LATE SMT. KAUSHALYA DEVI, THROUGH LEGAL HEIR SMT. MADHULIKA GOEL, SH. NITIN GOEL, SH. SHALEEN GOEL, SMT. SUNITA GOEL, SH. NALIN GOEL, SH. MANIK GOEL,KURUKSHETRA V. THE ACIT, INVESTIGATION CIRCLE-II, AMBALA

ITSSA 1120/CHANDI/1996

AI Insights

The case involves multiple appeals by the legal heirs of Late Smt. Kaushalya Devi and Late Shri Dharam Pal against the additions made by the Assessing Officer during the block assessment period from 1986-87 to 1996-97. The appeals were heard by the Income Tax Appellate Tribunal, which addressed various issues including the legality of the assessments under section 158BC(c) of the Income Tax Act, the validity of additions made on account of alleged shortages in stock, unexplained investments in properties, and capital gains. The Tribunal's decision involved a detailed examination of the evidence presented, including affidavits and other documentary proofs, leading to a mix of dismissals and remands of the grounds of appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396630 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: ROHIT SHARMA
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences; Unexplained investment; Cost of acquisition; Document seized; Documents seized; Onus to prove; Gift; Capital Gains; Principle of natural justice; Valuation report; Block assessment; Loose papers
• Section: 54

Judgement Text

"आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ, च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH HEARD THROUGH : PHYSICAL HEARING BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं. IT(SS) No. 1120/CHD/1996 Block Period: 1986-87 to 1996-97 Late Smt. Kaushalya Devi, Through L/H Smt. Madhulika Goel, Shri Nitin Goel, Shri Shaleen Goel, Smt. Sunita Goel, Shri Nalin Goel, Shri Manik Goel, Thanesar, Kurukshetra. C/o Shri Tejmohan Singh, Advocate # 527, Sector 10-D, Chandigarh. Vs The ACIT (Investigation), Circle-2,Ambala. अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent & आयकर अपील सं./ IT(SS) No. 1121/CHD/1996 Block Period: 1986-87 to 1996-97 Late Shri Dharam Pal (HUF), Through L/H Shri Nitin Goel and Shri Shaleen Goel, Main Bazar, Thanesar, Kurukshetra. C/o Shri Tejmohan Singh, Advocate # 527, Sector 10-D, Chandigarh. Vs The ACIT (Investigation), Circle-2,Ambala. अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent & आयकर अपील सं./ IT(SS) No. 1123/CHD/1996 Block Period: 1986-87 to 1996-97 Late Shri Dharam Pal, Through L/H Shri Nitin Goel and Shri Shaleen Goel, Main Bazar, Thanesar, Kurukshetra. C/o Shri Tejmohan Singh, Advocate # 527, Sector 10-D, Chandigarh. Vs The ACIT (Investigation), Circle-2,Ambala. अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent Assessee by : Shri Tej Mohan Singh, Advocate Revenue by : Shri Rohit Sharma, CIT DR Date of Hearing : 08.04.2025 Date of Pronouncement : 29/05/2025 PHYSICAL HEARING ITA Nos.1120,1121 & 1123/CHD/1996 2 O R D E R PER LALIET KUMAR, JM All the above appeals filed by the different assessee’s for the Block Period 1986-87 to 1996-97. 2. Firstly we shall deal with the appeal of the Assessee in IT(SS) No.1120/CHD/1996 3. In this appeal the assessee has raised the following grounds of appeal : 1. That the Ld. A. O. has completed the assessment u/s 158BC(c) of the Income Tax Act in utter disregard of the legal provisions and in violation of the principles of the natural justice and is thus liable to be annulled being beyond the scope of statutory provisions. 2. That the Ld. A. 0. has erred in law as well as on facts in making an addition of Rs.2,73,118/-on account of the alleged shortage in stock of gold and silver found during the course of survey as against the stock determined by preparing the Trading account on the date of survey, the 26th of September, 1995 in utter disregard of the explanation rendered at the time of survey. The addition is wholly uncalled for in as much as the affidavit of the Karigar and other evidence was duly furnished during the course of assessment proceedings. The Ld A. 0. has brushed aside the factor of shop lifting and pilferage of stock which was explained on behalf of the assessee holding the same to be self contradictory. 3. That in any case the shortage as worked out is totally wrong and the sale consideration of Rs. 1,97,523/- worked out by applying the Gross Profit rate of 32.16% in respect of the gold jewellery and Rs.75,595/- by taking GP rate of 14.66% in respect of silverwares is highly excessive and as such the total addition of Rs.2,73,118/- is liable to be deleted. 4. That the ld. AO has further erred in making an addition of Rs.15,959/- on account of the alleged sale/recovery worked out by him on page 11 of the assessment order which is again arbitrary and unjustified. The entire determination of the addition made is based on suspicion and surmises for which there is no positive evidence to justify and as such the addition is liable to be deleted. 5. That the Ld. A. 0. has further erred in making an addition of Rs.30,450/- on account of the long term capital gains of the sale of shop No. I860/5 in Chhota Bazar, Thanesar for an amount of Rs. 70,000/- on 25.1.91 adopting the cost of shop at Rs.25,000/- in the year 1982 by adopting the cost index at 112/100 which is wrong. The cost of shop adopted at Rs.25,000/-is too low and the cost of index applied for is also not correct and as such the capital gains as determined for addition is wholly unwarranted and is liable to be deleted. 6. That in any case the long term capital gains is not liable to be assessed in Block period of assessment particularly at the rate of 60% which ought to be assessed, if at all, at the rate of 20% applicable to such capital gains. ITA Nos.1120,1121 & 1123/CHD/1996 3 7. That the Ld. A. 0. has further erred in making an addition of Rs.22,774/- on account of alleged unexplained recoveries/advances made to various persons in business of pawn brokering. The Ld. A. 0. has wrongly assumed the income for the purposes of addition as per Annexure - A enclosed with the assessment order which is arbitrary and unjustified and thus, the addition is liable to be deleted. 8. That the Ld. A. 0. has further erred in making an addition of Rs.3,38,820/- explained to have been received on account of sale of buffalos, trees, cows and land rent etc. which stands duly credited in respective assessment years in the books of accounts. The Ld. A. 0. has wrongly assumed the said amount of sa4e of buffalos, trees, cows etc. to be an undisclosed income for the purposes of impugned assessment. The addition being wholly unwarranted is liable to be deleted. 9. That the Ld. A. 0. has further erred in making an addition of Rs.2,400/- on account of rent of shop having not been shown in assessment year 1995-96 while the same was shown in 1994-95. The Ld. A. 0. has failed to appreciate that no such shop rent amount was ever shown in the year 1994-95 and as such the addition is totally unwarranted. 10. The Ld. A. 0. has further erred in making an addition of Rs. 1,27,250/- on account of the alleged unexplained investment in the purchase of Kisan Vikas Patras and Indra Vikas Patras of the value of Rs. 80,000/- and interest thereon amounting to Rs.47,250/- for the respective years of Block period of assessment was explained to have been purchased periodically out of her lifelong savings invested in FD's and National Saving Certificates and converted in the investment in Vikas Patras on encashment. The details of the savings certificates etc. were duly furnished in her respective wealth-tax returns and as such the addition is totally uncalled for. 11. That the ld. AO has further erred in making an addition of Rs.57,700/- for the alleged unexplained investment in the purchase of half share of SCO-5, Sector 17, Kurukshetra allegedly in the name . of Shri Dharam Pal Gupta her son-in-law as benami. As a matter of fact the half share in this property was purchased by the assessee while the other half share was purchased by Shri Dharam Pal Gupta her son-in-law. The evidence in respect of purchase by Shri Dharam Pal Gupta was duly furnished during the course of assessment proceedings and as such no addition on this account is for. In any case the onus to prove benami character of the purchase is not on the assessee but on the department which has not been discharged. Thus, the addition is wholly unwarranted. 12. That the assessment is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable being without jurisdiction. Ground No. 1 4. Regarding this ground of appeal the Ld. AR of the assessee had submitted that the assessee is not pressing this ground and the same be dismissed as not pressed. ITA Nos.1120,1121 & 1123/CHD/1996 4 5. In view of the submission made by the Ld.AR for the assessee, ground 1 of the assessee's appeal is dismissed. Ground no:-2 and 3 6. In this regard Ld. AR had submitted A trading account was prepared at the shop during survey adopting the sales of gold and silver at Rs.6,96,352.16 and 5,35,366/- respectively and no weight of the jewelry has been taken into consideration as against the stock of gold found at the time of survey being 1.83 kg valued at Rs.5,62,160/- and that of silver being 65.280 kg. valued at Rs.4,70,000/-. The shortage in gold has been determined at Rs.1,34,112/- and that of silver at Rs.65,366/-. The assessing officer applying G.P rate of 32.16% on sale of gold worked out sale consideration of Rs . 197523/- on account of gold found short. 6.1 Similarly in respect of silver of Rs.65366/- allegedly found short, the assessing officer applied G.P rate of 14.66% and worked out total addition of Rs.75595/-. 6.2 Thus, the total additions has been made at Rs.2,73,118/- while the stock position as shown in the books of account has been accepted as such in the assessment for the year 1996-97. It was explained vide letter dated 22.06.1996 placed at Paper Book pages 77-78 that Sh. Pankaj, Goldsmith had taken gold ornaments for cleaning and repair on 15.09.95 which were returned by him on 30.09.95. His affidavits were also given which are placed in the paper book at Pages 79-80 the contents whereof have not been rebutted. 6.3 In respect of silver items, it was explained that the shortage was on account of shop lifting which is a regular feature in the nature of trade. 6.4 The assessing officer has made this addition solely on the ground that the assessee has been shifting stands and making contradictory statements. He refers to the reply of the assessee dated 02.09.1996 placed at Pages 143 to 151 of the paper book. The reply in respect of shortage of stock finds place ITA Nos.1120,1121 & 1123/CHD/1996 5 at Page 151. On perusal of both the replies i.e dated 22.06.95 and 02.09.06, it would be seen that the explanation rendered is the same. Rather the assessee in her later reply of 02.09.1996 specifically mentions that the query in respect of shortage of stock has already been explained vide letter dated 22.06.95. It is wrong to infer that the assessee has been giving self contradictory statements. No such additions could be made on the basis of estimate holding same to be sale outside the books of account for which there is absolutely no material and evidence on record. Thus the addition made merits deletion In the alternative, if at all any addition is called for, it is only the net profit which can be added and not the entire sale proceeds as has been done by the assessing officer. This is in respect of ground Nos. 2 & 3. 7. Per contra the Ld. DR for the revenue relied upon the order passed by the lower authorities. 8. We have heard the rival submissions and perused the material available on record. The Assessing Officer, in paragraph 8 of the assessment order, observed that the entire business operations of the assessee firm were being managed by Sh. Davinder Kumar, the manager. During the course of enquiry, Sh. Davinder Kumar stated that Sh. Dharam Pal, a partner, occasionally visited the shop. However, when specifically questioned about the shortage of gold and silver detected during the course of the survey, he expressed his inability to provide any satisfactory explanation and stated that the same could only be explained by Sh. Dharam Pal. The Assessing Officer further noted that even Sh. Dharam Pal, when confronted with specific questions regarding the shortage of stock, failed to provide any cogent reply. The assessee, in its reply dated 22.06.1996, submitted that the shortage could be attributed to the Karigar (artisan) and placed reliance on an affidavit to support this claim. However, the Assessing Officer noted contradictions in the assessee’s stand. If the articles had indeed been handed over to the Karigar, there was no plausible reason for any shortage or pilferage of stock from the assessee’s premises. On this basis, the Assessing Officer concluded that the ITA Nos.1120,1121 & 1123/CHD/1996 6 shortage was attributable to unaccounted sales made by the assessee, and accordingly, made an addition on an estimated basis. 8.1 In the present case, it is seen that although the assessee filed an affidavit claiming that the shortage was due to articles given to the Karigar, no affidavit from the said Karigar has been placed on record. Further, the assessee failed to produce any documentary evidence in its books of account to demonstrate that payments were made to the Karigar for any repair or cleaning activities. In the absence of any cogent evidence having been furnished either before us or before the lower authorities, we find no merit in the explanation offered by the assessee. Accordingly, we uphold the findings of the lower authorities and sustain the addition made. The grounds No. 2 and 3 of the assessee’s appeal are, therefore, dismissed. Ground no. 4 9. In this regard Ld.AR had submitted that Addition of sale/recovery amounting to Rs.15,959/- has been made which also pertained to the business of the assessee and the entries of document No. 9 are in the handwriting of Late Shri Rulia Ram who was the proprietor of the business then and died in the year 1986. Paper Book Pages 167-171.The entries pertained to the period beyond commencement for the block period and as such no additions whatsoever can be made in the block assessment on this account as well besides it being under preview of survey operation 10. The Ld. DR relied upon the order passed by the lower authorities 11. We have heard the rival contentions of the parties and have perused the material available on record. As noted by the Assessing Officer in paragraph 11 of the assessment order, the entries at serial numbers 52, 53, 54, 55, and 57 of the seized document pertain to the financial years 1989–90, 1988–89, 1989–90, 1988–89, and 1986–87, respectively. It is evident from the table reproduced in the said paragraph that all these entries relate to periods falling outside the block assessment period. Consequently, the transactions ITA Nos.1120,1121 & 1123/CHD/1996 7 recorded in the seized material do not pertain to the block period relevant for the purpose of the present assessment. Therefore, the addition of Rs.15,959 made by the Assessing Officer on this account is not sustainable and is accordingly directed to be deleted. Ground no 5 & 6 12. In this regard, the Ld.AR submitted that these grounds are in respect of addition of Rs.30,450/- on account of capital gains of the sale of shop no.1860/5 in Chotta Bazar, Thanesar. It was explained vide reply dated 02.09.96 placed at Pages 143-151 of the Paper Book specifically at page 149 that this building was received by the assessee from her husband late Sh. Rulia Ram in a family partition in the year 1969-70 and this partition was duly accepted by the Income tax department. The value of this property in 1982 was Rs.25000/- and thereafter some improvements worth Rs.10000/- were made in the year 1982 to 1984. Further it was submitted that the property was under litigation and a sum of about Rs. 20000/- was incurred as litigation expenses right from the stage of filing ejectment petition to the sub-judge till the Hon’ble Supreme Court. The assessing officer without giving benefit of the improvements and the litigation expenses applied the cost inflation index to the extent of Rs.25000/-and made the impugned addition. It is submitted that such an addition is not called for while framing block assessments. If at all any addition is called for, it is the subject matter of regular assessment for the previous year when it was sold. Moreover the assessing officer agrees with the cost declared at Rs.25000/- while rejects the other submission in respect of improvements made to the said property for want of documentary evidence. No evidence could be provided at that time as it was more than 13-14 years before that the improvements were made and even as per income tax laws, assessee is not bound to maintain such old records. Copies of the order of the High Court, Supreme Court and Senior Sub-judge have been annexed with the additional evidence at Pages 5-13 . Thus, the addition merits deletion on all counts. ITA Nos.1120,1121 & 1123/CHD/1996 8 13. On the other hand the Ld. DR relied upon the order passed by the Assessing Officer. 14. We have heard the rival contentions of the parties and perused the material available on record. The Assessing Officer disallowed the claim for cost of improvement because the assessee failed to furnish any documentary evidence either for carrying out improvements in the property or for incurring expenses towards litigation before various forums. However, it is not in dispute that the assessee contested litigation before different courts of law in connection with the said property. It would be unreasonable to presume that the assessee did not incur any expenditure towards legal representation and that the lawyers conducted the cases pro bono. 14.1 In our considered view, the Assessing Officer ought to have allowed some reasonable cost towards litigation as part of the cost of acquisition/improvement of the property. Given the vintage of the matter and the practical difficulty in furnishing actual fee bills after such a long passage of time, we consider it appropriate to estimate the legal expenses at Rs.15,000/-. Accordingly, the assessee is granted relief to the extent of Rs.15,000/- on an estimated basis. The balance disallowance is upheld. Consequently, the ground Nos. 5 & 6 raised by the assessee are partly allowed. Ground No. 7 15. In this regard Ld.AR had submitted An addition of Rs.22,774/- has been made on account of alleged unexplained recovery of advance made in the business of pawn brokering as per document No. 29, is also not sustainable because the documents being relied upon are dumb documents without specifying any details of any nature. These are placed at Pages 9-16 of the Paper Book filed by the revenue. 16. The Ld. DR relied upon the order passed by the lower authorities. ITA Nos.1120,1121 & 1123/CHD/1996 9 17. We have heard the rival contentions of the parties and perused the material available on record. The assessee has contended that the documents recovered during the course of search are 'dumb documents' and therefore cannot form the basis for making additions. However, a perusal of the assessment order, particularly at page 11, reveals that despite being granted several opportunities, the assessee failed to reconcile the entries found in the seized documents with its regular books of account. It is further noted that no satisfactory explanation was furnished by the assessee before the Assessing Officer in response to the discrepancies pointed out. 17.1 It is only at the appellate stage that the assessee has raised the plea for the first time that the documents in question are ‘dumb documents’. In our considered view, once the documents are recovered from the possession or control of the assessee, the burden lies on the assessee to explain the contents thereof. In the present case, the assessee has failed to discharge this burden by providing any cogent explanation or reconciliation. Therefore, we do not find any infirmity in the findings of the Assessing Officer in treating the unexplained entries as undisclosed income of the assessee. Accordingly, the additions made are sustained. 18. In the result, the ground raised by the assessee is dismissed. GORUND NO-8 19. In this regard Ld.AR had submitted that an addition of Rs.3,38,820/- has been made which was explained to have been from sale of cows, buffalos, trees, land rent, etc. The assessing officer vide his questionnaire dated 16.08.1996 placed at Paper Book page 120 in para 2 states “On perusal of the income tax return for the assessment years 1986-87 to 1995-96, it is noticed that you have shown increase in capital as under___”. Thus it is seen that the assessee had already disclosed these items in books of accounts as well as her regular returns of income filed before the search operations. This position was explained to the assessing officer vide her reply dated 02.09.96 at Page 147-148 of the Paper Book but the ld. Assessing officer without appreciating ITA Nos.1120,1121 & 1123/CHD/1996 10 the reply and the settled legal position made the addition. It is therefore submitted that the addition made in the block assessment be deleted as these amounts do not fall in the ambit of undisclosed income as they admittedly stood declared in the books. Further Sale of shop of Rs.70000/- which also stood declared in books of account has already been discussed in Ground nos 5 & 6. 20. The Ld. DR relied on the order passed by the lower authorities. 21. We have heard the rival contentions of the parties and perused the material available on record. It is an admitted position that the entries in the books of account pertaining to buffaloes and cattle under discussion are duly recorded, and the Assessing Officer has not disputed this fact, as the same has been acknowledged in the assessment order itself. In such circumstances, we fail to comprehend the basis for making the impugned addition in the hands of the assessee when the figures are already accounted for in the duly maintained books of account. Once the transactions are reflected in the books, there can be no justification for treating them as unexplained income. 22. In view of the above, this ground raised by the assessee is allowed. The Assessing Officer is accordingly directed to delete the impugned addition. Ground No. 9 23. The Assessing Officer made the addition on the presumption that the assessee had not disclosed rental income of Rs.2,400 for the assessment year 1995–96, even though the same was shown as income in the preceding assessment year 1994–95. During the course of the assessment proceedings, the Assessing Officer called upon the assessee to explain the discrepancy, as recorded in paragraph 16 of the assessment order. However, in response to the specific query, the assessee failed to furnish any conclusive details. Consequently, the Assessing Officer proceeded to confirm the addition in the hands of the assessee. ITA Nos.1120,1121 & 1123/CHD/1996 11 24. Aggrieved by the said addition, the assessee is now in appeal before us. It has been submitted that the addition is unwarranted and that it cannot be presumed that the assessee continued to receive rental income during the year under consideration. It was pointed out that no evidence has been brought on record by the Assessing Officer to substantiate the presumption of continued tenancy, and hence, the addition deserves to be deleted. The learned Departmental Representative, however, relied on the findings of the lower authorities. 25. We have considered the rival submissions and perused the material available on record. Admittedly, the assessee had declared rental income of Rs.2,400 in the assessment year 1994–95, but no such income was shown in the assessment year 1995–96. While there may be a general presumption of continuity in tenancy arrangements, there is nothing on record, by way of positive evidence, to establish that the assessee continued as landlord or that the premises remained in possession of the tenant during the relevant year. In the absence of such corroborative material, we are not inclined to uphold the addition. Accordingly, the addition of Rs.2,400 made in the hands of the assessee is hereby deleted. Ground 10. 26. It is the submission of the Ld. AR, in case the Tribunal confirms the addition in respect to Ground No. 2 & 3 then it has a direct impact on the adjudication of Ground No. 10 as the moment the Tribunal confirms the addition in Ground No. 2 & 3 then the amount added to the income of the assessee would be available for investment in the form of Kissan Vikas Patra. 27. Per contra, the Ld. DR has submitted that this plea was raised by the assessee for the first time at this stage, it cannot be entertained by the Tribunal. 28. We have heard the rival contention of the parties and perused the ITA Nos.1120,1121 & 1123/CHD/1996 12 material available on the record. Admittedly, we have dismissed the ground of the assessee in Ground no, 2 & 3 in the preceding paragraph. Now the question arises whether the cash was available on account of the dismissal of Grounds no. 2 & 3 so that the assessee can utilise the said cash for the purposes of purchasing the Kisan Vikas Patra / NSC. At this stage, we can't confirm whether the money will be available to the assessee for purchasing the Kisan Vikas Patra/NSC. Hence, we deem it appropriate to remand back this issue to the file of Assessing Officer with the direction to consider the amount of cash available with the assessee for the reasons of dismissal of the Ground No. 2 & 3. If the assessee has not utilised the cash for any other purposes, then the Assessing Officer may consider the same cash to be available for investing in Kisan Vikash Patra / NSC. 29. In the result, the ground of the assessee is partly allowed. Ground No. 11 30. This ground pertains to investment made in the joint property SCO -5 at Kurukshetra. The Assessing Officer has made the addition on the presumption that the assessee must have made the investment in purchasing the property on behalf of the Shri Dharam Pal Gupta Son in law. It is the contention of the AR that no evidence had been brought by the AO to corroborate this assumption. It was submitted by the Ld. AR that in case the property is registered in the name of Son in law, then it is for the Son in law to explain the source of investment and it cannot be assumed that the same was a benami investment by the assessee. 31. Per contra, the Ld. DR relied upon the orders of the lower authorities. 32. We have heard the rival contention of the parties and perused the material available on the record. Admittedly, the property is registered in the name of the assessee and Shri Dharam Pal Gupta, son-in-law. There is a presumption in law that the contents of the registered documents are presumed to be correct unless contradicted by cogent evidence. From the ITA Nos.1120,1121 & 1123/CHD/1996 13 reading of the document, it has not been brought on record that the consideration for purchasing the property in the name of the assessee and Shri Dharam Pal Gupta was given by the assessee alone. The Ld. Assessing Officer has not brought on record any evidence, statements, documents or bank records to prove that the assessee has provided the amount for purchasing the property on behalf of Shri Dharam Pal Gupta. In the absence of any such document / evidence/ statement it is difficult to uphold the finding given by the lower authority. In the light of the above we deem it appropriate to allow the ground raised by the assessee. 33. In the result, the appeal of the assessee is partly allowed. 34. During the course of hearing the Ld. AR submitted the synopsis in ITSS 1120/CHD/1996 wherein the Ld. AR mentioned that additional grounds raised are not being pressed. 35. In the result, additional grounds raised by the Assessee are dismissed as not pressed. Now we shall deal with the appeal of the Assessee in IT(SS) No.1121/CHD/1996 36. In this appeal the assessee has raised the following grounds of appeal : 1. That the Ld. A. O. has completed the assessment u/s 158BC(c) of the Income Tax Act in utter disregard of the legal provisions and in violation of the principles of the natural justice and is thus liable to be annulled being beyond the scope of statutory provisions. 2. That the Ld. A. O. has erred in law as well as on facts in making an addition of Rs.4,50,000/- on account of assumed purchase price of Plot 29, Sector 17, Kurukshetra holding the same to be as unexplained investment by the assessee which is arbitrary and unjustified. In as much as it was explained to have been purchased out of the sale proceeds of the old building situated in Subzi Mandi, Thanesar for a sum of Rs.2,30,000/-. The Ld. A. O. has failed to appreciate the facts and circumstances in correct perspective. 3. That the Ld. A. O. has further erred in making an addition of Rs. 1,08,000/- on account of capital gains on the sale of an old building situated in Subzi Mandi, Thanesar for a sum of Rs.2,30,000/- on 21st of June, 1993 assuming the cost of building as on 1.4.1981 at Rs.50,000/- and enhancing the same by ITA Nos.1120,1121 & 1123/CHD/1996 14 applying the cost of index rate at 244/100 to determine the cost at 1,22,000/- for purposes of calculation of capital gains at Rs. 1,08,000/- which is arbitrary and unjustified. 4. That in any case, the capital gains is not liable to be assessed in the block period of assessment particularly at the rate of 60% which ought to be assessed, if at all, at the rate of 20% applicable to the long term capital gains. Even otherwise the capital gains is exempt under section 54 of the Act. 5. That the entire assessment is based on irrelevant and untenable considerations being a figment of imagination for which there is no material or evidence on record. The assessment as a whole is liable to be annulled being without jurisdiction. 6. That the assessment is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable being without jurisdiction. 37. Ground 1 is not pressed, therefore the same is dismissed as not pressed. Ground No. 2 - Addition of Rs.8,910 on account of unexplained cash 38. The Ld. AR for the assessee submitted that the addition of Rs.8,910 on account of unexplained cash is wholly unjustified and merits deletion. It was submitted that during the course of assessment proceedings, the assessee had furnished a detailed reply dated 10.06.1996, which is placed in the paper book at pages 32 to 48. In the said reply, it was clearly explained that a sum of Rs.13,510 was found from the almirah of Smt. Madhulika Goel, wife of the assessee, who is the owner of agricultural land situated in villages Ratgel and Palwal, District Kurukshetra. The said land had been acquired by HUDA in April 1995, subsequent to the harvesting of crops in March and April 1995. 38.1 It was further submitted that the ownership of the said agricultural land, which had been purchased by Smt. Madhulika Goel as far back as in 1981, was already evidenced by documents seized during the search and is part of the record. The Ld. AR pointed out that the Assessing Officer has not made any adverse finding to rebut the explanation furnished by the assessee, nor has he disputed the ownership of the land or the source of the cash. Instead, the addition has been made merely on the basis of the statement of the assessee’s wife, without any corroborative evidence. ITA Nos.1120,1121 & 1123/CHD/1996 15 38.2 The Ld. AR contended that in the facts of the case, the cash found belonged to the assessee’s wife and, if at all, could only be considered in her hands and not in the hands of the assessee. Accordingly, in view of the explanation furnished and the absence of any contrary evidence brought on record by the Assessing Officer, the addition of Rs.8,910 deserves to be deleted. 39. On the other hand Ld. DR relied upon the order passed by the lower authority. 40. We have heard the rival contentions of both parties and perused the material available on record. The assessee has contended that the cash amount in question belonged to his wife, Smt. Madhulika Goel, who was the owner of agricultural land and was earning agricultural income therefrom. It was also submitted by the Ld. Authorised Representative that the ownership of the said land dates back to 1981, and no adverse findings have been recorded by the Assessing Officer regarding her ownership of the property. 40.1 In our considered opinion, once the statements of the assessee and his wife were recorded—both during the course of search and in assessment proceedings—the assessee was expected to disclose the full and truthful details regarding the income of both himself and his wife. However, it is pertinent to note that neither the assessee nor his wife had, at any stage, categorically stated that the cash found in the almirah belonged to the wife or that the same was earned by her through agricultural activities. No documentary evidence in support of this explanation has been brought on record either. 40.2 Further, we observe that the Assessing Officer has already granted a benefit of Rs.5,000 to the assessee during the assessment proceedings. Beyond that, there is no evidence to support the contention that the remaining amount of Rs.8,910 represented agricultural income available with the assessee's wife. However, keeping in view the totality of the facts and circumstances, including the fact that the assessee’s wife did own ITA Nos.1120,1121 & 1123/CHD/1996 16 agricultural land and it is reasonable to presume that some income would have been generated and retained by her, we consider it appropriate to extend a limited relief. 40.3 To maintain equity and balance the interests of both sides, we direct that a further sum of Rs.3,910 be deleted from the addition. Accordingly, the balance amount of Rs.5,000 stands confirmed in the hands of the assessee. 41. In the result, the ground no.2 of the assessee’s appeal is partly allowed. Ground No. 3 – Addition of Rs.7,198 on account of value of silver items weighing 1.36 kg 42. The Ld. AR for the assessee submitted that the addition of Rs.7,198 on account of the value of silver items weighing 1.36 kg is wholly unjustified and deserves to be deleted. It was submitted that during the course of the assessment proceedings, the assessee had furnished a detailed reply dated 10.09.1996, a copy of which is placed at pages 33–34 of the paper book. In the said reply, it was explained that the silver items in question formed part of the Istri Dhan of Smt. Madhulika Goyal, wife of the assessee. 43. The Ld. AR submitted that Smt. Madhulika Goyal and Shri Dharam Pal Goyal got married on 09.10.1976, and on the occasion of their wedding, customary gifts in the form of gold and silver jewellery were received from her parents, in-laws, relatives, and family friends. It was specifically clarified that no jewellery had been purchased by the assessee or his wife after the wedding. As such, the silver articles represented traditional and customary Istri Dhan, which is commonly received at the time of marriage in Indian households. 44. The Ld. AR further pointed out that no evidence has been brought on record by the Assessing Officer to suggest that the jewellery was purchased after the wedding or that it was acquired from unexplained sources. No purchase invoices, bills, or receipts were found during the course of search or ITA Nos.1120,1121 & 1123/CHD/1996 17 assessment to justify treating the silver as undisclosed investment. In the absence of any incriminating material and in view of the plausible explanation offered regarding the source of the silver articles, it was prayed that the addition of Rs.7,198 be deleted in its entirety. 45. Per contra the Ld. DR relied upon the order of the lower authority. 46. We have heard the rival contentions of the parties and perused the material available on record. The Assessing Officer, in the assessment order, noted that the statement of the assessee’s wife was recorded, wherein she specifically mentioned having received 70 tolas of gold jewellery at the time of her marriage. However, there was no specific mention or admission regarding the receipt of silver jewellery or articles on that occasion. 46.1 It is further observed that the Assessing Officer had already extended the benefit of 360 grams of silver to the assessee, considering it as part of customary gifts likely received by the assessee and his wife post-marriage. We have carefully considered the rival submissions and the surrounding circumstances. While it is correct that the marriage took place in the year 1976 and the Assessing Officer has already granted a reasonable benefit in that regard, we cannot ignore the prevailing customs in traditional Indian business families, where it is a common practice to receive gifts—including silver articles—from relatives on occasions such as marriages, childbirths, and other familial events. 46.2 In view of this social context, it is quite probable that a portion of the remaining silver jewellery, to the extent of 500 grams, may have also been received by the assessee or his wife on such customary occasions. Therefore, in the interest of equity and to balance the circumstances of the case, we consider it appropriate to allow further relief of Rs.4,198 from the addition. Accordingly, the remaining addition of Rs.3,000 is confirmed in the hands of the assessee. 47. In the result, this ground of appeal is partly allowed. ITA Nos.1120,1121 & 1123/CHD/1996 18 Ground No. 4 – Addition of Rs.54,500 on account of household items (Estimated Addition) 48. The Ld. AR for the assessee submitted that this ground relates to an addition of Rs.54,500 made on account of household items, which is purely an estimated addition. Without going into the merits of the said addition, the Ld. AR submitted that a similar issue had come up for consideration before the Hon’ble ITAT in the case of Shri Vishav Pal, wherein such estimated additions were upheld in a comparable factual matrix. 48.1 In light of the Tribunal’s consistent view on such matters, the Ld. AR fairly submitted that the assessee does not wish to press this ground further and seeks to rely on the principles laid down in the said decision. Accordingly, it was submitted that appropriate relief may be granted in the interest of consistency and judicial discipline. 49. Per contra, the Ld. DR relied upon the order passed by the lower authority. 50. We have heard the rival contentions of the parties and perused the material available on record. Admittedly, a similar addition on account of household items was confirmed by a Coordinate Bench of the Tribunal in the case of the assessee’s brother, Shri Vishav Pal, in ITA No. 1122/Chd/1996 50.1 Respectfully following the decision of the Coordinate Bench in the case of Shri Vishav Pal, and in the absence of any distinguishing facts brought on record in the present case, we see no reason to take a different view. Accordingly, the addition of Rs.54,500 made on account of household items is confirmed. 50.2 In the result, Ground No. 4 of the assessee’s appeal is dismissed. Ground No. 5 – Addition of Rs.4,02,500 on account of alleged low withdrawals for household expenses ITA Nos.1120,1121 & 1123/CHD/1996 19 51. The Ld. AR for the assessee submitted that this ground relates to an addition of Rs.4,02,500 made by the Assessing Officer on the ground of low household withdrawals. It was submitted that the addition is based merely on estimation without any concrete material or evidence to establish actual household expenditure or to prove that the withdrawals made were insufficient to meet the needs of the assessee’s family. 51.1 Without going into the merits of the addition in detail, the Ld. AR brought to the attention of the Hon’ble Bench that a similar addition made on identical facts was considered and deleted by the Hon’ble ITAT in the case of the assessee’s brother, Shri Vishav Pal(supra). It was submitted that the family structure, standard of living, and pattern of withdrawals were similar in both cases, and hence, there was no justification for treating the withdrawals in the present case as inadequate. 51.2 Accordingly, it was prayed that in view of the consistent view taken by the Coordinate Bench and for the sake of judicial uniformity, the addition of Rs.4,02,500 on account of low household withdrawals be deleted in the hands of the assessee as well. 52. Respectfully following the decision of the Coordinate Bench in the case of Shri Vishav Pal (supra), and in the absence of any distinguishing facts brought on record in the present case, we see no reason to take a different view. Accordingly, the addition of Rs.4,02,500 made on account of household withdrawal is deleted. Ground No. 7 – Addition of Rs.1,50,000 on account of alleged unexplained investment in Plot No. 7, Sector 7, Kurukshetra and Rs.1,28,000 towards instalment payments in the name of Smt. Madhulika Goel 53. The Ld. AR for the assessee submitted that the addition of Rs.2,78,000 comprising Rs.1,50,000 towards alleged unexplained investment and Rs.1,28,000 towards instalment payments in respect of Plot No. 7, Sector 7, Kurukshetra, is factually and legally untenable. It was pointed out that the ITA Nos.1120,1121 & 1123/CHD/1996 20 Assessing Officer himself has stated in the concluding lines of page 7 of the assessment order that the plot in question was purchased by Smt. Madhulika Goel, wife of the assessee. However, in the same paragraph, he contradictorily states that the investment was made by the assessee, Shri Dharam Pal Goel. This contradiction clearly reflects the uncertainty in the mind of the Assessing Officer as to the actual ownership of the said property. 53.1 The Ld. AR further submitted that the Assessing Officer has also admitted in the body of the order that the plot was purchased in the financial year 1987–88 and was transferred in the name of Smt. Madhulika Goel on 30.04.1987 after payment of Rs.1,28,000. Supporting documents including a letter issued by the Estate Officer, HUDA, confirming the instalments paid by Smt. Madhulika Goel, the re-allotment letter, and copies of her account in the books of M/s Paras Cold Storage & Ice Factory, have been placed in the additional evidence at pages 8–17 of the paper book. 53.2 Despite these facts, the Assessing Officer proceeded to assume on pure estimation and without any documentary evidence—that the total investment amounted to Rs.1,50,000 over and above the instalment payments, and that such investment was out of undisclosed income. The Ld. AR contended that the entire addition is based on suspicion, conjecture, and surmise, without any concrete material to link the assessee with the investment. It was strongly argued that, at best, if any addition were to be made, it could only be considered in the hands of Smt. Madhulika Goel, and not in the hands of the assessee. 53.3 Accordingly, it was prayed that the entire addition of Rs.2,78,000 be deleted. 54. Per contra, the Ld. DR relied on the order of lower authority. 55. We have heard the rival contention of the parties and perused the material available on the record. In this regard the Ld. AR had provided the document to substantiate the claim of the assessee which are the document ITA Nos.1120,1121 & 1123/CHD/1996 21 issued by the HUDA for transfer / allotment of land in the name of Madhulika Goel. The same have been admitted as additional evidence. 55.1 In the light of the above, we deem it appropriate to remand back this issue to the file of the Ld. Assessing Officer with the direction to decide afresh after affording opportunity of hearing to the assessee. 56. In the result, appeal this ground of appeal is allowed for statistical purposes. Ground No. 8 – Addition of Rs.7,00,000 on account of alleged investment in Plots No. 305 and 214A, Sector 7, Kurukshetra, in the names of Smt. Gurminder Kaur and Smt. Sharwan Kumari 57. The Ld. AR submitted that the addition of Rs.7,00,000 made by the Assessing Officer in respect of alleged investment in Plots No. 305 and 214A, Sector 7, Kurukshetra, is entirely baseless and deserves to be deleted. It was submitted that vide reply dated 10.06.1996 (at page 43 of the paper book), the assessee had clearly explained that Plot No. 305 was originally allotted by HUDA to Smt. Sharwan Kumari, sister of the assessee. However, due to site- specific constraints, HUDA later allotted Plot No. 214A to her in lieu of Plot No. 305. 57.1 The assessee had no connection with either allotment. Supporting evidence in the form of letters issued by the Estate Officer, HUDA, to Smt. Sharwan Kumari (pages 18–19 of the additional evidence) and her affidavit (page 21), clearly deposing the factual position as well as the source of investment, has been placed on record. In her affidavit, she has unequivocally stated that she was the allottee of the said plot and that the funds invested therein belonged to her. 57.2 As regards the alleged investment in the name of one Smt. Gurminder Kaur, the Ld. AR submitted that the assessee does not know who this person is and has no connection whatsoever with her or the plot said to be in her ITA Nos.1120,1121 & 1123/CHD/1996 22 name. No evidence has been brought on record by the Assessing Officer to show any link between the assessee and the investment allegedly made in her name. 57.3 It was further pointed out that the Assessing Officer has taken the value of these plots at Rs.3,50,000 each purely on ad hoc estimation, without any supporting material or reference to actual cost, market rate, or payment trail. The entire addition, therefore, rests on suspicion, surmise, and conjecture, without a shred of credible evidence linking the assessee to these properties. 57.4 In light of the above, it was strongly urged that the addition of Rs.7,00,000 be deleted in full. 57.5 The Ld. AR, had further submitted that the additional evidences filed by the assessee are identical to the evidences filed in the case of the Brother namely Shri Vishal Pal in ITA No. 1122/Chd/1196 whereby the Tribunal had remanded back the matter to the file of the Assessing Officer for fresh adjudication. 58. The Ld. DR has no objection if the matter is remanded back to the file of Assessing Officer. 59. We have heard the rival contentions of the parties and perused the material available on record. Ground Nos. 6 to 8 pertain to additions made by the Assessing Officer towards alleged unexplained investments in various plots—namely, Plot No. 8-P (Sector 7), Plot No. 7 (Sector 7), and Plots No. 305 and 214A (Sector 7), Kurukshetra—amounting to Rs.3,00,000, Rs.2,78,000, and Rs.7,00,000 respectively. 59.1 It is observed that similar issues regarding alleged unexplained investments in HUDA plots were considered by a Coordinate Bench of the Tribunal in the case of the assessee’s brother, Shri Vishav Pal, in ITA No. 1122/Chd/1996. In that case, the Tribunal restored the matter to the file of the Assessing Officer with specific directions to conduct a proper inquiry, verify ITA Nos.1120,1121 & 1123/CHD/1996 23 the ownership, sources of investment, and examine all supporting documents including those placed on record as additional evidence. 59.2 Respectfully following the decision of the Coordinate Bench in Vishav Pal (supra), we are of the view that the issues involved in the present grounds also require similar factual verification and re-examination. Accordingly, we deem it appropriate to restore Ground Nos. 6 to 8 to the file of the Assessing Officer for fresh adjudication after considering all evidences, including the assessee’s submissions, additional documents placed on record, and after granting a reasonable opportunity of being heard. 59.3 The Assessing Officer shall also consider the applicability of the directions issued by the Tribunal in the case of Vishav Pal (ITA No. 1122/Chd/1996) while re-examining these additions. 60. In the result, Ground Nos. 6 to 8 are restored to the file of the Assessing Officer for de novo adjudication in accordance with law. Ground No. 9 – Addition of Rs.1,98,290 on account of alleged investment in Plot No. 556, Sector 17, Kurukshetra in the name of Shri Subhash Chand 61. The Ld.AR for the assessee submitted that this ground pertains to an addition of Rs.1,98,290 comprising Rs.48,290 towards the value of Plot No. 556, Sector 17, Kurukshetra, and Rs.1,50,000 towards an estimated premium allegedly paid in connection with the said plot. The Assessing Officer has treated the said property as belonging to the assessee, purportedly purchased in the benami name of one Shri Subhash Chand, son of Shri Kedar Nath, resident of Shahabad Markanda. 61.1 It was submitted that the addition has been made without bringing on record any cogent material or evidence to substantiate that the assessee was in fact the real owner or beneficiary of the said plot. The Ld. AR specifically drew attention to the affidavit of Shri Subhash Chand (placed at page 96 of the paper book), which was filed during the assessment ITA Nos.1120,1121 & 1123/CHD/1996 24 proceedings, clearly affirming that the plot belonged to him and that the assessee had no connection whatsoever with the transaction. However, the Assessing Officer, without providing any justification or recording any reasoned finding, chose to disregard the said affidavit. 61.2 The Ld. AR further referred to the assessee’s detailed explanation available at pages 41 and 42 of the paper book, as well as the reply at page 99, which collectively clarify the factual position and deny any involvement of the assessee in the acquisition of the said property. 61.3 Moreover, the premium of Rs.1,50,000 added by the Assessing Officer has been computed purely on estimation, without any basis, supporting document, or inquiry to verify whether any such amount was actually paid and, if so, by whom. 61.4 In light of the above, it was submitted that the entire addition is based on mere suspicion, surmise, and conjecture, without any supporting evidence to link the assessee to the said investment. At best, if any addition is to be considered, it can only be made in the hands of Shri Subhash Chand, who is the recorded owner of the plot. 61.5 Accordingly, it was prayed that the addition of Rs.1,98,290 made in the hands of the assessee be deleted in toto. 62. The ld. DR relied upon the order passed by the lower authority. 63. We have considered the rival submissions and perused the material available on record. The addition under challenge comprises two components: (i) Rs.48,290 towards the cost of Plot No. 556, Sector 17, Kurukshetra, and (ii) Rs.1,50,000 towards the estimated premium allegedly paid for acquiring the said plot. The Assessing Officer has attributed the ownership of the plot to the assessee, though the same stands in the name of Shri Subhash Chand. 63.1 We note that the Assessing Officer has treated the investment in the ITA Nos.1120,1121 & 1123/CHD/1996 25 name of Shri Subhash Chand as benami in the hands of the assessee. However, no conclusive evidence has been brought on record to establish that the assessee was in fact the real owner or had contributed the consideration for the purchase of the said plot. The affidavit filed by Shri Subhash Chand (at page 96 of the paper book), affirming ownership in his name, has been summarily rejected by the Assessing Officer without recording any cogent reasons or undertaking further inquiry. 63.2 Nevertheless, we observe that no positive material has been brought on record by the assessee either to conclusively rebut the presumption drawn by the Assessing Officer regarding the assessee’s connection to the plot. In the absence of adequate verification and in view of the nature of the transaction, we are inclined to accept the basic investment amount of Rs.48,290 as attributable to the assessee. 63.3 As regards the estimated premium of Rs.1,50,000, we find that the addition has been made on a purely ad hoc basis without any material, inquiry, or evidence to show that such a premium was paid or that the assessee made such an investment. The estimation of premium is not supported by any comparable sale instances or valuation report and remains entirely speculative. 63.4 Accordingly, while we confirm the addition of Rs.48,290 in the hands of the assessee, we direct the deletion of the balance addition of Rs.1,50,000 being the alleged premium. 64. In the result, Ground No. 9 is partly allowed 65. No other ground has been argued by the Ld. AR of the assessee and therefore the remaining grounds raised by eh assessee in the appeal are dismissed. 66. During the course of hearing the Ld. AR submitted the synopsis in ITSS 112/CHD/1996 wherein the Ld. AR mentioned that additional grounds raised ITA Nos.1120,1121 & 1123/CHD/1996 26 are not being pressed. 67. In the result, additional grounds raised by the Assessee are dismissed as not pressed. Now we shall deal with the appeal of the Assessee in IT(SS) No.1123/CHD/1996 68. In this appeal the assessee has raised the following grounds of appeal 1. That the Ld. A. O. has completed the assessment u/s 158BC(c) of the Income Tax Act in utter disregard of the legal provisions and in violation of the principles of the natural justice and is thus liable to be annulled being beyond the scope of statutory provisions. 2. That the Ld. A. O. has erred in law as well as on facts in making an addition of Rs.8,910/- out of the cash amounting to Rs.13,910/- found from the almirah of the wife of the assessee at the time of search. The Ld. A. O. has made this addition for the reason that the wife of the appellant did not say anything about the availability of cash in her statement recorded at the time of search and thus, arbitrarily made the addition in the hands of the appellant in utter disregard of the fact that the cash was found in the almirah belonging to the assessee's wife and as such, the addition is wholly unwarranted especially in the hands of the assessee. 3. That the Ld. A. O. has further erred in making an addition of Rs.7,198/- on account of the value of silver items weighing 1.36 Kgs. which is again arbitrary and unjustified. The explanation of the assessee that the silver wares were received at the time of marriage, has been brushed aside for want of the alleged evidence. The addition is liable to be deleted. 4. That the Ld. A. O. has further erred in making an addition of Rs.54,500/- for the household items, detailed below:- • Onida Colour T.V. Rs. 15,400/- • Air-Conditioner with stabiliser Rs. 25,000/- • Refrigerator Rs. 8,000/- • Two-in-one Rs. 3,600/- • Room cooler Rs. 2,500/- No specific explanation was sought for acquisition of the above items except the T. V. The explanation rendered by the assessee for acquisition of T. V. has not been appreciated in correct perspective and thus, the addition is liable to be deleted. 5. That the Ld. A. O. has further erred in making an addition of Rs.4,02,500/- on account of the alleged low withdrawals for household expenses making his own estimate of household expenses and working out the difference after adjustment of the amount shown in the books of account. The Ld. A. O. failed to appreciate that the assessee resides with his mother, Smt. Kaushalya Devi as well as his brother, Shri Vishav Pal jointly and the household expenses are contributed jointly by all of them and as such, ITA Nos.1120,1121 & 1123/CHD/1996 27 there is no warrant to hold that the withdrawals for household expenses shown are low and thus, no addition whatsoever is called for. The addition is liable to be deleted. 6. That the Id. A.O. has further erred in making an addition of Rs. 3 lakhs towards the alleged unexplained investment in the purchase of Plot No. 8-P, Sector 7, Kurukshetra which is arbitrary and unjustified. The cost of plot has been estimated at Rs. 3.5 lakhs and allowing a margin of Rs. 50,000/- for investment out of the agricultural income, the impugned addition of Rs. 3 lakhs has been made. The explanation of the assessee to have purchased the plot out of the agrl. Income has been brushed aside. The addition of Rs. 3 lakhs made arbitrarily is liable to be deleted. 7. That the Ld. A.O. has further erred in making an addition of Rs. 1,50,000/- on account of alleged investment in the purchase of Plot No. 7, Sector 7, Kurukshetra. Another addition of Rs. 1,28,000/- on account of the payment of instalments towards the price of this plot after its purchase, (totaling Rs.2,78,000/-) has been made allegedly in the name of his wife, Smt. Madhulika Goel. The plot, as a matter of fact, has been purchased by Smt. Madhulika Goel who is the owner of this plot for all intents and purposes and as such, no addition in the hands of the assessee is called for as the same has to be explained by her alone. There is absolutely no material or evidence on record to hold that the purchased this plot in the name of his wife and the onus to prove the benami character of the property is not on the assessee but on the person who alleges. 8. That the Ld. A. O. has further erred in making an addition of Rs. 7 lakhs towards the alleged purchase of two plots No. 305 and 214 A in Sector 7, Kurukshetra in the names of Smt. Gurvinder Kaur and Smt. Sarwan Kumari estimating the price at Rs.3.5 lakhs each. The Ld. A. O. has held that the assessee purchased these two plots in Benami names of the above mentioned two ladies. Smt. Gurvinder Kaur is not at all related to the appellant in any way while Smt. Sarwan Kumari happens to be the married sister of the assessee. But there is absolutely no material or evidence on record to hold that the assessee has actually purchased these plots in the names of these two ladies as 'Benamidars' while the onus to prove the benami character of the properties is on the person who alleges. The addition is thus liable to be deleted. 9. That the Ld. A. O. has further erred in making an addition of the instalments of Rs.48,290/- on account of the value of plot no. 556, Sector 17, Kurukshetra besides the estimated premium of Rs. 1,50,000/-(totalling Rs. 1,98,290/-) towards the above said plot allegedly in the name of Shri Subhash Chand son of .Shri Kedar Nath. residentof Shahabad Markanda. The Plot actually belongs to Shri Subhash Chand mentioned above and the assessee has absolutely nothing to do with the said plot. There is absolutely nothing todo with the said plot. There is absolutely no material or evidence on record to hold that the plot has been purchased by the assessee as Benami and the onus to prove the benami character of the property is not on the assessee but on the person who alleges. 10. That the Ld. A. O. has erred in law in arbitrarily determining the total undisclosed income at Rs. 19,49,400/- which is arbitrary and unjustified being in violation of the principles of natural justice and utter disregard of the explanations rendered and as such, the entire assessment being erroneous, is liable to be cancelled. ITA Nos.1120,1121 & 1123/CHD/1996 28 11. That the order of the Ld. A.O. is erroneous, arbitrary, opposed to law and facts of the case and is beyond the jurisdiction and as such is untenable. 69. The Ld. AR for the assessee submitted that the addition made by the Assessing Officer on account of alleged unexplained investment in Plot No. 29, Sector 17, Kurukshetra is wholly unjustified and devoid of merit. It was explained that the said plot was acquired from the original allottees—Shri Prem Chand & Others—through a General Power of Attorney dated 25.06.1993, executed in the name of Shri Vivek Gupta for the purpose of completing the transaction on behalf of the assessee. 69.1 It was submitted that the plot was purchased as part of a distress sale by the allottees and the consideration was paid at par, without any premium, on 25.06.1993. The total investment in the plot was funded from disclosed and verifiable sources. Specifically, the funds came from the sale proceeds of an old building situated at Subzi Mandi, Thanesar, which was sold on 21.06.1993 for a sum of Rs.2,30,000/-. Additionally, withdrawals of Rs.14,000 and Rs.10,000 were made from the books of M/s Paras Rice Mills, as evidenced by the copy of the account placed at page 49 of the paper book, filed along with the written submissions dated 21.06.2006. The balance amount was met from agricultural income. 69.2 The Ld. AR further submitted that the transaction has also been acknowledged by the Assessing Officer himself in the assessment orders of Shri Vivek Gupta for Assessment Years 1994–95 and 1995–96. Copies of the relevant assessment orders are placed at pages 50–65 of the paper book. Details of the payments made by Shri Vivek Gupta and the correspondence with HUDA are enclosed in the additional evidence at pages 1–7. Furthermore, the affidavit of Late Shri Dharam Pal (Karta of the HUF) confirming the source and nature of investment is placed at page 16 of the additional evidence. 69.3 The Ld. AR strongly contended that the Assessing Officer has made the addition solely on the basis of assumptions and estimations, adopting the ITA Nos.1120,1121 & 1123/CHD/1996 29 value of the plot at Rs.4,50,000 as on the date of search, without any supporting evidence or inquiry to justify such valuation. The addition is entirely speculative in nature and has no basis in law or fact. 69.4 In view of the above factual position and documentary evidence placed on record, it was prayed that the addition made by the Assessing Officer in respect of Plot No. 29, Sector 17, Kurukshetra, be deleted in its entirety. 70. The Ld DR relied upon the order passed by the lower authorities and submitted that the addition made by the assessing officer is required to be confirmed. 71. We have considered the rival submissions and perused the material available on record. The issue under consideration pertains to the addition made by the Assessing Officer on account of alleged unexplained investment in Plot No. 29, Sector 17, Kurukshetra, which was acquired through a General Power of Attorney executed in favour of Shri Vivek Gupta. 71.1 The assessee has explained that the said plot was purchased at par under a distress sale arrangement from the original allottees, and the investment was made out of disclosed sources including sale proceeds of an old property, withdrawals from the books of M/s Paras Rice Mills, and agricultural income. Documentary evidence in support of this explanation, including copies of relevant accounts, affidavits, and assessment orders of Shri Vivek Gupta, has been placed on record. 71.2 On perusal of the assessment order, we find that the addition has been made by the Assessing Officer merely on estimation, by adopting the value of the property as on the date of search at Rs.4,50,000, without conducting proper verification of the evidences placed by the assessee or making any independent inquiry into the source of investment or the genuineness of the transaction. ITA Nos.1120,1121 & 1123/CHD/1996 30 71.3 We note that in a similar set of facts, involving identical issues, the Coordinate Bench of this Tribunal in the case of Shri Vishav Pal in ITA No. 1112/Chd/1996 had restored the matter to the file of the Assessing Officer with a direction to re-examine the issue afresh after proper verification and after granting due opportunity to the assessee. 71.4 Respectfully following the above decision, we deem it appropriate to restore the present issue to the file of the Assessing Officer for de novo adjudication, in accordance with law, after considering all the documentary evidence placed on record and after affording a reasonable opportunity of being heard to the assessee. 72. Accordingly, this ground is allowed for statistical purposes. Ground No. 3 & 4 73. The Ld. Authorised Representative for the assessee submitted that these grounds of appeal relates to the addition of Rs.1,08,000 made by the Assessing Officer towards capital gains allegedly arising from the sale of an old building situated at Subzi Mandi, Thanesar, which was sold for a consideration of Rs.2,30,000 on 21st June, 1993. 73.1 At the outset, the Ld. AR submitted that the capital gains, if any, arising from the said transaction are exempt under Section 54 of the Income-tax Act, 1961, as the sale proceeds were utilised for acquiring a residential property. Hence, no addition was warranted. 73.2 Secondly, it was submitted that the addition has been made based on an assumed cost of acquisition of Rs.50,000 as on 1.4.1981, which has been enhanced by applying the cost inflation index (CII) ratio of 244/100 to arrive at an indexed cost of Rs.1,22,000, thereby computing the capital gains at Rs.1,08,000. The Ld. AR strongly contended that this entire calculation is purely based on assumption and presumption, without there being any material found during the course of search to support such estimation. There is no ITA Nos.1120,1121 & 1123/CHD/1996 31 basis for arbitrarily fixing the cost of acquisition at Rs.50,000, and no investigation was made to ascertain the actual cost of acquisition. 73.3 Thirdly, the Ld. AR submitted that even assuming that there was a capital gain, it could not be brought to tax under block assessment proceedings carried out under Section 158BC of the Act. It was argued that capital gains, if chargeable at all, are to be assessed under regular assessment proceedings, particularly when the alleged capital gain is based on disclosed transactions and no incriminating material was found during the course of search. The Ld. AR emphasized that block assessment is confined to undisclosed income, and since the sale of the building was duly recorded and explained, the addition falls outside the scope of Chapter XIV-B. 73.4 Furthermore, it was pointed out that the rate of tax applicable to long- term capital gains is 20%, and not 60% as applicable to undisclosed income in block assessments. Hence, the Assessing Officer has erred in applying the higher rate and in treating this as undisclosed income. 73.5 In support of the assessee’s explanation, the Ld. AR referred to the affidavits of Sh. Ranjit Singh (tenant of the property) and Late Sh. Dharam Pal (Karta of the HUF), placed at pages 12–13 and 14–15 of the additional evidence respectively, both of which substantiate the long-standing ownership and usage of the property and confirm the bona fide nature of the sale transaction. 74. The Ld. DR relied upon the order passed by the lower authorities. 75. We have considered the rival submissions and perused the material available on record. This ground pertains to the addition of Rs.1,08,000 on account of alleged capital gains arising from the sale of an old building situated at Subzi Mandi, Thanesar. The assessee has explained that the said sale proceeds were utilised for subsequent investments and has claimed exemption under Section 54 of the Act. It has also been argued that the computation of capital gains is based entirely on estimations without any ITA Nos.1120,1121 & 1123/CHD/1996 32 material found during the course of search and that such gains, if any, are not assessable under block assessment proceedings. 75.1 We note that the transaction in question and the related claim of the assessee are closely linked to Ground No. 2, which has already been remanded to the file of the Assessing Officer for fresh consideration. Since this ground arises from the same transaction and involves overlapping facts and evidentiary aspects, we are of the view that it would be appropriate and procedurally efficient to have this ground examined by the Assessing Officer alongside Ground No. 2, in a holistic and consolidated manner. 75.2 Accordingly, we direct that this ground also be restored to the file of the Assessing Officer for de novo adjudication. The Assessing Officer shall consider all documentary evidence filed by the assessee in support of this ground, including claims made under Section 54, and pass a reasoned order in accordance with law after affording a reasonable opportunity of being heard. 76. In the result, this ground nos. 3 & 4 are allowed for statistical purposes. 77. The assessee has not pressed the remaining groudns raised the appeal and therefore the same are dismissed as not pressed. 78. During the course of hearing the Ld. AR submitted the synopsis in ITSS 1120/CHD/1996 wherein the Ld. AR mentioned that additional grounds raised are not being pressed. 79. In the result, additional grounds raised by the Assessee are dismissed as not pressed. 80. Before parting, we would like to place on record our deep appreciation for the cooperation and assistance extended by both the Ld. Authorized Representative for the assessee and the Ld. Departmental Representative for the Revenue in the course of hearing these appeals. Their constructive approach and diligent submissions have greatly facilitated the ITA Nos.1120,1121 & 1123/CHD/1996 33 adjudication of these matters, which have been pending for over 29 years. We acknowledge their valuable efforts in bringing these long-standing appeals to a conclusion. Order pronounced on 29/05/2025. Sd/- Sd/- (KRINWANT SAHAY) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam / AG” आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "