ACIT, Coimbatore V. Smt. Asha & Others, Coimbatore

ITSSA 66/CHNY/2004

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8436 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 11 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-05-2011
• Assessment Year: misc
• Appeal Filed On: 09-06-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V JAGADISAN
• Keywords: Business income; Block assessment
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI (BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T. (SS) A. NO.65/MDS/2004 BLOCK ASSESSMENT PERIOD : 1.4.1990 TO 19.1.2001 SMT. ASHA & OTHERS, (L/H OF LATE ARJUN SINGH U.SEWARSA), C/O SHRI NARAYANASINGH, 537, R.R. COMPLEX, BIG BAZAAR STREET, COIMBATORE 641 001. PAN : AOJPS2650D (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, COIMBATORE. (RESPONDENT) I.T. (SS) A. NO.66/MDS/2004 BLOCK ASSESSMENT PERIOD : 1.4.1990 TO 19.1.2001 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, COIMBATORE. (APPELLANT) V. SMT. ASHA & OTHERS, (L/H OF LATE ARJUN SINGH U.SEWARSA), C/O SHRI NARAYANASINGH, 537, R.R. COMPLEX, BIG BAZAAR STREET, COIMBATORE 641 001. (RESPONDENT) I.T.A. NO.1452/MDS/2004 ASSESSMENT YEAR : 2000-01 SMT. ASHA & OTHERS, (L/H OF LATE ARJUN SINGH U.SEWARSA), C/O SHRI NARAYANASINGH, 537, R.R. COMPLEX, BIG BAZAAR STREET, COIMBATORE 641 001. (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, COIMBATORE. (RESPONDENT) ASSESSEE BY : SHRI V. JAGADISAN REVENUE BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 2 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : I.T. (SS) A. NO.65/MDS/2004 IS AN APPEAL BY THE AS SESSEE AND I.T. (SS) A. NO.66/MDS/2004 IS AN APPEAL BY THE REVENUE, BOTH ARE FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I I, COIMBATORE, IN APPEAL NO.356-C/02-03 DATED 3.3.2004 FOR THE BLOCK ASSESSM ENT PERIOD 1.4.1990 TO 19.1.2001, AND I.T.A. NO. 1452/MDS/2004, WHICH IS A LSO FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE, IN APPEAL NO.101-C/03-04 DATED 3.3.2004, FOR THE AS SESSMENT YEAR 2000-01. AS ALL THE APPEALS RELATE TO THE SAME ASSESSEE, THE SA ME ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI V. JAGADISAN, C.A., REPRESENTED ON BEHALF O F THE ASSESSEE AND SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL, REPRESE NTED ON BEHALF OF THE REVENUE. I.T. (SS) A. NO.65/MDS/2004 3. IN THIS APPEAL, IT WAS SUBMITTED BY THE LEARNED A.R. THAT THE ASSESSEE, LATE ARJUN SINGH U. SEWARSA, HAS CHALLENGED TWO ISS UES THE FIRST ISSUE BEING THE ACTION OF THE LD. CIT(APPEALS) CONFIRMING THE A DDITION OF ` 85,660/- REPRESENTING THE PURCHASE OF IMMOVABLE PROPERTY BY THE ASSESSEES WIFE DURING THE ASSESSMENT YEAR 1995-96 AND THE SECOND ISSUE WA S AGAINST THE ACTION OF THE LD. CIT(APPEALS) IN TREATING THE INCOME RETURNED FO R THE ASSESSMENT YEAR 2000-01 AS UNDISCLOSED INCOME. I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 3 4. IN REGARD TO THE FIRST ISSUE, IT WAS SUBMITTED B Y THE LEARNED A.R. THAT THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEE ON 19. 1.2001 AND IN THE COURSE OF SEARCH, A DOCUMENT RELATING TO THE PURCHASE OF A VA CANT SITE AT PEELAMEDU IN THE NAME OF THE ASSESSEES WIFE, WHICH WAS PURCHASED FO R A CONSIDERATION OF ` 85,660/- DURING THE ASSESSMENT YEAR 1994-95, WAS FO UND. IT WAS A SUBMISSION THAT THE ASSESSEE HAD SPECIFICALLY CLAIMED THAT THE PROPERTY BELONGED TO THE ASSESSEES WIFE AND IT WAS PURCHASED OUT OF HER IND IVIDUAL SOURCE OF INCOME. THE A.O. HAD TREATED THE SAME AS HAVING BEEN PURCHA SED BY THE ASSESSEE OUT OF HIS UNDISCLOSED INCOME. IT WAS A SUBMISSION TH AT CONSEQUENTLY, THE A.O. HAD TREATED THE SAME AS UNDISCLOSED INVESTMENT OF THE A SSESSEE. IT WAS A SUBMISSION THAT THE LD. CIT(APPEALS) HAD CONFIRMED THE ADDITION ON THE GROUND THAT THERE WAS NO MATERIAL TO SUPPORT THE FINDING T HAT THE ASSESSEES WIFE DID NOT, IN FACT, HAVE INDEPENDENT SOURCE OF INCOME. IT WAS A SUBMISSION THAT THE PROPERTY WAS IN THE NAME OF THE ASSESSEES WIFE AND THERE WAS NO CLAIM OF BENAMIDAR. IT WAS A FURTHER SUBMISSION THAT THE AS SESSEE WAS DOING SMALL TIME GOLD-SMITHY WORK DURING THE ASSESSMENT YEAR 1994-95 AND HIS WIFE WAS HAVING TAILORING INCOME FROM WHICH SHE HAD PURCHASED THE S ITE. IT WAS A SUBMISSION THAT THE ADDITION WAS CONFIRMED BY THE LD. CIT(APPEALS) WHICH IS LIABLE TO BE DELETED. 5. IN REPLY LD. JUNIOR STANDING COUNSEL SUBMITTED T HAT NO MATERIAL WAS FOUND IN THE COURSE OF SEARCH. IT SHOWS THAT THE ASSESSE ES WIFE HAD ANY INDEPENDENT SOURCE OF INCOME DURING THE ASSESSMENT YEAR 1994-95 FOR THE PURCHASE OF SAID PROPERTY. IT WAS A SUBMISSION THAT THE FINDINGS OF THE A.O. AND CIT(APPEALS) ARE LIABLE TO BE UPHELD. I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 4 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF SECTION 158B(B) OF INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE AC T) DEFINES THE TERM UNDISCLOSED INCOME TO INCLUDE ANY MONEY, BULLION, JEWELLERY OR ANY OTHER VALUABLE ARTICLE OR THING . WHICH HAS NOT BEEN O R WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSE OF THIS ACT. A FURTHER P ERUSAL OF SECTION 158BB(1) SHOWS THAT THE UNDISCLOSED INCOME OF THE BLOCK PERI OD SHALL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITH IN THE BLOCK PERIOD COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF THE EVIDENCE FOUND AS A RESULT OF SEARCH, ETC. OR INFORMATION AS ARE AVAI LABLE WITH THE A.O. AND RELATABLE TO SUCH EVIDENCE . THUS, THE UNDISCLOSED INCOM E IN THE HANDS OF A PERSON IS THE MONEY, BULLION, JEWELLERY OR OTHER VA LUABLE ARTICLES OR THING OR ANY INCOME WHICH HAS NOT BEEN ARE WHICH WOULD NOT BE DI SCLOSED FOR THE PURPOSE OF THE ACT. IN THE PRESENT CASE, WHAT HAS BEEN FOUND IS A DOCUMENT IN THE NAME OF THE ASSESSEES WIFE WHO IS A SEPARATE INDIVIDUAL. THE SEARCH IS NOT ON THE ASSESSEES WIFE. NO ASSESSMENT UNDER SECTION 158BD OF THE ACT IS MADE ON THE ASSESSEES WIFE. THERE IS NO RELATABLE EVIDENCE OR INFORMATION FOUND WITH THE A.O. OR SHALL THERE BY AVAILABLE WITH THE A.O. TO C ONCLUDE THAT THE PROPERTY WHICH IS IN THE NAME OF THE ASSESSEES WIFE IS IN FACT TH E INVESTMENT BY THE ASSESSEE. THE UNDISCLOSED INCOME, IF ANY, IS TO BE DETERMINED ON THE BASIS OF EVIDENCES FOUND IN THE COURSE OF SEARCH. IN THE PRESENT CASE , NOTHING WHATSOEVER IS FOUND TO SHOW THAT THE ASSESSEE HAD INVESTED IN THE PURCH ASE OF THE SAID LAND BY THE ASSESSEES WIFE. IN THE CIRCUMSTANCES, WE ARE OF T HE VIEW THAT NO ADDITION IS LIABLE TO BE MADE IN THE HANDS OF THE ASSESSEE. IN THE CIRCUMSTANCES, THE ADDITION MADE BY THE A.O. AND AS CONFIRMED BY THE C IT(APPEALS) STANDS DELETED. I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 5 7. IN REGARD TO THE SECOND ISSUE, IT WAS SUBMITTED BY THE LEARNED A.R. THAT THE SEARCH IN THIS CASE WAS CONDUCTED ON 19.1.2001 AND THE RETURN FOR THE ASSESSMENT YEAR 2000-01 WAS FILED ON 12.9.2001 DECL ARING A TOTAL INCOME OF ` 1,29,590/- WHICH INCLUDED ` 25,000/- AS AGRICULTURE INCOME. IT WAS A SUBMISSI ON THAT AS THE RETURN HAD BEEN FILED UNDER SECTION 139 (4) OF THE ACT, THE SAME COULD NOT BE TREATED AS UNDISCLOSED INCOME. IT WAS A FUR THER SUBMISSION THAT THE RETURNED INCOME COULD NOT BE TREATED AS UNDISCLOSED INCOME AS THE SAME WAS NOT ON THE BASIS OF ANY MATERIAL FOUND IN THE COURS E OF SEARCH. IT WAS ALSO A SUBMISSION THAT A PROTECTIVE ASSESSMENT HAD BEEN CO MPLETED IN THE HANDS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2000-01 WHEREIN TH E A.O. HAD ACCEPTED THE RETURNED INCOME, BUT, HAD TREATED THE AGRICULTURE I NCOME DECLARED BY THE ASSESSEE AS BUSINESS INCOME. IT WAS A SUBMISSION T HAT THE RETURNED INCOME FOR THE ASSESSMENT YEAR 2000-01 WAS NOT LIABLE TO BE TR EATED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. 8. IN REPLY, THE LD. JUNIOR STANDING COUNSEL SUBMIT TED THAT THE RETURN FOR THE ASSESSMENT YEAR 2000-01 WAS NOT FILED IN TIME BUT W AS FILED AFTER THE SEARCH. IT WAS A SUBMISSION THAT THE RETURN FILED WAS NOT ON T HE BASIS OF BOOKS OF ACCOUNTS. IT WAS A FURTHER SUBMISSION THAT THE SAME WAS LIABL E TO THE TREATED AS UNDISCLOSED INCOME. HE VEHEMENTLY SUPPORTED THE ORDERS OF THE A.O. AND CIT(APPEALS). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF PROVISIONS OF SECTION 158BB OF THE ACT SHOWS THAT IN COMPUTING TH E UNDISCLOSED INCOME FOR THE BLOCK PERIOD, WHERE THE DUE DATE FOR FILING RETURN OF INCOME WAS EXPIRED BUT NO RETURN HAS BEEN FILED, THEN FOR REDUCING THE AGGREG ATE OF TOTAL UNDISCLOSED I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 6 INCOME, THE TOTAL INCOME AS DETERMINED ON THE BASIS OF THE ENTRIES AS RECORDED IN THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS MAINTAINE D IN THE REGULAR COURSE ON OR BEFORE THE DATE OF SEARCH, OR WHERE THE INCOME O N THE BASIS OF THE ENTRIES RECORDED IN THE BOOKS OF ACCOUNTS DOES NOT EXCEED T HE MAXIMUM CASE NOT CHARGEABLE TO TAX, IS LIABLE TO BE REDUCED. WHERE NO BOOKS OF ACCOUNTS ARE MAINTAINED, IT WOULD OBVIOUSLY FALL WITHIN THE PROV ISIONS OF SECTION 158BB(1)(CA) OF THE ACT WHICH SPECIFIES THAT WHERE THE DUE DATE FOR FILING THE RETURN HAS EXPIRED BUT NO RETURN OF INCOME HAS BEEN FILED AS NIL, IN CASES NOT FALLING UNDER CLAUSE (C). IN THE ASSESSEES CASE, UNDISPUTEDLY, NO BOOK S OF ACCOUNTS HAVE BEEN MAINTAINED AND RETURN FOR THE ASSESSMENT YEAR 2000- 01 HAS BEEN FILED ON AN ESTIMATE BASIS. THUS, THE ASSESSEES CASE WILL FAL L WITHIN THE CONDITIONS PRESCRIBED UNDER SECTION 158BB(1)(CA) AND CONSEQUEN TLY, NO DEDUCTION CAN BE GIVEN. HERE, IT IS NOTICED THAT THE ASSESSEE HAS R ETURNED AN INCOME OF ` 1,04,590/- AND AGRICULTURE INCOME OF ` 25,000/-. THE A.O. HAS TREATED THE RETURNED INCOME AS THE UNDISCLOSED INCOME OF THE AS SESSEE. THE A.O. HAS NOT DISCUSSED AS TO WHY HE CAME TO A CONCLUSION THAT TH E AGRICULTURE INCOME DISCLOSED BY THE ASSESSEE WAS NOT LIABLE TO BE ALLO WED AS AGRICULTURE INCOME. FURTHER, AS THE A.O. HAS ADOPTED THE RETURNED FIGUR ES FOR THE ASSESSMENT YEAR 2000-01 FOR TREATING THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE, OBVIOUSLY THE UNDISCLOSED INCOME WHICH IS ASSESSABLE FOR THE ASSESSMENT YEAR 2000-01 WOULD BE AN AMOUNT OF ` 1,04,590/- AND NOT ` 1,29,590/- AS THE AMOUNT OF ` 25,000/- IS THE AGRICULTURE INCOME DISCLOSED BY THE ASSESSEE. THE AGRICULTURE INCOME REMAINS OUTSIDE THE PURVIEW OF TOTAL TAXABLE INCOME. IN THE CIRCUMSTANCES, THE A.O. IS DIRECTED TO RESTRICT THE ADDITION TOWARDS UNDISCLOSED I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 7 INCOME IN RESPECT OF THE INCOME RETURNED TO ` 1,04,590/- FOR THE ASSESSMENT YEAR 2000-01. THEREFORE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. I.T. (SS) A. NO.66/MDS/2004 10. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THREE GROUNDS. THE FIRST GROUND IS AGAINST THE ACTION OF THE CIT(APPEALS) IN DIRECTING THE A.O. NOT TO TREAT THE INCOME FOR ASSESSMENT YEARS 1992-93 TO 1997-98 AS UNDISCLOSED INCOME, PARTICULARLY WHEN THE ASSESSEE HAD NOT FILED ANY RE GULAR RETURNS FOR THOSE YEARS. IT WAS SUBMITTED BY THE LD. JUNIOR STANDING COUNSEL THAT THE A.O. HAD TREATED THE RETURNED INCOME FOR THE ASSESSMENT YEARS 1991-92 TO 1997-98 AS THE UNDISCLOSED INCOME AS THE ASSESSEE HAD NOT FILED TH E REGULAR RETURNS. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. A.O. 11. IN REPLY, THE LEARNED A.R. SUBMITTED THAT THE I NCOMES OF THE ASSESSEE FOR ASSESSMENT YEARS 1992-93 TO 1997-98 WERE BELOW THE TAXABLE LIMIT AND CONSEQUENTLY THERE WAS NO COMPULSION FOR FILING RET URN FOR THE RELEVANT ASSESSMENT YEARS. IT WAS A SUBMISSION THAT AS THER E WAS NO COMPULSION FOR FILING THE RETURNS, THE RETURNS HAD NOT BEEN FILED. IT WAS A FURTHER SUBMISSION THAT FOR THE ASSESSMENT YEAR 1998-99, ASSESSEE HAD FILED HIS RETURN OF INCOME ON 29.3.2000 WITH THE ITO, WARD XXVI(1), MUMBAI AND IN THE SAID RETURN, THE ASSESSEE HAD ENCLOSED THE INCOME COMPUTATION SHEETS , TRADING AND PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNTS, BALANCE SHEET AND S OME OF THE TDS CERTIFICATES FOR THE ASSESSMENT YEARS 1992-93 TO 1997-98. IT WA S A SUBMISSION THAT THIS HAS NOT BEEN DISPUTED BY THE REVENUE. IT WAS A SUBMISS ION THAT ON THIS GROUND, LD. CIT(APPEALS) DID DELETE THE ADDITION AS THE INCOME FOR THE ASSESSMENT YEARS I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 8 1992-93 AND 1997-98 WERE BELOW THE TAXABLE LIMIT. HE VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(APPEALS). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF PARA 4.2 IN PAGE NO.2 OF ORDER OF THE CIT(APPEALS) CLEARLY SHOWS THA T THE ASSESSEE HAS RAISED THE CONTENTION BEFORE THE LD. CIT(APPEALS) AND THE LD. CIT(APPEALS) HAD GOT VERIFIED THE ACKNOWLEDGEMENT OF THE RETURN FILED AT MUMBAI. AS IT IS NOTICED THAT WHEN THE ASSESSEE HAS FILED HIS RETURN FOR THE ASSESSMEN T YEAR 1998-99 WHEREIN INCOME FOR THE ASSESSMENT YEARS 1992-93 TO 1997-98 HAS BEEN BROUGHT TO THE KNOWLEDGE OF THE REVENUE, THE SAME CANNOT BE TREATE D AS UNDISCLOSED INCOME OF THE ASSESSEE. IN THE CIRCUMSTANCES, WE ARE OF T HE VIEW THAT THE FINDING OF THE LD. CIT(APPEALS) IS LIABLE TO BE SUSTAINED AND WE D O SO. 13. ARGUING ON THE GROUNDS NO.2 AND 3, IT WAS SUBMI TTED BY THE LD. JUNIOR STANDING COUNSEL THAT IN THE COURSE OF SEARCH, IT W AS FOUND THAT THE ASSESSEE HAD SOLD JEWELLERY WORTH ` 15,25,000/- TO SHRI N. SUBHASH CHAND JAIN. IT WAS A SUBMISSION THAT IN THE COURSE OF SEARCH, THE ASSESS EE WAS LIABLE TO EXPLAIN THE SOURCE FOR THE PURCHASE OF THE GOLD BULLION FOR THE MANUFACTURING OF THE JEWELLERY SOLD TO SHRI N. SUBHASH CHAND JAIN. IT WAS A SUBMI SSION THAT IN THE COURSE OF ASSESSMENT, THE ASSESSEE HAD PRODUCED A CONFIRMATIO N LETTER FROM ONE SHRI T. SUBRAMANIAN OF COIMBATORE WHEREIN SHRI T. SUBRAMANI AN HAD CONFIRMED TO HAVE SOLD THE GOLD BULLION. IT WAS A SUBMISSION THAT TH E CONFIRMATION LETTER WAS NOT ADDRESSED TO ANYONE NOR DID IT CONTAIN THE DATE OF ISSUE. IT WAS A FURTHER SUBMISSION THAT THE PURCHASE OF GOLD BISCUITS AND R ECEIPT FOR THE SALE PROCEEDS WERE SHOWN ON THE SAME DAY. IT WAS A SUBMISSION TH AT THE A.O. HAD I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 9 CONSEQUENTLY MADE THE ADDITION AND ALSO MADE AN ADD ITION TOWARDS G.P. ON THE SALE OF THE JEWELLERY. HE VEHEMENTLY SUPPORTED THE ORDER OF THE A.O. 14. IN REPLY, THE LEARNED A.R. SUBMITTED THAT THE G OLD BULLION WAS PURCHASED WITHIN THE FUNDS PROVIDED BY SHRI N. SUBHASH CHAND JAIN AND THE PROFITS HAD BEEN DISCLOSED IN ASSESSEES RETURN FOR THE ASSESSM ENT YEARS 2000-01 AND 2001-02. IT WAS A SUBMISSION THAT THE ASSESSEE DID NOT HAVE THE SOURCE TO MAKE SUCH A HUGE INVESTMENT OF ` 15,00,000/- AS WAS EVIDENT FROM THE ADDITIONS AND ASSETS FOUND IN THE COURSE OF SEARCH. IT WAS A SUB MISSION THAT THE SALE OF GOLD JEWELLERY TO SHRI N. SUBHASH CHAND JAIN HAD BEEN AC CEPTED AND THE SOURCE FOR THE PURCHASE OF GOLD BULLION FOR THE MANUFACTURING OF GOLD JEWELLERY WAS BEING DOUBTED. IT WAS A SUBMISSION THAT THE CONFIRMATION LETTER PROVIDED BY SHRI N. SUBHASH CHAND JAIN ITSELF PROVED THE SOURCE. IN SO FAR AS THE PURCHASE OF GOLD BULLION AND SALE OF GOLD JEWELLERY WHICH TOOK PLACE ON THE SAME DAY HAS ALSO BEEN ADMITTED BY THE A.O., THE CLAIM OF THE ASSESSE E THAT THE FUNDS FOR THE PURCHASE OF THE GOLD BULLION TO BE THE SALE PROCEED S RECEIVED FROM SHRI N. SUBHASH CHAND JAIN WAS LIABLE TO BE ACCEPTED. IT W AS A SUBMISSION OF THE LEARNED A.R. THAT THE ORDER OF THE LD. CIT(APPEALS) IS LIABLE TO BE UPHELD. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A P ERUSAL OF THE ORDER OF THE CIT(APPEALS) AT PARA 6.3.1 IN PAGE NO.6 CLEARLY SHO WS THAT THE LD. CIT(APPEALS) HAS CONSIDERED THE BUSINESS REALITIES IN THE LINE O F TRADE IN WHICH THE ASSESSEE WAS ENGAGED, I.E. BORROWING AND SELLING OF GOLD ON CREDIT. IT IS FURTHER NOTICED THAT THE PURCHASE OF THE GOLD BULLION AND THE SALE OF GO LD JEWELLERY HAVE TAKEN PLACE ADMITTEDLY ON THE SAME DAY. THE GOLD BULLION HAS N OT BEEN FOUND IN THE I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 10 PREMISES OF THE ASSESSEE AND THE GOLD JEWELLERY HAS ALSO NOT BEEN FOUND IN THE PREMISES OF THE ASSESSEE. THE SALE OF THE GOLD JEW ELLERY TO SHRI N. SUBHASH CHAND JAIN WAS ACCEPTED BY THE REVENUE. OBVIOUSLY, THE SALE PROCEEDS WOULD HAVE ALSO MOVED FROM SHRI N. SUBHASH CHAND JAIN TO THE ASSESSEE. ONE SHRI T. SUBRAMANIAN HAS COME FORWARD TO CONFIRM THAT HE HAS SOLD GOLD BULLION TO THE ASSESSEE. THOUGH THE A.O. HAS MENTIONED THAT THE C ONFIRMATION LETTER HAS NOT BEEN ADDRESSED TO ANY SPECIFIC PERSON AND IS UNDATE D, HE HAS NOT FOUND ANY MATERIAL DEFECT IN THE CONFIRMATION GIVEN BY SHRI T . SUBRAMANIAN. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(APPEALS) IS ON RIGHT FOOTING AND DOES NOT CALL FOR INTERFERENCE. THUS THE APPEAL OF THE REVENUE IS DISMISSED. I.T.A. NO.1452/MDS/2004 16. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS CHAL LENGED THE ACTION OF THE LD. CIT(APPEALS) IN CONFIRMING THE ASSESSMENT OF TO TAL INCOME OF ` 1,29,590/- EVEN THOUGH THE SAME INCOME HAS BEEN INCLUDED IN TH E BLOCK ASSESSMENT AS UNDISCLOSED INCOME. 17. AS WE HAVE CONFIRMED THE ADDITION OF THE RETURN ED INCOME FOR THE ASSESSMENT YEAR 2000-01 AS UNDISCLOSED INCOME OF TH E ASSESSEE IN THE ASSESSEES APPEAL IN I.T. (SS) A. NO.65/MDS/2004 (S UPRA), THE PROTECTIVE ASSESSMENT IN THE CASE OF THE ASSESSEE NO MORE SURV IVES. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS ALLOWED. I.T. (SS) A. NOS. 65 & 66/MDS/04 I.T.A. NO. 1452/MDS/04 11 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I. T. (SS) A. NO. 65/MDS/2004 IS PARTLY ALLOWED, APPEAL OF THE REVENUE IN I.T. (SS) A. NO. 66/MDS/2004 IS DISMISSED AND THE APPEAL OF ASSESSEE IN I.T.A. NO. 1452/MDS/2004 IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 9 TH MAY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) ( GEORGE MATHAN) VICE PRESIDENT JUDIC IAL MEMBER CHENNAI, DATED THE 9 TH MAY, 2011. KRI. COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-II, COIMBATORE (4) CIT, CENTRAL-III, CHENNAI (5) D.R. (6) GUARD FILE