EXCESS CASH FOUND IN THE RESIDENCE. THE ASSESSEE COULD NOT EXPLAIN ANY REASONS FOR THE DEFICIT CASH. THEREFORE, THE DEFICIT CASH IS TREATED AS UNDISCLOSED INCOME. THE VALUATION FOR THE DETAILED REASONS MADE IN THE MAIN PART OF THE ORDER, 226 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. FOUND DURING THE COURSE OF SEARCH PROCEEDINGS, IT IS SUBMITTED THAT THE OFFICIALS OF THE DEPARTMENT, WHILE TAKING INVENTORY OF THE STOCK AVAILABLE AT THE PREMISES OF THE APPELLANT VALUED THE STOCK AT RS. 42,21,968. THE SAID STOCK BELONGS TO FOUR CONCERNS SITUATED IN THE SAME PREMISES I.E RAMESH WATCH CO.; KISHORE WATCH CO.; RAMESH WATCH ENTERPRISERS AND RAMESH WATCH SERVICES. THE TOTAL VALUE OF THE STOCK AS PER THE STOCK REGISTERS BELONGING TO THE ABOVE FOUR CONCERNS WAS VALUED AT RS. 34,37,336 AND ARRIVED AT AN EXCESS STOCK OF RS. 4,89,095. FROM OUT OF THIS, THE VALUE OF PROPORTIONATE EXCESS STOCK AS BELONGING TO THE ASSESSEE WAS ARRIVED AT RS. 1,98,083. WHILE ARRIVING AT THE EXCESS STOCK, THE ASSESSING OFFICER TAKEN INTO CONSIDERATION THE VALUE OF THE STOCK AS PER TAG PRICE AND REDUCED THERE FROM AN ESTIMATED GROSS PROFIT OF 7%. THE ASSESSING OFFICER THUS ARRIVED AT THE COST. AFTER DEDUCTING THE STOCK AS PER BOOKS ARRIVED AT THE DIFFERENCE. IN THIS CONNECTION IT IS HUMBLY SUBMITTED THAT THE VALUATION OF CLOSING STOCK BY THE ASSESSING OFFICER IS ERRONEOUS INASMUCH AS THE TAG OF STOCK WAS DONE ON TAG PRICE AND THEREAFTER THE COST PRICE OF THE STOCK WAS ARRIVED AT BY REDUCING THE GROSS PROFIT @ 7% AS DECLARED BY THE ASSESSEE IN PRECEDING YEARS. THUS THE EX-STOCK WAS ARRIVED AT. THE ADDITION ON ACCOUNT OF EXCESS STOCK IS DELETED. 227 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. PRICE INCLUDE THE PROFIT, THE DISCOUNT AND OTHER INCIDENTAL EXPENSES . IT IS A PRIMARY PRINCIPLE THAT THE CLOSING STOCK HAS TO BE VALUED EITHER AT COST PRICE OR AT MARKET PRICE WHICHEVER IS LOWER. HENCE THE OFFICIALS OF THE DEPARTMENT, WHILE TAKING INVENTORY SHOULD HAVE ADOPTED THE RATE OF CLOSING STOCK AT COST PRICE, WHICH IS LOWER THAN THE TAG PRICE. HENCE THE VALUATION OF CLOSING STOCK BY THE ASSESSING OFFICERS IS ERRONEOUS AND CONTRARY TO THE PRINCIPLES OF VALUATION. A DETAILED NOTE WITH REGARD TO THE VALUATION OF CLOSING STOCK WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS WHICH IS AT PAGE NOS. 13 TO 18 OF THE PAPER BOOK. WHILE REJECTING THE CONTENTION OF THE ASSESSEE THAT GROSS PROFIT RATE SHOULD BE ADOPTED AT 10%, THE ASSESSING OFFICER WITHOUT ASSIGNING ANY REASONS ADOPTED THE GROSS PROFIT RATE AT 7%. HE DID NOT SPECIFY THE BASIS ON WHICH HE ARRIVED AT THE GROSS PROFIT RATE AT 7%. THE APPELLANT SUBMITTED A DETAILED EXPLANATION AT PAGE NOS.13-18 WHICH MAY KINDLY BE CONSIDERED. THE APPELLANT SUBMITTED THE INVENTORY OF STOCK AS 228 IT(SS)A.NO.1 TO 15/HYD/2011 MS. SHOBHA R. CHUGANI AND OTHERS, HYDERABAD. OBTAINED BY THE DEPARTMENT. IT CAN BE SEEN THAT THE AUTHORITIES ADOPTED SALE PRICE FOR ARRIVING AT THE VALUE OF S TOCK. THIS IS NOT CORRECT. THE COST PRICE IS AVAILABLE IN THE BOOKS OF ACCOUNT SEIZED BY THE AUTHORITIES. THE ASSESSING OFFICER DID NOT CONSIDER A) THE DISCOUNTS ALLOWED WHILE SELLING THE GOODS; B) THE GROSS PROFIT WAS ADOPTED @ 7% WHEREAS THE GROSS PROFIT IS ABOUT 10% AND C) THE STOCK RECEIVED FOR CONSIGNMENT SALE WAS NOT EXCLUDED. IT IS FURTHER SUBMITTED THAT THE AUTHORITIES DID NOT FIND ANY PURCHASES OR SALES OUTSIDE THE BOOKS OF ACCOUNT. THERE IS ALSO NO DIFFERENCE IN THE QUANTITY OF STOCK. BUT THE DIFFERENCE IS ONLY WITH REFERENCE TO VALUATION OF THE STOCKS. THE AUTHORITIES ALSO DID NOT FIND ANY UNDISCLOSED PURCHASES OR UNDISCLOSED SALES DURING THE COURSE OF SEARCH. EVEN, THE VALUATION OF THE STOCK IS NOT CORRECTLY MADE IN VIEW OF THE EXPLANATION SUBMITTED ABOVE. THEREFORE, NO ADDITION CAN BE MADE. THEREFORE, IN VIEW OF EXPLANATION, THE ADDITION WORKED OUT BY THE ASSESSING OFFICER IS NOT JUSTIFIABLE.