TMI Blog2009 (12) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... representing the alleged unexplained investment in the purchase of jewellery found on search represented the appellant’s undisclosed investment for the assessment year 1997-98.? Held that – set aside the order of Tribunal and remand back the matter for re-consideration. - 12 of 2006 - - - Dated:- 23-12-2009 - SIKRI A. K., SIDDHARTH MRIDUL JJ Prem Nath Monga for the appellant. Sanjeev Sabharwal for the respondent. JUDGMENT The judgment of the court was delivered by A. K. Sikri J.- The appellants are the legal heirs of the late Shri Subhash Gambhir who was the assessee in this case. He was one of the promoter directors of M/s. D. D. Industrial Corporation Limited (hereinafter referred to as "the company"). On August 29, 1996, a search was conducted by the Revenue department under section 132 of the Income-tax Act, 1961 at the residential premises of the assessee, i.e., 1/14, West Patel Nagar, New Delhi as well as at the premises of the company at its registered office at Karampura, New Delhi. Certain documents were found and seized during the search which included annexure A-6, a loose sheet of paper and jewellery from the bank lockers was also seized. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per acre. In support of its case, the company also submitted affidavits of the vendors of the land from whom the pieces of agricultural land were purchased as per details given in its earlier letter dated July 23, 1997 appearing at pages 47 to 51, particularly page 49. The company also placed on the Assessing Officer' s record the report dated July 29, 1997 of the valuer for the valuation of the land purchased. This valuation was done as in January, 1997. The explanation, however, was not to the satisfaction of the Assessing Officer who passed orders dated October 31, 1997 in the case of the company making addition of Rs. 51,76,200 on protective basis. 5. On September 15, 1997, the Assessing Officer issued letter to the asses- see on the basis of annexure A-6 requiring him to explain as to why addition of Rs. 34,71,135 (Rs. 51,76,200 (-) Rs. 16,97,065) be not treated as undisclosed income for the assessment year 1996-97. The assessee replied to the same on September 19, 1997 giving similar explanation which were given by the company in the case of the assessee. On September 30, 1997, the Assessing Officer passed order under section 158BC on the appellant inter alia mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now take up discussion on these questions. Re : Question No. 1 8. The learned counsel for the appellant submits that the impugned order passed by the Income-tax Appellate Tribunal is erroneous in point of law and is legally vitiated. The impugned order passed by the Income-tax Appellate Tribunal has also been questioned as perverse and legally unsustainable in the eyes of law. The appellant contends that annexure A-6, page 34 is a loose sheet of paper unsigned, undated, it gives no particulars of any land, area, size or location or Khasra No. of any land. It is a vague document and admits of no such interpretation of purchase of any land for value Rs. 51,76,200 by the appellant. The scribbling on a loose sheet has no evidentiary value in the eyes of law. There is no search material with the Assessing Officer to support this loose sheet of paper to sustain the addition of Rs. 51,76,200. The document does not speak for itself and is a dumb document unsupported in material particulars of any search material and needs to be rejected having no evidentiary value. There is no warrant to read 51,762 as Rs. 51,76,200. Reliance is placed on CIT v. Girish Chaudhary [2008] 296 ITR 619 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n vide paragraph 22 of its order is thus legally vitiated. It is a blatant case of violation of the principles of natural justice. The order of the Income-tax Appellate Tribunal is also perverse. Independently annexure A-6 page 34 has no legs to stand on being a dumb document which otherwise also lacks all the necessary details to sustain any addition. Learned counsel has also relied upon the decision of the Supreme Court in the case of CBI v. V. C. Shukla [1998] 3 SCC 410 (SC). It is further pointed out that the letter dated September 15, 1997 issued by the Assessing Officer to the appellant requiring him to explain about annexure A-6, page 34. This notice to the assessee by the Assessing Officer makes no mention of annexure A-6 pages 4 and 5 and yet the Income-tax Appellate Tribunal has taken support of this document to reach its conclusion vide paragraph 22 of its order. This further vitiates the impugned order of the Income-tax Appellate Tribunal which also needs to be declared as perverse. 10. Mr. Monga also argued that section 158BB(b) read with section 69 casts burden on the Revenue to prove any undisclosed income which may be attributed to the assessee. This burden i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said document ; in any case the deed regarding that land was in the name of the company and addition could not have been made at the hands of the assessee ; the said document was not made available to the Income-tax Appellate Tribunal by the Revenue and, therefore, reliance thereupon amounted to violation of the principles of natural justice ; the burden was on the Revenue to prove any undisclosed income at the hands of the asses- see, which was not discharged by the Revenue. 13. It is not in dispute that these very arguments were raised by the assessee before the Assessing Officer, in the appeal before the Commissioner of Income-tax (Appeals) and thereafter before the Income-tax Appellate Tri- bunal as well. The Income-tax Appellate Tribunal has discussed the order of the Assessing Officer in detail, on the basis of which the Assessing Officer made the additions. What is not in dispute is that a document including annexure A-6 were found and seized from the premises of the assessee during the search. The assessee did not disown this document or state that it did not belong to him. His explanation was that this document had no connection with the purchase of the land by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Shri K. Lal from the office of Shri M.M. Suri, consultant for the projects. However, the assessee and any of his company had not shown any expenses on account of consultancy charges paid to Shri K. Lal. No consultant would provide consultancy without charging the fees. The payment of Rs. 5,000 shown at page 34 of annexure A-6 to Shri K. Lal would show the relationship between the assessee, the paper and Shri K. Lal. This would further prove that this paper relate to the land purchased for DD Industrial Corpn., which had started its activities subsequent to the search. The assessee itself had admitted having discussed regard- ing negotiation with foreign company and its components for project at Gannaur with Shri K. Lal in the month of May and June 1996 in his reply to question 7 and 8 of the statement recorded on November 19, 1996. Thus the Assessing Officer observed that this proved the close nexus between Shri K. Lal, the page and the land at village Bhigan. 13. The Assessing Officer also observed that page 36 of annexure AA-140 was the site plan for the said land and no expenses of this account had been shown to have incurred in the books. The expenses/payment to ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears to be correct. We find in agreement with the reasoning assigned by the Assessing Officer in arriving at the said conclusion. We, therefore, uphold the order of the Assessing Officer passed in this regard. Since the addition made substantively in the hands of the late Subhash Gambhir is upheld, we direct to delete the addition made protectively in the company (M/s. D. D. Indl. Corpn.)" 17. It is clear from the above that after analyzing facts/material, findings of facts are arrived at to the effect that the said sheet of paper relates to actual transactions and did not depict or reflect rough estimate of the cost of setting up of a new project in and around Gurgaon, explanation sought to be given by the assessee, which he failed to establish. In the facts and circumstances of the case, we, therefore, cannot treat it to be a dumb paper and are unable to accept this contention of the learned counsel for the assessee. Concurrent findings are arrived at by all the three authorities below and it is not a case where these findings can be treated as perverse. In view thereof, reliance placed upon the judgment of this court in Girish Chaudhary [2008] 296 ITR 619 (Delhi) or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of Smt. Urmila Gambhir as no such document was placed on their record. The finding recorded by the Income-tax Appellate Tribunal is simply based on the Assessing Officer's order without application of its own mind and addition confirmed without taking into account any material at all. The entire evidence in the shape of correspondence exchanged between the Assessing Officer and the assessee on the issue has been ignored from consideration by the Income-tax Appellate Tribunal. It is also submitted that the Income-tax Appellate Tribunal has acted arbitrarily, capriciously and failed to follow the law laid down by the Supreme Court in Lalchand Bhagat Ambica Ram [1959] 37 ITR 288. It is further submitted that the impugned order on this issue is thus legally vitiated resulting in the miscarriage of justice and also in violation of the principles of natural justice. 19. We find that the addition of Rs. 8,86,794 on account of unexplained jewellery is worked out by the Assessing Officer on the basis that during the course of search at the residence and other locker of the assessee, the following jewellery was found : (Rs.) 1/14 West Patel Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1995-96 14,05,927.00 (ii) Total appreciated value of above jewellery as on 29-8-96 18,38,520.00 (iii) Total jewellery found in the locker in Bank of India 14,25,309.00 (iv) Value of the jewellery belonging to mother of Smt. Urmila Gambhir and kept in the locker along with certain papers 1,72,887.00 (v) Value of jewellery belonging to the assessee (iii-iv) 12,52,422.00 (vi) Value of the jewellery in excess of jewellery found in the locker belonging to Urmila Gambhir to be considered in the assessment proceedings of the assessee, i.e., Shri Subhash Gambhir (ii-v) 5,86,098.00 22. The contention of the assessee that the jewellery amounting to Rs.10,96,379 belonging to his mother-in-law was mixed in the jewellery found at the residence and in the locker of Indian Bank, Karol Bagh was rejected by the Assessing Officer by observing that the same did not require any further consideration as this issue had been considered in the hands of Smt. Urmila Gambhir. The Assessing Officer further observed that the contention of the assessee regarding wealth-tax return filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect was dealt with in detail while considering the case of Smt. Urmila Gambhir. There is no independent discussion by the Assessing Officer in the assessment order passed by him in the case of the assessee. Because of this reason, grievance of the assessee is that the order of the Tribunal is without reasons and the Income-tax Appellate Tribunal did not have the benefit of the Assessing Officer's order passed in the case of Smt. Urmila Gambhir as no such document was placed on their record. The entire evidence in the shape of correspondence exchanged between the Assessing Officer and the assessee on the issue has been ignored from consideration by the Tribunal. This is a formidable argument put forth by the learned counsel for the assessee as is clear from the aforequoted portion of the Tribunal's order on this aspect. 25. We, therefore, have no option but to set aside the order of the Tribunal in so far as question No. 2 is concerned on the ground that this aspect was not duly considered and dealt with in the impugned order and remit the case back to the Tribunal on this aspect. 26. The upshot of the aforesaid discussion is that this appeal is partly allowed. Parties are le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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