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TMI Blog2014 (9) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of Rs.,77,156/- on account of undisclosed interest received from M/s Brinsar India Pvt. Ltd. and M/s Brinsar Foods Pvt. Ltd.; and vi) Addition on account of unexplained investment in jewellery at Rs. 1.56.446/-. 2. It is prayed that the order of the Ld.CIT(A) be cancelled and that of the Assessing Officer may be restored. 3. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard or disposed off." 3. The Brief facts of the case are that search and seizure operations were carried out at the residential premises of the assessee on 20.7.2000. The search and seizure operations were carried out by the Income Tax Department named 'operation gentleman' and the warrants of authorization were issued in the names of various cricket players, their associates and the bookies who were involved in betting and match fixing. Shri Ramesh Nikhanj was the brother of Shri Kapil Dev and his premises alongwith the concerns of his brothers were also searched. During the course of search and seizure operation at this residence House No.268, Sector 9-C, Chandigarh, certain incriminating documents were found, which related to various expenses and income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee. 6. The CIT (Appeals) deleted the said addition. 7. The contention of the learned D.R. for the Revenue was that in view of the description of the documents wherein the entries were made in the hands of the assessee and even the total figure of Rs. 6,25,700/- has been mentioned at page 4 of Annexure A-7. The said addition is warranted for the block period. 8. The learned A.R. for the assessee placed reliance on the order of the CIT (Appeals). 9. We have heard the rival contentions and perused the record. Under the provisions of section 158BC of the Act the un-disclosed income for the block period in the hands of the person searched is to be based on the evidence found during the course of search. In the case of the assessee a diary marked as Annexure A-7 was seized from the premises of the assessee and the said diary contained notings of various expenditure of various shoguns/gifts given to the near relatives of the son-in-law of the assessee. The assessee has totaled the said expenditure at page 4 of Annexure A-7 at Rs. 6,25,700/-. The assessee , however, claimed that the same were proposed expenditure. We find no merit in the plea of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) where the evidence in the form of invoices were found from the possession of the assessee and also in view of the fact that the marriage of the daughter of the assessee had been solemnized at Ahmedabad. The assessee in his statement had admitted that he and his relatives had traveled by air from Delhi to Ahmedabad for solemnizing the marriage of his daughter. Accordingly, we confirm the addition of Rs. 29,841/- made on the basis of the evidence/invoices found during the course of search. 13. The next addition made as per para 4.4 of the assessment order was on account of expenses on pre-marriage dinner at Chandigarh. As per page 12 of Annexure A-10 seized from the residence of the assessee contained a material list given by Kirpal Catering Agency for the function held on 20.2.2000. As per the said list, the number of estimated guests was about 300. However, the assessee admitted that only 150 persons attended the dinner at his residence. The Assessing Officer in view of the list found estimated the expenditure @ Rs. 250/- per head and made addition of Rs. 75,000 plus estimated addition of Rs. 25,000/- on other arrangements like tent, lighting, etc. Thus an addition of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom hotel West End at Ahemedabad for the period 4.3.2000 to 10.3.2000 an expenditure of Rs. 21,097/- was incurred. The assessee could not substantiate this expenditure and accepted the claim that these were part of the marriage expenditure. Hence the addition of Rs. 21,097/- was made in the hands of the assessee, which was deleted by the CIT (Appeals). 17. Once the evidence of having incurred the expenditure has been found from the possession of the assessee and in the absence of any explanation as to the source of expenditure, the same constitute undisclosed income in the hands of the assessee. Accordingly, we confirm the addition of Rs. 21,097/- and reverse the order of the CIT (Appeals) in this regard. 18. The next expenditure considered by the Assessing Officer vide paras 4.8 and 4.9 of the assessment order were on account of marriage expenses at Ahmedabad and other miscellaneous expenses. The Assessing Officer in view of the marriage ceremony being solemnized at Ahmedabad and in view of the statement of the assessee that 150 persons had attended the function at Ahmedabad, in the absence of any hotel bills and other receipts estimated the expenditure at Rs. 1 lac. Further t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the authorities below has failed to furnish any details of the said receipts of shaguns and in the absence of the same, the differential amount of Rs. 1,84,65-/- is treated deemed income of the assessee. The ground of appeal No.1(i) raised by the Revenue is partly allowed. 21. The ground of appeal raised by the Revenue No.1(ii) is against the deletion of addition on account of un-explained household expenses at Rs. 11,06,285/-. The Assessing Officer vide para 5 had estimated the household expenses of the assessee for the last 10 years on the basis of few telephone bills and electricity bills found from the premises of the assessee. The assessee, on the other hand, claimed that he alongwith his family members had made withdrawals of Rs. 4,24,000/- during the period 1.4.1996 to 31.3.2000. The Assessing Officer rejecting the claim of the assessee estimated the annual average amount of un-explained household expenses and made an addition of Rs. 10,64,300/- + Rs. 37,900/- = Rs. 11,06,285/-. The said addition was deleted by the CIT (Appeals) as no evidence or any material was found to establish that the assessee had incurred the said expenditure. We are in conformity with the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92. During the course of search, certain papers containing page Nos.1 to 6 and 11 to 16 of Annexure A-8 were seized from the residence, which contained details of banks through which the gifts amounts were transferred to the assessee alongwith the gifts letters. The plea of the assessee was that the amount was received through banking channel and duly reflected in the books of account. In the absence of any documentary evidence, the assessee was show caused to prove the identity and creditworthiness of the persons, who had gifted the amounts. The assessee was unable to prove the same except for pointing out that the relevant documents were available as part of the seized documents. The Assessing Officer thus made an addition of Rs. 5,83,600/-, which was deleted by the CIT (Appeals). 24. The assessee before us had failed to bring on record any evidence to prove any evidence of relation with the said persons or the occasion on which the said gifts were given to the assessee. In the absence of the same and as the assessee had failed to prove the identity and creditworthiness of the said persons, we uphold the addition of Rs. 5,83,600/-. The ground of appeal No.1(iv) raised by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins unaccounted or undisclosed. The AOP consisted of the assessee and Shri Romesh Nikhanj which carries on the business of money lending and no regular books of account were maintained. However, on the basis of documents found during the course of search, the said AOP had made a disclosure of Rs. 95,77,200/- which as per the claim of the assessee was inclusive of interest earned on such advances. The assessee claims that the above said figures of undisclosed investment and interest earned thereon was by the two groups of families and was worked out by the Department on the basis of documents, diaries and other material found and seized from the residence of Shri Romesh Nikhanj. The assessee thus claims that whatever was undisclosed or unaccounted on the basis of seized documents including A-13 has been disclosed and assessed in the hands of the AOP which includes the assessee and his family members and Shri Romesh Nikhaj and his family members. 19. The second plea of the assessee was against the addition on account of alleged interest for and from assessment year 1996-97 to assessment year 2001-02 being made on hypothetical basis. The assessee explained before the CIT(A) that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia (P) Ltd and Brinsar Foods (P) Ltd. b) The aforesaid entries worked out by the Assessing Officer on the basis of seized diaries are relatable to the income reflected in the hands of the AOP consisting of assessee and Sh. Romesh Nikhanj earned from their business of money lending. c) The income arising to the assessee and Shri Romesh Nikhanj and their family members are part of the income declared in the hands of the AOP. d) The figure of disclosure of Rs. 95,77,200/- in the hands of AOP is inclusive of interest earned and ploughed back upto 23.11.1994 which in turn is claimed to have been e) worked out by the investigation wing of the I.T. department. f) The basis of working the disclosures of Rs. 95.77 lakhs in the hands of AOP was the entries in documents and diaries and other material found including A-13 and seized from the residence of Romesh Nikhanj, which are also the basis for making additions in the hands of assessee. g) Whatever was undisclosed or unaccounted income either in the hands of the assessee and his family members and Shri Romesh Nikhaj and his family members on the basis of seized documents was disclosed in the hands of AOP and nothing rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . or relates to the AOP. From the perusal of the seized documents, the Assessing Officer in the case of the assessee before us had worked out the figures of interest relating to assessment years 1993-94 to 1995-96 and the exercise of determining whether the same is a part of the aforesaid peak investment assessed in the hands of the AOP has not been examined by the CIT(A). 24. We find that the CIT(A) has failed to address the issues in their proper perspective. The CIT(A) under the provision of section 250(6) of the I.T. Act is to pass a speaking order on the facts and circumstances before it. However, we find that the CIT(A) has failed to give a finding in respect of the issues raised before it except for upholding the claim of the assessee that all the above said amounts are included in the peak investment taxed in the hands of the AOP. The CIT(A) refers to the arguments of the assessee in respect of assessment years 1995-96 to 2001-02 being outside the purview provisions of Chapter XIV B, being worked out on hypothetical basis, and the deletion made by the CIT(A) is not appealed by the Revenue. In the interest of justice, we deem it fit to restore the issue back to the file o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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