ACIT, Hyderabad V. Jaishree D.Menon, Puttaparthi

ITSSA 75/HYD/2004

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8413 (ITAT-HYDERABAD)
• Duration Of Justice: 6 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-03-2011
• Assessment Year: misc
• Appeal Filed On: 16-06-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Document seized; Cost of acquisition; Block assessment; Condonation of delay; Documents seized
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER IT(SS)A NO.74/HYD/2004 (BLOCK PERIOD FROM 1.4.1991 TO 14.9.2000) SMT. JAYASREE D.MENON, PUTTAPARTHY (PAN/GIR J-704) VS ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 5, HYDERABAD (APPELLANT) (RESPONDENT) AND IT(SS)A NO.75/HYD/2004 (BLOCK PERIOD FROM 1.4.1991 TO 14.9.2000) ASST. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 5, HYDERABAD VS SMT. JAYASHREE D.MEMON, PUTTAPARTHY (PAN/GIR J-704) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.RAMA RAO REVENUE BY : SHRI V.SRINIVAS CIT-DR O R D E R PER G.C.GUPTA, VICE PRESIDENT: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVEN UE FOR THE BLOCK PERIOD FROM 1.4.1991 TO 14.9.2000 ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS). S INCE COMMON ISSUES ARE INVOLVED, BOTH THESE APPEALS ARE BEING D ISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 2 2. LET US FIRST TAKE UP FOR CONSIDERATION THE RE VENUES APPEAL. REVENUES APPEAL IT(SS)A NO.75/HYD/2004: 3. GROUND OF APPEAL NO.1 OF THE REVENUE IS AS UNDE R- THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. THIS GROUND IS GENERAL IN NATURE AND NEEDS NO SEPAR ATE ADJUDICATION. 4. GROUND OF APPEAL NO.2 OF THE REVENUE IS AS UND ER: THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.10 ,00,000/- MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF HOUSE SITE AT BELATHUR VILLAGE, KODUGOD U POST, BANGALORE. AS THE INVESTMENT STOOD UNEXPLAINED, THE CIT(A) OUGHT TO HAVE CONFIRMED THE SAID ADDITION. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE INVESTMENT IN THE PURCHASE OF HOUSE SITE AT BEL ATHUR VILLAGE COULD NOT BE EXPLAINED BY THE ASSESSEE. HE SUBMITTED THA T THE INVESTMENT WAS NOT SHOWN BY THE ASSESSEES SON IN HIS BOOKS OF ACCOUNT AND THE RETURN OF INCOME WAS FILED AFTER THE SEARCH WAS CON DUCTED ON THE ASSESSEES PREMISES. HE REFERRED TO THE PARA 6.1 O F THE ASSESSMENT ORDER AND PAGE 51 OF THE ORDER OF THE CIT(A) IN SUP PORT OF HIS SUBMISSIONS. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS WRONG TO SAY THAT THE ASSESSEE HAS NOT MAINTAINED T HE BOOKS OF ACCOUNT AND IN FACT, THE ASSESSEE HAS MAINTAINED BO OKS OF ACCOUNT AND HAS FILED ITS RETURNS OF INCOME YEAR AFTER YEA R AND THE ONLY THING IS THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE N OT COMPLETE ON THE IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 3 DATE OF SEARCH. HE SUBMITTED THAT THE ISSUE IN THI S GROUND OF APPEAL OF THE REVENUE HAS ALREADY BEEN CONSIDERED BY THE T RIBUNAL IN THE CASE OF SHRI KANAK D. MENON, SON OF THE ASSESSEE, I N IT(SS)A NO.19/HYD/2007 DATED 19 TH JUNE, 2009, WHEREIN PART OF THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS COUNT, HAS BE EN SUSTAINED BY THE TRIBUNAL. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE PERUSED THE ORDER OF THE COORDINATE BENCH OF THE TR IBUNAL IN THE CASE OF THE SON OF THE ASSESSEE, SHRI KANAK D.MENON, IN IT(SS)A NO.19/HYD/2007 DATED 19 TH JUNE, 2009, CITED SUPRA, WHEREIN THIS VERY ISSUE HAS BEEN CONSIDERED AND DECIDED BY THE T RIBUNAL. IN THESE FACTS OF THE CASE, WE FIND THAT THERE WAS NO MISTAK E IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT WAS NOT PROPER IN THE HANDS OF THE ASSES SEE AND IT COULD BE ASSESSED, IF WARRANTED, ONLY IN THE HANDS OF SH RI KANAK D.MENON, IN WHOSE NAME THE PLOT HAS BEEN PURCHASED, AND CONS EQUENTLY DELETING THE ADDITION MADE IN THE HANDS OF THE ASSE SSEE. ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUND OF APPEAL NO.2 OF THE REVENUE IS REJECTED. 8. GROUND OF APPEAL NO.3 OF THE REVENUE IS AS UNDE R- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.1 ,88,400/- IN THE HANDS OF THE ASSESSEE ON INVESTMENT ON PURCHASE OF LAND AT BRAHMANPALLY. HE OUGHT TO HAVE CONFIRMED THE AD DITION. 9. BOTH THE PARTIES BEFORE US SUBMITTED THAT FACTS OF THE ISSUE INVOLVED IN THIS GROUND OF THE REVENUE ARE THE SIMI LAR TO THE FACTS INVOLVED IN RESPECT OF GROUND NO.2 OF THE REVENUE. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE OF PURCHASE OF LAND AT BRAHMANPALLY IN THE NAME OF ASSESSEES SON, SHRI KANAK IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 4 D. MENON COULD BE CONSIDERED ONLY IN THE CASE OF A SSESSEES SON SHRI KANAK D. MENON AND THE SAME COULD NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, ORDER OF THE CIT(A) ON THIS COUNT IS CONFIRMED AND GROUND OF APPEAL NO.3 OF THE REVENUE IS REJECTED. 10. GROUND OF APPEAL NO.4 OF THE REVENUE IS AS UND ER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.48 ,75,377/- U/S. 40A(3) IN THE HANDS OF THE ASSESSEE TOWARDS CA SH PAYMENT MADE FOR CONSTRUCTION OF APARTMENTS. HE OU GHT TO HAVE CONFIRMED THE ADDITION. 11. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THE CIT(A) HAS NOT CALLED FOR ANY REMAND REPORT REG ARDING THE CASH PAYMENTS MADE FOR CONSTRUCTION OF APARTMENT AND HAS DELETED THE ADDITION. HE SUBMITTED THAT THE ISSUE MAY BE SET AS IDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION ON THE ISS UE. HE REFERRED TO THE RELEVANT PARA OF THE ASSESSMENT ORDER IN SUPPOR T OF HIS SUBMISSIONS. 12. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D THAT IN FACT, REMAND REPORT WAS CALLED FOR BY THE CIT(A) F ROM THE ASSESSING OFFICER ON THIS ISSUE AND REFERRED TO PAGES 324 TO 327 OF THE COMPILATION, WHEREIN COPY OF THE REMAND REPORT SUB MITTED BY THE ASSESSING OFFICER TO THE CIT(A) HAS BEEN FURNISHED. HE SUBMITTED THAT THE ADDITION ON THIS VERY ISSUE WAS MADE IN THE CAS E OF THE PARTNERSHIP FIRM, M/S. SRI SAI PLAZA AND THE SAME W AS DELETED IN APPEAL BY THE TRIBUNAL IN THE CASE OF THE FIRM, M/S . SRI SAI PLAZA IN IT(SS)A NO.7/HYD/2006 DATED 14.5.2010, WHEREIN THE ADDITION MADE ON ACCOUNT OF CASH PAYMENTS WAS DELETED BY THE TRIB UNAL. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ORDER OF THE TRIBUNAL IN THE CASE OF TH E FIRM, M/S. SRI SAI IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 5 PLAZA DATED 14.5.2010 CITED SUPRA. WE FIND THAT TH E ASSESSING OFFICER HAS SUBMITTED HIS REMAND REPORT TO THE CIT(A) ON TH IS ISSUE. THE ISSUE OF ADDITION ON ACCOUNT OF CASH PAYMENT FOR TH E CONSTRUCTION OF FLATS HAS ALREADY BEEN CONSIDERED AND THE ADDITION WAS MADE IN THE CASE OF THE PARTNERSHIP FIRM, M/S. SRI SAI PLAZA. T HE TRIBUNAL IN THE CASE OF THE FIRM, HAS ADJUDICATED THIS ISSUE IN FAV OUR OF THE ASSESSEE AND HAS DELETED THE ADDITION MADE BY THE DEPARTMEN T. IN THESE FACTS, WE HOLD THAT THERE IS NO JUSTIFICATION FOR M AKING ANY ADDITION ON THIS COUNT IN THE HANDS OF THE ASSESSEE, AND ACCORD INGLY, ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AN THE GROUND OF APPEAL NO.4 OF THE REVENUE IS REJECTED. 14. GROUND OF APPEAL NO.5 OF THE REVENUE IS AS UN DER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.80 ,900/- IN THE HANDS OF THE ASSESSEE TOWARDS OF UNDISCLOSED L ODGE RECEIPTS. HE OUGHT TO HAVE CONFIRMED THE ADDITION. 15. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE WAS A DIFFERENCE IN THE AMOUNT OF LODGE RECEIPTS, AS PER THE SEIZED DOCUMENTS AND AS PER THE AMOUNT DECLARED BY THE ASSESSEE AND THEREFORE THE ADDITION WAS RIGHTLY MAD E BY THE ASSESSING OFFICER. HE REFERRED TO THE RELEVANT PAR A OF THE ASSESSMENT ORDER IN SUPPORT OF HIS SUBMISSIONS. THE LEARNED C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DIFFERENCE BETWEEN THE LODGE RECEIPTS AS PER SEIZED RECORDS AND THE AMOUNT DECLARED BY THE A SSESSEE WAS DUE TO THE LUXURY TAX IMPOSED ON THE LODGE AND IN FACT, THERE IS NO DIFFERENCE IN THE FIGURE OF LODGE RECEIPTS, IF LUXU RY TAX IS EXCLUDED. HE SUBMITTED THAT THE AMOUNT OF LUXURY TAX OF RS.80,90 0 WAS ALREADY RECORDED IN THE ACCOUNTS SEPARATELY AND THE SAME WA S PAID TO THE GOVERNMENT. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 6 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. W E FIND THAT THE LODGE IS NOT OWNED BY THE ASSESSEE AND THE OWNE R OF THE LODGE WAS M/S. SRI SAI PLAZA, PARTNERSHIP FIRM, WHICH IS SEPARATELY ASSESSED TO INCOME-TAX. THE SEIZED BOOK NO.59 CLEARLY ME NTIONS THE NAME OF M/S. SAI PLAZA. IN THESE FACTS, THE CIT(A) HAS RECORDED THAT THE ASSESSING OFFICER HAS NOT PROVIDED ANY BASIS FOR TH E ADDITION AND HAS DELETED THE SAME AND HAS RECORDED THAT THE ASSESSIN G OFFICER WAS AT LIBERTY TO ENQUIRE INTO THE ISSUE IN THE CASE OF TH E PARTNERSHIP FIRM WHICH IS THE OWNER OF THE LODGE. WE FIND THAT THE F ACT THAT THE LODGE WAS OWNED BY THE PARTNERSHIP FIRM, M/S. SRI SAI PLA ZA COULD NOT BE CONTROVERTED BY THE REVENUE. IN THESE FACTS, WE HOL D THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE, W HICH IS ACCORDINGLY CONFIRMED AND THE GROUND OF APPEAL NO.5 OF THE REVE NUE IS REJECTED. 17. GROUND OF APPEAL NO.6 OF THE REVENUE IS AS UN DER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.61 ,05,402/- MADE TOWARDS ADDITION TO CAPITAL ACCOUNT. HE OUGHT TO HAVE CONFIRMED THE ADDITION. 18. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT ON PERUSAL OF THE ASSESSEES CAPITAL ACCOUNT IN THE FIRM, M/S. SRI SAI PLAZA, , IT WAS NOTICED THAT AN ADDITION OF RS.61, 05,402 WAS MADE TO THE ASSESSEES CAPITAL ACCOUNT AS ON 31.3.1998. HE SUBMITTED THAT EXPLANATION GIVEN BY THE ASSESSEE FOR THE INCREASE IN THE CAPITAL WAS VAGUE AND THE ASSESSEE COULD NOT SATISFACTORILY EXP LAIN THE SOURCES FOR THE ACCRETION IN THE CAPITAL ACCOUNT. HE SUBMI TTED THAT THE CIT(A) HAS DELETED THE ADDITION WITHOUT ANY VALID REASON. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 19. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELI ED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ACCRETI ON IN THE CAPITAL IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 7 ACCOUNT OF THE ASSESSEE IN THE PARTNERSHIP FIRM, M/ S. SRI SAI PLAZA WAS NOT ON ONE DAY, I.E. ON 31.3.1998 AS RECORDED B Y THE ASSESSING OFFICER. HE SUBMITTED THAT THE ACCRETION OF THE AM OUNT OF RS.61,05,402 WAS THE RESULT OF THE TOTAL TRANSACTIO NS DURING THE RELEVANT PERIOD AND THE ACCOUNTS WERE SUBMITTED ALO NGWITH THE RETURN OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1998-99 AND THE REGULAR RETURN WAS FILED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH. HE SUBMITTED THAT THE ASSESSMENT OF THE ASSESSEE FOR T HE RELEVANT ASSESSMENT YEAR, VIZ. 1998-99 WAS COMPLETED IN SCRU TINY UNDER S.143(3), AFTER EXAMINATION OF THE BOOKS OF ACCOUNT OF THE ASSESSEE BY THE ACIT. HE SUBMITTED THAT THE ADDITION MADE I S NOT WITH REFERENCE TO ANY SEIZED MATERIAL AND THEREFORE, IT IS OUTSIDE THE PURVIEW OF THE BLOCK ASSESSMENT FRAMED BY THE ASS ESSING OFFICER. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREF ULLY AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AN D THE CIT(A). WE FIND THAT IT IS NOT CORRECT TO SAY THAT THE ADDITIO N OF RS.61,05,402 WAS MADE TO THE ASSESSEES CAPITAL ACCOUNT AS ON 31.3.1 998. WE FIND THAT THIS ACCRETION TO THE CAPITAL ACCOUNT OF THE A SSESSEE WAS NOT DUE TO A CREDIT ENTRY MADE ON ONE DAY, I.E. 31.3.1998 A S RECORDED BY THE ASSESSING OFFICER AND IN FACT, THE ACCRETION WAS TH E RESULT OF TOTAL TRANSACTIONS DURING THE RELEVANT YEARS PER THE RELE VANT ACCOUNT COPY REPRODUCED BY THE CIT(A) IN HIS APPELLATE ORDER ON PAGES 55 AND 56 THEREOF. WE FIND THAT THE ASSESSMENT OF THE ASSESSE E FOR THE RELEVANT ASSESSMENT YEAR, VIZ. 1998-99 WAS COMPLETED IN SCRU TINY ASSESSMENT UNDER S.143(3), AFTER EXAMINATION OF THE BOOKS OF A CCOUNT OF THE ASSESSEE BY THE ACIT, KURNOOL. THE ADDITION ON ACC OUNT OF ACCRETION IN THE CAPITAL ACCOUNT OF THE ASSESSEE WAS NOT MADE WITH REFERENCE TO ANY MATERIAL SEIZED AS A RESULT OF SEARCH ACTION U NDERTAKEN BY THE DEPARTMENT. THE ACCRETION TO THE CAPITAL ACCOUNT OF THE ASSESSEE WAS IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 8 FOUND ONLY WITH REFERENCE TO THE REGULAR BOOKS OF A CCOUNT MAINTAINED BY THE ASSESSEE AND THE REGULAR RETURN WAS FILED BY THE ASSESSEE ON 15.3.1999 PRIOR TO THE DATE OF SEARCH. WE FIND THAT IT IS AN OLD ACCOUNT RUNNING FOR YEARS TOGETHER AND THE ASSESSIN G OFFICER HAS ACCEPTED THE SAME IN THE SCRUTINY ASSESSMENT OF TH E ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. THE CIT(A) HAS RECOR DED THAT THE ACCOUNTS WERE MAINTAINED PROPERLY IN THE INSTANT CA SE AND THE ACIT KURNOOL HAD EXAMINED THE SAME. THE AUTHORIZED REP RESENTATIVE FOR THE ASSESSEE HAS RIGHTLY POINTED OUT THAT THIS AMOU NT WAS NOT GATHERED AS A RESULT OF SEARCH IN THE SHAPE OF INCR IMINATING MATERIAL. THE CIT(A) HAS FURTHER RECORDED THAT THE ASSESSING OFFICER HAS NOT GIVEN PROPER REASONING FOR MAKING THE ADDITION IN H IS BLOCK ASSESSMENT ORDER, AND HAS ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. IN THESE FACTS OF THE CASE, SINCE THE ACCRETION IN THE CAPITAL ACCOUNT WAS THE RESULT OF TOTAL TRAN SACTIONS DURING THE RELEVANT PERIOD, WHICH WERE RECORDED IN THE BOOKS O F ACCOUNT OF THE ASSESSEE AND SINCE THE ASSESSEE HAS FILED THE RETUR N OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 1998-99 PRIOR TO THE DATE OF SEARCH AND THE ASSESSMENT FOR THE ASSESSMENT YEAR 1998-99 WAS COMP LETED IN SCRUTINY UNDER S.143(3) OF THE ACT AFTER EXAMINATIO N OF THE BOOKS OF ACCOUNT OF THE ASSESSEE BY THE ASSESSING OFFICER AN D THE ADDITION MADE HAD NO REFERENCE TO ANY SEIZED MATERIAL, WE HO LD THAT THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE THE I MPUGNED ADDITION IN THE BLOCK ASSESSMENT OF THE ASSESSEE. ACCORDINGLY , THE ORDER OF THE CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSI NG OFFICER IS CONFIRMED AND THIS GROUND OF APPEAL OF THE REVENUE IS REJECTED. 21. GROUND OF APPEAL NO.7 OF THE ASSESSEE IS AS UN DER- IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 9 THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.35 ,00,000/- TOWARDS INVESTMENT IN SAI ASHRITHAM,. HE OUGHT TO HAVE CONFIRMED THE ADDITION. 22. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SU BMITTED THAT THE ASSESSEE HAS INVESTED APPROXIMATELY RS.35 LAKHS IN SAI ASHRITHAM AND THE ASSESSEE COULD NOT PRODUCE ANY EV IDENCE IN SUPPORT OF HER CLAIM THAT THIS AMOUNT WAS SPENT BY HER OUT OF THE AMOUNTS RECEIVED BY HER FROM SWAMINI THURIA, USA. HE SUBMITTED THAT OUT OF TOTAL INVESTMENT OF RS.35 LAKHS, A SUM OF RS. 20 LAKHS WAS SPENT IN HOME FOR ORPHANS AND OLD PEOPLE. HE SUBMI TTED THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HER STATEMENT AND THEREFORE THE ADDITION OF RS.35 LAKHS MADE AS UNEXPLAINED INVESTMENT, BY THE ASSESSING OFFICER WAS JUSTIFIED. 23. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE HAS EXPLAINED THAT THE INVESTMENT IN QUES TION WAS MADE OUT OF THE AMOUNTS RECEIVED BY HER FROM SMT. SWAMIN I THURIA, USA. HE SUBMITTED THAT THE ASSESSEE WITHDREW THE AMOUNTS FROM OUT OF HER RECEIPTS FROM SMT. SWAMINI THURIA USA FROM BANK S AND A COMPLETE LIST OF BANK WITHDRAWALS FROM WHERE THE SO URCE OF INVESTMENT WAS SHOWN TO BE THE AMOUNTS RECEIVED FRO M SMT. SWAMINI THURIA USA WAS FILED BEFORE THE ASSESSING O FFICER AND THE CIT(A). HE SUBMITTED THAT THE ASSESSEE HAS FILED T HE REQUIRED INFORMATION REGARDING THE CONSTRUCTION COST AND THE SOURCES THEREOF AS PER THE BANK ACCOUNT AND THE INCOME TAX RETURN W AS FILED IN TIME AND THEREFORE, NO ADDITION IN THE BLOCK ASSESSMENT COULD BE MADE BY THE ASSESSING OFFICER. 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ASSESSEE HAS EXPLAINED THAT THE INVESTMENT IN Q UESTION WAS MADE IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 10 OUT OF THE AMOUNTS RECEIVED BY HER FROM SMT. SWMINI THURIA, USA. WE FIND THAT IT IS NOT A MERE CLAIM MADE BY THE ASS ESSEE AND THE ASSESSEE IN FACT HAS FILED COMPLETE DETAILS OF THE WITHDRAWALS MADE FROM BANK OUT OF WHICH SHE SPENT ON CONSTRUCTION AN D SOME OTHER INCIDENTAL EXPENSES. THE DATE WISE AMOUNTS IN US DO LLARS DEPOSITED IN THE BANKS WHICH WERE LATER ON WITHDRAWN AND SPEN T BY THE ASSESSEE FOR SAI ASHRITHAM THROUGH ABU DABI COMM ERCIAL BANK HAS BEEN REPRODUCED BY THE CIT(A) ON PAGE 58 OF HIS APP ELLATE ORDER. WE FIND THAT SMT. SWAMINI THURIA HAS FILED HER CONFIRM ATION, AFFIRMING THE ABOVE FACT THAT THE AMOUNT ON CONSTRUCTION OF T HIS BUILDING WAS MET OUT THE AMOUNTS REMITTED BY HER THROUGH BANKIN G CHANNEL. WE FIND THAT THE ASSESSEE HAS FILED LIST OF THE SUNDR Y CREDITORS IN HER BOOKS OF ACCOUNT AS ON 31.3.1997, 31.3.1998 AND 31. 3.1999 WHEREIN THE NAME OF SMT. SWAMINI THURIA APPEARED WITH BALA NCE OF RS.28.92 LAKHS AS ON 31.3.1997; RS.120.37 LAKHS AS ON 31.3.1 998 AND RS.86.73 LAKHS AS ON 31.3.1999. WE FIND THAT THE A SSESSEE HAS FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000-0 1 IN TIME ON 31.10.2000. IN THESE FACTS OF THE CASE, WE HOLD TH AT THERE IS NO JUSTIFICATION FOR MAKING THE ADDITION IN THE BLOCK ASSESSMENT OF THE ASSESSEE AND THERE WAS NO MISTAKE IN THE ORDER OF T HE CIT(A) IN HOLDING THAT THE SOURCES ARE THERE AND BANK CREDIT S WERE ALSO THERE AND SINCE THESE HAVE BEEN SHOWN IN THE INCOME-TAX R ETURN FOR THE RELEVANT ASSESSMENT YEAR FILED IN TIME, THE ASSESSI NG OFFICER WAS NOT JUSTIFIED IN MAKING THE IMPUGNED ADDITION IN THE BL OCK ASSESSMENT. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED A ND THE GROUND OF APPEAL NO.7 OF THE REVENUE IS REJECTED. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 11 25. GROUND OF APPEAL NO.8 OF THE REVENUE IS AS UN DER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.3, 05,000/- BEING UNDISCLOSED INCOME IN SALE OF SAI DARSHAN. H E OUGHT TO HAVE CONFIRMED THE ADDITION. 26. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE SU BMITTED THAT THE ASSESSEE HAS UNDERSTATED THE SALE FIGURE O F SAI DARSHAN BY RS.3,05,000. HE SUBMITTED THAT THE ASSESSEE HAS SOL D EACH APARTMENT AT A COST OF RS.3.05 LAKHS AND THE TOTAL RECEIPTS FROM THIS VENTURE COMES TO RS.36,60,000 AS AGAINST RS.31,52,2 45 ADMITTED BY THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE WAS T HAT SHE HAS PROVIDED ONE FLAT FREE TO ONE SMT.VALMAL OF AUSTRA LIA, BUT COULD NOT ADDUCE ANY EVIDENCE IN SUPPORT OF HER CONTENTION. T HE LEARNED CIT- DR SUBMITTED THAT THE ASSESSEE COULD NOT PRODUCE EV EN A CONFIRMATION LETTER FROM SMT.VALMAL, ASUTRALIA. HE SUBMITTED THAT THERE IS NO JUSTIFICATION FOR THE CIT(A) TO APPLY O NLY A PROFIT RATE OF 8% AND NOT TAKING THE FULL VALUE OF THE FLAT WHILE MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. 27. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIE D ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT IN FACT NO A DDITION EVEN OF ESTIMATED PROFIT COULD BE MADE IN THE FACTS OF THE CASE. HE SUBMITTED THAT THE ASSESSING OFFICER COULD NOT BRING ON RECOR D ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIVED ANY THING MORE THAN THE RECEIPTS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HE SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND BY THE DEPARTME NT AT THE TIME OF SEARCH. 28. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THERE WAS DISCREPANCY IN THE SALE FIGURE OF THE SAL E OF FLATS IN SAI DARSHAN, AS THE ASSESSEE HAS RECORDED RECEIPTS OF R S.31,52,245 AS IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 12 AGAINST TOTAL SALE CONSIDERATION OF RS.36,60,000 WO RKED OUT AS PER THE NUMBER OF FLATS SOLD BY THE ASSESSEE. THE ASSES SEE HAS CLAIMED THAT SHE HAS PROVIDED ONE FLAT FREE TO MS.VALMAL, O F AUSTRALIA AND THEREFORE, THE DIFFERENCE IN THE SALE CONSIDERATION . THE ASSESSEE HOWEVER COULD NOT ADDUCE ANY EVIDENCE IN SUPPORT OF HER CLAIM THAT SHE HAS PROVIDED ONE FLAT FREE TO ONE AUSTRALIAN CI TIZEN. WE FIND THAT THE ASSESSEE COULD NOT PRODUCE EVEN A CONFIRMATION LETTER FROM SMT.VALMAL OF AUSTRALIA. WE FIND THAT IN THE NATURA L COURSE OF EVENTS, THE ASSESSEE SHOULD BE ABLE TO PRODUCE AT LEAST A C ONFIRMATION LETTER FROM SMT. VALMAL OF AUSTRALIA IN CASE SHE WAS HAVIN G SO CLOSE RELATIONSHIP WITH HER AS TO GIVE HER A FLAT FREE OF COST. WE FIND THAT NO EVIDENCE WHATSOEVER WAS PRODUCED IN THIS REGARD EIT HER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) AND THEREFOR E, THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PRESUMPTION UNDER S .132A(4) AND THE NOTINGS WERE MADE BY THE ASSESSEE IN HER OWN HANDW RITING, WHICH WERE CONSIDERED TO BE TRUE. WE FIND THAT THE FACT OF GIVING ONE FLAT FREE OF COST TO SMT. VALMAL WAS NOT DISCLOSED BY TH E ASSESSEE IN HER REGULAR RETURN OF INCOME FILED WITH THE DEPARTMENT. THE ONUS WAS ON THE ASSESSEE TO PRODUCE SOME EVIDENCE WHICH COULD PRIMA FACIE SHOW THAT THE ASSESSEE HAS IN FACT PROVIDED ONE FLA T FREE TO SMT. VALMAL OF AUSTRALIA, AS CLAIMED BY HER. IN THESE F ACTS OF THE CASE, WE FIND THAT THERE IS NO JUSTIFICATION FOR THE CIT(A) TO INCLUDE ONLY THE INCOME IN RESPECT OF THE FLAT CLAIMED TO HAVE BEEN GIVEN FREE OF COST TO SMT. VALMAL OF AUSTRALIA, BY ESTIMATING THE SAME AT 8% INSTEAD OF ADDING THE WHOLE AMOUNT OF THE SALE VALUE. ACCORDI NGLY, WE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORE T HE ADDITION MADE BY THE ASSESSING OFFICER AND CONSEQUENTLY, THIS GRO UND OF THE REVENUE IS ALLOWED. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 13 29. GROUND OF APPEAL NO.9 OF THE REVENUE IS AS UN DER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.20 ,00,000/- TOWARDS EXPENDITURE ON FOREIGN TOURS. HE OUGHT TO HAVE CONFIRMED THE ADDITION. 30. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT AS A RESULT OF SEARCH, IT WAS NOTICED THAT THE ASSE SSEE HAS MADE FIVE JOURNEYS TO USA FROM DECEMBER 1996 TO SEPTEMBER, 19 99 AND THE TOTAL EXPENDITURE ON EACH TRIP COSTS NEARLY RS.2,50 ,000 AND THE ASSESSING OFFICER MADE SOME ESTIMATE OF INCIDENTAL CHARGES OF THE FIVE TRIPS AT RS.8 LAKHS AND HAS A MADE A TOTAL ADDITION OF RS.20 LAKHS IN THE BLOCK ASSESSMENT OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE COULD NOT ADDUCE ANY EVIDENCE IN SUPPORT O F HER EXPLANATION THAT THE ENTIRE EXPENSES ON THE FOREIGN TRIPS WERE BORNE BY SMT.SWAMINI THURIA OF US AND THEREFORE, THE ADDITIO N OF RS. 20 LAKHS WAS VALIDLY MADE BY THE ASSESSING OFFICER. 31. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELI ED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE VISITS TO USA WERE UNDERTAKEN ON BEHALF OF SMT. SWAMINI THURIA, WHO HA S INCURRED ALL THE EXPENDITURE ON SUCH TRIPS. HE SUBMITTED THAT T HE ADDITION WAS MADE ON ESTIMATE BASIS, ALTHOUGH THERE WAS NO MATER IAL FOUND AS A RESULT OF THE SEARCH OPERATION. HE SUBMITTED THAT S OME OF THE EXPENDITURE WAS DEBITED TO THE ACCOUNT OF SMT. SWAM INI THURIA AND THE DETAILS WERE SUBMITTED TO THE ASSESSING OFFICER . 32. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE H AS UNDERTAKEN FIVE TRIPS TO THE USA FORM DECEMBER, 1996 TO SEPTEMBER, 1999. THE ASSESSEES EXPLANATION IS THAT THE ENTIRE EXPENDITU RE ON THE FOREIGN TRIPS WERE BORNE BY SMT.SWAMINI THURIA. HOWEVER, T HE ASSESSEE DID IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 14 NOT ADDUCE ANY EVIDENCE THAT THE ENTIRE FOREIGN TRI P EXPENSES WERE BORNE BY SMT.SWAMINI THURIA. THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE BEFORE THE LOWER AUTHORITIES OR BEFORE US TO SHOW THAT THE TICKETS FOR THE US TRIPS WERE IN FACT SPENT OR SPON SORED BY SMT.SWAMINI THURIA. THE FACT THAT THE ASSESSEE HAS UNDERTAKEN FIVE TRIPS TO THE USA DURING THE BLOCK PERIOD CAME TO LI GHT ONLY DUE TO VERIFICATION OF THE PASSPORT OF THE ASSESSEE AND TH IS FACT WAS NOT DISCLOSED BY THE ASSESSEE IN ANY OF HER STATEMENT O F ACCOUNTS FILED WITH THE DEPARTMENT. THE ASSESSEE HAS GONE TO USA F OR FIVE TIMES WITHIN THE BLOCK PERIOD ALONGWITH ONE SHRI MOSKOVIC I, WHO WAS RESIDING WITH THE ASSESSEES FAMILY SINCE THE YEAR 1989. SHRI MOSKOVICI HAS STATED ON OATH THAT HE HAS NO SOURCE OF INCOME AND HE IS DEPENDENT ON ASSESSEES FAMILY AND THE ENTIRE EX PENSES RELATING TO FOREIGN TRIPS WERE BORNE BY THE ASSESSEE. THE CIT(A ) HAS DELETED THE ADDITION ON THE GROUND THAT THE ASSESSEE HAS FILED THE LEDGER ACCOUNT COPY OF SMT.SWAMINI THURIA BEFORE THE ASSESSING OFF ICER DURING THE COURSE OF ASSESSMENT FOR THE ASSESSMENT YEAR 1998- 99. HOWEVER, WE FIND THAT NO EVIDENCE IN THIS REGARD WAS FILED B Y THE ASSESSEE. THE EXPENDITURE INCURRED ON FOREIGN TRAVEL WOULD NO T HAVE SEEN THE LIGHT OF THE DAY, HAD THERE BEEN NO SEARCH ACTION ON THE PREMISES OF THE ASSESSEE. IN THESE FACTS, WE HOLD THAT THE ADD ITION WAS CALLED FOR ON ACCOUNT OF UNEXPLAINED EXPENDITURE IN THE FOREIG N TRIPS MADE BY THE ASSESSEE DURING THE BOCK PERIOD IN THE BLOCK AS SESSMENT OF THE ASSESSEE. HOWEVER, WE FIND THAT THE ADDITION ON AC COUNT OF FIVE TRIPS HAS BEEN CALCULATED AT RS.12.50 LAKHS BY THE ASSESS ING OFFICER AND THE ASSESSING OFFICER HAS FURTHER ESTIMATED RS.8 LA KHS ON ACCOUNT OF INCIDENTAL EXPENSES, THOUGH ULTIMATELY A ROUND-SUM ADDITION OF RS.20 LAKHS WAS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITUR E ON FOREIGN TRIPS. IN OUR VIEW, THE ESTIMATE OF TRAVEL EXPEND ITURE PER TRIP TO USA AT RS.2.5 LAKHS IS SUFFICIENT TO COVER STAY AND OTH ER INCIDENTAL IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 15 EXPENSES ALSO. THERE BEING NO BASIS FOR MAKING ANY ADDITION ON ACCOUNT OF INCIDENTAL STAY EXPENSES DURING THE FORE IGN TRIP, WE HOLD THAT ENDS OF JUSTICE SHALL BE MET IF THE ADDITION O N ACCOUNT OF UNEXPLAINED EXPENDITURE ON FIVE FOREIGN TRIPS TO US A IS RESTRICTED TO RS.12.5 LAKHS INSTEAD OF TOTAL ADDITION OF RS.20 LA KHS MADE BY THE ASSESSING OFFICER. WE ACCORDINGLY SET ASIDE THE OR DER OF THE CIT(A) AND RESTORE ADDITION MADE BY THE ASSESSING OFFICER ONLY TO THE EXTENT OF RS.12.5 LAKHS. THIS GROUND OF THE REVENUE IS AC CORDINGLY ALLOWED IN PART. 33. GROUND OF APPEAL NO.10 OF THE REVENUE IS AS U NDER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.15 ,21,288/- TOWARDS UNCLAIMED DEBT RELATING TO SMT UMA JORDAN. HE OUGHT TO HAVE CONFIRMED THE ADDITION. 34. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER FROM THE SEIZE D MATERIAL FOUND THAT THE ASSESSEE HAS RECEIVED A SUM OF RA.15,21,28 8 IN MARCH, 1995 FROM ONE SMT.UMA JORDAN. THE ASSESSEE HAS STATED T HAT THE SAID AMOUNT WAS RECEIVED FOR CONSTRUCTION OF HOUSE AT PU TTAPARTHI AND THAT THERE WAS NO AGREEMENT AVAILABLE AND THE PRES ENT WHEREABOUTS OF SMT.UMA JORDAN ARE NOT KNOWN. THE ASSESSEE STATE D BEFORE THE ASSESSING OFFICER THAT THE SAID AMOUNT WAS RECEIVED FROM SMT. UMA JORDAN WAS SPENT ON CONSTRUCTION OF THE HOUSE. THE ASSESSEE HAS CLAIMED THAT SMT. UMA JORDAN HAS NOT COME THEREAFTE R AND HAS NOT GIVEN THE REQUIRED SUM RESULTING IN THE WORK OF CON STRUCTION REMAINING INCOMPLETE. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE AMOUNT WAS REMAINING IN THE BOOK S OR ACCOUNT AS UNCLAIMED FOR THE LAST FIVE YEARS AND THE CURRENT WHEREABOUTS OF THE CREDITOR WERE NOT KNOWN AND THE ASSESSEE COULD NOT FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HER CLAIM REGARD ING THE NATURE OF IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 16 RECEIPTS AND THEREFORE, THE RATIO OF THE DECISION O F THE HONBLE SUPREME COURT IN T.V. SUNDARAM IYENGAR AND SONS LTD . (222 ITR 344) APPLIES TO THE FACTS OF THE CASE OF THE ASSESS EE. 35. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.15,21,288 WAS DULY ACCOUNTED FOR IN TH E INCOME-TAX RETURN FILED BY THE ASSESSEE PRIOR TO THE DATE OF S EARCH AND THEREFORE THE SAME COULD NOT BE CONSIDERED IN THE BLOCK ASSES SMENT OF THE ASSESSEE.. HE SUBMITTED THAT THE ASSESSING OFFICER COULD HAVE INVOKED THE PROVISIONS OF S.147 OF THE ACT AND REOPENED THE ASSESSMENT, IN CASE HE HAS SOME DOUBT REGARDING THE AMOUNT IN QUES TION. HE SUBMITTED THAT THE ASSESSEE HAS SPENT ALL THE AMOUN T FOR CONSTRUCTION AS DESIRED BY SMT. UMA JORDAN AND HAS ADMITTED PROF IT UNDER S.44AD OF THE ACT FOR THE ASSESSMENT YEARS 1994-95 AND 199 5-96 AND HAS DECLARED PROFIT AT THE RATE OF 8% THEREON AND THE R ETURNS OF INCOME FOR THE ASSESSMENT YEAR 1994-95 AND 1995-906 WERE FILED PRIOR TO THE DATE OF SEARCH BY THE ASSESSEE. 36. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSING OFFICER FOUND FROM THE SEIZED MATERIA L THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.15,21,288 IN MARCH, 19 95 FROM SMT.UMA JORDAN. THE ASSESSEE HAS EXPLAINED THAT THE AMOUNT WAS SPENT ON THE CONSTRUCTION OF A HOUSE AT PUTTAPARTHI AS PER THE INSTRUCTIONS OF SMT.UMA JORDAN AND THE CONSTRUCTION WORK REMAINED INCOMPLETE. WE FIND THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM SMT.UMA JORDAN WAS ACCOUNTED FOR BY THE ASSESSEE IN HER INCOME TAX RETURNS FILED PRIOR TO THE DATE OF SEARCH. ASSESSE E HAS DECLARED INCOME OF RS.52,800 FOR THE ASSESSMENT YEAR 1994-95 AND RS.69,000 FOR THE ASSESSMENT YEAR 1995-96 BY APPLYING PROFIT RATE OF 8% AS PER THE PROVISIONS OF S.44AD OF THE ACT AND THE RETURNS OF INCOME FOR THE IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 17 RELEVANT ASSESSMENT YEARS WERE FILED PRIOR TO THE DATE OF SEARCH ON 30.3.1995 FOR THE ASSESSMENT YEAR 1994-95 AND ON 25 .1.1996 FOR THE ASSESSMENT YEAR 1995-96. THE GROSS RECEIPTS FROM S MT.UMA JORDAN OF RS.15,21,288 WERE DECLARED BY THE ASSESSEE IN TH E ASSESSMENT YEARS 1994-95 AND 1995-96 IN HER RETURNS OF INCOME FILED AND THEREFORE, THE RECEIPT OF AMOUNT FROM SMT.UMA JORDA N COULD NOT BE CONSIDERED IN THE BLOCK ASSESSMENT OF THE ASSESSEE AND IN FACT, IT IS A SUBJECT MATTER OF REGULAR ASSESSMENT ONLY. THE T RANSACTION WAS A PART OF THE ASSESSEES TRADING ACTIVITY. IN THESE FACTS OF THE CASE, SINCE THE ASSESSEE HAS DISCLOSED THE TRANSACTION OF RECEIPT OF AMOUNT FROM SMT.UMA JORDAN AND HAS OFFERED PROFIT THEREON IN HER REGULAR RETURNS OF INCOME FILED FOR THE ASSESSMENT YEARS 19 94-95 AND 1995- 96 PRIOR TO THE DATE OF SEARCH, WE HOLD THAT NO CAS E FOR ADDITION COULD BE MADE OUT BY THE REVENUE IN THE BLOCK ASSESSMENT OF THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE CIT(A) ON T HIS ISSUE IS CONFIRMED AND THE GROUND OF APPEAL NO.10 OF THE REV ENUE IS REJECTED. 37. GROUND OF APPEAL NO.11 OF THE REVENUE IS AS U NDER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.8, 65,000/- MADE TOWARDS MARRIAGE EXPENSES. THE CIT(A) OUGHT TO HAVE CONSIDERED THE SOURCES FOR MEETING THE MARRIAGE EXP ENSES AND CONFIRMED THE ADDITION. 38. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT AS A RESULT OF THE SEIZED MATERIAL, THE ASSESS ING OFFICER FOUND THAT THE ASSESSEE HAS INCURRED AN AMOUNT OF RS.8,65,000 AS MARRIAGE EXPENSES AND THE SAME WAS NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS T AKEN CONTRADICTORY STAND WHILE EXPLAINING THE SOURCE OF THE EXPENDITURE INCURRED BY HER. HE SUBMITTED THAT THE EXPLANATION OF THE ASSESSEE THAT THE AMOUNTS WERE DEBITED TO THE ACCOUNT OF SMT .SWAMINI THURIA IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 18 WAS NOT TENABLE SINCE THE ASSESSEE COULD NOT FILE E VEN A CONFIRMATION FROM SMT.SWAMINI THURIA TO THAT EFFECT. HE RELIED O N THE ORDER OF THE ASSESSING OFFICER. 39. THE LEARNED COUNSEL FOR THE ASSESSEE HAS OPPOS ED THE SUBMISSIONS OF THE LEARNED CIT-LEARNED DEPARTMENTAL REPRESENTATIVE. HE SUBMITTED THAT NO MARRIAGE WAS SOLEMNIZED IN THE ASSESSEES FAMILY, AS THE MARRIAGE OF SON OF SM T.SWAMINI THURIA WAS SOLEMNIZED AT BANGALORE AND THE EXPENSES WERE I NCURRED BY SMT.SWAMINI THURIA FOR THE MARRIAGE OF HER SON AND THE EXPENSES DO NOT RELATE TO THE ASSESSEE. HE SUBMITTED THAT SMT. SWAMINI THURIA HAS WITHDRAWN TOWARDS MARRIAGE EXPENSES FORM HER BA NK ACCOUNT ON DIFFERENT DATES AND THE TOTAL WITHDRAWALS FROM 16.1 1.1999 TO 27.11.1999 AMOUNTED TO RS.8,65,000. HE RELIED ON T HE ORDER OF THE CIT(A). 40. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ASSESSEE HAS SUBMITTED THAT THERE WAS NO MARRIA GE IN THE FAMILY OF THE ASSESSEE AND THE MARRIAGE OF SMT.SWAMINI THU RIAS SON WAS SOLEMNIZED AT BANGALORE, FOR WHICH SMT.SWAMINI THUR IA HAS WITHDRAWN RS.8,65,000 BY MAKING SEVEN WITHDRAWALS F ROM HER BANK ACCOUNTS ON DIFFERENT DATES FROM 16.11.1999 TO 27.1 1.1999 AND DETAILS THEREOF HAVE BEEN REPRODUCED BY THE CIT(A) ON PAGE 69 OF THE APPELLATE ORDER. THE REVENUE COULD NOT CONTROVERT T HE EXPLANATION OF THE ASSESSEE THAT THERE WAS NO MARRIAGE IN THE FAMI LY OF THE ASSESSEE AND THAT THE SUM OF RS.8,65,000 WAS WITHDRAWN ON DI FFERENT DATES BY SMT.SWAMINI THURIA FROM HER BANK ACCOUNT. WE FIN D THAT SMT.SWAMINI THURIA HAS ISSUED CHEQUES IN THE NAMES OF SHRI SHELDON, HER RELATIVE, SHRI SALEEM, HER EMPLOYEE; A ND TIPPANNA HER EMPLOYEE AMOUNTING TO RS.7,65,000 AND CHEQUES TOTAL ING TO RS.1 IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 19 LAKH WAS THROUGH M/S. SRI SAI PLAZA AND NONE OF TH E AMOUNTS WERE WITHDRAWN THROUGH THE ASSESSEE. IN THESE FACTS OF THE CASE, WE FIND THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS BEHA LF. ACCORDINGLY, ORDER OF THE CIT(A) IS CONFIRMED AND THIS GROUND OF THE REVENUE IS REJECTED. 41. GROUND OF APPEAL NO.12 OF THE REVENUE IS AS U NDER- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.10 ,99,500 BEING THE INCOME NOT DECLARED FOR 2000-2001 AND UPT O 14.09.2000. THE CIT(A) OUGHT TO HAVE CONSIDERED THA T SEC.158BB(1)(C) INCLUDES INCOMES NOT RECORDED IN T HE REGULAR BOOKS OF ACCOUNT. HE OUGHT TO HAVE CONFIRM ED THE ADDITION. 42. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THE CASE OF THE ASSESSEE WAS NOT OF AUDIT AND THEREFORE THE DUE DATE FOR FILING THE RETURNS OF INCOME FOR THE ASSES SMENT YEAR 2000-01 WAS 31.8.2000, WHICH IS PRIOR TO THE DATE OF SEARCH AND THE ASSESSEE WAS LIABLE FOR ADDITION OF RS. 10,99,500 AS UNDISCL OSED INCOME WORKED UPTO THE DATE OF SEARCH AND THE ASSESSEE HAS NOT F ILED HER RETURN OF INCOME BY DUE DATE AND SAME WAS RIGHTLY BROUGHT TO TAX BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER OF THE A SSESSING OFFICER. 43. THE LEARNED COUNSEL FOR THE ASSESSEE HAS OPPO SED THE SUBMISSIONS OF THE LEARNED CIT-LEARNED DEPARTMENTAL REPRESENTATIVE. HE SUBMITTED THAT IT IS WRONG TO S AY THAT THE ASSESSEE DID NOT MAINTAIN THE ACCOUNT BOOKS. HE SU BMITTED THAT THE ASSESSEE HAD MAINTAINED THE BOOKS OF ACCOUNT AND FO R THE ASSESSMENT YEAR 2000-01, THE BOOKS WERE SUBJECT TO TAX AUDIT AND THE RETURN OF INCOME WAS FILED ON THE DUE DATE ON 3 1.10.2000 FOR THE ASSESSMENT YEAR 2000-01. HE SUBMITTED THAT THE ASS ESSEE ESTIMATED IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 20 THE INCOME AT THE RATE OF 15% OF THE GROSS RECEIPT AND ADMITTED AN INCOME OF RS.9,52,000 FOR THE ASSESSMENT YEAR 2000- 01. IN RESPECT OF THE ASSESSMENT YEAR 2001-02, THE DUE DATE OF FIL ING OF THE RETURN WAS 31.8.2001 AND SINCE THE ACCOUNTING YEAR DID NOT END ON THE DATE OF SEARCH, THE RETURN OF INCOME WAS FILED BY THE AS SESSEE ON 26.3.2002 AND THE PROVISIONS RELATING TO THE BLOCK ASSESSMENT DID NOT APPLY TO THE INCOME RETURNED BY THE ASSESSEE HE RELIED ON THE ORDER OF THE CIT(A) 44. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSEE HAS GOT TAX AUDIT REPORT WITH REGARD T O THE ASSESSMENT YEAR 2000-01 AND THEREFORE THE DUE DATE OF FILING T HE REGULAR RETURN FOR THE ASSESSMENT YEAR 2000-01 WAS 31.10.2000. THE SEARCH TOOK PLACE AT THE ASSESSEES PREMISES PRIOR TO THE DUE D ATE FOR FILING THE RETURN FOR THE ASSESSMENT YEAR 2000-01. IN RESPECT OF THE ASSESSMENT YEAR 2001-02, THE ACCOUNTING YEAR OF THE ASSESSEE DID NOT END ON THE DATE OF SEARCH, VIZ. 14.9.2000. THE ASSESSEE HAS WORKED OUT THE INCOME BY APPLYING A RATE OF 15% ON GROSS RECEIPTS AND ADMITTED AN INCOME OF RS.9,52,000 FOR THE ASSES SMENT YEAR 2000-01 AND RS.1,47,500 FOR THE ASSESSMENT YEAR 200 1-02. WE FIND THAT SINCE THE DUE DATE FOR FILING THE RETURN OF IN COME FOR THE ASSESSMENT YEAR 2000-01 HAS NOT EXPIRED ON THE DATE OF SEARCH AND FOR THE ASSESSMENT YEAR 2001-02, THE ACCOUNTING YEA R OF THE ASSESSEE ITSELF HAS NOT ENDED ON THE DATE OF SEARCH , THE ADDITION MADE ON ACCOUNT OF THE INCOME DECLARED BY THE ASSES SEE IN HER REGULAR RETURNS OF INCOME FOR THE ASSESSMENT YEAR 2 000-01 AND 2001-02, COULD NOT BE SUSTAINED AS UNDISCLOSED INCO ME FOR THE BLOCK PERIOD OF THE ASSESSEE. IN THIS VIEW OF THE MATTER , WE FIND NO MERIT IN THE GROUND OF APPEAL OF THE REVENUE ON THIS ISSUE. IT IS ACCORDINGLY REJECTED. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 21 45. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLO WED. ASSESSEES APPEAL IT(SS)A NO.74/HYD/2004: 46. THERE IS A DELAY OF THREE DAYS IN PRESENTING T HIS APPEAL BY THE ASSESSEE BEFORE THIS TRIBUNAL. ASSESSEE HAS FI LED CONDONATION PETITION, STATING THE REASON FOR THE MARGINAL DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE PARTIES ON THIS ISSUE. AFTER HEARING THE PARTIES AND KEEPING IN VIEW THE CIRCUMS TANCES EXPLAINED IN THE CONDONATION APPLICATION FILED BY THE ASSESSE E, WE HOLD THAT IT IS A FIT CASE FOR THE CONDONATION OF DELAY OF THREE DA YS IN FILING THE PRESENT APPEAL BEFORE THE TRIBUNAL. ACCORDINGLY, T HE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL IS CONDONED. 47. GROUND OF APPEAL NO.1 OF THE ASSESSEE READS AS FOLLOWS- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJU DICIAL TO THE APPELLANT. 48. THIS GROUND IS GENERAL AND NEEDS NO ADJUDICAT ION. 49. GROUNDS OF APPEAL NO.2 TO 7 OF THE ASSESSEE A RE AS UNDER- 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS ) ERRED IN CONFIRMING ADDITION OF RS.2,39,772/- TOWARDS PURCHA SE OF GOLD JEWELLERY. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING ADDITION OF RS.40,000/- ON ACCOUNT OF C ASH FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS WHEN THE SAID AMOUNT WAS PROPERLY EXPLAINED. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 22 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING ADDITION OF RS.2,46,041/- BEING THE AMOU NT CREDITED IN THE ACCOUNT OF APPELLANTS HUSBAND. 5. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS.2,78,000/- REPRESENTING DONATIONS MADE BY SMT.SW AMINI THURIA, AS THE UNDISCLOSED INCOME OF THE APPELLANT. 6. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.28,333/- TOWARDS RENT RECEIVABLE. 7. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.35,804/- ON ACCOUNT O F SHORT TERM CAPITAL GAINS. THESE GROUNDS OF APPEAL NO.2 TO 7 ARE NOT PRESSED B Y THE LEARNED COUNSEL FOR THE ASSESSEE. THEY ARE ACCORDINGLY REJE CTED. 50. GROUND OF APPEAL NO.8 OF THE ASSESSEE IS AS UN DER- 8. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.6 LAKH ON ACCOUNT OF ELECTRONIC GADGETS PURCHASED FOR SRI SAI PLAZA, A PARTNERSHIP FIRM AS THE UNDISCLOSED INCOME OF THE APPELLANT. 51. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ELECTRONIC GADGETS FOUND AT THE TIME OF SEARCH AT T HE PREMISES OF THE ASSESSEE WERE PURCHASED BY THE PARTNERSHIP FIRM, M/ S.SHRI SAI PLAZA AND THEREFORE, THE ADDITION HAS BEEN WRONGLY MADE I N THE HANDS OF THE ASSESSEE. HE REFERRED TO PAGES 238 TO 271 OF T HE COMPILATION FILED BY THE ASSESSEE WHEREIN THE COPIES OF THE INC OME TAX RECORD OF THE FIRM, M/S. SHRI SAI PLAZA WAS FILED. THE LEARN ED DEPARTMENTAL REPRESENTATIVE, HAS OPPOSED THE CONTENTIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND RELIED ON THE ORDERS OF THE AS SESSING OFFICER AND THE CIT(A). 52. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ELECTRONIC GADGETS AND NEW FURNITURE ETC. WERE FOUND AT THE TIME OF SEARCH ON 14.9.2000 IN THE RESIDENCE OF THE ASSE SSEE. THE IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 23 ASSESSEE HAS CLAIMED THAT THE COST OF ACQUISITION O F THESE ITEMS WERE ORIGINALLY DEBITED IN THE BOOKS OF THE PARTNERSHIP FIRM, M/S. SRI SAI PLAZA AND WAS FINALLY TRANSFERRED TO THE ASSESSEES ACCOUNT BY MAKING JOURNAL ENTRY ON 31.3.2000. THE CIT(A) HAS RECORDE D THAT THE ASSESSEE HAS CLAIMED THAT SHE HAS ACQUIRED THE FURN ITURE AND ELECTRONIC GOODS DURING THE PERIOD FROM 5.7.1999 TO 14.3.2000 AND HAS ISSUED CHEQUES FOR PURCHASES, DRAWN ON HER ACCO UNT IN CANARA BANK. THE CIT(A) HAS ALSO RECORDED THAT THE ASSESS EE HAD NOT FURNISHED BEFORE HIM EITHER THE CHEQUE NOS. THROUGH WHICH THE AMOUNT HAS BEEN PAID OR THE BOOKS OF ACCOUNT, WHERE IN IT HAS BEEN MENTIONED WERE NOT SHOWN TO HIM. THE CIT(A) HAS FU RTHER RECORDED THAT EXCEPT VERBAL STATEMENTS, NO EVIDENCE WAS PRO DUCED BEFORE THE ASSESSING OFFICER AND HAS ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. WE HAVE PERUSED THE COPIES OF THE INCOME-TAX RECORDS OF THE FIRM, M/S. SRI SAI PLAZA FIELD BY TH E ASSESSEE IN THE COMPILATION FROM PAGES 238 TO 270. THESE COPIES OF THE DOCUMENTS FILED IN THE COMPILATION BEFORE US ARE COPIES OF TH E STATEMENT OF ACCOUNT AND THE RETURN FILED BY THE FIRM, M/S. SHRI SAI PLAZA AND NO WHERE THEREIN COST OF THE PURCHASE OF THESE ITEMS H AS BEEN SHOWN AS HAVING BEEN DEBITED. IN THESE FACTS, SINCE THE ASSE SSEE COULD NOT EXPLAIN THE SOURCE OF THE EXPENDITURE IN QUESTION, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A ) IS UPHELD, AND THE GROUND OF APPEAL NO.8 OF THE ASSESSEE IS REJEC TED. 53 . GROUND OF APPEAL NO.9 OF THE ASSESSEE IS AS UNDER- 9. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.24,800 BEING THE PROF IT ON THE FLAT ALLOTTED TO SMT. VALMAL. IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 24 54. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO JUSTIFICATION FOR ADDING 8% ESTIMATED PROFIT ON THE VALUE OF THE FLAT ALLOTTED TO SMT.VALMAL, VALUING RS.3,05,000 AN D IN FACT NO ADDITION IS CALLED FOR. THE LEARNED DEPARTMENTAL R EPRESENTATIVE HAS RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND T HE CIT(A). 55. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ISSUE IN THIS GROUND OF APPEAL IS COVERED WITH OUR DECISION RENDERED IN THE CONTEXT OF GROUND OF APPEAL NO.8 OF THE REVENUE IN ITS APPEAL HEREINABOVE. ACCORDINGLY, FOR THE REASO NS DISCUSSED IN THAT CONTEXT IN PARA 28 OF OUR ORDER HEREINABOVE, THIS G ROUND OF THE ASSESSEE IS REJECTED. HOWEVER, WE MAKE IT CLEAR TH AT SINCE THE ENTIRE SALE PRICE OF ONE FLAT AMOUNTING TO RS.3,05,000 HAS BEEN HELD AS ADDABLE IN THE HANDS OF THE ASSESSEE, NO SEPARATE A DDITION OF PROFIT AT 8% THEREOF OF RS.24,800 COULD BE MADE IN THE HA NDS OF THE ASSESSEE. 56. GROUND OF APPEAL NO.10 OF THE ASSESSEE IS AS U NDER- 10. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.1,57,820/- B EING THE COST OF PRINTING THE BOOKS INCURRED BY THE APPELLAN TS HUSBAND AS THE UNDISCLOSED INCOME OF THE APPELLANT. 57. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED TH AT EXPENDITURE ON PRINTING OF BOOKS WAS INCURRED BY T HE HUSBAND OF THE ASSESSEE AND THEREFORE NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE H AS RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 58. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. NO E VIDENCE WAS FILED BY THE ASSESSEE TO SHOW THAT THE EXPENDIT URE ON PRINTING OF IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 25 BOOKS WAS INCURRED BY THE ASSESSEES HUSBAND AND AC CORDINGLY, WE HOLD THAT NO INTERFERENCE WITH THE ORDER OF THE CIT (A) IS CALLED FOR. WE ACCORDINGLY UPHOLD THE ORDERS OF THE LOWER AUTHO RITIES AND REJECT GROUND NO.10 OF THE ASSESSEE IN THIS APPEAL. 59. GROUND NO.11 OF THE ASSESSEE IS AS UNDER- 11. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.89,941/- ON ACCOUNT O F SITE PURCHASE. 60. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THIS ISSUE MAY BE DECIDED ON MERITS THEREOF. THE LEARNE D DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSES SING OFFICER AND THE CIT(A). 61. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT NO EXPLANATION ON ACCOUNT OF SITE PURCHASE WAS FILE D BY THE ASSESSEE BEFORE US OR BEFORE THE REVENUE AUTHORITIES AND ACC ORDINGLY, THE ADDITION MADE IS CONFIRMED AND THE GROUND OF APPEAL NO.11 OF THE ASSESSEE IS REJECTED. 62. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISM ISSED. 63. TO SUM UP, WHILE APPEAL OF THE REVENUE, BEING IT(SS)A NO.75/HYD/2004, IS PARTLY ALLOWED, APPEAL OF THE AS SESSEE, BEING IT(SS)A NO.74/HYD/2004, IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 21.4.2011 SD/- SD/- (CHANDRA POOJARI) (G.C. GUPTA) A CCOUNTANT MEMBER V ICE PRESIDENT DATED THE 21 ST APRIL, 2011 IT(SS)A NO.74 & 65/H/2004 SMT. JAYASREE D.MENON, PUTTAPARTHY 26 COPY FORWARDED TO: 1. SMT. JAYASREE D.MENON (PUTTAPARTHY), C/O. SHRI S.RA MA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD 500029. 2. ASSTT./ DY. C OMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 5 , HYDERABAD 3. CIT (A), VIJAYAWADA . 4. COMMISSIONER OF INCOME - TAX CENTRAL , HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S.