TMI Blog2015 (11) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... ernatively, it was proposed that the assessee can be assessed under section 41(1) of the Act for the cessation of liability. The assessee did not respond to the proposal. As such, the Assessing Officer included the sum as the undisclosed income of the assessee for the assessment year 1996-97 in the light of the definition of undisclosed income contained in section 158B(b) of the Act. No particular argument was advanced in his regard at the time of hearing. Order was contested on the ground of opportunity. Having heard both the parties and after perusing the records, we uphold the order of the Assessing Officer on this count. - Decided against assessee. Advance paid to Mr. Vivek treated as undisclosed income - Held that:- We find there is no entry with regard to advance to Mr. Vivek in the cash flow statement. Being so, we consider this amount as undisclosed income of the assessee. Accordingly, this ground of the appeal of the assessee is rejected.- Decided against assessee Fixed deposits in Canara bank treated as undisclosed income - Held that:- There are entries for E65,000/- for the assessment year 1987-88 and E1,00,000/-for the assessment year 1992-93. Being so, we direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has explained this expenditure and accordingly, this addition is deleted. This ground of the appeal of the assessee is allowed.- Decided against revenue Investment in Tamilarasi which was treated as undisclosed income - Held that:- This amount of E52,500/- was reflected in the cash flow statement for the year ended 31.03.1992. Being so, the addition cannot be made. Hence, we delete the addition made by the Assessing Officer. Accordingly, this ground of the appeal of the assessee is allowed. - Decided against revenue Purchase of land at Thanjavur treated as undisclosed income - Held that:- These amounts reflected in the cash flow statement at E1,24,000/-as on 31.3.1992 and E89,000/- as on 31.03.1993. Being so, the additions are deleted as the assessee has explained the investments. This ground of the appeal of the assessee are allowed.- Decided against revenue Interest suspense account - Held that:- The assessee has not furnished the details of these expenditure. In our opinion, whenever assessee claimed an expenditure it should be incurred wholly and exclusively for the purpose of business. In the absence of any evidence to substantiate this expenditure, we decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HRI V. DURGA RAO, JUDICIAL MEMBER For The Appellant : Shri. T. Vasudevan, Advocate For The Respondent : Shri. Pathlaveth Priya, IRS, CIT ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order of the DCIT, Central Circle II(4) (i/c), Chennai dated 28.02.2013. 2. The assessee has raised the following grounds:- (1) The learned Assessing Officer erred in treating 85% of the subscribers deposits of E1,47,86,860/- as the assessee s undisclosed income. (2) The learned Assessing Officer erred in making the disallowances/additions while computing the total undisclosed income of the block period. 1 Purchase of newsprint from capital market : 7,50,000/- 2 Advance to Vivek : 1,50,000/- 3 FD with Canara Bank : 1,65,000/- 4 Difference in cost of construction : 5,19,000/- 5 Personal expenses : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Depreciation disallowed : 4,60,000/- g. Donation : 1,500/- h. Disallowance under sec. 40A(3) : 1,33,365/- i. Scan Tech u/s.41(1) : 67,055/- 17 Unexplained investment in jewellery : 2,00,000/- 18 Foreign tour expenses : 31,42,000/- (3) The learned Assessing Officer erred in treating the amounts as undisclosed income of the assessee for the block period asst. years 1987-88 to 1997-98 (upto 24.09.1996). Further the ld. Authorised Representative for assessee filed additional grounds before us and also petition for admission of additional grounds as under:- Additional Grounds of Appeal 1. The order of the officer is not in accordance with the provisions of sec.158BG of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified by them or not specified by them, the Tribunal for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced . Further, whatever rule is applicable for filing the appeal before the Tribunal is also applicable for filing additional grounds. Thus sec. 253(6) of the Act prescribes that appeal to the Tribunal shall be filed in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made, on or after the 1st day of October, 1998 irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of :- a) where the total income of the assessee as computed by the Assessing Officer, in the case to which the appeal relates, is one hundred thousand rupees or less, five hundred rupees, (b) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than one hundred thousand rupees but not more than two hundred thousand rupees, one thousand five hundred rupees, (c) where the total income of the assessee, computed as afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he old Act, it was specifically provided that the words in like manner appearing in subsection (2) of section 35 in relation to sub-section (1) of section 35 are not sufficient to apprehend the Authorised Representative of the Income-tax Department. It is noted that the ld. Authorised Representative for assessee have no power to sign any appeals, Co-objections, grounds and additional grounds before the Tribunal. He is authorized only to argue the case. He is not competent to sign the appeals, Co-objections, grounds and additional grounds before the Tribunal as per the provisions of the Act. As per section 140 of the Income Tax Act, the following person could sign the appeals, co-objections, grounds and additional grounds before the Tribunal. a) in the case of an individual, (i) by the individual himself; (ii) where the individual is absent from India, by the individual concerned or by some person duly authorised by him in this behalf; and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf; (iii) where he is mentally incapacitated from attending to his affairs, by his guard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, by any member of the association or the principal officer thereof; and (f) in the case of any other person, by that person or by some person competent to act on his behalf. The procedure for filing of additional grounds is at par with the filing of appeal and the rules framed under ITAT Rules for filing of appeal will also apply to additional ground also. The IT Rules, 1962, prescribes an appeal shall be in form No.36 and the form gives the required verification portion. It is also prescribed in Rule 47 that memorandum and the grounds of appeal as also the verification portion shall be signed by the assessee as prescribed under Rule 45(2). If the entire provisions of the IT Act, 1961, IT Rules, 1962 and ITAT Rules, 1963, are read together it clearly emerges that an application for admission of addition grounds in this case can be filed either by the assessee or the Assessing Officer, as the case may be. If additional ground filed before the Tribunal by the assessee or the Assessing Officer, the same can be considered, subject to the provisions of law. The only interested persons in the result can file the additional ground and the Tribunal has to act on representation m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices were issued u/s. 142(1) of the Income-tax Act calling for certain particulars. On his request, the assessee was also permitted to take copies of seized materials. Finally on 05.09.97, the assessee filed his return of income in Form No. 2B in compliance with the notice u/s. 158 BC. In the return he admitted a total undisclosed income of E3,80,000. Subsequently notice u/s 143(2) was issued on 09.09.1997. In response to this notice u /s.143(2) and other notices, assessee s representative appeared and filed some of the details called for. After hearing the assessee s representative and after going through the books of account, seized documents, statements, letters etc. filed by the assessee and on behalf of the assessee and also relying on the Special Audit Report u/s 142(2A) furnished by Shri. K. Venkataraman, FCA of M/s. Murali and Associates, the total income for the A.Ys.1987-88 to 1997-98 (up to 24.09.1996) comprised in the block period was computed vide Order u/s 143(3) r.w. Sections 158BC, passed on 13/03/1998, determining the total undisclosed income at E3,77,41,760/-. 4.1 Against this order, the assessee preferred an appeal to the ITAT and the ITAT vide its order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was passed by Assessing Officer within the three months time limit from the date of receipt of the order by Assessing Officer as directed by the High Court. During the course of this High Court remand proceedings before Assessing Officer, the assessee furnished further details only on the issue of Subscribers deposit. 4.3 The assessee commenced his business of Tamilarasi Publication during the previous year relevant to assessment year 1993-94. During the previous year relevant to assessment year 1994-95 there was credit balance in the subscription deposit account of E70,32,500/-, which went up to E1,47,86,860/- for the year ending 31.03.1995. It was set to be received from 6000 parties ranging from E1,500/- to E2,500/- for which one of the magazines were given free of cost as along as deposit was not withdrawn, who has given E2,500/- two magazines were given free of cost. This deposits will not bear any interested and the assessee was asked to explain from whom it had received the deposits. Further, there was reference to the Special Audit u/s.142(2A) of the Act, and the report of the Special Auditor is as under:- 3.1 These deposits said to have been received from various va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-(24.2.96) 2,00,000/-(24.2.96) 8,38,800 17,74,500 3.5 We understand that these subscribers (who have paid deposits from various locations) are sent with the weekly/fortnightly copies of Tamilarasi Puthiaparvai by means of lorries/its own van etc. However, this statement could not be corroborated by any documents and no such despatches appear to have taken place at all. This is in view of our below mentioned findings in respect of despatches of both Tamilarasi ( weekly) and Puthiaparvai (fortnightly) to the Agents/subscribers. Kept and maintained by the publications as to date. i). The publication has been dispatching the magazines both by Rail and Book post (duly evidenced by the Despatch Register/Railway Acknowledgements /Postal expenses for Book Post etc. ii). None of the Vasagar Vattams appear to have been included In the Despatch Summary/Register in evidence of despatches. iii). In the absence of any supporting evidences for despatches to Vasagar Vattams (though stated to have been sent by lorries/their own vans). We could not check/verify such despatches at all. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posits have been returned. There is no correspondence also in this regard in the nature of request from the depositors for return of the deposits. 4.5 The information collected by the auditor with regard to the dispatch of the magazines to these alleged depositors is also quite revealing. The special auditor has reported that there is absolutely no evidence for dispatch of the magazines to these alleged subscribers. He has enclosed the manuscript copy of the details of the despatches effected in November, 1997. As per this manuscript. 6027 copies have been dispatched but none of it is for the alleged depositors. The details of despatches furnished by the Special auditor are as under: Central : 1853 Egmore : 1785 City Agent : 750 H.B. Stall : 215 Postal : 377 Free copies : 100 Office copies : 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntical printed letters in identically addressed envelops were received in Assessing Officer in various names confirming the deposit of E. 2500/- made by them to the assessee for the supply of the 2 magazines. Obviously, these letters were filed at the instance of the assessee, since no letters had been addressed to these persons by this office. Again out of these letters a few at random were chosen by the then Assessing Officer for making enquiries. Since the letters have come from various places, like Madurai, Dindugal, Vellore, Palani etc. the local officers of Income Tax Department in these places were requested to make enquiries about the genuineness of the letters and also to ascertain whether such persons were in receipt of the magazines. Here also, the enquiries revealed that these persons in whose names letters were received are not real and genuine depositors. Everyone of them who were contacted by the officers of the department denied having made any deposit. They also denied knowledge about the magazine. Enquiries made at Namakkal revealed that Mr. Chandrasekar who is a lecturer in Ramakrishna Nallammai Industrial Training Institute, had obtained lot of letters signed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ically the seized document no. RLN/ B 0/17 18 containing the stereo typed letters confirming the Deposit. Annexure I contains name of the persons where letters were returned unserved . Annexure II contains names of the persons where deposits were denied. Annexure III contains a mix of both types, namely where the letters could not be served and where the deposits were denied. In the remand proceedings, the assessee contended that letters sent to many cases were returned unserved because of incomplete address and also due to the fact that many of them have shifted their residences. During the course of hearings on different dates before Assessing Officer, the assessee filed the present address of some of these persons. He also filed affidavits from these persons to the effect that they have indeed subscribed to the two magazines by depositing life-term membership fee of E2,500/-. The assessee also filed the Id. proof and the address proof of these persons. After these were filed by the assessee, vide our letter dated 12.02.2013 before Assessing Officer, the assessee was directed to produce all the persons mentioned in his earlier letters, for personal examination by the under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n they had denied having made any such deposit. One person by name Sri. Govindaraj, Kurugulam, Melappti, Tanjore District, has given a blatantly wrong statement answering in two different places that he is receiving the magazine from 1954 onwards whereas the publication itself is started only in 1992 or so. Therefore his statement is ignored as not reliable even though he insisted that he is receiving the magazine. Thus, out of total 9 persons produced by the assessee, only 6 have satisfactorily confirmed that they have indeed subscribed to the magazines. To summarize, out of about 100 persons to whom letters were issued as brought out in the original assessment order, at that time only 8 persons have confirmed having deposited the money as seen from in para 4.20 of the assessment order dated 1303.1998. Now, during the remand proceedings, a further 6 persons only have confirmed having deposited the money. In respect of others the assessee was neither able to get the current address nor he could produce them for personal verification. In fact the assessee vide his letter dt. 19/02/2013 has admitted that he has taken copy of application of subscriber deposit in respect of more than 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had not given accepted to have participated in the deposit scheme of assessee. It was submitted that the enquiry launched after a lapse of time would normally be at variance since many distancing themselves. Further, the details of responses were also not available to assessee to counter the negative statement of those persons. The assessee had in fact filed confirmation letters as to participation in the deposit scheme from substantial number of persons and the Assessing Officer had not given due cognizance to them. There was no basis for the Assessing Officer to reject the overwhelming evidence produced by the assessee as to the publication of the magazines and distribution to its subscribers and merely rely on some unserved letters and subject to addition the majority of the subscriber deposits collected as unexplained. The very fact that the Assessing Officer allowed 15% of deposits only reveals that the rejection of the remaining deposits on an estimated basis was only arbitrary and based on surmises and conjectures. In a block assessment, the Assessing Officer should have seen that there is no scope or estimated additions and disallowances. Having accepted the scheme in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case and in the interest of justice, we set aside the matter to the file of the Assessing Officer with direction to decided the issue in dispute after re-investigation in respect of 41 persons only and after giving reasonable opportunity of being heard. Accordingly, the assesee s appeals on this issue is allowed for statistical purposes. Since, w have set aside identical issue in the assessee s appeal. The Revenue s appeals are dismissed. In the present case, the Assessing Officer had given ample of opportunity at various level to prove the genuineness of the deposits. Inspite of this, the assessee failed to prove the genuineness of the deposits. In our opinion, no useful purpose will be served by remitting the issue back to the file of the Assessing Officer for fresh consideration. Hence, the order of the Assessing Officer is confirmed. This ground of the appeal of the assessee is rejected. 6. The next ground raised by the assessee is with regard to disallowance made by the Assessing Officer treating purchase of newsprint from capital market as undisclosed income of the assessee . 6.1 The facts of the assessee are that for the year ended 31.3.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that the paper was returned to M/s. Capital Market through one Mr. L. Raju.L-33. Raj Bhawan Colony, Check Post,Chennai-42. He has also enclosed copy of letter dated 26.8.95 purported to be from the said Mr. Raju. However it is stated that Mr.Raju is not authorized by M/s. Capital market to receive the stock on their behalf and hence the claim made by the assessee regarding the return of stock cannot be accepted as genuine. Further, the assessee has also not proved with reference his stock records and other records (such as incidental expenditure incurred etc.) that the stock was in fact returned. On the merit of the addition u/s.28(iv) assessee s representative stated that benefit or perquisite presupposes consensus ad idem or identity of mind between the parties and since this is not there in the given situation assessee is not liable for being taxed on this. The Assessing Officer do not agree with this contention. For taxing a benefit it was not necessary to have an agreement between the parties. What is to be seen is whether the assessee has received a benefit with or without the agreement or consent from the other party. In this case if the claim regarding return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Capital Market. Enquires were made with M/s. Capital Market regarding this transaction. In their letter dated 25.02.1998 M/s. Capital Market while confirming the delivery of newsprint to the assessee on 21.07.1994 denied having received back the newsprint on 26.08.1995. It was made clear that M/s. Capital Market did not receive the newsprint or its cash equivalent of E7.5 lakhs. It was categorically stated by M/s. Capital Market that they have never got back either 24.5 tons of newsprint given to Tamilarasi Publication for performing certain job work or the cost of the newsprint. From this the Assessing Officer concluded that the assessee did not propose to return the stock. Since the stock appeared to have been used by the assessee himself or it was lying in stock with him, the assessee derived benefit from this business. Such benefit needs to be made eligible to tax within the meaning of section 28(i). Alternatively, it was proposed that the assessee can be assessed under section 41(1) of the Act for the cessation of liability. The assessee did not respond to the proposal. As such, the Assessing Officer included the sum as the undisclosed income of the assessee for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 2.9.1997 which was in continuation of his reply dated 7.8.1997, the assessee stated that this deposit would be explained in the cash flow statement which is being submitted. The cash flow statement has already been discussed and rejected as unreliable. It was therefore obvious that there was explanation regarding the source for this deposit. The Assessing Officer treated this amount as undisclosed income to the assessee. Against this, the assessee preferred a appeal before us. 8.2 The ld. Authorised Representative for assessee submitted that sources for the fixed deposits is traceable to the cash flow statement filed by the assessee. The Assessing Officer s mere summary rejection of it cannot be a ground to hold that the amount invested is the undisclosed investment of the assessee. 8.3 The ld. Departmental Representative relied on the order of the Assessing Officer. 8.4. We have heard both the parties and gone through the cash flow statement. There are entries for E65,000/- for the assessment year 1987-88 and E1,00,000/-for the assessment year 1992-93. Being so, we direct the Assessing Officer to give due credit to the tune of E1,65,000/- only. This ground of the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be applied. It was judicially noticed that the difference in rates would be 15% and also a margin of 10% to be given for self-supervision vide Abdul Rahim vs ITO 258 ITR 714 (Mad HC), CIT vs. Gajalakshmi 331 ITR 216 (Mad. HC). If these aspects are considered then the cost of construction returned by the assessee is correct and needs to be accepted. Further, the board in its Circular No.96 dated 25.12.1972 while explaining the newly inserted sec 55A has accepted that 15% difference is acceptable margin between the cost determined by the officer and that returned by the assessee. The circular was applied by the ITAT, in the case of Rm. Chinniah vs. ITO in ITA No.2035/2006 vide order dated 8.8.2008 and dismissed the department appeal. In this case, the margin of difference is 10.4% and hence the returned cost may kindly be accepted. 9.3 The ld. Departmental Representative relied on the orders of the Assessing Officer. 9.4. We have heard both the parties and perused the material on record. The addition is made only based on the DVO report and the variation between the amount shown by the assessee for construction and the DVO report which is less than 10.4% and there is no seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. A mere summary rejection of it cannot be a ground to hold that the amount invested is the undisclosed investment of the assessee. 10.3. The ld. Departmental Representative relied on the orders of the Assessing Officer. 10.4. We have heard both the parties and perused the material on record. The addition is only based on estimation and there is no seized material available on record to suggest the personal expenses. Being so, we delete the addition made by the Assessing Officer on this count. This ground of the appeal of the assessee is allowed. 11. The next ground raised by the assessee is with regard to purchase of E2,15,000/- as household articles which was treated as undisclosed income by the Assessing Officer. 11.1 The facts of the case are that during the course of search the assessee was found to be in possession the following household articles: 1. Soni Colour TV26 : 1No. 2. Soni Colour TV24 : 1No. 3. Soni Colour TV18 : 1No. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the course of search as to the unexplained nature of expenditure or investment. The assessee has shown drawings in the cash flow as well as the years in which the regular returns were filed. A mere summary rejection of it cannot be a ground to hold that the amount invested is the undisclosed investment of the assessee. 11.3 The ld. Departmental Representative relied on the orders of the Assessing Officer. 11.4 We have heard both the parties and perused the material on record. There is no seized material found during the course of search suggesting this addition. The addition is made only on estimation basis hoping that they were purchased during the course of block period. The assessee is being a senior person having means to purchase these articles from known sources as there is no evidence to suggest that it has acquired from unaccounted income of the assessee. Accordingly, this addition is deleted. This ground of the appeal of the assessee is allowed. 12. The next ground raised by the assessee is with regard to E28,53,778/-deposits in Canara bank for the assessment years 1991-92, 1992-93, 1993-94, 1994-95, 1995-96 and 1996-97. 12.1 The facts of the the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is dismissed. 13. The next ground raised by the assessee is with regard to investment of E1,00,000/- for the assessment year 1991-92. 13.1 The facts of the issue are that the assessee made an investment of E1 lakh in Unit Trust of India during the assessment year 1991-92. The assessee was asked to explain the source for the investment. The assessee submitted the cash flow statement which has been rejected by the Assessing Officer. Therefore, the Assessing Officer treated E1,00,000/- as undisclosed income of the assessee. 13.2 The ld. Authorised Representative for assessee submitted that the source for the UTI investment of E1,00,000/- is traceable in the cash flow statement filed by the assessee. A mere summary rejection of it cannot be a ground to hold that the amount investment is the undisclosed income of the assessee. 13.3 The ld. Departmental Representative relied on the orders of the Assessing Officer. 13.4 We have heard both the parties and perused the material on record. This amount of E1,00,000/- was reflected in the cash flow statement for the year ending 31.03.1991. Accordingly, this ground of the appeal of the assessee is allowed. 14. The next groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has not explained the source. Hence, the Assessing Officer treated E52,500/- as undisclosed income of the assessee. 15.2 The ld. Authorised Representative for assessee submitted the explanation is given regarding source of fund in the cash flow statement. The reason given by the Assessing Officer to discredit the cash flow statement is arbitrary and merely based on surmises. 15.3 The ld. Departmental Representative relied on the orders of the Assessing Officer. 15.4 We have heard both the parties and perused the material on record. This amount of E52,500/- was reflected in the cash flow statement for the year ended 31.03.1992. Being so, the addition cannot be made. Hence, we delete the addition made by the Assessing Officer. Accordingly, this ground of the appeal of the assessee is allowed. 16. The next ground raised by the assessee is with regard to purchase of land at Thanjavur for E2,13,000/- which was treated as undisclosed income by the Assessing Officer. 16.1 The facts of the case are that the assessee purchased a land on 10.2.92 and 10.05.1992 in Parisutham Nagar, Thanjavoor at an admitted cost of E1,24,000/- and E89,000/- for the assessment years 1992-93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a credit of E4,23,460/-under the head interest suspense. The details in respect of the same was not furnished by the assessee, though the department has called for the same vide letter dated 25.02.1998. Therefore, the Assessing Officer treated E4,23,460/- as undisclosed income of the assessee. Against this, the assessee is in appeal before us. 18.2 The ld. Authorised Representative for assessee submitted that there was actually a debit balance in the books of the assessee. The assessee has claimed deduction in respect of proportionate amount for two assessment years as an expenditure. The Assessing Officer went wrong in not allowing the deduction but also erroneously treated this is as a credit balance and made the addition. 18.3 The ld. Departmental Representative relied on the orders of the Assessing Officer. 18.4 We have heard both the parties and perused the material on record. The assessee has not furnished the details of these expenditure. In our opinion, whenever assessee claimed an expenditure it should be incurred wholly and exclusively for the purpose of business. In the absence of any evidence to substantiate this expenditure, we decline to appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no evidence regarding the repayment of these loans by these individuals the credits in their accounts are treated as assessee s undisclosed income. Against this, the assessee is in appeal before us. 19.2 The ld. Authorised Representative for assessee submitted that confirmations letters from these parties and the Assessing Officer treated these credits as not genuine without any sort of examination of the parties concerned. The onus cast on the assessee of proving the credits was discharged by way of filing confirmation from the parties. It was within the powers of the Assessing Officer to summon them and examine the creditors which the Assessing Officer does not chose to do. The parties are regular financiers and the Assessing Officer could have caused their examination before treating the credits as unexplained. Under these circumstances, the rejection of the explanation and addition of the amounts are unexplained credits may be deleted. That apart, these credits figure in the books of Tamilarasi publications and the examination/addition of these credits would fall for consideration in regular assessment and cannot be considered in block assessment u/s.153BC. 19.3 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995 375 16.1.1995 626 18.1.1995 1260 27.1.1995 153.02 The assessee has not adduced any evidence such as copies of hospital bills etc. to show that the expenditure was incurred on Mr. Thomas Yip and that the payment was in fact made by Mr.Thomas Yip. No details of source such as debit to a bank account of Mr. Thomas Yip etc., have been furnished to substantiate the claim that the payment was in fact made by Thomas Yip. No details of source such as debits to a bank account of Mr.Thomas Yip etc have been furnished to substantive the claim that Mr. Yip made the payment. Further, if it was to be believed that Mr. Yip suddenly fell ill and the assessee helped him in hospitalisation. It was not understandable a to why the amounts were debited to the assessee s account and that too spread over a period of 02 months or so. The Assessing Officer not satisfied that the source of this payment from Thomas Yip. Therefore, the payment of US$5642/- (equivalent Indian money E1,80,262/-) was treated as assessee s expenditure from unexplained source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following items are not supported by bills/ vouchers (a) Moulis Advertising : Rs.2,00,000/- (b) C.C. Display : Rs.45,000/- (c) Advertisement exp. Display : Rs.18,000/- (d) Moulis Advertising : Rs.2,26,341/- (e) 2 publications : Rs.3,00,000/- (f) C C Display expenses : Rs.45,000/- (g) Dhina Thanthi : Rs.45,000/- (h) Excellent 2 publicities : Rs.4,30,642/- Total Rs.13,09,983/- The Department vide letter dated 25.2.1998 the assessee was asked to prove these details towards advertisement in the light of the observations made by the Special Auditor. The case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. 21.5 With regard to Preliminary expenses of E8,947/- which was treated as undisclosed income by the Assessing Officer, the facts of the case are that the assessee debited E8,947/- as preliminary expenses. By its very description the Assessing Officer considered the amount has not allowable. So, he treated E8,947/- as undisclosed income of the assessee. 21.6 With regard to depreciation disallowed to the tune of E4,60,000/-which was treated as undisclosed income by the Assessing Officer, the facts of the case are that the assessee had claimed depreciation of E30,26,551/-. One of the machineries viz WEB offset press model mark 62 is purchased for E48,40,956/-. Out of this consideration the assessee has not paid a sum of E2,06,794/- . During the course of discussion with the ld. Authorised Representative for assessee it transpired that this liability is not proposed to be paid off. In view of this, the amount of E2,06,794/- is reduced from the block of assets and the deprecation at 25% is disallowed, which works out E51,699/-, Apart from this, sale of a van was wrongly credited to sales a/c. in the books of Tamilarasi Publications. This mistake was pointed out by the ld. Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se grounds are remitted back to the file of the Assessing Officer for fresh consideration. This grounds of the appeal of the assessee are partly allowed for statistical purposes. 22. The next ground raised by the assessee is with regard to investment in jewellery to the tune of E2,00,00/- which was treated as undisclosed income by the Assessing Officer. 22.1 The facts of the case are that the assessee stated that he owns jewellery worth of E2,00,000/- as on 31.12.1995. The department vide letter dated 02.07.1997 directed the assessee to furnish a list of jewels owned by him together with his explanation regarding the source of its acquisition. However, the assessee has not furnished the details till date. Hence, the Assessing Officer treated E2,00,000/- as unexplained investment of the assessee for the year ending 31.03.1996 and accordingly assessed the investment as undisclosed income. 22.2 The ld. Authorised Representative for assessee submitted that the possession of jewellery was explained in the net wealth statement of the assessee. Further, the source is available in the cash flow statement filed by the assessee. A summary rejection of the cash flow by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich, Dubai and Singapore 12days. The Assessing Officer estimated the expense for 62 days at 5,000 per days, the expense comes to E3,10,000/- and the cost of ticket for two trips is taken at E2,00,000/-. The total foreign tour expenses taken at E6,10,000/-. The assessee undertook foreign trips to Frankfurt, London from 23.04.1992 for 09 days and to Singapore from 23.05.92 for 5 days, Singapore and Malaysia from 13.11.92 for 16 days. The Assessing Officer estimated the expense for 30 days at 5,000 per days, the expense comes to E1,50,000/- and the cost of ticket for three trips is taken at E4,00,000/-. The total foreign tour expenses taken at E6,10,000/-. For the assessment years 1993-94, the assessee s total foreign tour expenses is E5,50,000/- , for the assessment years 1995-96, the assessee s total foreign tour expenses is E7,52,000/- and for the assessment years 1996-97, the assessee s total foreign tour expenses is E10,10,000/-. The Assessing Officer treated the amount as undisclosed income of the assessee. Against this, the assessee is in appeal before us. 23.2 The ld. Authorised Representative for assessee that in the scheme of block assessment there is no scope of estimati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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