TMI Blog2004 (7) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued to the assessee followed by an assessment order dt. 26th Nov., 2001. In concluding the block assessment for the period 1989-90 to 15th Nov., 1999, the AO computed the undisclosed income under the following heads: Rs. (a) Unaccounted investment in house construction 11,19,201 Less : Deduction being amount shifted to Sri Chandresh 3,00,000 (b) Unexplained cash 2,69,438 (c) Unexplained investment in land (1/5 share purchase of 3 acres land) 1,05,500 4.1 The first addition was in respect of unaccounted investment in construction of residential building at No. 242, 3rd block, Basaveshwaranagar. The learned counsel for the assessee submitted that this amount has been already declared in the assessment in the IT return filed by the assessee many years before the search. The site was purchased in 1990 for Rs. 3,86,790. The construction of the building was over a period at the cost of: 1. Year ending 31-3-1992 Rs. 4,52,957.69 2. Year ending 31-3-1993 Rs. 1,48,041.16 The learned counsel pointed out that including site value, the total investment is Rs. 9,87,788.85. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much force in the stand taken by the assessee. The addition is therefore deleted. 5. The next addition relates to unaccounted cash at Rs. 2,69,438. This issue was dealt with in pp. 1 and 2 of the assessment order. It is not in dispute that each of Rs. 10,90,000 was found at the residence of the assessee, the eldest person in the group. At the time of search itself, it was noticed by the search officer that a sum of Rs. 1,90,000 belonged to four business concerns. For the balance of Rs. 9,00,000 (10,90,000 - 1,90,000) it was explained that the each belonged to several persons, i.e., 18 entities. That aside, it was shown that each and every one of the said 18 persons are assessed to income-tax. Their returns would show closing cash was on 31st March, 1999, itself and the cash as found on 15th Nov., 1999 has come out of bank withdrawals, etc., and their tax returns till the date of search would show availability of substantial cash. The search officer seized the cash of Rs. 9,00,000 as stated above and directed the assessee to submit a detailed letter explaining the cash signed by all the members to whom the cash belonged. Accordingly, a detailed petition dt. 7th Dec., 1999 was sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural land (assessee's share 1/5th) from Shri Ramachar, Shri Rajachar and Shri Neelakantachar on 18th Feb., 1996. The registered price is Rs. 1,20,000 for the said 3 acres. As against this, it is stated that the actual price paid was Rs. 6,45,500. It was presumed that the assessee's 1/5th share in the extra consideration should be Rs. 1,05,000 (1/5* 6,45,000 - 1,20,000 = 5,25,000). This, the AO brought to tax as undisclosed investment. To support this conclusion, the AO has alleged in the assessment order that during search to quote "the necessary document evidencing the transaction was found in the course of search" subsequently during the search proceedings a statement was recorded by the investigating DDIT on 26th Jan., 2000 from the sellers and as per their deposition the actual sale consideration was Rs. 6,45,000. 6.1 It is necessary to point out that the alleged "necessary document" was not found either in the possession of the assessee and his associates. That apart, it is to be noted that there was no search conducted at the premises of anyone of the joint sellers. Shri Ramachar, Shri Rajachar and Shri Neelakantachar. The DDI confronted the seller, Shri Ramachar. He, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made a petition to the DDI. This fact cannot be ignored or rejected summarily. The retraction by the vendors would have come about even before DDI himself and he arranged for cross-examination of the vendors. At any rate, the AO has not established by independent examination of the vendors that they were paid 'on-money' of Rs. 5,25,000. Neither did he disprove the contents of the affidavit dt. 1st Oct., 2001. It needs mention that having provided to the assessee cross-examination of the vendors, he cannot summarily reject their affidavit without examining them. 6.4 Considering the aforesaid facts, we do not find any justification in making the addition of Rs. 1,05,000. The assessee had established the case by providing all the necessary details. On consideration of which, we will only go to show that the addition made is arbitrary and not justified. Therefore, the addition estimated is deleted hereby. IT(SS)A No. 81/Bang/2002 7. The issue in this case relates to the addition of Rs. 65,887. The total cash of Rs. 1,85,200 was found in assessee's premises during the search. The assessee family consists of six members. The AO keeping in mind the school and college education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 2,87,060 on account of unaccounted jewellery of 741.080 grams. Both sides argued at length. The learned counsel for the assessee submitted that when admittedly the jewellery belonged to various entities, who are assessed to income-tax and wealth-tax, it is absolutely absurd to treat the allegedly explained 741.080 grams exclusively as unaccounted investment by the assessee. It is significant to mention: (a) That during the search no member was examined and no one admitted, under s. 132(4) unaccounted holding of jewellery. (b) Not a scrap of evidence was found during search to establish the year or years in which the alleged quantity of jewellery was purchased. That apart, the AO has failed to apply his mind to the explanation furnished before him during the hearing. It was specifically stated that the inventorised jewellery 2,593.800 included the jewellery found in assessee's residence, jewellery of 192 grams belonged to others. 9.1 We have heard the rival submissions and perused the records. It is an admitted fact that during the search no member of the family was examined and no one admitted to hold unaccounted jewellery. No evidence was found during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the then AO. Now the same matter is sought to be reviewed by the AO in the block assessment. There is no legal authority to do so. There was no discovery of any incriminating evidence during the search conducted on 15th Nov., 1999. On the other hand, the learned Authorised Representative fully supported the orders of the authorities below. 10.1 From the facts appearing on record, it is seen that the DDI who conducted the search, referred the matter to the Valuation Officer on extraneous consideration. In fact, there is no rejection of books either by the DDI or by the AO. It is an admitted fact that the assessee had shown cost of construction in the IT return for the asst. yrs. 1993-94 and 1994-95 and the same were accepted. On the valuation report, the assessee had made critical comments in writing before the AO on the incorrectness of the report. However, the AO had not chosen to examine the Valuation Officer. The AO, however does not know what happened later on. The AO neither heard the assessee nor issued a show-cause notice but had made an addition behind the back of the assessee. The AO made a passing reference in respect of valuation report prepared by Hitech ..... 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