TMI Blog2003 (12) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... nsive inquiries, although covering a very short span, the block assessment order dt.29th March, 2001, was passed. In terms of the said order the undisclosed income was determined at Rs. 1,65,35,579 made up as under: (a) Rs. 20,00,000 on account of gifts received from NRE account standing in the name of Shri Mahendra Singh on the ground that relevant information about the gift could not be furnished and the gift deed did not appear to be genuine. (b) Rs. 3,44,775 on account of investment in construction of house, said to have been understated by the appellant at the original assessment stage, as based on the report of Valuation Cell, which is said to have been obtained on20th March, 2001. (c) Rs. 10,11,855 on account of capital gain arising out of sale of shares (which stood already disclosed in the income-tax return for the asst. yr. 1992-93). (d) Rs. 23,75,000 on account of investment alleged to have been made by the appellant with Saharanpur Associates, as worked out in following manner: Investment said to have been made by Appellant as per Associates 26,75,000 Deduct: Amount withdrawn by appellant From Patni Chemicals (P) Ltd. 3,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and remand report of the AO, allowed the appeal of the assessee in part. Some of the additions were reduced and some of the additions were deleted by CIT(A). The Department is in appeal against reducing/deleting the additions fully. The assessee is in appeal against the finding of CIT(A) by which some of the additions were reduced or sustained. 5. The learned counsel has relied upon the submissions filed before the CIT(A). On the other hand, the learned Departmental Representative has placed strong reliance on the order of AO and on the order of CIT(A) to the extent to which the additions were sustained. 6. We will take first the assessee s appeal. 7. Ground No. 1 in assessee s appeal against upholding the addition of Rs. 38,312 on account of income from dealing in property was not pressed by the counsel of the assessee during the course of hearing. Therefore, the same is dismissed as not pressed. 8. Ground No. 2 is against upholding the addition of Rs. 3,44,775 made and confirmed on account of investment in construction of house property, in view of DVO s report. 8.1 After considering rival submissions, we found that the lower authorities were not justified in making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.5 lakhs in Saharanpur Associates is, therefore, false. If this being the case, the Saharanpur Associates had no reason to return back the sum of Rs. 13.5 lakhs as discussed above, as is evidenced from the balance sheet at p. 127 of Annex. A-4 of the seized documents from Saharanpur Associates. The reply of the assessee vide letter dt.14th March, 2001in response to this office query dt.9th March, 2001has been considered and is not found to be tenable. The investment of Shri Rakesh Goyal was exactly Rs. 26.75 lakhs, the evidence of which is available in the seized material of Saharanpur Associates as already discussed. Shri Rakesh Goyal could not produce any documentary evidence in support of his claim regarding the extent of investment to be only Rs. 11.5 lakhs. Since Rs. 3 lakhs have been shown by Shri Rakesh Goyal to be out of amount of Patni Chemicals by way of draft, the remaining amount of Rs. 23.75 lakhs is out of undisclosed sources and treated as unexplained investment under s. 69 of the IT Act, 1961. The addition of Rs. 23,75,000 consists of the following: (a) Rs. 8.50 lakhs investment made by Shri Rakesh Goyal but not accepted in absence of any documentary evidence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions and perusing other material on record, we noted that search was also conducted in case of Saharanpur Associates and it was noted there that credit entry of Rs. 26,75,000 was in the name of the assessee. Out of this credit entry of Rs. 26,75,000 a sum of Rs. 3 lakhs has been explained by assessee, as the same was made after withdrawal from Patni Chemicals Ltd. The remaining amount was held by the AO as unexplained. The CIT(A) noted that the assessee had paid a further amount of Rs. 8.5 lakhs out of savings bank a/c No. 14718 with Oriental Bank of Commerce, Saharanpur and the same was duly disclosed in the income-tax return year after year. Accordingly to this extent the addition was deleted and the remaining amount was held as unexplained. 9.2 The counsel of the assessee has stated that neither the assessee was partner during the relevant period when the paper was found. It was further stated that though initially the assessee was partner, however, during the relevant period the assessee was not partner in the firm. The attention of the Bench was drawn on pp. 3 and 4 of the paper book where no name of the assessee is mentioned, as on these pages the copy of Panchnama i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period properly. Therefore, we are not inclined to interfere in the findings of CIT(A), who sustained an addition of Rs. one lakh as against Rs. 2 lakh addition made by the AO. Accordingly the order of the CIT(A) is confirmed on this issue. 11. Next issue, i.e., ground No. 5 is against the sustenance of addition of Rs. 45,000 on account of expenses incurred by assessee on foreign tour. The total addition was made by the AO at Rs. 99,000. In fact, the AO made addition by observing that cost of stay at abroad for 18 days estimated at Rs. 72,000 and cost of air ticket estimated at Rs. 50,000 and after allowing the benefit of withdrawals shown from Patni Chemicals of Rs. 23,000, the remaining amount of Rs. 99,000 was added by the AO as unexplained expenditure on foreign visit. The CIT(A) after ascertaining the fact that the expenses on stay were borne by Shri Atul Gupta, who asked the assessee to visit South Africa for purpose of supply of computers. Therefore, the expenditure incurred on stay for 18 days was deleted by the CIT(A). However, he sustained the addition of Rs. 18,000 on account of stay atSingaporeand on account of tickets at Rs. 27,000 (Rs. 50,000 total cost of ticket mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares during asst. yr. 1992-93 while filing its regular return. 16. Ground No. 3, which relates to deleting the addition of Rs. 8,50,000 out of total addition of Rs. 23,75,000, this issue we have already dealt with while disposing the ground of appeal, where the CIT(A) has sustained the addition of Rs. 15,25,000. We have already deleted the addition of Rs. 15,25,000 by holding that no addition can be made in the hands of the assessee, as nothing was brought on record which could have established that assessee has made deposit with Saharanpur Associates of Rs. 15,25,000. A sum of Rs. 8,50,000 was advanced by assessee out of his bank account and the same was disclosed by assessee while filing his regular return of income. Therefore, there was no point in making any addition while completing the assessment under s. 158BC. Therefore, this ground of the Department also fails. 17. Ground No. 4 relates to deletion of addition of Rs. 4,37,569 made by the AO on account of diversion of income in the name of his wife Smt. Parul Goyal. This addition was made by the AO by observing that Smt. Parul Goyal was not aware of filing of any return on her behalf. Therefore, the conclusion was draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substitute the documentary evidences available in seized material in support of the declaration under VDIS having been made by her and enjoyment of proceeds of jewellery (covered by VDIS 1997 in her own name). 42. On a consideration of the totality of facts and circumstances of the case, I have no option but to delete this addition of Rs. 18,57,038. The appellant gets a relief of Rs. 18,57,038." 18.2 After considering the above finding of CIT(A) and the order of the AO, we do not find any infirmity in the findings of the CIT(A), as findings of the CIT(A) neither could be controverted nor any material was brought on record as to how the jewellery disclosed under VDIS was bogus. Therefore, in view of the reasoning given by the CIT(A), we confirm his order on this issue also. 19. Ground No. 6 is against deleting the addition of Rs. 1,47,000 on account of capital introduced in the name of minor children of the assessee. Various gifts were received by the minor son of the assessee and the gift-tax returns were filed during the relevant period of time and also regular returns of the minor son of the assessee were filed and they were accepted also. Therefore, we hold that the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 10 lakh and Rs. 2,75,000 were deleted. The findings of the CIT(A) given in his order in paras 48 to 50, are as under: "48. In reply, Shri Y.P.B. Singh, Asstt. CIT stated as follows: Page No. 25 of Annex. A-26 has been examined by me, total has been made like this 3-30 2-12 5-42 the period has been mentioned from 15.1 to 1.5 with regard to total of Rs. 2,12,800 different amount have been added to each other which total upto Rs. 2,12,800, reg. 3-30, there is no such detail. I have carefully considered the material and information on record as also various case laws as have been referred to and relied upon by the learned counsel for the appellant. From the scrutiny of the paper no inference can be drawn about any investment in moneylending business by the assessee. Practically it does not give any sort of details as has also been admitted by the AO. Further, initially, it was for the Revenue to prove that the loose paper had some contents of income. Apparently, the AO has failed to discharge this initial onus. Respectfully following the case laws as have been referred to and relied upon by the learned counsel for the appellant, the addition is deleted. Addition on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the CIT(A) was correct. The grounds of the assessee were dismissed. On the same reasoning we dismiss these grounds of the Department. 22. The remaining issue in appeal of Department is against the deletion of addition of Rs. 67,50,000 made by the AO on account of undisclosed investment in purchase of property Thrill Hotels (P) Ltd. 22.1 The learned Departmental Representative has simply placed reliance on the order of the AO. 22.2 The findings of the CIT(A) are given in his order in pp. 59 to 64, which are as under: "59. During the course of search, a loose paper was found from the possession of Shri Nand Kishore Goel. The said letter gave an impression that the property had been purchased for Rs. 2 crores and the difference was paid outside the books of accounts. The amount of addition of Rs. 67,50,000 was worked out as under: (a) Value of property (a) Value of property Deduction : Amount covered by the agreement 2,00,00,000 50,00,000 1,50,00,000 (b) 45 per cent of above being the share of the appellant and other members of his group 67,50,000 60. In short the AO under some misconception held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 90 per cent shares in the said company; 45 per cent belonging to Shri Rakesh Goel and remaining 45 per cent belonging to Shri Naresh Goel (brother of Shri Rakesh Goel). In this statement under s. 132(4) Shri Arvind Gupta has admitted the subsequent sale of shares to Goels and in the said statement he has further stated that the transactions took place on various value of shares. From a combined reading of all the material referred to above, only conclusion that can be drawn, is that Shri Rakesh Goel instead of selling the shares of Thrill Hotel (P) Ltd. had purchased shares from Shri Arvind Gupta and such transactions had nothing to do with purchase of property for which agreement had been entered into on 12th May, 1989. Thus, the said letter s authenticity has not been proved, as no bearing on the assessment of the appellant and the same cannot go to support that the appellant has made any such investment for which addition of Rs. 67,50,000 has been made here. 63. Thus, from whatever angle the matter is examined, there does not seem to be any basis for the said addition of Rs. 67,50,000. The same is, therefore, deleted. 64. For the same reasons as given above, the Annexure o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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