TMI Blog2004 (8) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirming the addition of Rs. 2,00,000 made on account of cash found Rs. 2,89,200 belonging to the firm in which the appellant is partner. 5. That, on the facts and in the circumstances of the case, the Hon ble CIT(A) has erred in confirming the addition of Rs. 8,00,000 made for the asst. yr. 1997-98 being cash deposited by the appellant in his saving bank account No. 1342. 6. That, on the facts and in the circumstances of the case, the Hon ble CIT(A) has erred in confirming the addition of Rs. 9,00,000 made by the learned AO for the asst. yr. 1990-91 out of opening balance of capital of Rs. 9,19,490 as on 1st April, 1989. 7(a) That, on the facts and in the circumstances of the case, the Hon ble CIT(A) has erred in confirming the addition of Rs. 2,26,740 for the asst. yr. 1990-91 on account of no evidence for filing the regular returns. 7(b) That, on the facts and in the circumstances of the case, the Hon ble CIT(A) has erred in not passing the order against the addition of Rs. 1,84,143 made by the learned AO, being difference in returned income for the following assessment years. Asst. yr. Disclosed income as shown in block period returns (Rs.) Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the dollars for the amount of Rs. 2,53,847. 4. Assessee s counsel, Shri Anil Jain, contends that the authorities below have not given any adverse comments on the explanation as well as the documents filed in support thereof. A paper book has already been furnished before the Tribunal. In the written submissions contained in assessee s paper book at p. 4, the assessee has tendered complete and proper explanation in respect of all the four entries and the documentary evidence thereof are also annexed from assessee s paper book II from pp. 67 to 74. The first entry of Rs. 20,000 was available with the assessee from cash withdrawn from M/s Malhan Builders, F-20, GK-II,New Delhi, who were also searched on the same day by the IT Department. A copy of accounts duly confirmed has been filed. This amount stands repaid on 18th Dec., 1997, from the SB account No. 4976 of Manish Malhan with Bank of Maharashtra and evidence for entry of withdrawal made through cheque No. 669550 showing debit to the account as per copy placed at assessee s paper book p. 68 is on record. The block assessment of Malhan builders has also been completed besides completion of regular assessment and no adverse vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e comments on the explanations given by the assessee nor did she find that the evidence filed for source of availability of funds is insufficient. It appears that without proper application of mind on the details of sources placed on record by assessee, the learned CIT(A) was casual in taking a decision and arbitrarily has said that the assessee has failed in proving source of investments in purchasing the dollars for Rs. 2,53,847. This was not a correct approach of the learned CIT(A) and she has factually erred in arriving at such a finding without appreciating the evidence available on record. The assessee is found to have explained the availability of funds for purchase of dollars for remittance abroad for the education of his two children in respect of remittances in aforesaid four transactions. Under such peculiar facts and in the light of the explanation as borne out from the assessee s arguments, we are satisfied that the Revenue has failed to make out any case against the assessee and the purchase of dollars for Rs. 2,53,847 under the facts and circumstances of the case could not have been treated as unexplained or undisclosed income of the block period of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was on him to show that FDRs as narrated did not belong to him. That having not been done, the AO cannot be expected to do which is beyond his knowledge and control. He, therefore, relies on the decision of the authorities below. 10. In rejoinder, the learned counsel for the assessee contends that the assessee is a builder and he has to interact with so many customers and suppliers of material. In case some person left this paper at his residence, the assessee cannot be expected to explain the contents thereof, particularly when the assessee was not found to be the author of such paper. All the corners of the house and business premises were thoroughly searched, all the bank accounts are in the knowledge of the Department, no evidence was found nor any corroborative material brought on record by AO to show that FDR of Rs. 3 lakhs listed in the seized paper belonged to the assessee or were purchased by him. Under such circumstances no addition was called for. 11. We have heard the parties with reference to material on record. The assessee admits that FDRs of Rs. 50,000 belongs to him. This was purchased out of cash available as on1st April, 1989. Assessee s balance sheet place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h an addition could not have been made as undisclosed income for the block period. The same is, therefore, directed to be deleted. 13. Ground No. 4 relates to the addition of Rs. 2 lakhs which the AO has treated as undisclosed income. 14. Assessee s counsel contends that, as a result of search at the assessee s residential premises as well as business premises, cash at the residence of the assessee found was Rs. 2,89,200 while cash at the premises of Shri N.K. Malhan found was Rs. 75,105 as is borne out from the inventory prepared by the Department. These two brothers are partners in M/s Malhan Builders whose premises was searched and no cash was found at the business premises. The total cash found at the residence of two brothers as aforesaid is Rs. 3,64,305. This was a business cash and was duly reflected in the cash book of M/s Malhan Builders and this was revealed from assessee s paper book I p. 37 where cash in hand on the date of search was Rs. 3,89,530. The assessment of M/s Malhan Builders has been completed for the block period as well as regular assessment has been made. No addition has been made in the hands of the firm nor any adverse view was taken by the AO. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be accepted. There are no circumstances which warranted the sum so found to be treated as undisclosed income for the block period. The additions so made are directed to be deleted. 17. Next ground relates to the sustenance of addition of Rs. 8 lakhs for the asst. yr. 1997-98 comprised in block period on account of cash deposited by the assessee in the SB account No. 1342, Bank of Maharashtra,New Delhi. 18. Briefly, the facts are that the AO, vide internal p. 6, found that the assessee has deposited cash of Rs. 4 lakhs in account No. 1342 on23rd May, 1996, and another sum of Rs. 4 lakhs on24th June, 1996. When required, the assessee explained that this amount was deposited out of money earlier drawn from the same bank account on different dates. This explanation of the assessee was not accepted as he was of the view that no linkage between the cash withdrawn on earlier dates and deposited on relevant date has been made by the assessee. He, therefore, treated the deposits of Rs. 8 lakhs as unexplained income of the assessee for the asst. yr. 1997-98. This action stood confirmed by the learned CIT(A). 19. We have heard the parties with reference to material on record. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1st April, 1989 to 27th July, 1999. The learned CIT(A) confirmed the action. 22. We have heard the parties with reference to material on record. The assessee has been regularly assessed to tax and has enclosed the balance sheet and the assets reflected therein in his regular returns. The perusal of balance sheet reveals that one of the assets is property bearing No. D-642,ChittarajanPark,New Delhi, of the value of Rs. 4,75,000 for which the assessee has placed a copy of conveyance deed dt.17th Dec., 1986as an evidence for purchase of property in that year. This investment was beyond the block period. Likewise, assessee had disclosed investment in capital account in M/s Malhan Builders at Rs. 30,990 where he was a partner from the earlier period. Copy of capital account in M/s Malhan Builders placed at assessee s paper book p. 48 reveals that this balance is a closing balance as on 31st March, 1989 and as such also this investment is beyond the block period. Likewise, another investment of the assessee is in Ocean Construction India (P) Ltd. for Rs. 3,63,000 and the assessee had appended a certificate from that concern in which it has been certified by that company that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with law. 25. Ground No. 7(b) has not been pressed, the same is dismissed as not pressed . 26. Ground No. 8 relates to sustenance of levy of interest under s. 158BFA(1) of the IT Act for late filing of return for block period. 27. We have heard the parties with reference to material on record. The AO did not pass any specific order for charge of interest under s. 158BFA of the Act. Perusal of the order reveals that only the penalty proceedings under s. 158BFA have been initiated. We have perused mandatory provisions in this respect contained in s. 158BFA(1) which deals with charging of interest on undisclosed income determined under cl. (c) of s. 158BC of the Act where the return is furnished after the expiry of period specified in the notice or is not furnished in compliance to the notice. Sub-s. (2) of s. 158BFA mandates levy of penalty on undisclosed income determined under cl. (c) of s. 158BC if it is more than the returned income. Since s. 158BFA deals with levy of interest and levy of penalty under two different sub-sections and the AO initiated only the penalty proceedings under s. 158BFA, it is therefore, evident that no specific order for charge of interest as state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received and from whom interest has been received, was not enquired by the AO nor any corroborative material brought on record. However, the learned CIT(A) was justified in deleting the addition on the basis of jottings and recordings on the loose papers. 32. We have heard the parties with reference to material on record. A paper containing jottings of certain figures even if seized from the possession of assessee would not come within the compass of the word document and cannot be the basis for treating undisclosed income of the assessee. Such a view has also been taken by the Mumbai Bench of Tribunal in S.P. Goel vs. Dy. CIT (2002) 77 TTJ (Mumbai)(TM) 1 : (2002) 82 ITD 85 (Mumbai)(TM). 33. We have also perused the seized papers placed in assessee s paper book. The Revenue did not bring any material on record to show that the assessee is the author of these documents. There was no corroboratory material in possession of the Revenue to hold that the assessee has in fact made any investment in advances. There is also no material on record to show that any interest has been received or accrued to assessee as income. The document speaks of some payment of interest upto2nd Sept. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has received the sale consideration of Rs. 1.65 crores and disclosed only Rs. 36 lakhs. The AO thus erred to bring the difference to tax as undisclosed income for the block period. She, therefore, deleted this addition. 37. The learned Departmental Representative, on the other hand, while referring to the seized annexure at pp. 80 and 81 of assessee s paper book contends that the seized documents had a reference to the property under consideration and the calculations made were for Rs. 1.65 crores. The assessee was, however, under obligation to have disclosed the entire consideration of the whole property in his books. This was not done, the AO, therefore, was justified in treating the difference of the disclosed amount and the recorded amount as undisclosed for the block period by bringing 25 per cent of the share of the tax as undisclosed income of the assessee. 38. On the other hand, the learned Authorised Representative supported the findings arrived at by the learned CIT(A). It was also contended that in the same document the estimated value of second and third floor have also been mentioned but the same were occupied by the assessee himself and his brother for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
