TMI Blog2002 (2) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... sst. yr. Income declared/assessed 1986-87 26,627 1987-88 20,340 1988-89 21,840 1989-90 30,954 1990-91 18,600 1991-92 30.960 1992-93 38,050 1993-94 43,340 1994-95 47,700 1995-96 52,140 1996-97 25,000 3,55,551 The assessment was framed by the AO under s. 158BC(c)/143(3) at an income of Rs. 10,13,222. In that income, already assessed/shown income in the return at Rs. 3,27,629 was adjusted whereby the undisclosed income was assessed at Rs. 6,85,593. The quantum of the undisclosed income within the block period was computed by the AO as under: Asst. yr. Returned income Addition Total 1986-87 30,144 — 30,144 1987-88 30,295 25,000 55,295 1988-89 36,400 — 36,400 1989-90 30,954 1,37,000 1,47,954 1990-91 18,600 1,40,000 1,58,600 1991-92 30,960 1,12,000 1,42,960 1992-93 38,050 — 38,050 1993-94 43,340 — 43,340 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g and baseless. 7. That the addition of Rs. 8,800 on the purchase of merrigold bonds during the asst. yr. 1996-97 is wrong. 8. That the addition of Rs. 20,000 on account of investment for the household articles during the asst. yr. 1996-97 is without any base and against facts on record. 9. That the appellant requests for the acceptance of the returned income by deleting the impugned addition made in the declared income of the assessee. 10. That the appellant requests for leave to add or withdraw any ground before the appeal is heard and disposed of." 3. The assessee has also raised an additional ground which is reproduced hereunder: "That the AO should have assessed the correct income from the socalled undisclosed source. The income has been assessed in excess at Rs. 55,954 and the same may kindly be excluded from the total assessed income." 4. Shri P.N. Arora, advocate, the learned counsel for the assessee, submitted that while preparing grounds of appeal, this ground was inadvertently not taken in the memorandum of appeal. However, the same pertains to the facts available on the record, and, therefore, this ground may be admitted and decided in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank. As regards the cost of the ticket, he drew our attention towards page No. 75 of the paper book which is the photocopy of the ticket. The learned counsel for the assessee submitted that the AO was not justified in making addition of Rs. 25,000 in respect of visit of the assessee to Singapore when the expenses required for that visit were properly withdrawn by the assessee from his saving bank account. As regards to the visit of Smt. Dev Kumari wife of the assessee in November, 1988 to Singapore, it was submitted that at that time the cost of the ticket was Rs. 4,732 and the assessee had withdrawn a sum of Rs. 6,000 from Oriental Bank of Commerce on 27th Sept., 1988. It was also submitted that no currency was obtained from the Government for going to Singapore by the wife of the assessee. It was argued that during her visit to Singapore, the assessee's wife stayed with her brother and all the expenses during her stay at Singapore were met out by her brother. Accordingly, it was submitted that there was no justification in making the addition on account of the visit of Smt. Dev Kumari wife of the assessee in November, 1988. In respect of visit of Smt. Dev Kumari to UK during A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidential value to prove that the wife of the assessee stayed with her brother and they incurred expenditure during her stay. It was contended that the explanation of the assessee is purely an after-thought and as such the evidences produced by the assessee are liable to be rejected. 8.4. We have heard both the parties at length and carefully gone through the material available on the record. In the instant case, it is evident from the copy of the passbook produced by the assessee that a sum of Rs. 15,000 was withdrawn on 5th May, 1986 and also another amount of Rs. 10,000 was withdrawn on 4th July, 1986. It is not the case of the AO that the assessee has utilised the aforesaid amount of Rs. 15,000 withdrawn form the bank for making investment elsewhere. It is also not in dispute that the assessee visited Singapore in July, 1986 and as per copy of the passbook placed at p. 72 of the paper book, the foreign exchange realised on 19th July, 1986 was US $ 500 only. It is also an admitted fact that nobody is allowed to carry out the foreign exchange in excess of the permitted amount which is mentioned in the passport. The emigration department is very vigilant to see that the passeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn by her from the joint saving bank a/c No. 1691 with Oriental Bank of Commerce on 5th April, 1989 and the visit to the UK was also in April, 1989. In that view of the matter, we do not find any logic in not considering the withdrawals to meet out the cost of the air-ticket. As regards the expenditure on account of foreign currency is concerned, it is very much clear from the photocopy of the passport placed at p. 84 of the paper book that no foreign exchange was issued on 19th April, 1989, i.e., on the date of the visit of Smt. Dev Kumari when no amount was carried by Smt. Dev Kumari to abroad. Then there was no question in estimating the expenses because the expenses can be incurred out of money which is in possession of a person and it is also an admitted fact that nobody can carry foreign exchange without mentioning in the passport. The contention of the learned counsel for the assessee is supported by the affidavit of Smt. Shanta Kumari who categorically submitted that during her visit to U.K. Smt. Dev Kumari stayed with them and she was looked after by them. In that view of the matter, we find no justification in estimating the expenses at Rs. 40,000 and making the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that a sum of Rs. 82,000 was withdrawn by the assessee for the expenses of the marriage. It was also claimed that various gifts from relatives, friends and other well wishes of the family were received on the occasion of the marriage which the AO had not taken into consideration. As regards the marriage of second daughter, the learned counsel for the assessee submitted that it was a very simple marriage because the same was love marriage and was performed on 3rd Sept., 1990. It was submitted that no gift or dowry were given at the time of marriage and only small items required at the time of marriage were obtained by withdrawing the amount from the saving bank a/c No. 1691 maintained with the Oriental Bank of Commerce and a/c No. 14774 with Canara Bank. The details of the withdrawals were as under: Date Amount A/c No. 6-4-1990 10,000 14,774 9-6-1990 4,500 14,774 28-9-1990 18,000 1,681 It was claimed that on the occasion of the marriage of second daughter, very few people attended the marriage because the same was a love marriage and was performed without any punp and show. In respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the paper book which was the statement recorded under s. 132(4) and drew our attention towards the question raised by the AO in respect of expenses of the marriage. The answer given by the assessee was as under: "The total expenses of around Rs. 40,000 were incurred by me on the marriage of each two daughters and was withdrawn out of my capital from M/s Faqir Chand Chaman Lal. This is also to add that one of my elder brothers Shri Krishan Chand (now in Canada) and my brother-in-law (Sandu) Ramesh Chander also extended their help on these marriages. As regard the valuable articles including jewellery, my wife presented about 35 gms. of gold jewellery to each of the daughters on their marriage. I may also add that I also remained in England between 1961 to 1974 in employment until I started my business in 1980. I worked with my parental concern M/s Daulat Ram Faqir Chand, Apra." It was vehemently argued that the jewellery was given out of old jewellery of the wife of the assessee to each of the daughters and no expenses were incurred for fresh purchases. The reliance was also placed on the decision of Tribunal, Bangalore Bench in the case of Asstt. CIT vs. H.M. Sathyanarayana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It is also noticed from the statement of the assessee under s. 132(4) placed at page No. 114 of the paper book that the explanation in respect of valuable articles including jewellery was given that the same were presented by the wife of the assessee. This contention was not denied at any stage. It is also noticed that while estimating the expenses the AO did not give the details of expenses on the basis of documents seized/found at the time of search. It is not the case of the AO that marriages were performed lavishly. This contention of the assessee that his relatives who were residing abroad helped him at the time of marriages was also not denied. It is also not in dispute that the assessee withdraw a sum of Rs. 27,500 on the occasion of the marriage of the second daughter which was a love marriage. it is not the case of the AO that many persons attended the marriage of second daughter and even the learned Departmental Representative referred to the list of the guests for the first marriage i.e., in respect of first daughter and said nothing for the marriage of second daughter. It is also not denied that the father of the girl who was married to the son of the assessee expire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee." In the instant case also, the AO has not brought anything on record to establish that the items mentioned in the seized documents were either purchased by the assessee or had given to his daughters at the time of marriages. In that view of the matter also, we are of the view that the AO was not right in estimating the expenses on the occasion of the marriage. The learned counsel for the assessee also relied upon the following case laws: (i) Monga Metals (P) Ltd. vs. Asstt. CIT (2000) 67 TTJ (All) 247 (ii) CIT vs. Murgesh Jaykrishna (iii) CIT vs. Smt. Usha Tripathi (2000) 166 CTR (All) 77 : (2001) 249 ITR 4 (All) (iv) CIT vs. Ravi Kant Jain (2001) 167 CTR (Del) 566 : (2001) 250 ITR 141 (Del) (v) Dolly Farms Resort (P) Ltd. vs. Dy. CIT (2000) 69 TTJ (Del)(TM) 821 : (2000) 74 ITD 147 (Del)(TM) In the decision of Tribunal Delhi 'A' Bench (Third Member) in the case of Dolly Farms Resort (P) Ltd vs. Dy. CIT, it has been held that: "As a matter of fact, search and seizure is a serious invasion on the right of the subject. The search and seizure was really not known at earlier stages to common law. When it was for the first time introduced, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Setty, the Tribunal Bangalore Bench held that: "The Departmental Representative has argued that the marriage cannot be performed with such a lesser amount in the family of a person of the status of the assessee. But he has not been able to substantiate contention with the support of any evidence. In the absence of any enquiries under the provisions of s. 133A(5) and any questionnaire being issued to the assessee to ascertain the expenditure incurred for the marriage of his daughter, arbitrary addition of Rs. 1,20,000 without any legal or prudent basis is not justified in the eyes of law. The CIT(A) is right in his findings and this addition cannot be sustained in the given circumstances of the case." In the instant case, also, the AO has not been able to substantiate his contention with the support of any evidence and also not asked the assessee any specific query to ascertain the expenditure incurred for the marriages of his daughters and son. The addition of Rs. 2,50,000 made by him is arbitrary, without any legal or prudent basis, so the same cannot be justified in the eyes of law. On the basis of the aforesaid discussions, we are of the view that the AO was not justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the relatives sent the foreign drafts dt. 16th Aug., 1990 and 21st Aug., 1990 for Rs. 7,000 and Rs. 5,000 respectively as shagun on the occasion fo the marriage of the daughter of the assessee. It is apparently clear that the drafts were dt. 16th Aug., 1990 and 21st Aug., 1990. Both the dates were prior to the marriage of the daughter of the assessee which occurred on 3rd Sept., 1990. In that view of the matter, we find no justification to sustain the addition made by the AO and accordingly, the same is deleted. 11. Vide ground No. 5, the assessee contended that the AO erred in making an addition of Rs. 1,12,000 on account of bank deposit during the asst. yr. 1989-90. 11.1. For making this addition, the AO observed that the assessee was maintaining savings bank a/c No. 1691 jointly with his wife of Smt. Dev Kumari in O.B.C. Moron and had not furnished any explanation with regard to the various credits in that account. He added a sum of Rs. 1,12,000 considering the same as the peak credit in April, 1988 and treated the amount of Rs. 1,12,000 as assessee's undisclosed income for the asst. yr. 1989-90. 11.2. The learned counsel for the assessee, Sh. P.N. Arora, submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-6-1985 Canara Bank 7,000 10-9-1985 239884 6-11-1986 Kala Ram 6,000 24-1-1986 059196 30-11-1986 S.B. No. 2381 12,000 21-2-1986 4822690 18-3-1986 — 10,000 4-4-1986 0117502 15-3-1986 — 5,000 4-4-1986 076110 20-11-1986 Bank of Oman 2,000 23-5-1986 0310921 At. Rajhi Co. for currency 3,500 13-6-1986 24-5-1986 30061 14-6-1986 Emirate Income Co. (P) Ltd. 7,000 11-7-1986 07-6166.139 Bank of Oman 5,000 9-7-1986 07-7127-103 -do- 5,000 318385 3-6-1987 Bindays Bank 31,275 24-6-1986 257926 14-6-1997 Habirb Bank Ltd. U.A.E. 3,000 17-7-1987 0749362 26-8-1987 Canadian Imp. Bo. Comm. 21,000 25-9-1987 4749458 7-3-1988 -do- 40,000 12-4-1988 4749431 4-3-1988 -do- 40,000 12-4-1988 3050858 24-9-1988 Ounsnotary Kanjhi Ex. Co. 6,000 12- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the withdrawal considering the same as peak credit. It seems that the basis of the AO for making the addition is without any material/evidence available on the record. Considering the totality of the facts and circumstances of the present case, we are unable to sustain the addition made by the AO and the same deserves to be deleted. 12. Vide ground No. 6, the assessee challenged the addition of Rs. 1,86,839 on account of construction work during the asst. yr. 1996-97. 12.1. For making this addition, the AO observed that as per seized documents contained in Annex. A-2/9, as per pp. 1 to 10 12, the assessee spent a total sum of Rs. 1,36,839 in the construction work, and since the assessee had not furnished any explanation for investment in the purchase of material and other connected expenses, the sum of Rs. 1,36,839 was treated as undisclosed investment for the asst. yr. 1996-97. Accordingly, the addition was made. 12.2. The learned counsel for the assessee submitted that the assessee purchased various items of raw material, etc. for the construction purposes on credit basis and thus the total amount has wrongly been added in the taxable income of the assessee. It was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proper opportunity should be given to the assessee to explain its case. In that view of the matter, we restore this issue to the file of the AO to decide the same afresh after affording reasonable opportunity of being heard to the assessee. The assessee is also free to adduce any evidence in support of its claim before the AO. 13. Ground No. 7 raised by the assessee relates to the addition of Rs. 8,800 on account of purchase of merrigold bonds during the asst. yr. 1996-97. 13.1. According to the AO, the assessee invested a sum of Rs. 8,800 in the name of self and his wife on account of purchase of bonds of marrygold leasing company and no explanation with regard to the source of that investment was given. Accordingly, the addition of Rs. 8,800 was made. 13.2. Before us, the learned counsel for the assessee submitted that the investment in the aforesaid bonds were made by depositing a sum of Rs. 2,200 per month and the amount was paid by all the family members out of their savings and withdrawals from time to time. It was submitted that family of the assessee consists of five members out of which three are earning hands. So they were in a position to invest the money from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icularly the deck was purchased somewhere in 1982 for Rs. 500 only. In support of other items, it was submitted that the value of those items was less than Rs. 3,000 which were received free of cost as gift from his relatives. So there was no justification in making addition in the hands of the assessee on account of old items. 14.3. In his rival submissions, the learned senior Departmental submitted that the assessee has not disclosed the ownership of those articles, so the AO was justified in estimating the value of those articles of Rs. 20,000. 14.4. After hearing the learned representatives of both the parties and considering the material available on the record, we are of the view that the AO was not justified in making addition because he has not established on record that the assessee in fact purchased those items during the year under consideration. There is some force in this contention of the assessee that the washing machine was given as gift by his brother-in-law and the same was purchased on 27th Sept., 1986, copy of the bill of purchase is placed at page No. 65 of the paper book. Similarly, the colour TV in question was brought to India on 27th Dec., 1988 by Mrs ..... 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