TMI Blog1992 (3) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) which were pending on the date of the application. As regards the assessment year 1988-89, the return of income was filed on July 29, 1988, and the assessment was pending on the date of application. On the basis of the documents seized, the Department came to the conclusion that the applicant was carrying on money-lending business. It is stated in the statement of facts by the applicant that on account of his reputation and ability to adjudicate betweerr parties on matters of dispute, the applicant was normally acting as a Pancha for number of transactions. Gradually, this led to a situation whereby persons in need of money for a short term requested him for arranging loans and persons with surplus money were prepared to rely on his assurance and lend money. Thus, the applicant indulged in arranging for loan transactions between. third parties. The rate of interest and terms of payment would differ from person to person and transaction to transaction. In the case of certain transactions where the applicant merely acted as a mediator in linking the borrower and the lender, the applicant earned some brokerage as a onetime payment. However, in certain other transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the applicant's counsel had been considered by the Departmental Valuer and only thereafter he had estimated the cost of construction and hence he urged that the estimate made by. the Departmental Valuer should be accepted. We find that the Departmental Valuer has not given any allowance for self-supervision by the applicant though he has noted the plea made by him in his valuation report. Since the fact of self-supervision is not doubted, we direct that allowance at 10 per cent. of the cost estimated by the valuer, viz., Rs. 31,870, should be given for self-supervision. As regards point No. (ii), the valuer has observed that, looking to the RCC construction of the new house, the old material could not have been used in the construction of the new property. We agree with him on this point. As regards point No. (iii), we find that even at the time of giving a statement under section 132(4) of the Income-tax Act, 1961, the applicant had stated that an amount of Rs. 30,000 was available for the construction of the new property from the sale proceeds of the material obtained by demolition of the old structures. We, therefore, hold that an allowance of Rs. 30,000 should be give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , accordingly, furnished a revised computation of additional income for the first two assessment years by includ-ing the investment in the pigmy deposit at the figures mentioned above. Amount of Rs, 1,20,000 seized during the search operation. During the search and seizure operations conducted on September 29, 19B7, cash of Rs. 1,20.000 was found in the applicant's residential premises, The source for this amount was explained before the Assessing Officer as tinder : (Rs.) (i) Cash from M/s. Mohan. Wine Shop 58,144 (ii) Sale of jewellery belonging to the mother 42,974 (iii) Loan from jagadamba Mitra Mandal 20,000 The Assessing Officer, after verification of the books of account of the wine shop, has accepted the source from the shop. As regards the second source, Shri Manoliaran submitted that the jewellery belonged to the applicant's mother who had sold the same to one Mallappa. When the mother was examined by the Assessing Officer on oath, she confirmed the fact that the jewellery belonged to her and she had sold it to Mallappa. The only ground on which the Assessing Officer did not accept the explanation was that Mallappa was a poor agriculturist who could not have bou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------ Total 1,36,000 -------- As no explanation for the source for the capital employed of Rs. 1,36,000 has been offered, the same would be treated as income. On the basis of the dates ( taken as the dates of advance ), the average period of advance will be taken as three months for this year. Interest at 21 per cent. on Rs. 1,36,000 for three months will amount to Rs. 7,140 and this will be included in the total income. The Assessing Officer has referred to an amount of Rs. 1,83,000 appearing in Pocket Book No. A-25. On going through the pocket book, we find that the date mentioned therein is October 4, 1986, which relates to the previous year for the assessment year 1987-88 and hence the same will be considered in that assessment year. Assessment year 1987-88: The total amount advanced during the year where names/dates given, is Rs. 4,59,000. Since the loans were rotated on encashment after a period of three months/100 days, we estimate the capital employed at one-third of this amount, viz., Rs. 1,53,000. After giving credit for the capital taken into account in the previous assessment year, viz., Rs. 1,36,000, the additional capital employed at Rs. 17,000 will be added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the amendments of these sections with effect from this assessment year, interest charged under sections 139(8) and 215/217 in the original assessment will be revised on the basis of the revised total income computed on the basis of this order. There is a delay of 21 months in the assessment year 1986-87 in filing the return of income. It was explained by the applicant's counsel that the sales tax authorities had seized the books of account of the wine shop in August, 1984, on account of which they could not file their return in time. Taking this fact into consideration, we order that interest under section 139(8) may be levied for the assessment year 1986-87 for delay of one year. As regards assessment year 1987-88, there is no sufficient cause for the delay of nine months in filing the return of income and accordingly interest under section 139(8) will be levied for nine months. There is no delay in filing the return of income as far as assessment year 1988-89 is concerned. As regards interest under section 215/217, we order that the same may be levied for one year from the due dates for the assessment years 1986-87, 1987-88 and 1988-89. Since the applicant has co-operated in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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