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TMI Blog2006 (1) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... h and Ashok Soni, his daughters-in-law Smt. Dipika and Smt. Subhya, inter alia , on 3rd Jan., 1997. On the basis of material gathered during search, the AO made various additions, which were subjected to appeal and the first appellate authority allowed part relief, which resulted in these cross-appeals. We will discuss more relevant facts while dealing with the individual ground of appeals. ITA No. 479/Jdpr/1999 [Block period Asst. yr. 1987-1988 to 1997-98] 3. This is assessee's appeal and as per the concise grounds of appeal dt. 9th Feb., 2004, there are as many as 13 grounds of appeal. 4. The first ground of appeal was not pressed at the time of hearing by the learned Authorised Representative, Shri N.R. Mertia. Therefore, this ground stands dismissed as not pressed. 5. The second ground of appeal consists of two parts, consisting of grounds 2.1 and 2.2. The learned CIT(A) observed that a reasonable and fair opportunity was given in valuing the seized assets particularly the stock-in-trade, and also that no objection was raised by the assessee when the stock-in-trade was being valued during the course of search. The assessee has objected to the above observation made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties being at residence, he had categorically denied. But his son Shri Satya Prakash Soni had stated in answer to question No.8, that as far as his knowledge went, nobody else's stock was included in the stock found at the shop. 12. The AO disbelieved the assessee on this point and rejected assessee's claim that gold ornaments weighing 380.300 gms belonged to others. The learned CIT(A), however, deleted this addition, and the Department is aggrieved from this finding. 13. We have heard the rival submissions and perused the evidence on record. 14. The assessee has shown that the job register contained the entries regarding receipt of such gold ornaments weighing 438.59 gms. (gross) recorded vide entry Nos. 228 to 231. It has been clearly established by the learned Authorised Representative that the job register was not found on the date of search, but this job register was signed and sealed by the Gold Control Authority. This fact was brought to the notice of the AO vide letter dt. 2nd Oct., 1998. The assessee was also maintaining bill books for the receipts against such job charges from the customers. These bills were produced before the AO for verification. But the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing Rs. 37,704 belonged to his brother Mr. Ganesh. 18. The stock of silver ornaments found at the shop and residence at SunaronKi-Ghati is as under: At shop as per Annexure S-1 - 99216 gms. At residence as per Annexure 'J' - 12400 gms. 111616 gms. Out of this silver, the assessee claimed that 5425 gms of pure silver belonged to his brother Shri Ganesh Kumar. It was stated by the assessee before the AO that vide letter dt. 17th Jan., 1997 during the course of search itself it was brought to the notice of the ADIT. At the time of search, no such question was stated to have been put to the assessee. So it could not be claimed that such a pure silver belonged to his brother. The books of account admittedly, were not complete from 28th Dec., 1996 to 2nd Jan., 1997. The assessee gave the reason that he was sick during that period, which was the cause for not completing the books. Therefore, as per assessee, this transaction was recorded only on 10th Jan., 1997. An affidavit of his brother was filed in support of the above claim. It was stated that Shri Ganesh Kumar came from Ahmedabad to see the assessee on 31st Dec., 1996 and also visited his shop on 1st Jan., 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by duly sworn affidavit placed at pp. 79 to 80 of the paper book. In the statement, no such question with regard to impurity aspect was put to the assessee. 22. In our considered opinion this issue also needs to be restored to the file of the AO. We, therefore, restore the same along with the main issue with the similar directions. Thus, ground Nos. 4.5 and 4.6. are also restored as above. 23. In ground No. 4.7, the assessee has challenged the addition of Rs. 1,67,635. This issue is also co-related with the above issue and therefore, we restore this issue also to the file of the AO for fresh decision. The similar directions shall hold good in this regard also. Likewise, the issue of deduction claimed in respect of nosepins to the extent of Rs. 7,405 is also restored to the file of the AO. These ground Nos. 4.7,4.8 are allowed for statistical purposes only. 24. The ground Nos. 5.1, 5.2, 5.3, 5.4 and 5.5. relate to the addition of Rs. 1,16,180 maintained by the learned CIT(A) out of Rs. 1,81,791 as unexplained cash found during the course of search. In the alternative, the cash found has been explained by ground Nos. 5.2 to 5.5. 25. The facts relating to this issue are that a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed by the learned CIT(A) also. 30. We have heard the rival submissions and perused the evidence on record. 31. The statement of Smt. Ratanjot Bai, the mother of the assessee was also recorded under s. 132(4) on the date of search wherein she had stated that she had one FDR of Rs. 40,000 and some ornaments. She denied to have any cash with her. Shri Damodar Soni had withdrawn Rs. 70,000 in the month of October 1996 from his savings bank a/c No. 11559. The mother of the assessee was ill since August 1995. The only fact that this amount was not in th:e knowledge of Smt. Ratanjot Bai should not lead to rejection of the claim of the assessee. When the assessee has produced Shri Damodar Das, the fact of withdrawal of cash from his account, and also the affidavit of Smt. Ratanjot Bai, we are of the considered opinion that this claim of the assessee should have been allowed. The disallowance is too far-fetched one. Therefore, we accept this claim of the assessee. 32. In ground No. 5.4, the cash of Rs. 10,000 belonging to the brother of the assessee Shri Ganesh, has been claimed. In view of our finding given with regard to silver ornaments, we have accepted the plea of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that with regard to 1780 gms. of gold, he did not have any explanation. In fact, the assessee had surrendered Rs. 8,88,000 on this account. But the assessee retracted from his admission so made and disclosed only income of Rs. 2,39,322 on this account, while furnishing return of income for the block period. During the assessment proceedings the assessee explained that 578 gms. of gold ornaments belonged to Smt. Subhda Soni, which she had received on various occasions including her marriage. The AO noted some discrepancies in the statements of Smt. Subhda Soni and the assessee with regard to quantity of gold ornaments received by her on various occasions, 36. The assessee also claimed that 55 totals of gold ornaments belonged to Smt. Deepika Soni. The assessee also claimed that 875 gms. belonged to Smt. Savitri Devi, his wife, which she received as a result of Will. The AO partly accepted the explanation of the assessee and made an addition of Rs. 8,16,870 as undisclosed income, on account of unexplained amount of gold ornaments weighing 1770 gms. The learned CIT(A) partly sustained an addition of Rs. 5,77,548. Both the parties are aggrieved, therefrom, and have raised their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttention to the statement of the (sic) placed at pp. 96 to 97 of the paper book and has submitted that the statement has to be read in its entirety. He has also invited our attention to pp. 46 to 51 of the paper book, where a copy of the 'Will', which was found during the course of search, is placed at p. 52 of the paper book of wealth-tax return of Smt. Shiv Joti Bai, is placed. It has been submitted that the Will in question was found during search from the possession of the assessee and the same has to be accepted as belonging to the possessor. It has been further submitted by referring to ss. 59 and 93 of the Indian Evidence Act of 1991, that written documents has to prevail over oral document, unless the written evidence is rebutted (sic). The learned Authorised Representative has also drawn our attention to the statement of the sister of Savitri Devi and has submitted that the AO has strongly relied on the statement of assessee's wife where she had denied the existence of any Will. 40. After hearing both the parties, we are of the considered opinion that the written document has to prevail over the oral statement made during search. The 'Will' in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under Chapter XIV-B of the IT Act, 1961, the learned CIT(A) has grossly erred in law and in facts in not fully accepting appellant's ground of appeal No. 5(f) whereby the appellant has disputed the addition made and also the voluntarily offering of Rs. 25,000 in his undisclosed income on account of household expenses because the learned AO has arbitrarily estimated such, income against the provisions of law and material available on record thereby entitling the appellant to retract and withdraw from the voluntarily disclosed income as the same was offered to tax under the wrong understanding of law." The AO found that the assessee had performed the marriage of his daughter and son in the year 1988, and also performed the marriage of other son in the year 1994. The assessee had however disclosed the marriage expenses of Rs. 30,261 in asst. yr. 1989-90 and Rs. 48 900 in the asst. yr. 1995-96. In the return of income filed for the block period the assessee returned Rs. 60,000 as undisclosed income for asst. yr. 1989-90 and Rs. 25,000 for asst. yr. 1995-96. The assessee showed his inability to explain these expenses headwise. The AO, thus, estimated the marriage expenses on appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating document was found to support the impugned addition. This Bench has been continuously taking the view that a statement recorded under s. 132(4) of the Act does not tantamount to unearthing any incriminating evidence, during the course of search, therefore, no addition can be made on that score alone. Therefore, in our opinion, the impugned addition cannot survive, and the same has to be deleted. The following cases can be referred to for the above proposition of law. (i) Dy. CIT vs. Sanmukhdas Wadhwani (2003) 80 TTJ (Nag) 648 : (2004) 85 ITD 734 (Nag); (ii) Concord of India Insurance Co. Ltd. vs. Smt. Nirmala Devi & Ors. (1979) 118 ITR 507 (SC); (iii) Satishbhai Jayantilal Shah vs. Asstt. C1T (1997) 57 TTJ (Ahd) 424 : (1997) 61 ITD 307 (Ahd). 48. Therefore, ground No. 10 of the assessee's appeal is allowed. 49. In the result, the appeal of the assessee is partly allowed. ITA No. 488/Jdpr/1999 [Block period asst. yrs. 1987-1988 to 1997-98] 50. The grounds raised by the Department's appeals are extracted, hereinbelow. "On the facts and in the circumstances of the case the learned CIT(A) has erred in law in : (i) accepting the explanation of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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