TMI Blog2013 (5) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... will have to be aggregated in order to find out the total undisclosed income relating to the block period. In other words, the block period is to be treated as the previous year and so it follows that the losses suffered during certain parts or periods of the block period have to be set off or adjusted against the income earned during the remaining parts or periods thereof. Thus on legal principles the contentions of the assessee are valid. There is an admission by the Assessing Officer on record that these transactions were already being ascertained and inquired in section 133A proceedings and just because the search and appraisal report, the Assessing Officer has considered them in the block assessment proceedings. Even before the search, purchase of non-existing assets from REPL was rejected in the case of IDBI on the basis of which the assessment in that case was completed for the assessment year 1996-97. Therefore, the assessee' s contentions that these matters were crystallised much before the search proceedings has to be accepted. Therefore, the same cannot be considered in the block assessment. Having crystallised the issue in the assessment proceedings, not only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same was recorded by any group concerns. In view of this, we hold that this docu ment does not establish any unaccounted income. In fact, the Assessing Officer made addition of net amount without considering the TDS made on the gross amount. - Decided in favour of assessee Loan amount adjustment for the assessment year 1998-99 - Held that:- was submitted before us that the said loose paper has nothing do with the affairs of the company REPL. The said loose paper in any case does not indicate any receipt of income by REPL or anyone else. The said paper does not represent any unaccounted income of the company. Restore the issue to the file of the Assessing Officer to examine the document and the records to decide whether the same can be considered as unaccounted. - Decided in favour of assessee by way of remand. Unaccounted transactions th regard to N. Cheraj Travels P. Ltd. - Held that:- nsidering the finding by the Assessing Officer that most of the transactions are recorded in books and also the fact that this bill does not pertain to the assessee, we are inclined to accept the assessee' s contention that this does not pertain to the assessee and more so as unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperties were verified and accepted, we do not see any reason to sustain the addition when there is no evidence that the said property belongs to the assessee. The addition is deleted. - Decided in favour of assessee. Seizure of shares - Held that:- We are unable to sustain the action of the Assessing Officer. Instead of making addition in the hands of shareholder, in this case the assessee is not shareholder, the addition was made without any enquiry. Just because the share certificates were seized from the company the addition cannot be made. The assessee discharged his onus of explaining the ownership to director and reason they are found in the assessee' s possession. These are not disproved. We are of the opinion that the addition cannot be made in the hands of the assessee.- Decided in favour of assessee. Sale and lease back of non-genuine assets - CIT(A) deleted addition on admitting additional evidence - Held that:- Considering the rival contentions and the nature of transactions undertaken and consistent with the stand taken on these transactions we see no reason to interfere with the order of the Commissioner of Income- tax (Appeals). Such profits are to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax (Appeals) as the learned Commissioner of Income-tax (Appeals) has verified the loose papers and deleted on facts. Shares were never issued to Oxcamb nor any money was received by REPL from Oxcamb. Addition of ₹ 27 crores also made on the same grounds of alleged investment by OIL as per ground No. 2 was also deleted. Further copy of the loose paper in fact seized by the search party which was mate rial for addition was always in possession of the learned Assessing Officer and this was considered by the Commissioner of Income-tax (Appeals). - Decided against revenue. Unaccounted interest component - CIT(A) deleted addition - Held that:- There is no need to disturb the finding of the Commissioner of Income-tax (Appeals). As submitted the interest was otherwise also dis allowed. Since the issue of allowing interest was restored to the Assessing Officer in the assessee' s appeal, this aspect of double disallowance can also be examined by the Assessing Officer - Decided against revenue. Disallowance of consultancy charges - CIT(A) deleted addition - Held that:- The learned Commissioner of Income-tax (Appeals) held that it is evident that certain services were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at:- Before the CIT (A) it was stated that a statement duly typed for October, 1997 was furnished to the bank indicating the value of the stock of ₹ 3339.41 lakhs which was duly acknowledged by the bank which does not contain any handwritten corrections unlike the loose papers. Subsequently when it came to furnishing the statement of stock tally for November, 1997 the statement for October, 1997 was taken as the basis for preparing November, 1997 tally. In doing so, the typewritten figures were struck off by hand and the figures for November, 1997 were put by hand. A comparison of the two will very clearly explain that there was no difference in the stock tally. These figures represented value of stocks for two different months. The Assessing Officer himself has accepted and acknowledged the position wherein the stock tally for two different months were bound to be different. Hence it was now known why in the final analysis he treated the loose papers as representing undisclosed income.- Decided against revenue. Unaccounted investment in immovable property - CIT(A) deleted part addition - Held that:- We uphold the order of the Commissioner of Income-tax (Appeals) as obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions made by the Commissioner of Income-tax (Appeals), that too mostly on the reason that the Commissioner of Income-tax (Appeals) admitted additional evidence in violation of rule 46A. IT(SS) No. 152/Mum/2005 : 4. Briefly stated, a search and seizure action under section 132 of the Income-tax Act had taken place on December 18, 1997 at the various premises of the assessee. The search took place along with similar action carried out in the cases of the directors of the company as well as in some sister concerns. The documents found were seized and statements of concerned persons were recorded. 5. Consequent to the search and seizure action, on receipt of the intimation the Assessing Officer issued notice under section 158BC of the Act calling for the return for the block period within the period of 30 days. 6. In compliance to the said notice, the assessee-company filed return for the block period in the extended period granted for the purpose, offering undisclosed income at a loss of ₹ 22,93,24,285. However, when the Assessing Officer initiated the assessment proceedings for the determination of the undisclosed income, there was no compliance in this direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer and the Joint Commissioner objected the admission of additional evidences, the learned Commissioner of Income-tax (Appeals) vide para 18 has admitted the fresh evidence in terms of rule 46A and accordingly the Revenue is aggrieved with reference to the admission of fresh evidence in their grounds. 9. At the outset, learned counsel briefly explained the facts of the case to submit that the Assessing Officer has treated many of the transactions of the purchase and sale of wind turbine generators and payments of lease rents as bogus and made various additions in the block assessment, whereas the information pertains to these were available with the Assessing Officer in the course of survey proceedings which were initiated much earlier and inquiries have been concluded. It was the submission that assessee was volunteering to file VDIS declarations, but was prevented at that point of time. Therefore, part of the seized material was based on the VDIS declarations prepared by the assessee. It was the submission that the information obtained in the course of the survey cannot be utilised in the block assessment. The detailed submissions of the assessee are as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orbed depreciation of about ₹ 78 crores pertaining to the assessment years 1996-97 and 1997-98 for which returns were already filed. The Income-tax authorities also did not wish to allow the set-off of the revenue expenses of about ₹ 26 crores which were capitalised in the books of account and also refused the allowance of interest of ₹ 7.50 crores forming part of lease rent. These facts are clear on pages 6 and 7 of the assessment order. The above stated facts clearly confirmed that inquiries were conducted by the Income-tax authorities in the matters of the said lease rent and wind turbine generators much before the search action. It also confirms that sub sequent to such inquiries survey action was carried out under section 133A on more than one occasion with the specific intention to verify the gen uineness of the said transactions. It also confirms that specific statements were recorded of different parties directly concerning the genuineness of the transactions. It also confirms that the income pertaining to such non existent transactions was sought to be considered for the purposes of tax ation much before the date of search on February 18, 1997. The sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee places reliance on the following decisions : (i) CIT v. G. K. Senniappan [2006] 284 ITR 220 (Mad) In the instant case it was held that the word such used as a prefix to the word evidence assumes much significance, in this provision as it indicates only the evidence found as a result of search or requisition of books of account or other documents, at the time of search. Any other material cannot form the basis for computation of undisclosed income of the block period. (ii) Dasari Sri Sailendra Kumar v. Deputy CIT [2009] 27 SOT 33 (Vizag) (URO) In the instant case the Tribunal held that the expression such other material or information has to be relatable to the evidence found as a result of search. It does not take into its encompass the material gathered or information collected as a result of survey which is not relatable to the material found as a result of search. Therefore, the material gathered during the course of survey under section 133A, cannot form the basis for computation of undisclosed income of the block period of the assessee. (iii) Gauthamchand Bhandari v. Deputy CIT [2005] 95 TTJ (Bang) 288 In the instant case it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that this was found out in survey proceedings conducted on February 20, 1997 is not acceptable. There are several seized documents which prove that the assessee made wrong claim of depreciation and lease rent. The details of such seized documents are furnished in the table below : Sl. No. Seized material or Description AO reference 1 Pages 13 and 41 Annex-A Proposed VDIS declaration withdrawing lease rent of 13.80 crores and depreciation of ₹ 59.51 crores AO pages 6 and 7 2 Page 1 of Annex.A 1 Details of wind energy equipments with connection date AO page 7 and page 15 AO 3 Letter of Gujarat Energy Development Agency dated 29.12.1997 Informing the Assessing Officer that the commissioning certificates are not genuine in 20 cases - post search investigation. AO pages 8 and 9 4 Statement of B.S. Doctor under section 132(4) dated 18.12.1997 The statement was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 114.08 crores relating to bogus claim of depreciation and lease rent. This is to bring to the kind notice of your honours that the statement was during the course of the search and not during the course of survey. The contents of the statement have been again ratified by the statement of Homi J. Patel recorded on December 27, 1997. The directors have stated that the bogus commissioning certificates must have been an in house creation. (5) The Commissioner of Income-tax (Appeals) in the course of deciding appeals for the regular assessment has also held that the dis allowance of depreciation and lease rent has to be taxed in the block assessment. The order of the Commissioner of Income-tax (Appeals) in Appeal No : CIT(A) VIII/IT-318/2000-01, dated : January 6, 2005 or assessment year : 1997-98, indicates that the disallowances are to be made only in block assessment. The Commissioner of Income-tax (Appeals) has discussed this issue in paragraphs 12 to 15 of his order cited supra. The assessee has accepted this contention of the Commissioner of Income-tax by not filing appeal against this order. Therefore, the issue has become final. The assessee cannot contest this issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (ii) Section 158BB(4) provides that losses brought forward under Chapter VI or unabsorbed depreciation under section 32(2) shall not be set off against the undisclosed income determined in the block assessment but may be carried forward for being set off in the regular assessments. (iii) The assessee' s claim has been that since the depreciation amount could not be allowed as deduction for want of adequate profits in two assess ment years, there was no case for taking these inadmissible amounts as part of the undisclosed income. There is also no case for holding that any part of the said carried forward amount if found inadmissible cannot be taken as part of the total income in the computation of the undisclosed income. 12.4. It was submitted before us that : (a) The net undisclosed income for the assessment years 1993-94 till 1997-98 and also for the broken period of the block is negative and such unaccounted loss be adjusted against the undisclosed income, if any, for the block period. (b) The provision of section 158BC for set off of losses in relation to those losses which were incurred in regular course out of duly accounted transactions. Such an embargo d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim for deduction under Chapter VI-A as there was no authority in law to do so. In the assessment years 1995-96 to 1997- 98, the Assessing Officer has not given any reason, nor any comment in support of his action. 13.2. It was submitted before the Commissioner of Income-tax (Appeals) that the lease rent was paid by the account payee cheque, duly accounted in the books of account and it was regularly allowed as deduction in the regular assessments. It was the submission that no evidence was found during search to establish that lease rent paid was bogus. The Assessing Officer has not identified the relevant loose papers relying on which he has added the lease rent as undisclosed income. The assessee nowhere stated that the lease rent claimed was a bogus expenditure and the entire lease rent claimed was disallowed in the block assessment without even identifying the payees or inquiring with them about the genuineness. Also there was no reason to believe that the entire lease rent was bogus without any evidence or inquiry leading to such findings. 13.3. Without prejudice it was claimed that the lease rent represented interest paid to financial institution and banks for genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be the subject-matter of block assessment. The excessive element of claim could have been determined only after reducing the lease rent by the amount of interest and the amount of paper profit. It is only the excess net claim of expenditure if any that could be treated as undisclosed income under Chapter XII-B. Instead of bringing to tax, the net income relating to the transaction disallowed the entire amount that was debited as lease rent and treated the amount so disallowed as undisclosed income for the block period. The company had in fact inflated its profit by an amount of ₹ 20,45,12,686 on account of the activity of raising finance and claiming lease rent and had accordingly shown higher profit. The said amount was offered for taxation and was considered in determining the total income for the respective assessment year which should be reduced in ascertaining true undisclosed income for the block period. Thus, there was no understatement of income in respect of this activity and the company was not in possession of any undisclosed income. The Assessing Officer instead of reducing the profit, added an amount of ₹ 20,71,06,500 to the income that was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings an entry recorded in regular books of account, if on that account some incriminating document is found during the course of proceedings. According to the learned Commissioner of Income-tax (Appeals) the said transaction entered into by the assessee was not a genuine sale and lease back transaction. The assessee had shown payments having been made for the purchase of the assets to these non-existent concerns. The authorised representative has not rebutted this observation of the Assessing Officer in the remand report. The finance obtained in the form of sale consideration under the arrangement has not remained in the business of the assessee-company to be utilised for the said purpose but has been taken out from the business by payments to non-existent and non-genuine suppliers. Therefore, the claim of the assessee for the admissibility of deduction of interest component relating to and forming part of the lease rent cannot be accepted. 13.10. Before us the assessee' s main submissions are as under : (1) Lease rent was paid by the account payee cheque, duly accounted in the books of account and it was regularly allowed as deduction in the regular assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he accounted transaction from the purview of block assessments. (5) It was also submitted by the assessee before us that once it is held that the income pertaining to excessive claim was the subject-matter of regular assessment as is duly confirmed by the assessment order of the assessment year 1997-98, the additions in respect of each of the assess ment years should be excluded from the purview of block assessment. The hon' ble Gujarat High Court in the case of N. R. Paper and Board Ltd. [1998] 234 ITR 733 (Guj) held that the proceedings in block assessment are totally different from the proceedings in regular assessment and that a sub ject-matter of one assessment could not be the subject-matter of block assessment. Statement on oath nowhere confirms that the amount of lease rent represented suppression of profit in its entirety. (6) The decision relied upon by the Commissioner of Income-tax (Appeals) are on different facts as he himself has highlighted that it is possible to disregard the accounts only on the basis of material seized during the course of search. Neither the Assessing Officer nor the learned Commissioner of Income-tax (Appeals) has highlighted or specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment for the assessment year 1997-98 had disallowed claim of lease rentals on non-existing assets of ₹ 14,73,48,444. 13.11. Without prejudice the undisclosed income if any represented the income of a new industrial undertaking that was eligible for deduction under section 80-IA and also pertained to export business and was eligible for deduction under section 80HHC and such deductions should have been granted in computing undisclosed income. The amendment in section 158BB covering expense/deduction or allowance, if at all, applies only when the claims are found to be false as a result of the search and evidence found in search. The definition of undisclosed income prevailing on date of search and also on the date of block assessment order did not include in its scope and ambit the claims made for expenses/deductions and allowances. There was no seized material in possession of the Assessing Officer which he could have seen to disallow the lease paid to IDBI LKP. Moreover he has also not given any reason whatsoever for rejection and how he has determined the quantum of disallowance. No seized materials were found and the Assessing Officer never produced any proofs to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer disallowed an amount of ₹ 4,10,00,000. The expenses of revenue nature not claimed in regular return of ₹ 9,98,73,498 not set off against the undisclosed income. 13.16. In the assessment year 1997-98 the amount debited to profit and loss account was ₹ 17,81,46,180 against which the Assessing Officer disallowed an amount of ₹ 14,00,00,000. The expenses of revenue nature not claimed in regular return of ₹ 23,55,97,722 not set off against undisclosed income. 14. Ground No. 7 of the assessee' s appeal is with reference to addition for depreciation claimed for the assessment years 1995-96 to 1997-98 for ₹ 2,08,00,000, ₹ 38,52,00,000 and ₹ 59,51,00,000 respectively. 14.1. In the assessment the Assessing Officer held that evidences were found in the course of the search that the assessee had claimed depreciation as well as lease rentals on non-existing assets. 14.2. It was submitted before the Commissioner of Income-tax (Appeals) that depreciation was duly accounted in the books of account and it was regularly allowed as deduction in the regular assessments. Undisclosed income excludes an income which is represented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Finance Act, 2002 but retrospectively with effect from July 1, 1995. The said amendments specifically include therein income based on entries in books of account or other documents which represent false claim of any expense, deduction or allowance. 14.5. In the light of the amendment made by the Finance Act, 2002 the possibility of having two opinion on the matter is clearly eliminated and the Assessing Officer is at liberty to examine in a block assessment proceedings an entry recorded in regular books of account, if on that account some incriminating document is found during the course of proceedings. There is no merit in the claim of assessee that the expenses which were capitalised in the accounts be allowed as the revenue deduction in the computation of undisclosed income. In the computation of the undisclosed income only an expenditure can be held as admissible for deduction that has been incurred for earning an unaccounted receipt that was noticed in the course of search proceedings only. 14.6. It was submitted before us that depreciation was duly accounted in the books of account and it was regularly allowed as deduction in the regular assessments. No evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim. The definition of undisclosed income prevailing on date of search and also on the date of block assessment did not include in its scope and ambit the claims made for expenses/deductions and allowances. The amendment to the Finance Act, 2002 did not dispense with the need for the seized material and findings thereon. The amendment does not cure the deficiency arising on account of want of seized material which is a sine qua non for the addition in Chapter XIV-B. The Commissioner of Income-tax (Appeals) himself confirmed this position in law. The amendment in any case was inapplicable to the case of a search which took place on December 18, 1999 and importantly to a block assessment order passed on December 29, 1999. Without prejudice the claim of depreciation was part of the overall scheme for raising funds for business and the net undisclosed income, if any, relating to the entire scheme should only be taxed. 14.8. Without prejudice the learned Assessing Officer could not have treated the entire amount representing the claim of depreciation as undisclosed income but should have reduced such amount by the amount against paper revenue/income shown on sale of electricit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 10,69,12,434 which when adjusted against the gross total income before depreciation of ₹ 9,01,54,495 came to ₹ 1,67,57,939. Accordingly there was no scope for adjusting genuine depreciation of ₹ 4,73,68,372 (Rs. 7,28,92,386 ₹ 2,55,23,934) which remained unabsorbed and available for set off against income of subsequent year. 14.12. For the assessment year 1996-97, the net result of unaccounted transactions/undisclosed income was ₹ 17,74,26,078 which when adjusted against the gross total income before depreciation of ₹ 12,59,93,545 came to ₹ 5,14,32,533. Accordingly there was no scope for adjusting genuine depreciation of ₹ 3,59,75,504 (Rs. 38,01,71,841 ₹ 34,41,96,337) which remained unabsorbed and available for set off against income of subsequent year. The assessee-company has not claimed any depreciation to the extent of ₹ 24,03,95,048. Depreciation of ₹ 3,59,75,054 out of ₹ 38,01,71,841 was for genuine existing assets while the Assessing Officer has added ₹ 38,52,00,000. 14.13. With regard to the assessment year 1997-98, the net result of unaccounted transactions/undisclosed income as menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f paper book I. (ii) Genuine expenditure of revenue nature were incurred on finance charges, professional fees and lease management fees. Page 347 of paper book 3A. (iii) Details of expenses were furnished. Page 347 of paper book 3A. (iv) The Commissioner of Income-tax (Appeals) erred in saying that the expenses capitalised were relatable to the acquisition of assets and their installations since the asset was not in existence. (v) The Commissioner of Income-tax (Appeals) himself confirms that the assets were found to be non-existent thus contradicting his position. (vi) The company showed higher book profits by not claiming genuine revenue expenditure since it wanted to raise funds by ADR and GDR issue. (vii) This expenses were never claimed and hence not allowed as deduction in regular assessment. (viii) The expenses were revenue in nature. (ix) Proofs of expenditure were available and details were furnished. (x) This expenditure were incurred for earning undisclosed income. (xi) It had the effect of reducing undisclosed income. (xii) Only real (net) undisclosed income can be taxed. It is only the excess net claim of lease rent that could be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been withdrawn consequent to the search action. 16.3. It was also held by the Commissioner of Income-tax (Appeals) that there is also no finding in the search proceedings in regard to the sale of electricity being non-genuine. Even the accounts of the company does not indicate any sale. Again for the claim of exclusion of income of the interest on hire purchase transaction, it is to be said that there is no finding in the search proceedings that any item has been taken by the assessee in terms of the said arrangement. 16.4. Before us the assessee submitted the following : (a) Claim that income was non-existent was made in return for block period. Page 77 (b) To ensure higher book profits, company generated paper profits on fictitious sale of the power or energy from paper windmills (non-genuine assets) and showed bogus income on sale of electricity. (c) The company showed higher book profits by showing bogus income on sale of electricity, profit on sale and lease back since it wanted to raise funds by ADR and GDR issue. (d) The excessive element of claim for lease rent that could be treated as an undisclosed income could have been determined only after reducing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1996- 97 (Rs. 3,96,00,000) and for the assessment year 1997-98 (Rs. 8,32,00,000). 17.1. The Assessing Officer held that the interest was paid on funds borrowed for acquiring non-existing assets cannot be allowed. 17.2. Before the Commissioner of Income-tax (Appeals) it was submitted that the Assessing Officer had not defined or specified the parties from whom these funds were borrowed nor had he specified the quantum or the amount of the loans. He had also not identified when these loans were taken, what was the rate of interest and whether the loans taken were otherwise used for business purposes or not. He had not bothered to furnish any reasoning or methods explaining how the respective amounts were determined by him for the purposes of disallowances. 17.3. It was submitted that interest was duly accounted in the regular books of account and could not have been treated as undisclosed income under section 158B(b) of the block period nor under section 158BB. As long as the funds are not proved to have been utilised for the non-business purposes, the interest on the said funds cannot be disallowed. 17.4. It was also submitted before the Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd whether the loans taken were otherwise used for business purposes or not. He had hot bothered to furnish any reasoning or methods explaining how the respective amounts were determined by him for the purposes of disallowance. (h) There was no reason to believe that the entire interest was bogus without any evidence or inquiry leading to such findings. (i) The funds were not borrowed for acquiring non-existing assets and acquired and used only for business purpose. (j) Interest was duly accounted in the regular books of account and could not have been treated as undisclosed income under section 158B(b) of the block period nor under section 158BB. (k) Even remand report of the Assessing Officer was indicative and tentative-not conclusive. The facts of borrowings are not disputed and are confirmed by the learned Commissioner of Income-tax (Appeals). The fact of payment of interest is not disputed and is confirmed by the Commissioner of Income-tax (Appeals). (l) No independent findings of the Commissioner of Income-tax (Appeals) for diversion of funds. (m) As long as the funds are not proved to have been utilised for the non-business purposes, the interest on said f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material. The same cannot be considered in the block assessment. 18.2. The relevant case law on this issue are as under : (a) In the case of E. K. Lingamurthy v. Settlement Commissioner (I. T. and W. T.) [2009] 314 ITR 305 (SC), it was held (page 307) : Section 158BB, inter alia, states that undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed in accordance with the provisions of Chapter IV. Total income is defined in section 2(45) to mean the total amount of income referred to in section 5, computed in the manner laid down in the Act. In other words, Chapter XIV does not rule out Chapter IV of the Act in the matter of computation of undisclosed income under Chapter XIV-B. It may be mentioned that ordinarily, in the case of regular assessment, the unit of an assessment is one year consisting of twelve months, whereas in the case of block assessment the unit of assessment consists of ten previous years and the period up to the date of the search. Section 158BB provides for aggregation of income/loss of each previous year comprised in the block period. The block period assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amritsar Processors P. Ltd. [2006] 154 Taxman 33 (Asr) (Mag) (November 10, 2005) it was decided that : In view of the decision of the Tribunal, Mumbai Bench in the case of B. D. A. Ltd. [1998] 65 ITD 501 (Mumbai), in which it was held that losses computed in block assessment for later years had to be set off against the undisclosed income computed in respect of other previous year falling within the block period, the Commissioner (Appeals) was justified in allowing the claim of the assessee. (d) In the case of CIT v. Krishna Kumar R. Parmar [2010] 322 ITR (St.) 2 (Guj) SLP (Case) No. 25394 of 2009, dated October 1, 2009, the hon' ble Gujarat High Court dismissed the Departmental' s appeals holding that the material or evidence which was unrelated to search could not form the basis of the computation of undisclosed income especially when the impugned income had been disclosed by the assessee in regular assess ment and the same had been assessed (Tax Appeals Nos. 1195 and 1196 of 2008 dated January 19, 2009). (e) In the case of B. D. A. Ltd. [1998] 65 ITD 501 (Mumbai) There is no prohibition against the losses of some of the previous years comprised in the block per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l have to be aggre gated in order to find out the total undisclosed income relating to the block period . In other words, the block period is to be treated as the pre vious year and so it follows that the losses suffered during certain parts or periods of the block period have to be set off or adjusted against the income earned during the remaining parts or periods thereof. Reading sub-section (1) of section 158BB in conjunction with clause (a) of the Explanation, it is clear that while aggregating the results of the different previous years falling within the block period, the losses have also to be taken into account. The Explanation does not say that if the computation results in a loss it should be ignored. On the contrary it proceeds to say that the loss for that previous year shall be considered for aggregation. Only the brought forward losses under Chapter VI and the unabsorbed depreciation under section 32(2) cannot be adjusted against the income of a previous year while resorting to aggregation. Thus, reading clause (a) of the Explanation to sub-section (1) in harmony with the said sub-section and sub-section (4), the prohibition against setting off the losses agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income of an assessee have got to be aggregated and the results of each source for the entire previous year have to be reckoned and merely because the first few months of the previous year show a positive income and the rest of the period shows a negative income, the result of the later period cannot be ignored. The Income-tax law does not permit this. What is true of the assessment of an assessee who has not been brought under section 132 and in whose case Chapter XIV-B does not apply is also true in respect of an assessee who has been searched and whose assessment is to be made under Chapter XIV-B. There is no difference between the two types of cases so far as the application of the principle is concerned. In the former, the previous year is the period with reference to which the income is to be ascertained, as defined in section 3 ; in the latter, it is the block period with reference to which the income is to be ascertained, and the block period consists of previous years relevant to ten assessment years preceding the previous year in which the search took place and includes the further period up to the date of commencement of the search. But the undisclosed income is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appraisal report (para 3 of the DDs forwarding letter dated March 21, 1998) the search action has resulted into discovery of documents suggesting evasion to the tune of ₹ 200 crores on account of claim of depreciation and lease rentals on non-existing assets. (This includes estimated depreciation and lease rentals till the date of search which the assessee was expected to claim). The only job left for the Assessing Officer is to find out the assets representing the concealed income as desired by the ADIT in his concluding remarks on page 104 of the appraisal report. Ideally this should have been the other way round. Whether any asset is existing or not can be ascertained simply by making spot inquiries under section 133A. In fact the claim of depreciation on non-existing assets sold to IDBI and leased back to the assessee was conclusively proved as bogus much earlier. This is evident from the seized papers 86 and 87 of annexure A-2 dated February 20, 1998 which is a pho tocopy of letter dated March 30, 1997 written by IDBI to REPL. It is mentioned therein that vide order under section 143(3) dated March 26, 1996 and March 27, 1997 respectively for the assessment years 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt and this way there is hardly any unrecorded transaction. Most part of the appraisal report however repeats over and again the loose papers showing transaction in sale of wind turbine generators which the assessee already admitted as bogus though not unrecorded. Some of the remarks indicating huge tax evasion (page 68 of authorised representative referring to seized papers 49 to 58) defies any description concerning knowledge of accountancy. 5. As stated above the ADIT has generously referred to a large number of documents showing transactions of sale and lease of non existing assets (wind turbine generators) on almost each page of the appraisal report. Discussion on pages 116 and 117 of the appraisal report itself makes it clear that only a fraction of the total amount exceeding ₹ 75 crores involved in the leasing was in fact received by the assessee. There are some other seized papers referred to in the appraisal report. The assessee was confronted with all such papers but there is no compliance. Unfortunately the regular books of account have not been seized. Accordingly no direct verification is possible. However, summons were issued to the banks and copies of bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search proceedings has to be accepted. Therefore, the same cannot be considered in the block assessment. 18.6. Even in the block assessment completed there are other contentions that the losses to be considered in the block assessment can be claimed and set off. In our opinion the learned Commissioner of Income-tax (Appeals) wrongly considered the issue while rejecting the assessee' s contentions. As can be seen from the case law extracted the losses which were determined and eligible for set off in the regular assessment cannot be considered in the block assessment but there is no restriction under the law to set off the losses arrived at the block period itself which has nothing to do with the quantified losses in regular assessments. Therefore, on that issue also the assessee' s contentions are valid. 18.7. The other issue to be considered is to give effect to the entire transactions of it is to be considered as bogus. It was the assessee' s contentions that the entire sale and lease back transactions being bogus, what is required to be adjusted is that the sale of electricity shown as income should be excluded while considering the disallowance of depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar assessment as all the transactions are arising out of the books of account. If there are any other transactions not connected with section 133A proceedings and having been crystallised by the search, these have to be considered in the block assessment. Since this require detailed examination of not only the survey folders but also various statements recorded and the incriminating material therein, in the interest of justice, we set aside the order of the Assessing Officer and direct the Assessing Officer to establish and examine each issue in the light of legal principles stated above. 18.9. It is also one of the contention that the assessee has not claimed depreciation in some years, but still these were considered as undisclosed depreciation claim in the block assessment. Since the assessee has not claimed depreciation, the question of treating the same as undisclosed does not arise in the block assessment. Therefore, to that extent since the claim is not made, disallowance per se does not arise. These aspects should be kept in mind by the Assessing Officer while crystallising the disallowance of depreciation claimed in the regular assessment. 18.10. The learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciding the matters both at the level of the Commissioner of Income-tax (Appeals) (almost five years) and before this forum (about eight years) due to various factors mainly as the company became sick and is fighting many court cases as well. The quantification of losses and depreciation may become academic in nature as efflux of time may not permit setting of losses in later years. The Assessing Officer also may find difficult to reopen the past assessments which may not be pending. Therefore the only option is to give findings in these proceedings about the necessary working as these matters are to be examined in detail on facts and pass consequential modification orders for carried forward losses and depreciation in regular assessment proceedings under section 154 or 155 of the Act. The assessee is at liberty to admit the incomes/losses in block proceedings as it has taken a stand before the Commissioner of Income-tax (Appeals) and admitted undisclosed incomes, to settle matters. However, the above suggestion to the assessee is only advisory as legally the issues can be contested on principles of law, which we are aware. 18.12. In the result the block assessment order on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. In the case of CIT v. C. J. Shah and Co. [2000] 246 ITR 671 (Bom), the Bombay High Court held that where the material is decided after the seizure operations are carried out, the Assessing Officer is required to determine the undisclosed income on estimations. In the case of Rajendra Kumar Lahoty v. Deputy CIT [2004] 266 ITR 621 (Raj) it was held that the addition in a block assessment can be made even where there is no direct evidence found during the course of search. The recording cannot be equated with lease rent payments and depreciation in respect of non-existing asset. Onus is on the assessee to explain the entries therein in a proper manner in terms of section 132(4A) of the Act. The action of the Assessing Officer of making estimation is sustained. 19.4. Before the Tribunal it was submitted that : (a) Statement on oath clearly confirmed that the loose papers did not represent any income and were fabricated for stalling the recovery by cre ditors. (b) Ad hoc addition based on surmises and guess work without any evidence or proofs. (c) The same cannot be treated as undisclosed income. (d) Outside the ambit of section 158BB. (e) the Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t basis an income of ₹ 10 crores was undisclosed on the basis or loose seized papers. Accordingly, in the said Lahoti' s case the fact that the event had taken place was undisputed and that as estimated was the expenditure incurred on such undisputed income. In the assessee' s case no such find ings are established warranting an estimation. 2. CIT v. P. R. Metrani (HUF) [2001] 251 ITR 244 (Karn) In this case. onus was discharged by the Department and the assessee had failed to discharge his burden. While in the appellant' s case onus was on the Assessing Officer to have disproved the facts, Such a huge addition could not have been made simply on the basis or loose papers of no con sequence and without giving any explanation. 19.6. We have considered the rival contentions. As seen from the office note extracted earlier the Assessing Officer made enquiries with banks and came to a conclusion that the so-called remittances are not genuine. Therefore the contention of the assessee that these are forged documents for the purpose of obtaining credit can be accepted. Since no income/ receipt was identified the document need not be considered for making any addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led receivable. We are also guided by the finding that most of the transactions are recorded in books and practically no unrecorded transaction. The ground is allowed. 21. Ground No. 12(a)(ii) is relating to interest for the assessment year 1998- 99 for ₹ 45,164. 21.1. It was held by the Assessing Officer that loose paper No. 9 in Annexure A-3 on page 19 of the assessment order vide page 5123 of paper book 3B was found. Hence, the assessee was asked to furnish complete details relating to the transactions mentioned in the above papers. Nothing was heard from the assessee and therefore, the same is treated representing the undisclosed income for the relevant year. 21.2. It was submitted before the Commissioner of Income-tax (Appeals) that the Assessing Officer presumed that the said loose paper represented income of the company which had not been accounted. The Assessing Officer should also have added the amount of ₹ 12,370 being TDS on such interest and the said loose paper represents the interest calculation in respect of an inter-corporate deposit received by the company which was duly accounted in the books of company. 21.3. It was held by the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.2. It was submitted before the Commissioner of Income-tax (Appeals) that the assessee is not connected with the said loose papers. The said papers do not bear any name of the assessee and do not indicate any income or undisclosed income/receipt of the assessee. The said loose paper has nothing to do with the affairs of the company REPL. The said loose paper in any case does not indicate any receipt of income by REPL or anyone else. The said paper does not represent any unaccounted income of the company. The statement on oath nowhere deals with the said loose paper under consideration. 22.3. It was held by the Commissioner of Income-tax (Appeals) that the said document is addressed to Mr. Pethe of REPL, therefore, it is for asses see to discharge the onus. Considering it has failed to do so, addition is sustained. 22.4. It was submitted before us that the said loose paper has nothing do with the affairs of the company REPL. The said loose paper in any case does not indicate any receipt of income by REPL or anyone else. The said paper does not represent any unaccounted income of the company. The statement on oath nowhere deals with the said loose paper under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount was paid or set tled. For these reasons, we allow the ground and delete the addition. 24. Ground No. 12(a)(v) pertains to Runner Corporation for 1998-99 for ₹ 25,00,000. 24.1. It was held by the Assessing Officer that loose paper No. 31 was found in Annexure A-4 and hence the assessee was asked to furnish complete details relating to the transactions mentioned in the above papers. Nothing was heard from the assessee and therefore, the same is treated representing the undisclosed income for the relevant year. 24.2. It was submitted before the Commissioner of Income-tax (Appeals) that the said loose paper indicates the movements in the bank balance and the said transactions relate to the regular affairs of the company and do not reflect anything which is unaccounted or is in the nature of undisclosed income. The said funds as expected were not received from M/s. Runners Corporation and the statement on oath nowhere deals with the said loose paper under consideration. 24.3. It was held by the Commissioner of Income-tax (Appeals) that mere fact that in the accounts of M/s. Runners Corporation this amount is not appearing is of no consequence. The claim of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no indication that the payment of ₹ 10 lakhs has been made by M/s. Avon Global Pvt. Ltd. as made out by the assessee. The addition is sustained as incriminating document was found in the possession of the assessee. 25.4. Before us it was submitted that company REPL and other concerns had in year 1993 acquired shares of Saple' s Scale Mfg. Co. Ltd. The loose papers contain the detail of payments made to Shri S. N. Dhruv who was majority shareholder of the said Saple' s Scale. These payments were made by account payee cheques in all cases but for ₹ 10 lakhs which was paid in cash by M/s. Avon. These papers are self-explanatory and the payments are duly accounted in the books of account of various concerns. The said paper does not represent any unaccounted income of the company. More over, the statement on oath nowhere deals with the said loose paper under consideration. 25.5. Ground No. 12(a)(vii) pertains to receipt from Shri G. S. Khator for the assessment year 1996-97 for ₹ 7,00,000 25.6. Loose paper Nos. 1 and 2 of Annexure A-8 was found by the Assessing Officer, hence the assessee was asked to furnish complete details relat ing to the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.3. It was held by the learned Commissioner of Income-tax (Appeals) that except for the property being W 163 MIDC, Dombivali, the ownership of remaining properties stands established and no addition on this account can be sustained. No details regarding property being W-163 MIDC Dom bivali was furnished by the assessee even after copy of remand report sent by the Assessing Officer. Consequently, out of ₹ 20 crores added to the undisclosed income, the addition of ₹ 50 lakhs was sustained and balance of ₹ 19.50 crores was deleted. 26.4. Before us it was submitted that the Assessing Officer has added the said amount on the basis of loose paper No. 29 of Annexure A-4. A bare look confirms that the said paper neither indicates any value nor investment nor the year of investment and nowhere states or confirms the existence on any unaccounted or undisclosed income. The Assessing Officer has simply assumed that the said loose paper represented such income. The owner of the property being W-163, MIDC, Dombivali was Eltrol Ltd. Loose paper itself confirms the third party ownership. It does not represent any undisclosed income under section 158B(b) and the same is outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77 of the Companies Act, 1956, prohibits a company from purchasing its own shares and therefore, the company could never have bought these shares. Non-inquiry was made by the Assessing Officer with these persons to confirm his action. 27.3. It was observed by the Commissioner of Income-tax (Appeals) that the assessee has not been able to produce any evidence of the sources of investment. While the shares of Trans Power Engg. Ltd. were acquired by the assessee-company and its associates from the open markets. However, no evidence as to source of investment has been produced. The provisions of section 77 of the Companies Act is no relevant in the case considering that is only applicable where there is a legal acquisition having taken place. 27.4. Before us it was submitted that : (a) These shares were in the name of the third parties and many were the shares of the company REPL itself. (b) No material or loose paper found or seized to show the invest ment by the company. (c) The only material found was share certificate issued by the com pany in the name of shareholders. (d) Some of the share certificates were not even of the company but were of Transpower Engg. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issues restored to the file of the Assessing Officer for fresh consideration. With these observations and directions, the appeal is considered allowed for statistical purposes. IT(SS) No. 162/Mum/2005 29. The Revenue has raised the following grounds : (1) On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in holding in para 45 of his order that the profits offered by the assessee on sale and lease back of non-genuine assets of ₹ 10,29,93,553 for the assessment year 1996-97 and ₹ 11,65,11,868 for the assessment year 1997-98 in the regular assessments should not form a part of the undisclosed income of the block period, without appreciating the facts of the case. (2) On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in para 55 of his order in deleting the addition of ₹ 27 crores, being the investment made by Oxcamb Investment Ltd. by admitting additional evidence from the assessee in violation of rule 46A of the Income-tax Rules, 1962 without appreciating the facts of the case. (3) On the facts and in the circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 lakhs, by admitting additional evidence from the assessee in violation of rule 46A of the Income-tax Rules, 1962, without appreciating the facts of the case. (11) On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in para 96 of his order in deleting payment of ₹ 18 lakhs, by admitting additional evidence from the assessee in violation of rule 46A of the Income-tax Rules, 1962 without appreciating the facts of the case. (12) On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in para 101 of his order in deleting the addition of ₹ 2,36,05,000 by admitting additional evidence from the assessee in violation of rule 46A of the Income-tax Rules, 1962, without appreciating the facts of the case. (13) On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in para 107 of his order in deleting the addition of ₹ 19.50 crores without appreciating the facts of the case. 29.1. As can be seen from the grounds raised the grievance of the Revenue is mainly on admission of additional evidence by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-existent assets in the course of search proceedings. The profits on account of the said transaction is entitled for deduction in the computation of the undisclosed income for the respective assessment years forming part of the block period. 30.3. Considering the rival contentions and the nature of transactions undertaken and consistent with the stand taken on these transactions we see no reason to interfere with the order of the Commissioner of Income- tax (Appeals). Such profits are to be excluded and the quantum of addition on account of bogus lease rent and depreciation has to be reduced by the bogus profits. The ground is rejected. 31. Ground No. 2 pertains to investment in shares and fixed assets of Oxcamb Investment P. Ltd. for the assessment year 1996-97 amounting to ₹ 27,00,00,000. 31.1. It was held by the Assessing Officer that Oxcamb Investment Ltd. (OIL) was a foreign company and OIL was a benami concern of the assessee. Investment in shares of REPL by OIL was treated as undisclosed income. the Assessing Officer however did not make any addition on the reason that large amount of cash was withdrawn from the account of M/s. Universal Moulders and Fabri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal in Appeal No. IT(SS)A 645/Mum/2004 vide pages 25 to 27. OIL, a company incorporated in Mauritius on March 1, 1995 had obtained a permission from RBI for purchase of shares from some of the shareholders of the company REPL which was granted by the RBI. The investment was made by the said OIL out of borrowings from Taib Bank, Bahrain. Therefore question of treating the investment as the assessee' s income that too as undisclosed does not arise. The ground is rejected. 32. Ground No. 3 pertains to deposit from Kamalkant Chotalal for the assessment year 1996-97 for ₹ 20,00,000. The Assessing Officer asked assessee to furnish copy of accounts of M/s. Kamalkant Chotalal Exporters Pvt. Ltd. and as the assessee failed to provide necessary evidence, the amount was treated as income. 32.1. It was submitted before the Commissioner of Income-tax (Appeals) that the said loose papers represent an ICD taken from Kamalkant Chotalal Exporters Ltd. The payment was made by account payee cheque, interest was also duly paid by account payee cheque and tax was deducted at source. Loan was taken against security by pledging the equity shares. A criminal case had been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in whose name authorisation of search has not been issued. Further as the authorised representative produced confirmation letter from the said companies that the payments are duly recorded in the books of the respective companies, he deleted the same. 33.3. Before us respective contentions were reiterated. Since it is also a fac tual issue which was examined by the learned Commissioner of Income- tax (Appeals), we do not see any reason to accept the Revenue' s ground and accordingly rejected. 34. Ground No. 5 pertains to alleged remittances from Oxcamb Investment Ltd. for the assessment year 1997-98 of ₹ 13,46,25,200. It was held by the Assessing Officer that the amount received from M/s. Oxcamb Investment Ltd. was utilised for the benefits of the assessee-company, which indicated that M/s. Oxcamb is benami concern of the assessee and the Assessing Officer treated the remittance as undisclosed income of the company. Before the learned Commissioner of Income-tax (Appeals) it was submitted that loose paper No. 42 is an undated working of details of receipts from M/s. Oxcamb Investment Ltd. which is registered and incorporated in Mauritius under proper and necessary ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period up to March 31, 1997, was ₹ 1,39,77,806 which was debited to the profit and loss account. The said loan in any case was used for the purposes of busi ness for repayment to various creditors of the company. The interest was duly considered in regular assessment for the assessment year 1997-98 and was allowed as a deduction by the Assessing Officer. Further, disallowance of a claim of interest recorded in regular books of account cannot be a subject-matter of block assessment. 35.2. It was held by the Commissioner of Income-tax (Appeals) that there is nothing to indicate that the documents reflect in any manner any element of profit embedded therein, inter alia, include IFCI loan of ₹ 12 crores under equipment credit scheme and certain other loan and their uti lisation. While the loan in itself cannot be the subject-matter of addition, the interest thereof has to be allowed. Therefore, on the basis of this, there cannot be addition to the undisclosed income of the assessee-company to the extent of ₹ 1,82,01,041. 35.3. Before us also the assessee reiterated the submissions made before the learned Commissioner of Income-tax (Appeals). Alternatively, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the assessee failed to produce necessary evidence and on that reason added the amount as undisclosed income. Before the Commissioner of Income-tax (Appeals) it was submitted that the said loose paper was a bill raised by ASIS Overseas P. Ltd. for rendering professional services for an amount of ₹ 5,69,400 only. The said bill was in respect of processing and procuring the advance licence for the company of the value of ₹ 5,80,30,000. ASIS had rendered their professional services for a remuneration of 3 per cent. of value of licence which came to ₹ 17,40,900. The said expenditure had been claimed as deduction in computing the total income for the assessment years 1996-97 and 1997-98 which expenditure has been allowed by the Assessing Officer. The said loose paper carried the identification and address of payee as also the telephone numbers and in case of doubt the Assessing Officer should have examined the payee and verified the correctness. The said payee was assessed to tax and has been taxed in respect of the receipt of professional fees. 37.1. The learned Commissioner of Income-tax (Appeals) held that it is evident that certain services were ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee failed to produce necessary evidence, the Assessing Officer made the addition. 39.3. Before the Commissioner of Income-tax (Appeals) it was held that the company had raised various ICD' s from other companies and individuals. Such deposits have been duly accounted for by the assessee-company in its regular books of account. Copies of account were filed in the course of the assessment proceedings. Since the entries were recorded, there is no case for making addition on this account to the undisclosed income. The learned Commissioner of Income-tax (Appeals) held that there is a merit in the claim considering the evidences produced. In the circumstances, there remains no basis for sustaining the addition. We uphold the order and reject the ground. 40. Ground No. 11 pertains to payment to Runners Corporation of ₹ 18,00,000. The Assessing Officer observed that the assessee failed to produce necessary evidence and on that reason made the addition. Before the Commissioner of Income-tax (Appeals) it was submitted that against the amount received from time to time, an amount of ₹ 18 lakhs was paid by cheque to them, vide No. 111390 dated July 31, 1997 drawn on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Commissioner of Income-tax (Appeals) as it is based on facts and correct appreciation of the documents. Ground is rejected. 42. Ground No. 13 pertains to the investment in immovable property. The Assessing Officer held that the assessee was asked to furnish complete details in response to show-cause notice dated September 28, 1999 failing which it was proposed to hold that these properties were in fact owned by the assessee in different names. Some of the properties are not prima facie appearing in the assessee' s books of account. All such properties were held to be benami properties of the assessee as no explanation regarding the identity of the party concerned and the source of acquisition has been furnished by the assessee. Individual cost of acquisition of each property was not made available by the assessee. In the absence of any explanation, the Assessing Officer added an amount of ₹ 20 crores as undisclosed part of the investment in acquiring the properties on estimated basis. 42.1. Before the Commissioner of Income-tax (Appeals) it was submitted that the said properties are the properties belonging to the company REPL or its related concerns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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