TMI Blog2010 (6) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... e above stated incriminating materials, the assessee was questioned in the course of search which ultimately culminated in a statement recorded under section 132(4). In the said statement given by the assessee, it was admitted that the assessee has not disclosed various deposits with different banks to the Income-tax Department other than the transactions reflected in his accounts with Vijaya Bank. Such undisclosed bank deposits worked out approximately to Rs. 84.60 lakhs. This is the amount admitted in the sworn statement made under section 132(4). There were instances of unexplained withdrawals for personal needs as well. 3. In the light of the above details obtained in the course of search and those obtained in the course of post-search enquiries made, the assessing authority issued a notice under section 158BC to the assessee, requiring him to file block return for the purpose of returning his undisclosed income. 4. In the block period consisting of assessment years 1997-98 to 2002-03, the assessee returned a gross total income of Rs. 14,69,963. The assessee is regularly assessed to income-tax. The total of the income already returned by the assessee for the above asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ds : ( a )Canara Bank/Vijaya Bank : Rs. 2,69,184 ( b )Standard Chartered Bank : Rs. 2,51,600 ( v )Unexplained withdrawals for personal needs : Rs. 16,05,469 7. The total of the above segments works out to Rs. 1,23,84,696. The Assessing Officer has deducted Rs. 51,487 from the above amount as it related to the income of the assessment year 1996-97. The balance amount of Rs. 1,23,33,210 has been determined as the undisclosed income of the assessee as already stated. 8. The block assessment was taken in the first appeal. The Commissioner 8 of Income-tax (Appeals) considered the various grounds raised by the assessee and ultimately held that there was no need to interfere with the order passed by the Assessing Officer. Accordingly, the first appeal has been dismissed. The assessee is aggrieved and, therefore, the second appeal before us. 9. The grounds raised by the assessee in this appeal read as below : ( i )The order of the learned Commissioner of Income-tax (Appeals)-V, Bangalore (in short "CIT (Appeals)") confirming the assessment order passed by the Assessing Officer under section 158BC of the Income-tax Act is opposed to law and facts of the appellant s case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income-tax return, etc. Learned counsel argued that in spite of filing of the above specific evidences before the Assessing Officer, he has brushed aside the contentions of the assessee in a very lighter way without making any further enquiry on the genuineness of those transactions. Counsel explained that Shri S. Venkataraman is an income-tax assessee, he is carrying on business and he has confirmed the payment of such amount to the asses see and in these circumstances, the assessee has discharged the onus of proving the genuineness of the receipt of Rs. 10,25,000 from Shri S. Venkataraman. 14. As another sample case, learned counsel invited our attention to pages 136 and 137 of the paper book. Page 136 portrays the confirmation letter issued by Ms. Vivian Rusmussen, stating that she had already given Rs. 30 lakhs to the assessee. Page 137 shows a legal notice stated to be issued by Ms. Vivian Rusmussen, to the assessee for failure to pay back the said amount of Rs. 30 lakhs. Here also, the contention of learned counsel is that the assessee has furnished similar confirmation letters and supporting evidence before the Assessing Officer, in respect of the funds utilised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. Adjournments were given to you on the principle of justice, equity and good conscience. However, you have failed to comply with various notices and letters issued to you." 18. In the light of the above arguments, the learned Commissioner submitted that there is no case of lack of opportunity and the prayer of the assessee s counsel for remanding the case back to the assessing authority is unjustified and unfounded and the appeal must be decided on the merits of the ground raised in the appeal. 19. Regarding the merits of the case, the learned Commissioner explained that the contention of the assessee is that the bank deposits and other investments which stood in his name were made out of the cash received by the assessee from different persons in his capacity as the custodian of the funds of those persons. She contended that this argument of the assessee was examined by the assessing authority in a very detailed manner as seen from pages 47 to 61 of the assessment order. She stated that the Assessing Officer has examined each and every paper including the confirmation letters filed by the assessee and has come to a valid finding that all those letters and materials fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed before him and he has also explained the reasons why those letters have not been accepted by him. Therefore, the argument of the assessee that the materials available on record were not looked into by the assessing authority is against the facts of the case. There is no ground for the assessee to allege that the Assessing Officer has not considered the explanations offered by the assessee. There is no basis in stating that the assessment order was passed without application of mind. Therefore, we reject all the preliminary objections raised by the assessee in respect of the orders passed by the lower authorities. We are proceeding to dispose of the appeal on the merits. 23. On a reading of the assessment order, it is very clear that the search action has resulted in collecting details of bank deposits and other financial investments standing in the name of the assessee. It is on the basis of those specific materials that the Assessing Officer has made out the case of the undisclosed income against the assessee. As already stated elsewhere in the order, funds were available in various bank accounts in the name of the assessee, like the State Bank of India, Canara Bank, Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prabhakaran. For various such reasons, the confirmation letter filed by Dr. Prabhakaran was rejected by the assessing authority. 27. In the case of Dr. Alphonse Mariadoz, the assessee claimed receipt of amount of Rs. 2.5 lakhs. The confirmation letter was again rejected for similar reasons stated in the case of Dr. Prabhakaran. The assessee has. stated that he has received Rs. 10.25 lakhs from Shri. S. Venkataramanas advance for the purchase of a property, but the Assessing Officer found that the total turnover of the business carried on by Shri. S. Venkataraman was only Rs. 15 lakhs and as per accounts no funds were available with him to advance such Rs. 10.25 lakhs to the assessee. Another creditor according to the assessee was Ms. Vivian Rusmussen. It was stated that she had given Rs. 30 lakhs to the assessee. According to the assessee, the amount was given for procuring a house site for purchase. A confirmation letter has been filed before the Assessing Officer. The assessee has also filed a copy of the legal notice said to be issued by the same Ms. Vivian Rusmussen to the assessee for failure of returning the amount of Rs. 30 lakhs. 28. It is not necessary to repeat th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in treating interest accrued on bank deposits as undisclosed income of the assessee as such interest income was not disclosed in the regular returns filed by the assessee. 32. But in respect of the unexplained cash of Rs. 11,75,300 and the un-explained withdrawals for personal expenses of Rs. 16,05,469, we find that a different approach is called for. 33. The Assessing Officer has added the sum of Rs. 11,75,300 as un-explained income in the nature of unexplained cash. Likewise, the Assessing Officer has added a sum of Rs. 16,05,469 as the undisclosed income towards unexplained withdrawals for personal expenses. In both the cases, the reasoning given by the Assessing Officer is that the assessee has not properly explained the sources of this cash and expenses. 34. It is to be seen at the same time that the Assessing Officer has already made additions in the hands of the assessee towards unexplained bank balances and fixed deposits. While explaining those bank balances and fixed deposits in the hands of the assessee, the assessee has explained that these amounts were funds received from different persons for different purposes. But the said explanation has not been acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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