TMI Blog1999 (5) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income for the block assessment years under consideration in response to the above notice on 5th Nov., 1997. The case was taken up for scrutiny vide notice under s. 143(2) dt. 5th Nov., 1997. The assessee filed the details. During the search and seizure operation, the gold weighing 2073.100 grams valued at Rs. 10,57,540 was found and seized as per the Annexure J-4 of the Panchanama dt. 30th Nov., 1996. On questioning, the assessee replied that the gold was purchased at different times and it was not possible for the assessee to explain with the help of books of account. In view of the above, the AO treated it as the assessee's undisclosed income. As per Panchanama dt. 30th Nov., 1996, the gold was valued at Rs. 10,57,540. The assessee's case was that the investment in these gold were made at different point of time and it was acquired with the amounts available with the different family members. A separate sheet explaining the year wise acquisition of gold was filed. The assessee claimed that he purchased 688.500 gms. of gold during the asst. yr. 1994-95 worth Rs. 3,16,710. Again in stated that he acquired the gold weighing 1385.110 during the asst. yr. 1995-96 worth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-97 Rs. Rs. Rs. --------------------------------------------------- Ramakant - 30,000 5,84,000 Ramakant HUF - 4,45,000 1,05,000 Sumitra (wife) 34,406 60,325 - Gopal (HUF) 1,21,332 - - Mamta Govind 75,193 1,09,949 - Shashikala 27,073 1,78,493 - Geeta Gopal 58,706 20,171 - ----------------------------------- Total 3,16,710 8,43,948 6,89,000 = 18,49,648 --------------------------------------------------- The AO accepted for the asst. yr. 1996-97, the fund available to the extent of Rs. 6,89,000 whereas the assessee's claim was of Rs. 15,59,000. The AO without discussion disallowed the claim of the assessee and treated it as undisclosed income of the assessee. The assessee is agitating the same before us. 10. The learned counsel for the assessee submitted that the AO was not justified in not allowing the claim of the assessee to this extent without any discussion in the assessment order. 11. The learned Departmental Repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Akola in the premises of the assessee, nothing incriminating document connecting the assessee with the transaction was found. Papers of Balewadi was found at Pune with Sudhir Kohte and Patil group. No evidence connecting the assessee either with receipt or payment of on money was detected or found. The assessee acquired the right by virtue of agreement dt. 6th April, 1996 with Shri Babu Bala Chavhan and Smt. Shobha Babu Chavhan and the right was transferred to M/s Elite Erectors (P) Ltd. on 24th Dec, 1996. The circumstances under which the deponent Shri Babu Chavhan came in contact with the vendors are explained in his affidavit dt. 13th Nov., 1997. Somewhere before 6th April, 1996, the assessee met them and made enquiry regarding the plot and after discussion, agreed to sell the property for the total amount of Rs. 11,20,000. They agreed to sell the property to Shri Dilip Ramchandra Chavhan and Shri Uttam Prataprao Dhanwala after getting the permission from the Government of convert the land into non-agriculture land on making payment of 50 per cent of the market price (Nazrana) and they could not do that as they were having some problems. It was under these circumstances, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO (1992) 42 TTJ (Del) 44 : (1992) 39 ITD 183 (Del); (9) Kishan Chand Sobhraj Mal vs. Asstt. CIT (1992) 41 ITD 97 (Ahd) (TM) and (10) Udairaja Goliya (HUF) vs. Asstt. CIT (1998) 64 ITD 21 (Mumbai)(TM) 18. The learned Departmental Representative supported the order of the AO. 19. We have heard the rival submissions and gone through the decisions cited supra. In the case of Kirloskar Investments Finance Ltd. vs. Asstt. CIT, the Tribunal, Mangalore Bench held that the CIT cannot give any direction to the AO of any sort, being not provided with any power to modify or enhance or reduce the assessment. In the case of Kirtilal Kalidas Co. vs. Dy. CIT, the Tribunal held that the CIT's approval to the draft without hearing the assessee and without giving or recording any reason for approval is against the principle of natural justice and, therefore, void and nullity. In the case of Udairaja Goliya (HUF) vs. Asstt. CIT, the Tribunal Bombay Bench held that the statement recorded at the back of the assessee and no opportunity was provided to the assessee to cross-examine the deponent cannot be a basis for any addition. The Tribunal further held that in the absence of any evidence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the flat in Mumbai. It was stated that the Akhil Bharat Varashiya Marwadi Agarwal Jataya Kosh, 227 Kalbadevi Road, Bombay 400 002 (Marwadi Trust) had a flat No. 5 in Agrawal Nagar, Dr. Babasaheb Ambedkar Road, Matunga, Bombay 400 019. The said flat was about 1,200 sq. ft. in area. It was given on rent to the assessee at Rs. 160 per month, on the strength of application made by him on 28th Dec, 1995. Prior to this, one Shri Sanjay Shriprakash Chokhani was occupying this flat. He surrendered the tenancy rights to the landlord. Then it was handed over to the assessee. From some of the letters seized, the AO came to the conclusion that the assessee had paid some huge amount for the transaction. From the letter dt. 6th Nov., 1995, written by Shri P.R. Agrawal to the assessee which reads as under: "The flat is approximately 1,350 sq. ft. On super built up and about 900 sq. ft. or above carpet area. You have offered Rs. 70 lakhs for the same and it can be settled around Rs. 70.50 lakhs or so 2-3 other buyers are taking interest in the above matter as seller may take decision shortly. Hence your immediate action in the matter is appreciated." The Revenue came to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated that it was finalised directly by the trust as they never allow anybody to interfere. Summon was issued to the trust and in response to that, they submitted as follows: "We are accepting the tenants on our monthly tenancy basis. We have various appeals, request and recommendations from various person that Mr. Ramakant Umashankar Khetan is in dire need of a suitable accommodation in Bombay and the trust should consider the allot him suitable accommodation. Accordingly, on 23rd March, 1996 the said tenancy was allotted to him. We do not know Mr. P.A. Agrawal, Mr. R.U. Khetan of Akola has not paid any amount except 6 months deposit of rent and the monthly rent to us or through Mr. P.R. Agrawal. We do not know the whereabout of Mr. Chokhani and his family. It has been reported to us that the said Chokhani family has shifted to Bangalore. The AO personally visited the office of the Trust and made enquiries regarding the procedure of the allotment of the flat, as to whether they accept deposit/Pagadi/donation from tenants, as to whether the flat No. 2/5 was allotted to Shri R.U. Khetan through broker or directly. It was also enquired with them as to when they were not know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the trust's stand that were not aware or known to Mr. Agrawal was incorrect as they mentioned about Mr. Agrawal, broker in some letter, He also rejected the explanation of the trust that they are not aware of whereabout of Shri Sanjay Chokhani as he was staying in their flat for more than 10 years. The AO came to the conclusion that the assessee has paid some deposit or Pagadi as it is an accepted fact that in Bombay, no transaction regarding the flat takes place without such payment. He further came to the conclusion that Shri Sanjay Chokhani would have received the money from the assessee for relinquishment of the tenancy rights. The AO further came to the conclusion that the assessee had invested in the flat and not for doing any business. The AO noted that the trust vide its letter dt. 19th Nov., 1997, stated that the committee of the Board of trustees will consider the application of the assessee only if he is a bona fide resident of Bombay and is in need of residential accommodation. From the above, the AO came to the conclusion that the assessee being not-resident of Bombay, so as to overcome the difficulty, might have paid something. He came to the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter at serial No. 49 of Annexure A-2, the counsel for the assessee submitted that from this letter, the conclusion reached by the AO that the assessee has paid certain amount is wrong. The AO inferred from the letter dt. 2nd Jan., 1996, that the assessee has made certain payment. From the letter relied upon by the AO, it can be seen that on 1st Jan., 1996, the assessee was out of station and could not be contracted. From the letter dt. 2nd Jan., 1996, the AO came to the conclusion that the assessee has made certain payment. If both the letters are read together, it makes clear that the assessee could not make the payment and an inference reached by the AO was erroneous as the letter itself speaks as follows: "Shri Ramakantji Khetan, You must have received our letter dt. 1st Jan., 1996." If it is established that the assessee had received the letter written on 1st Jan., 1996, there no need to mention this, letter's mentioning that "including pay now" is a misnomer and there was no reason to come to the conclusion that the assessee paid anything for the flat. Inviting our attention to paper book p. 70, P.B. III, which is a letter written by Shri P.R. Agrawal on 14th March, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Departmental Representative brought our attention to the specific mention of the AO where the AO demolished the statement of the trust vide which they said that they were not aware about Mr. P.R. Agrawal or Mr. Chokhani. He supported the order of the AO and stated that (sic-contradiction, falsity) in the statement of the parties is glaring. They say that the assessee is not aware and known of Shri P.R. Agrawal still the fact remained that the trust had received the deposit of flat 2/5 given on rent to Shri Khetan through Shri P.R. Agrawal. If they were not known about the whereabout of Shri Sanjay Chokhani, it was not possible to have an agreement signed by the trust and an indemnity bond was executed by the previous tenant Shri Sanjay Chokhani. The learned Departmental Representative submitted that all these facts put together show that the assessee made the payment and the deal was finalised through Shri P.R. Agrawal, the broker. Therefore, the learned Departmental Representative submitted that the order of the AO may be confirmed. 28. We have heard the rival submissions, gone through the order of the AO and the papers filed before us. This addition is made by the AO o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish above before 25th March." If we take into consideration the first portion regarding the payment and confirmation which has not been done by the assessee, it leads to the conclusion that the broker wants the deal to be done through him which has not taken place. Coming to the next part of the letter, it is also clear that some discussion with the trust was going on either directly by the assessee or even through the broker. This letter does not speak of Mr. Sanjay Chokhani or any other person to whom the amount is required to be paid. There is a submission of the assessee before the AO regarding flat No. 2/5, Agrawal Nagar, Matunga, which states that the transaction had taken place looking to the social status of the assessee, being recognised social worker of state level and his active participation in society. The assessee had made an application to the trust at different time for allotment of the flat and the agreement was executed by the trust in favour of the assessee on 23rd March, 1996. Taking all these facts together, we are convinced that there is no material to hold that the assessee had made any payment for acquisition of tenancy right of the flat. 29. The AO did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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