TMI Blog1998 (11) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 51,594 Rs. 87,594 1988-89 Rs. 48,962 Rs. 80,962 1989-90 Rs. 75,563 Rs. 1,16,563 1990-91 Rs. 80,461 Rs. 1,23,461 1991-92 Rs. 53,981 Rs. 31,95,984 1992-93 Rs. 60,851 Rs. 1,18,851 1993-94 Rs. 2,47,332 Rs. 2,87,332 1994-95 Rs. 12,71,400 Rs. 14,48,512 1995-96 Rs. 12,75,385 Rs. 17,74,129 1996-97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under : (i)That agreement (Annexure A-1), the most important evidence relating to undisclosed investment was recovered and seized from possession of Shri David Dhawan in search. (ii)The assessee, when confronted with unaccounted cash transaction of ₹ 31 lakhs did not give any satisfactory reply except stating that investment pertained to his sister-in-law, Mrs. Kiran Mohan. (iii)The assessee s wife stated that it was not their paper and she had nothing to do with that paper. (iv)No confirmation from Mrs. Kiran Mohan was furnished before the Investigation Wing in the course of search proceedings. (v)Mrs. Kiran Mohan in her statement recorded on 13-11-1997 stated that agreement of sale was not related to Dhawans and that she was planning to buy the properties at Bangalore. (vi)In her statement on 2-12-1997, Mrs. Pushpa Rawal admitted the document and her statement showed that version of Mrs. Kiran Mohan is fabricated and incorrect one and that she was trying to help her sister and brother-in-law. Mrs. Rawal also admitted that she had received ₹ 31 lakhs at the time of signing of agreement and that amount was spent on construction, although, Mrs. Kiran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice letter dated 5-1-1998 of the assessee filed before the Assessing Officer informing him that Mrs. Kiran Mohan had made a disclosure under the Voluntary Disclosure Scheme and disclosed the amount including ₹ 31 lakhs invested by her in Bangalore property. He accordingly argued that addition of ₹ 31 lakhs as undisclosed investment in the hands of the assessee was totally unjustified. The learned departmental representative on the other hand supported the impugned order. 5. On careful consideration of rival submissions, we find force in the submission advanced on behalf of the assessee. A copy of original agreement dated 29-2-1992 is available at pages 24 to 26 of paper book. The said agreement is entered into between Mrs. Pushpa Rawal and Mrs. Kiran Mohan, resident of M-16, Kailash Colony, New Delhi. The document also establishes receipt of ₹ 31 lakhs by Smt. Pushpa Rawal from Mrs. Kiran Mohan. The statement of the assessee and his wife recorded at the time of search under section 131 also confirm that property at Bangalore was purchased by Mrs. Kiran Mohan, who is sister of assessee s wife. Mrs. Pushpa Rawal in her statement dated 2-12-1996 had stated on oath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an is my wife s sister, and I have to consult her before giving answer to this question. So kindly give me some time. Q. No. 16. Do you want to say anything else ? Ans. No, please. No other question or suggestion was put to him. 5.3 The assessee s wife was asked the following questions :- Q. No. 5 After going through pages 45 to 48 of A/1 of the panchanama 18-12-1996, it is seen that the property papers of ₹ 31,00,000 in cash have been found from your residence. Under the Indian Evidence Act, the presumption is that the same belongs to you. It is presumed that it is benami property of yours, purchased by paying cash in the name of some Mrs. Kiran Mohan. What do you have to say about ? Ans. It is not our paper and I have nothing to do with the paper. Q. No. 6 What evidences and proof you have that this property papers do not belong to you ? Ans. I will arrange confirmation letter from the concerned parties i.e. Mrs. Kiran Mohan, who will claim the transactions in the said documents. Q. No. 7 As this does not answer my question and you have not given any proof or evidence for the above categorically, I am asking the same question i.e. Q. No. 6 above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the course of search and stated that he would have to ask Mrs. Kiran Mohan as to why document was left in his house. 8. The second circumstances is the vague statement of Mrs. Kiran Mohan. The relevant question put to her and her answer on agreement of sale and payment of amount is as under :- Q. No. 10. I am showing you pages 45 to 48 of Annexure A-1 seized from the residence of Mrs. David Dhawan. These pages are Agreement in respect of purchase of shops at Bangalore where you had paid a sum of ₹ 31,00,000 in cash to Mrs. Pushpa Rawal of M/s Mamdila Developers Pvt. Ltd. Please explain whether this investment was made by you and what was the sources of investment ? Whether this is reflected in your I.T. Returns. Please also explain how this Agreement pertaining to you was found at the residence of Shri David Dhawan ? Ans. The Agreement which you have shown me now which was found at the residence of Mr. Mrs. David Dhawan has no connectio with Mr. Mrs. David Dhawan. The said Agreement is not even registered at Bangalore. In fact the pages are just Memorandum of Understanding. I was planning to buy this property at Bangalore for which two copies of the said MOU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances referred to above. We shall first take up the second and the third circumstances. We agreed with the revenue that Mrs. Mohan s statement that original agreement was cancelled and destroyed is not correct and is contrary to documentary and other oral evidence brought on record. But other part of her statement that Mr. Mrs. David Dhawan have no connection with the document is fully corroborated with other materials on record and has to be accepted. There is no justification to reject this part of the statement. Further, she never denied execution of the document and it is not correct to infer that she denied payment of consideration. At any rate, after considering entire material, it is difficult to infer that Mrs. Kiran Mohan is benamidar of the assessee. On the facts of the case, there is no reason to reject the statement on oath of Mrs. Pushpa Rawal who admitted having sold the property to Mrs. Kiran Mohan and having received consideration from her. It is also difficult to hold that Mrs. Kiran Mohan had no money to make investment as reflected in the agreement of sale. The certificate issued under the Voluntary Disclosure of Income Scheme, 1997 is good proof to hold that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... membership fees paid is a permissible deduction. That apart, there is no scope to make addition under section 158BC of IT Act. We, therefore, see no justification for upholding addition of ₹ 2,50,000. The same is directed to be deleted. 15. In the next ground of appeal, the assessee has challenged addition of ₹ 4 lakhs made on account of low household withdrawals. The Assessing Officer examined the figures of withdrawals made from year to year between assessment years 1987-88 to 1997-98 by the assessee and his wife and held that these were too low. According to the Assessing Officer, the film career of the assessee started in the year 1980s and he had never to look back thereafter. All modern amenities were being used by the assessee and his family standard could not be sustained on the withdrawals shown by the assessee. 16. The learned counsel for the assessee has challenged the addition as based on no material. According to him, there is no material on record to show that any undisclosed funds were utilised for meeting household expenses. The learned departmental representative supported the impugned order of the Assessing Officer. 17. On careful consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has challenged the addition of ₹ 3,91,650 under section 28(iv) of the Income-tax Act. 21. The assessee has been directing many foreign shows held by film fare and other film groups and industrialists. On many of such foreign trips, the assessee takes his wife and children along. The expenditure incurred on wife and children has been taken as income from profession falling under section 28(iv) of the Income-tax Act. 22. The learned counsel for the assessee explained that the assessee is a diabetic patient and is suffering from number of diseases. The job of direction and organisation of shows abroad is strenuous and, therefore, the assessee cannot carry on alone in foreign land without his wife and children looking after him. Therefore, children accompany the assessee on some shows not for pleasure trip, but a matter of necessity. At any rate, the question whether provision of section 28(iv) is applicable to expenditure incurred on assessee s wife and children could not be considered in proceedings to determine undisclosed income. 23. We find force in above submission advanced by the learned counsel for the assessee and hold that income could not be add ..... X X X X Extracts X X X X X X X X Extracts X X X X
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