TaxTMI 
TaxTMI 
1999 (1) TMI 55
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.... Found Seized Cash (Rs.) (Rs.) 226, Cycle Market, Jhandewalan (business 3,26,580 3,20,000 premises of PPC) New Delhi First floor, 64, Kalyanvihar (residence 2,18,450 2,00,000 of Sunil Vasudev, partner of PPC) Ground floor, 64, Kalyanvihari (residence 1,31,700 1,00,000 of Deshraj Vasudev, father of Sunil Vasudev and partner of M/s Syndicate Advertisers) Locker No. 157 of Deshraj Vashudev 3,81,400 3,81,400 50, Ishwar Colony, Delhi (residence of 5,38,160 4,87,700 Naresh Vasudev, partner of PPC) B-206, Derawalan Nagar, Delhi (residence 11,97,967 11,65,000 of Rajesh Vasudev & Mukesh Vasudev, partners of PPC) &....
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....sudev (4) M/s P.K. Advertising Service (P) Ltd. (Directors) Rajesh Vasudev Deshraj Vasudev Naresh Vasudev Sunil Vasudev Dinesh Vasudev Deepak Vasudev (5) M/s Syndicate Advertisers (Firm) Partners Rajesh Vasudev Deshraj Vasudev Mukesh Vasudev Avinash Vasudev Kiran Vasudev Satish Vasudev Surinder Vasudev Smt. Ramwati Vasudev 2.2 M/s Pioneer Publicity Corporation was constituted as back as October 1966 and other concerns as well as companies came to be formed by the members of the family of Deshraj Vasudev in 1985, 1987, 1992 and 1996, respectively. It would be seen that various firms and the companies are constituted or formed by the members of the family of Deshraj Vasudev. The business carried on by the group was that of advertising through the display of hoardings, etc. The various firms/companies maintain regular books of account in the shape of cash book, ledger, etc.....
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....ny vouchers surrendered the amount of Rs. 4,12,038 vide its letter dt.17th Oct., 1996. The AO, therefore, treated the said amount of Rs. 4,12,038 as undisclosed income of the assessee for the block period on account of inflation of expenses under the head "Painting charges". The learned counsel of the assessee has not contested the addition made on account of surrender of the painting amount of Rs. 4,12,038 and in this view of the matter and especially when the said expenses incurred were not found vouched or accounted for in the books of account, the addition made of Rs. 4,12,038 is held to be justified and the same is confirmed. 4. The next ground relates to the addition of Rs. 1,81,000. The AO noted from p. 139 of Annexure "A" to the Panchnama relating to the premises in Cycle Market, Jhandewalan Extn.New Delhi, that there was an agreement dt.1st March, 1995, between the assessee-firm and Shri Krishna Kumar to pay the site rent at Rs. 65,000 in cash besides Rs. 65,000 in cheque for the third floor roof of house No. 3173, Sector "C", Vasant Kunj,New Delhi. According to the assessee the payment made through cheque is verifiable from the books of account but the payment made by ....
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....the purpose of display of hoardings and how much amount was charged from the said party and whether the amount charged from the said party has been fully disclosed in the books of account or the receipt has also been suppressed as the assessee has suppressed the payment of rent for display of hoarding. According to the learned Departmental Representative it has been established from the incriminating documents seized that the assessee-firm had also indulged in suppressing of receipts. Unless it is established that all the receipts have been fully disclosed the claim made for such cash payment as revenue expenses cannot be allowed. He also pointed out that the facts of the case cited are distinguishable from that of the assessee-firm inasmuch as in those cases the receipt was not found suppressed whereas in the case of the assessee there has been found suppression of receipts. The learned Departmental Representative has, therefore, pleaded that the claim made on the facts and circumstances should not be allowed especially when the assessee has surrendered the amount during the course of assessment proceedings as payment out of undisclosed income and the revenue expenses as legitimat....
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.... received in cash on full and final settlement. The AO further noted there was no such entry in the books of account seized but the same was found in the books of account produced during the course of assessment proceedings and the assessee was required to explain. The assessee gave no explanation to such query made. The AO has further noted that no confirmation has been filed from Meghraj. The AO, therefore, treated Rs. 20,000 as income on cash basis and Rs. 35,000 on due basis and thus he treated the total amount of Rs. 55,000 as income from undisclosed sources. 5.1. It has been submitted by the learned counsel of the assessee that the cash book had not been written up to date as on the date of search but the fact remains that the amount of Rs. 20,000 was duly entered in the cash book as on 25th Sept., 1995, and, therefore, the amount was duly taken into consideration in the computation of income for the asst. yr. 1996-97 and the addition on account of same amount would tantamount to double addition. It is also claimed that confirmation from the concerned party was obtained and the same is placed in the paper-book No. 3. There is otherwise no evidence to prove that the sum of ....
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....p; Rs. Rs. Last balance 35,000 Received Amt. 20,000 15,000 ------ ------ Defence Colony 20' x 10' (One month) 9,000 Sewa Nagar 20' x 10' " 6,000 Bhogal 20' x 10' " 5,000 R.K. Puram 20' x 10' "&n....
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....e by cheque of Rs. 3,50,000 which have been accounted in the books of account but there being no explanation about the source he made an addition of Rs. 1,69,000 on account of undisclosed income for the block period. 6.1. The learned counsel for the assessee has not disputed the addition made on account of payment made to Paramount Publicity being unexplained but he has contested that it should have been allowed as revenue expenditure and in support he has placed reliance on (1995) 52 ITD 103 (Pat) and (1996) 52 TTJ (Pune) (TM) 207 : 217 ITR 1 (AT). It is further contended that the entire amount of Rs. 5,19,000 appear in the same document and nature of payment of Rs. 3,50,000 made by cheque and Rs. 1,69,000 made by cash are identical and the AO having allowed the deduction of Rs. 3,50,000 as revenue expenditure, there is no justification for not allowing Rs. 1,69,000 as deduction being revenue expenditure. The addition made of Rs. 1,69,000 as income from undisclosed source would thus get neutralised by the deduction on account of revenue expenditure. The addition made of Rs. 1,69,000, therefore, deserves to be deleted. The learned Departmental Representative relied on the order ....
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....f the assessee-firm. The AO, however, noted that extent of investment in the transactions of Rs. 36,02,878 has to be separately taxed since every transaction involved investment and income. The AO further noted that in the regular return for the asst. yr. 1995-96 the assessee has shown total receipt of Rs. 5,16,10,522 and capital employed is of Rs. 1,07,57,836. The capital employed was thus found to be at 20 per cent of the turnover. The AO, therefore, worked out the unexplained investment in these transactions @ 20 per cent of the turnover which came to Rs. 7,20,575. The AO, therefore, apart from assessing the undisclosed income of Rs. 2,64,288 also made an addition of Rs. 7,20,575 on account of unexplained investment. The total addition made, therefore, comes to Rs. 9,84,863. 8.1. The learned counsel has made a submission that the addition of Rs. 2,64,288 is not contested in view of the fact that the same was surrendered before the AO by the assessee-firm. 8.2. As regards the addition of Rs. 7,50,575 it has been submitted that this addition is wholly uncalled for as according to him a sum of Rs. 1,51,133 was available as per the diary produced at the very beginning of the p....
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....shape of office premises and certain godowns where hoardings, etc. are prepared and kept before and after the display at the selected site and as on 31st March, 1996, such fixed assets are of Rs. 36,20,835. Therefore, looking to the nature of business and the position obtained from accounts filed for various years we are of the considered view that there was involved no capital investment as such in the advertisement business done at Rs. 36,02,828. Moreover, an amount of Rs. 1,51,133 was available at the beginning of the period being the difference between the opening balance receipt and opening balance payments and the profit earned of Rs. 2,64,288 from such unaccounted business and this amount could be utilised for payment, if any required before the advertisement amount received from the clients. Moreover, the addition made on account of investment is only estimated and there is no material evidence as such found during the course of search to prove and establish that the assessee did make investment in such unaccounted business to the extent of Rs. 7,20,575 nor the AO has invoked the provisions of s. 69 which provides that where in the financial year immediately preceding the a....
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....placed on records copies of relevant pages of cash book and the same are available at pp. 27 to 31 of the paper-book. While making a reference to these papers the learned counsel of the assessee has shown that a sum of Rs. 1,62,800 was debited on4th Oct., 1995, to Diwali imprest account and the said amount was credited to the imprest Diwali account on25th Oct., 1995. Based on these entries it has been explained that the amount advanced to the partners and others was for expenses to be incurred on the occasion of Diwali at different business premises. According to the learned counsel a consolidated expenditure of Rs. 1,65,917 was incurred through cheque for payment of gift packs of dry fruits, etc. from M/s Roopak Pick & Pay,Ajmalkhan Road,New Delhi, as per the details given at pp. 584 to 587 of the paper-book. The expenses incurred relates to various transactions of the group and the details given are as under: &n....
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....at the amount was withdrawn from the regular cash books. On4th Oct., 1995, cash balance was available with the various concerns at Rs. 3,18,644.47 and it was out of this amount that the said amount was taken to the Diwali imprest a/c. The AO has not doubted the entries recorded nor he has brought on record any material to disprove the correctness of the entries with regard to the availability of the cash balance. The learned counsel, therefore, pleaded that the addition, being not justified deserves to be deleted. 9.3. The learned Departmental Representative on the other hand, relied upon the order of the AO and further submitted that as per the incriminating documents seized the said amount was given to the partners and others and there was found no entry made in the regular books of account seized during the course of search. There is no valid explanation available about the source of such amount paid to the various persons and accordingly the addition made was fully justified being representing the unexplained expenditure. 9.4. We have considered the facts and rival submissions. Admittedly as per the seized documents an amount of Rs. 1,62,800 was given to the partners and ....
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....ibly be taken. The AO did not agree with such contention and noted that in unaccounted transactions normally no acknowledgment is given. The presence of visiting card with the assessee-firm is an evidence that the money was advanced by the assessee. With such observation the AO treated the said amount of Rs. 80,000 as advance from undisclosed sources. The learned counsel of the assessee has admitted the recovery of the visiting card on the back side of which is written "Rajesh please give bearer Rs. 80,000". The learned counsel has pointed out that Rajesh Vasudev is one of the partners of the assessee-firm and in explanation before the AO the assessee has denied to have made any payment to any person on the basis of the visiting card and also contested that at best the visiting card contained only a request for making the payment but there was no evidence as to the payment having been actually made. He has contended before us that visiting card did not have any date and there was also no evidence of making any payment. The assessee-firm also did not have any dealings with Haryat of Insat and there was also no account of any kind appearing in the books of assessee-firm relating to H....
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....osed income. The learned counsel of the assessee had made a submission that it was a trading receipt as the assessee had put up a hoarding for M/s Manu Oil and received the said amount for that work, there is, therefore, no justification for adding the entire amount and only the profit element thereon be assessed. 11.1. The learned Departmental Representative, on the other hand, relied upon the order of the AO. 11.2. We have considered the facts and rival submissions. It is evident from the facts given that assessee-firm did receive the said amount of Rs. 35,000 from M/s Manu Oil and the same is claimed to be on business account. It is claimed on behalf of the assessee that the whole amount be not taken as undisclosed income but there is no evidence or material produced either before the AO or before us to show the details of advertisement contract with Manu Oil and total amount involved, how much amount received was recorded in books and how much was kept out of books, how much expenses relating to such works were incurred and whether the same was fully accounted for in books and, if not, how much was not accounted. There are also no details given of expenses incurred if any....
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.... A-2 gives details of unaccounted payments of Rs. 82,000 on front side and Rs. 1,23,000 on back side. When confronted it was explained that the payment of Rs. 82,000 relates to M/s. P.K. Advertising Services a separate concern of the group and the payment being unaccounted an addition of this amount has been made in the hands of that firm. As regards the payment of Rs. 1,23,000 there being no explanation offered about its source the amount was taken unexplained expenditure out of undisclosed income. 13.1 The learned counsel of the assessee has made a submission that it was admitted before the AO that both these payments were unaccounted. He has, however, contested before us on the ground that the assessee-firm was entitled for allowance of the said amount as revenue expenditure. He pointed out that the nature of the document would show that expenditure relates to the various advertising sites such as: (a) Greenpark site; (b) Patel Nagar site; (c) Azadpur site; (d) Punjabi Bagh site; (e) NOIDA site; (f) Dhaula Kuan site; (g) Africa Avenue site; (h) Kutub Hotel site. 13.2. The expenditure being related to various sites is of revenue nature and the same d....
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.... not be treated as a document and in support placed reliance on the following judgments. (i) Asstt. CIT vs. Karodilal Agarwal (1994) 50 TTJ (Jab) 393; (ii) Kantilal & Bros. vs. Asstt. CIT (1995) 51 TTJ (Pune) 513 : (1995) 42 ITD 412 (Pune); (iii) Addl. ITO vs. T. Mudduvirappa & Sons (1993) 45 ITD 12 (Bang); (iv) ITO vs. W.D. Estate (P) Ltd. (1993) 46 TTJ (Bom) 143 : (1993) 45 ITD 473 (Bom); and (v) M.V. Mathews vs. ITO (1996) 46 TTJ (Coch) 353. 13.5 The learned counsel invited particular reference to the decision in the case of ITO vs. Pitamber Industries (P) Ltd. (1992) 42 ITD 373 (Del) wherein it was held that no addition could be made on the basis of a table diary belonging to a disgruntled employee. A reference was also made to the judgment of the Hon'ble Delhi High Court in the case of L.K. Advani in Cr. R.P. No. 265/1996 and as approved by the Hon'ble Supreme Court in the case of V.C. Shukla. In the Bombay High Court judgment reported in JT 1998 (Dal) SC 172 the provisions of s. 34 of the Evidence Act were interpreted and it was held that on the basis of entries in the diary of a third person no case can be made out. The learned counsel contested that in lig....
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....ed otherwise. The presumption available under s. 132(4A) is subject to rebuttal. The onus was on the assessee to rebut such presumption. The assessee-firm though claimed that the diary belonged to a government officer but there is no valid explanation or any evidence produced to show the identity of such government officer, how the diary happened to be found at the business premises of the assessee-firm and why the concerned officer has not come forward to own the diary and explain the nature of the entries recorded therein. There is thus nothing to prove that the diary belonged to a third person and not to the assessee-firm. The onus thus cast upon the assessee-firm to rebut the presumption has not been discharged. Under the circumstances we entirely agree with the AO that diary found and seized from its premises belonged to the assessee-firm and none else. As regards the nature of the entries we note that there is a figure of "192" recorded against the name of the assessee-firm and the assessee-firm during the course of assessment proceedings read the figure as "19200" and surrendered such amount as undisclosed income. The Department has, however, decoded the figure of "192" as 1....
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....nbsp; --------- 14.1. The AO made a reference to the Valuation Cell for estimating the extent of investment in these properties. The DVO as per his report estimated the value of these properties at Rs. 20,98,907 as per following details: Rs. 225, Cycle Market, Jhandewalan Extn. 4,19,270 F-107, Jawahar Park 2,52,465 R-64, G.T. Karnal Road, Industrial Area ....
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....ycle Market, Jhandewalan Extn was purchased on 5th April, 1994, for consideration of Rs. 1,75,000 and is was duly disclosed in the balance sheet of the assessee-firm as on 31st March, 1995, placed at pp. 438 to 474 of the paper-book. A copy of account of property is also given at page 435 of the paper-book. He submitted that copy of account of the property shows further investment on the renovation as per details placed at pp. 436 and 437 of the paper-book. The property was thus originally purchased for Rs. 1,75,000 and further investment thereon was made on its renovation at Rs. 2,06,000. Thus, the total investment made in the property comes to Rs. 3,81,000. The learned counsel has pointed out that no incriminating document was found during the course of search which could justify the allegation for any undisclosed income being attributable to these properties and accordingly the present addition is outside the scope of Chapter XIV-B of the IT Act. Without prejudice to the main contention that the addition was without jurisdiction it was further contended by the learned counsel that no addition could be made simply on the basis of the valuer's report and in fact there was no justi....
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.... to be deleted. 14.5. The learned Departmental Representative, on the other hand, relied upon the order of the AO. He further submitted that as is evident from the report of the DVO the market value of the property at the time of purchase was substantially higher than that disclosed and the difference represented the "on money" paid by the assessee-firm. The learned Departmental Representative, therefore, urged that the addition made being fully justified be upheld. 14.6. We have carefully considered the facts and rival submissions. There is no dispute that the assessee-firm purchased G.T. Karnal property in 1991 and other two properties in 1994 relevant to the asst. yrs. 1992-93 and 1995-96 and the apparent consideration as recorded in the sale-deeds has been duly accounted for in its books of account. The assessee made further investment in renovation of Jhandewalan Extn. property and the same is also duly accounted for in the books of account. The AO, however, made a reference to the Valuation Cell under s. 131(1)(b) of the IT Act and the DVO in the report submitted valued the properties at the amount given above. The report sent by the DVO is in an advisory capacity and t....
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.... fact of making investment of Rs. 6,95,907 over and above that disclosed at Rs. 14,03,000 has not been proved and established and accordingly no addition could be made on account of deemed income within the meaning of s. 69 of the IT Act. 14.8. Considering the facts and the ratio of various decisions cited we are of the considered view that the addition made of Rs. 6,95,907 is neither justified nor valid and the same is, therefore, directed to be deleted. 15. The next ground relates to the addition of Rs. 36,02,500 on account of peak credit for the block asst. yrs. 1989-90 to 1992-93. During the course of search a diary was found and seized. The diary contained cash receipts and payments of substantial amounts. The assessee was required to explain the nature of the entries made in the diary and in response it was admitted that the transactions recorded in the diary are totally outside the regular books of account and peak amount of the transactions has been considered as undisclosed income and offered in the return for the block period filed under s. 158BC. As mentioned earlier, the assessee failed to give the bifurcation of the undisclosed income shown in the return. The AO ....
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....nt years relevant to the financial years 1989-90 to 1992-93 on account of peak credits. The learned counsel of the assessee has disputed the additions so made on the ground that the calculation of the peak arrived at by the AO was not correct and he filed a revised calculation placed at pp. 259 to 294 of the paper-book, according to which the peak, as per the learned counsel worked out at Rs. 21,34,918 as on 4th Jan., 1993. During the course of hearing the Bench required the learned Departmental Representative to verify the correctness of the peak as worked out by the learned counsel of the assessee and to submit a report. The learned Departmental Representative in his report, dt.16th July, 1998, made a submission that as per direction of the Bench the said peak statement was sent to the AO for verification and he has reported that there are number of discrepancies in the assessee's peak statement. He has also pointed out certain discrepancies. He also submitted that it is not possible to prepare a peak list as the dates are not mentioned clearly against the amounts mentioned in the seized diary. According to the AO such discrepancies were pointed out to the assessee but the assess....
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.... on running basis and any addition of opening or closing balance on any one place of the diary would disturb the whole calculation. The fact thereof is already there in the running details. The objection thus raised about the opening balance is misconceived. He has further explained that the said payments of Rs. 1,09,750 have duly been accounted for in the peak statement at pp. 264 and 265 of the paper-book as per details below: S. No. Date Amount Page No. of P.R. Rs. 1. 8-8-1991 10,000 264 2. 8-8-1991 5,000 264 3. 11-11-1991 25,000 264 4. 8-8-1991 &nb....
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....59 to 294 of the paper book negative peak worked out to Rs. 10,13,764.30 as on 3rd July, 1992, and adding thereto the positive peak of Rs. 21,34,918.20 the total peak would come to Rs. 31,48,682.50 as against the peak adopted by the Revenue at Rs. 36,02,500. The learned counsel of the assessee has, therefore, submitted that calculation of the peak as adopted by the AO is not correct and the same cannot be relied upon. He, therefore, made a submission that the peak as per calculation given by the assessee-firm be adopted as against that adopted by the AO. 15.5. The learned Departmental Representative on the other hand, has relied upon the order of the AO. He has further submitted that the peak as drawn by the AO is as per the details furnished by the assessee-firm. The learned counsel of the assessee has given a lower figure both of negative and positive peaks drawn out of the same statement but the peak as given by the learned counsel of the assessee also suffers from wrong calculation. He, therefore, pleaded that the addition as made by the AO based on the peak drawn is fully justified. Moreover, admittedly the various entries found recorded in the diary have not been found rec....
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....July, 1992 to October, 1992 were of Rs. 37,02,500 and according to him there was only one payment of Rs. 1 lakh on 16th Aug., 1992. The peak for the period, according to the AO, therefore worked out to Rs. 36,02,500. 15.8. We have gone through the peak statement prepared by the assessee and placed at pp. 259 to 294 and we find that on3rd July, 1992, there was a negativepeakofRs.10,13,764.30 and it thus represented the peak of the payments made. There is a positive peak as on4th Jan., 1993, at Rs. 21,34,918.20 on p. 269 of the paper-book. This peak represents the amount received. As mentioned above the peak drawn was of the entries recorded in the period from1st April, 1985, to27th Oct., 1995, and running into 36 pages from 259 to 294 of the paper-book. However, during the course of hearing before us the learned counsel of the assessee gave a peak statement for the period from 1st July, 1989,to 1st March, 1993, running into four pages and this statement shows a negative peak (net payment amount) at Rs. 12,81,904 as on 26th June, 1992, and a positive peak of Rs. 20,40,596 (net amount received) as on 4th Jan., 1993. There is thus wide difference between the peak statements as place....
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....nt so paid seems to have been recovered subsequently in the month of July to September, 1992 and after recovering the payment the peak of the amount received subsequently would be around only Rs. 7,58,692. Having regard to the above position the peak adopted by the AO for the period July, 1992 to October 1992 at Rs. 36,02,500 is not held to be correct. It is not correct to claim that addition should be made both on account of positive peak and negative peak as the negative peak get merged into positive peak during the financial year 1992-93 itself and accordingly no separate addition on account of negative peak is justified. The only peak which in our considered view deserves to be adopted for assessing the undisclosed income for the financial year 1992-93 is of Rs. 20,40,596. Since the assessee has already offered a peak amount of Rs. 9,09,004 in the financial year relevant to the asst. yr. 1990-91, 1991-92 and 1992-93, the balance amount of peak of Rs. 11,31,592 (Rs. 20,40,596-Rs. 9,09,004) deserves to be adopted as undisclosed income for the financial year relevant to the asst. yr. 1993-94. We order accordingly. 16. The next ground taken by the assessee-firm is against additi....
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.... earned in the name of Oriental Advertising Agency belonged to the assessee-firm and the deposit represented the total turnover. The assessee-firm offered that the profit thereof be estimated at 5 per cent of the turnover for assessment. According to the AO it was also admitted in the case of M/s. P.K. Advertising Services (a sister concern) that Oriental Advertising Agency is a unit of the assessee-firm and the transactions made in its name are unaccounted. According to the AO the assessee-firm has not given the quantum of investment in such transactions. The AO noted that the maximum balance as per the bank statement is at Rs. 6,09,739 as on 24th October. He, therefore, treated and adopted the said amount as undisclosed investment in the said unit and therein he added the income at Rs. 61,487, worked out @ 5 per cent of the total turnover as offered by the assessee-firm. The AO thus made an addition of Rs. 6,71,226 in the total undisclosed income computed for the block period. 17.1 The learned counsel of the assessee made a submission that the assessee-firm has no grievance against the income adopted at Rs. 61,487 as business done in the name of Oriental Advertising Agency was....
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....e said business and declared the income therefrom @ 5 per cent of the total turnover and at this rate the income comes to Rs. 61,487. The assessee-firm has not contested the income adopted from the said business at Rs. 61,487. The addition thus made to the extent of Rs. 61,487 in the undisclosed income computed is therefore, confirmed. 17.4. As regards the addition of Rs. 6,09,739 we note that the AO has taken the same as unexplained investment in its business. There is, however, no material evidence to support that the assessee-firm made unexplained investment to the extent of Rs. 6,09,739 in the name of Orient Advertising Agency. In the absence of any such material the undisclosed income computed on account of such unexplained investment is held to be outside the purview of Chapter XXIV-B. Undisclosed income computed on identical facts as considered in earlier grounds have been directed to be deleted and for similar reasons the addition made of Rs. 6,09,739 computed as undisclosed income is directed to be deleted. 18. The next ground relates to the undisclosed income computed at Rs. 6,72,613 on account of undisclosed income on account of investment in the account of M/s SPC....
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.... XIV-B and accordingly the addition made on this count deserves to be deleted. 18.3. The learned Departmental Representative on the other hand, advanced arguments in support of the order of the AO on the issue. 18.4. We have considered the facts and rival submissions. Admittedly there is no material found and seized during the course of search proving investment in such business at Rs. 5,38,093 and in the absence of such material there arises no question of explaining any such investment. Moreover, for the detailed reasons given by us on similar ground discussed earlier the undisclosed income computed on account of unexplained investment of Rs. 5,38,093 is directed to be deleted. M/s. P.K. Advertising Services (P) Ltd. (ITA No. 6169/Del/1996): 19. The present appeal preferred by the assessee-company is directed against the block assessment made under s. 158BC and the only ground raised relates to undisclosed income computed and assessed at Rs. 1,55,000. 19.1 During the course of search, business premises of M/s. P.K. Advertising Services, a sister concern, was searched and certain loose papers relating to the assessee-company were found and seized therefrom. There wa....
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....computed comprises of the following: Rs. (1) Unexplained receipt from M/s Sanjay Publicity as discussed in para 3(a) 5,000 (2) Credit note of M/s Neelam Advertising & Marketing as discussed in para 3(b) 98,775 (3) Inflated expenses under the head site rent as discussed in para 3(c) 9,600 (4) Unexplained painting charges as discussed in para 3(d)  ....
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....en that the said receipt of Rs. 5,000 was found recorded in the note books seized during the course of search. The amount was received from Sanjay Publicity. It is claimed by the assessee that the amount was received through cheque and the cheque bounced back but the explanation so offered is not supported either by a confirmation from Sanjay Publicity or from the bank account. Before us also no grievance has been led in support of the explanation given. We, therefore, see no merit in the claim of the assessee and the receipt amount of Rs. 5,000 taken by the AO as undisclosed income for the block period is confirmed. 21. The other point in dispute is with regard to the undisclosed income taken at Rs. 9,600. The AO noted from pp. 29-30 of Annexure A-17 seized that it was a computerised trial balance of the assessee-firm as on31st March, 1995. As per this trial balance the site rent and licence fee paid was at Rs 1,02,12,992 whereas as per the P&L a/c filed the total debit amount under this head was at Rs. 1,29,16,679. The assessee was required to explain the difference of Rs. 27,03,687 and in reply it was explained that in the trial balance there were heads like "Northern Railway....
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....sp; Rs. (1) On account of diary seized C-4/A-1 25,000 (2) On account of diary C-4/A-2 (Rs. 50,000 + Rs. 30,000 + Rs. 82,000) 1,62,000 (3) On account of exercise book C-4/A-10 pp. 80-87 1,50,000 (4) On account of bogus expenses determined on the basis of C-4/A-17 pp. 37 & 38 2,16,824 &....
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....e amount was advanced to the employees of the following concerns of the group: M/s Pioneer Publicity Corporation; M/s P.K. Advertising Service; M/s Delhi Advertising Service and M/s P.K. Advertising Services (P) Ltd. He further argued that on the date of advance there was sufficient cash balance as per the books and this fact has not been disputed by the AO. The cash books were duly produce before the AO and he found no fault therein. Apparently there was no justification for making addition of Rs. 25,000. He, therefore, contended that the addition made be deleted. 22.3. The learned Departmental Representative on the other hand, relied upon the order of the AO and further contended that the diary in fact was found and seized from the premises of the assessee-firm and there is nothing to show in the diary that the said amount was paid as advance out of the cash balance of the said four firms on the relevant dates to their employees. The explanation thus offered by the learned counsel is not supported by any material. He, therefore, submitted that the amount was otherwise not found recorded in the regular books of the assessee nor there was any details of the accounts rendered by ....
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....at pp. 80 to 87 of the exercise book it was explained that this is memoranda record for amounts paid and received back from the employees and the same are not verifiable from the regular books of account. The said cash transactions as found recorded were of the nature of receipt and payment and since the same were not found verifiable from the regular books of account all the transactions were taken as outside the books of account. Summary of payments as given in the assessment order gives the total amount of Rs. 4,57,107 and these relate to the period from October, 1992 to April, 1993. According to the AO the peak of the amounts was apparently on pp. 82 and 83 and looking to the nature of the transactions and after the benefit of peak the AO computed on this count undisclosed income for the block period at Rs. 1,50,000. The learned counsel of the assessee has contended that the theory of peak is not applicable to the trading receipts. Moreover, how the amount of Rs. 1,50,000 is worked out by the AO is not clear. The highest figure between30th Nov., 1992, and23rd Dec, 1992, works out to Rs. 1,07,700 against which the AO estimated the peak at Rs. 1,50,000 without giving any reasons ....
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....ying a profit rate of 5 per cent but no basis therefor is given and accordingly in our opinion it would be reasonable if the profit rate is estimated by applying a profit rate of 12 per cent looking to the trading results declared by the sister concern Pioneer Publicity Corporation and on this rate the profit is worked out to Rs. 54,800. We, therefore, sustain the undisclosed income on this account to the extent of Rs. 54,800. The assessee gets a relief of Rs. 95,200 (Rs. 1,50,000 - Rs. 54,800). 24. As regards the addition of Rs. 2,16,824 the facts are that there was found a trial balance of the assessee-firm as on 31st March, 1995, during search and on comparison of the trial balance with the regular P&L a/c the AO noted that as per the trial balance profit comes to Rs. 17,24,502 whereas profit as per the P&L a/c as shown in the return for asst. yr. 1995-96 was at Rs. 5,32,397. When confronted it was explained that the difference in profit is mainly on account of the figures of the amount adopted as licence fee and site rent. It was pointed out that as per the seized documents an amount of Rs. 8,60,795 is shown as advance to Northern Railway. This amount was in fact paid to the....
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....urse of assessment, the learned counsel of the assessee has submitted that it was done wrongly. It was claimed that the amounts in question were on account of payment of commission outside the books of account. Therefore, while on one hand the addition should be made as income from undisclosed source, on the other hand deduction should be allowed on account of revenue expenditure nullifying the addition. The learned Departmental Representative however strongly objected to the suggestions so made. 24.5. We have considered the facts in this behalf. The facts relating to the addition of Rs. 1,62,000 have been discussed by the AO on p. 4 of the block assessment order. The diary seized contained entries relating to the payments received by the assessee group from Directorate of Health Services and Directorate of Advertising & Visual Publicity and certain amounts received were not found recorded in the regular books of account. While there were also found entries relating to certain payments amounting to Rs. 1,62,000 but nowhere it is mentioned that such payments represented the commission paid. Moreover, there are no details furnished of the advertising receipts against which such co....
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.... --------- 11,71,057 11,71,057 --------- --------- 12-9-1995 b/d 11,707" 25.1. When confronted it was explained that the assessee-firm earned a profit of Rs. 71,707 on the said transaction and the same is offered by the assessee-firm in the return of the block period filed as undisclosed income. When asked to explain the nature of the said entries and oth....
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....ame of party Amount (1) M/s Outdoor Publicity Corporation 3,13,500 (2) M/s Deo Publicity Corporation 3,18,000 (3) M/s Sara Publicity Corporation 2,92,500 (4) M/s Balaji Publicity Service 2,67,000 --------- Total: 11,91,000 ....
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....s. 11,31,450 was received and credited and cash of Rs. 10,94,850 was debited. According to the learned counsel it is but natural that when the cash is received against the cheques no corroboration would be coming either oral or otherwise. The documents in question itself constitute sufficient evidence for the transactions involved and entries made in the seized documents cannot be disbelieved in view of the Tribunal's decision in the case of T.S. Kumaraswami vs. Asstt. CIT (1998) 65 ITD 188 (Mad). The learned counsel further argued that in any case it is not open to believe one set of document and ignore the other set. The learned counsel, therefore, pleaded that the addition made on the given document is not justified on given facts and the same deserves to be deleted. 25.4. The learned Departmental Representative on the other hand, has placed heavy reliance on the order of the AO and has further submitted that the assessee has shown receipt of cash but the assessee neither produced any evidence about the source of such cash including the names and addresses of the parties from whom the amount is claimed to have been received and there being no sufficient evidence the AO was ju....
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.... 1,22,940 (5) Loan to Shri K.I. Malik as discussed in para 3.5 50,000 (6) Unexplained investment in household articles as discussed in para 3.6 74,665 (7) Cash expenses for ceremony as discussed in para 3.7 29,738 (8) Unexplained investment in UTI Rajlakshmi as discussed in para 3.9 &....
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.... to item Nos. 1 and 11 above. The facts in brief are that property at B02-6, Derawala Nagar, is jointly owned by the assessee and his wife Sweaty Vasudeva and his brother Mukesh Vasudeva and his wife Anju Vasudeva. The property was purchased on22nd Oct., 1992, for a consideration of Rs. 11,60,000. The AO referred the property to the Valuation Cell who valued the cost of the property at Rs. 36,64,369. A copy of the valuation report was supplied to the assessee and he was required to explain as to why 50 per cent of the unexplained investment being difference between the consideration shown and the value taken by the DVO should not be adopted. The assessee in reply submitted that he had duly shown the investment in the property in the return for asst. yrs. 1993-94 and 1994-95 and no notice under s. 143(2) has been issued. The assessment proceedings, therefore, stand concluded as provided in the Act. It was also contended that investment in the said property was disclosed and there was no paper or incriminating document or any evidence whatsoever found during the course of search on the basis of which inference could be drawn that the assessee suppressed the purchase consideration. It....
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....e of income of her own except some rental income. The unexplained investment, therefore, cannot be attributed to her. The AO, therefore, held the view that 50% of the unexplained investment, in the property would, therefore, be considered in the hands of the assessee and the balance in the hands of his brother Mukesh Vasudeva. The AO worked out the difference at Rs. 25,04,369 (Rs. 36,64,369 - 11,60,000) and this amount was rounded to Rs. 25 lakh. Fifty per cent thereof at Rs. 12,50,000 was, therefore, treated as unexplained investment in the hands of the assessee representing his undisclosed income. 26.5. The assessee was also found to have purchased another property No. 182, Gujrawala, for a consideration of Rs. 4,25,000 on18th Feb., 1988, from Smt. Manju Agarwal and as per the document found Manju Agarwal purchased the said property on17th June, 1983, for a consideration of Rs. 6,70,000. It was explained before the AO that no document or paper indicating payment over and above Rs. 4,25,000 was found during search and accordingly no adverse inference could be drawn. .The explanation so given was not accepted by the AO. He worked out its market value as on the date of search at ....
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....as been duly disclosed in the sale-deed as well as accounts of the co-owners. Similarly, the property at 182, Gujrawala town, was purchased by the assessee for a consideration of Rs. 4,25,000 as is apparent from the sale-deed and the same has also been accounted for in his accounts. There is no material evidence found during the course of search to prove and establish that both the properties were purchased for a consideration more than the consideration shown or unexplained investments made therein over and above the apparent consideration shown. A paper indicating certain details of construction at Rs. 17,40,000 is claimed to have been found during search but there is no detail given therein that the said figure related to the property at B-206 Derawala Nagar and the date on which such expenditure was incurred. It is thus a dumb paper without giving necessary narration and particulars of the transactions and in our considered view no adverse inference could be taken based on such paper. Moreover, as mentioned above, no other incriminating document was found and seized during search establishing investment in the properties at an amount over and above that shown in the sale-deeds ....
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....ounsel cash books were produced before the AO during the course of assessment proceedings but no attempt was made to verify the explanation offered. The learned counsel, therefore, pleaded that on these facts the addition made was not justified. 27.2. The learned Departmental Representative, on the other hand, relied upon the order of the AO. 27.3. We have carefully considered the facts and rival contentions. A copy of the said letter written by Shri K.L. Malik to the assessee is placed at p. 30 of the paper-book wherein Shri Malik asked for Rs. 20,000 per bearer of the letter and with that the total amount due to the assessee would be Rs. 50,000. He promised to send back the amount through draft. The assessee has admitted the contents of the letter as correct and advance made of Rs. 50,000. It is, however, claimed that this amount was given out of the cash balance belonging to the four concerns of the group but there is no entry made in the books of account of the firms about the amount so advanced to Mr. Malik nor there is any details given about the back receipt of the amount from Mr. Malik. There is also no material to show that the assessee was keeping imprest money out ....
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....the following: Rs. (1) Unexplained investment in B-206, Derawala Nagar property 12,50,000 (2) Unexplained cash 5,89,000 (3) Unexplained investments in shares & UTI 24,940 (4) Unexplained investment in purchase of goods 11,710 (5) Unexplained investment in household expenses 25,000 (6) Other investment in Units  ....
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....of his wife the deposit would have been in her name and not in the name of the assessee. Admittedly, the amount has not come out of any explained source of income. Under the circumstances, the addition made of Rs. 15,000 is confirmed. The question of set off against the surplus income/cash available from various concerns would, however, be considered separately. Sunil Vasudeva (ITA No. 6156/Del/1996) 32. The appeal preferred by the assessee is directed against the order of the AO passed under s. 158BC of the IT Act on30th Oct., 1996, determining the undisclosed income at Rs. 4,59,190. The undisclosed income so computed in comprised of the following: Rs. (1) Unexplained investment in shares 2,07,000 (2) Unexplained investment in two air-conditioners ....
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....ssee for the block period. The learned counsel has made a submission that the purchase consideration of Rs 6 lakh for the property was paid by the co-owners as under: Cheque/Pay order No. Date Amount 817451 15-4-1995 2,00,000 817452 15-4-1995 2,00,000 090570 15-4-1995 2,00,000 34.1. These payments have been debited and accounted for in their accounts. According to the learned counsel, Mukesh Vasudeva made a payment of Rs. 2 lakh out of his saving bank account with State Bank ofIndia, Jhandewala, and Dinesh Vasudeva made the payment of Rs. 2 lakh out of the savings bank account with Oriental Bank of Commerce, Paharganj. Necessary details of the payment made are placed at pp. 198 to 204 of the paper book. The assessee also made the payment out of his bank account with State Bank ofIndia. The learned counsel further submitted that the sa....
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.... of Rs. 1 lakh in the hands of the assessee and the same is directed to be deleted. Naresh Vasudeva (ITA No. 6158/Del/1996) 35. The appeal preferred by the assessee is directed against the order of the AO passed under s. 158BC of the IT Act on30th Oct., 1996, determining the undisclosed income at Rs. 8,59,240. The undisclosed income so computed is comprised of the following: Rs. (1) Undisclosed cash 3,40,000 (2) Unexplained expenditure in renovation of house 50,000 (3) Unexplained investment in FDRs and shares 2,53,040 (4) Unexplained expenditure in connection with the marr....
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....y old. As regards one air-conditioner, one colour TV, one BPL refrigerator and micro-oven it was submitted that the same were received by the assessee on Sagai ceremony of his son Pankaj Vasudeva. According to the AO no evidence in support of such claim was adduced. The AO further noted that the assessee's son got married on17th Nov., 1995, and it is customary to give gifts to couple at the time of marriage but gifts of such heavy items are never given at the time of Sagai. The AO further noted that the assessee had shown withdrawals in the family of five persons to the extent of only Rs. 24,000 p.a. upto the asst. yr. 1991-92 and accordingly no asset especially costly items could be purchased out of savings from such withdrawals. There were also no purchase bills of the said items produced. The AO, therefore, valued the household articles at Rs. 1,45,000 and treated the same as representing unexplained investment in purchase thereof for the block period as per details below: Rs. Three ....
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....mity in the order of the AO and the undisclosed income computed at Rs. 1,45,000 on this count is sustained. The question of its adjustment against the surplus cash/income from Pioneer Publicity Corporation shall be dealt with separately. Smt. Avinash Vasudeva (ITA No. 6163/Del/1996). 38. The appeal preferred by the assessee is directed against the order of the AO passed under s. 158BC of the IT Act on30th Oct., 1996, determining the undisclosed income at Rs. 7,64,112. The undisclosed income so computed is comprised of the following: Rs. (1) Undisclosed cash 1,98,160 (2) Unexplained investment in jewellery 4,07,952 (3) Unexplained investment in shares &....
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....ng with her other assets would exceed the taxable limit under the WT Act. It was further contended before the AO that in view of the Board's circular the possession of 500 gms. of gold jewellery is reasonable for persons not assessed to wealth-tax and in the circular the Board has also clarified that the question to include larger quantity of jewellery and ornaments can be considered having regard to the status of the family and custom and practice to which the family belongs and facts and circumstances of the case. It was, therefore, argued that the assessee got married in October, 1972 when the market rate of gold jewellery was very low. The AO further noted that in view of Board's circular the authorised officer on his own allowed the gold jewellery of 595.6 gms. at the time of search and it would be fair to allow the benefit of jewellery released. He, however, treated the jewellery seized of Rs. 4,07,952 as unexplained and undisclosed income to that extent was computed and assessed for the block period. 40.1. The learned counsel of the assessee has reiterated that the jewellery found was received by the lady at the time of her marriage and other ceremonial occasions like bir....
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....osed income at Rs. 31,019 and this comprised of the following: Rs. Unexplained investment in shares 7,000 Unexplained credit 24,019 42. The learned counsel of the assessee has not contested the undisclosed income adopted at Rs. 7,000 the same being surrendered at the time of block assessment. As regards the unexplained credit of Rs. 24,019 the facts are that the AO on examination of the saving bank account of the assessee observed that there was a credit entry of Rs. 24,019 on 16th Sept., 1989, and when required to explain its source it was explained that the credit amount is the proceed of the lottery ticket after deduction of tax at source but the assessee failed to produce any certificate about the lottery amount awarded and the TDS from the concerned authority. The AO, therefore, treated the credit amount of Rs. 24,019 as u....
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....ock assessment made under s. 158BC of the IT Act on30th Oct., 1996, determining the undisclosed income at Rs. 77,621 comprising of the following: Rs. Unexplained investment in shares 7,000 Unexplained expenses 47,500 Credit entry on 16th Sept., 1988 23,121 44.1. The learned counsel has not contested the undisclosed income of Rs. 7,000 computed, the same having been surrendered before the AO and the same is accordingly confirmed. As regards the amount of Rs. 23,121 the same has been claimed as proceeds of lottery but no proof in support has been furnished either before the AO or before us. The undisclosed income, therefore, on this count also is confirmed. 45. Regarding the amount of Rs. 47,500, it has been submitted by the learned counsel that a sum of Rs. 50,000 has been surrendered by the assessee's father Shri Naresh Vasudeva on account....
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....the marriage. The assessee's father claimed to have surrendered an amount of Rs. 50,000 on account of expenses incurred on marriage of the assessee and the same in our view does not cover the afore-mentioned expenses incurred by the assessee individual. The addition made on this count in the hands of the assessee is fully justified and the same is confirmed. However, the alternate plea of the assessee with regard to both the additions of Rs. 47,500 and Rs. 23,121 for set off against the surplus income/cash available with the firms will be considered separately along with others. Smt. Anju Vasudeva (ITA No. 6165/Del/1996) 46. The appeal, preferred by the assessee, is against the block assessment made under s. 158BC of the IT Act, dt.30th Oct., 1986, determining the undisclosed income at Rs. 1,17,986 comprised of the following items: Rs. (1) Unexplained investment in jewellery ....
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....e the AO and accordingly the same are confirmed. 47. As regards the undisclosed income of Rs. 62,736 at Sl. No. 1 above, the facts in brief, are that during the course of search gold jewellery weighing 648.1 gms. and silver weighing 23 kgs. was found at the premises of the assessee. The total value of the gold jewellery as determined by the approved valuer was at Rs. 3,26,708. Out of this jewellery weighting 130.7 gms. valued at Rs. 62,736 was seized. When required, to explain the source of acquisition of the jewellery it was explained that the jewellery belonged to the assessee as her Istridhan and the same were received as presents on her marriage. The assessee was not found to be a wealth-tax assessee, her wealth being below the taxable limit. When further asked to give evidence about its acquisition, it was contended that the total weight of the jewellery does not exceed the permissible limit as prescribed by the Board in its circular issued inl994. The AO noted that as per the Board's circular jewellery upto 500 gms. got accepted and the jewellery seized weighing 130.7 gms. was in excess of 500 gms. The AO treated the said jewellery as unexplained representing the undisclos....
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....bsp; Rs. Unexplained investment in jewellery 1,37,270 Unexplained investment in shares 1,82,668 -------- Total: 3,19,938 -------- 48.1. The learned counsel has not contested the undisclosed income computed at Rs. 1,82,668 on account of investment in shares, the same having been surrendered before the AO. We accordingly confirm the addition made on this count. 48.2. As regards....
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....de of Rs. 1,37,270 is confirmed. 48.5. As regards the claim made for set off, the same would be considered separately along with others. Desh Raj Vasudeva (ITA No. 6162/Del/1996) & Rajesh Vasudeva L/H of Late Ved Prakash Vasudeva (ITA No. 6155/Del/1996) 49. The appeals preferred in these cases are directed against the orders of the AO passed under s. 158BC of the IT Act on30th Oct., 1996, determining the undisclosed income of Rs. 6,30,389 in the cases of Desh Raj Vasudeva and Rs. 25,900 in the case of Ved Prakash Vasudeva. The learned counsel has not contested these appeals on account of amount having been surrendered before the AO. Both the appeals are, therefore, dismissed. Smt. Pushpa Vasudeva (ITA No. 6164/Del/1996) 50. The appeal preferred is against the block assessment made under s. 158BC of the IT Act on30th Oct., 1996, determining the undisclosed income at Rs. 93,400 comprising of the following: ....
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....losed income. 52.1. The learned counsel of the assessee has submitted that AO has only assumed the payment of ten instalments of Rs. 2,818 but there is no evidence for payment of such instalments and there is no basis for estimating the payment of Rs. 28,880. The learned counsel, therefore, pleaded that the addition should be restricted to Rs. 2,818. 52.2. The learned Departmental Representative, on the other hand, supported the order of the AO. 52.3. We have considered the facts and submissions made. It is not disputed that the policies were taken in March, 1984 and to keep the policies alive the assessee was required to pay the annual premium of Re. 2,818. There is no material produced either before the AO or before us to show that only one premium was paid at the time of obtaining the policy in 1984 and thereafter the same were allowed to be lapsed and no payment thereafter was made and in the absence of any such material the AO was justified in taking the payment of annual premium for each year till the date of search for consideration of its source. On these facts we see nothing wrong in the order of the AO on this count and the undisclosed income computed for the blo....
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....ising Service or M/s P.K. Advertising Service (P) Ltd. were made by them during the course of examination on account of cash vouchers, not available. In those cases also no evidence could be adduced that the transactions have resulted in cash generation and such cash was available with the partners on the date of search. Further, how movement of cash from one concern has been taken place to another when the partners/directors are not common also could not be explained. In view of these reasons the assessee's submission in this regard are not tenable and are rejected." 52.5. The learned counsel of the assessee has made a submission that this is the case of business run and controlled by close family group. The family's pedigree as given at p. 401 of the paper-book is reproduced below: Family Tree Late Shri Arjan Dass Vasudeva &....
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....sp; | Sh. Sunil Vasudeva | | | (Wife Smt. Kiran Vasudeva) | | | | | | | | Sh. Rajesh Vasudeva | | | (Wife Smt. Sweety Vasudeva | | | |&n....
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....13 (Guj); (4) CIT vs. A.W. Figgies & Co. (1953) 24 ITR 405 (SC); (5) CIT vs. R.M. Chidambaram Pillai 1977 CTR (SC) 71 : (1977) 106 ITR 292 (SC); (6) CIT vs. Sant Lal Arvind Kumar (1981) 25 CTR (Del) 207 : (1982) 136 ITR 379 (Del); (7) Malabar Fisheries Co. vs. CIT (1979) 12 CTR (SC) 415 : (1979) 120 ITR 49 (SC); (8) Bist & Sons vs. CIT (1979) 8 CTR (SC) 152 : (1979) 116 ITR 131 (SC); and (9) Addl. CIT vs. Vinayak Cinema 1977 CTR (AP) 212 (FB); (1977) 110 ITR 468 (AP) (FB). 52.6 The learned counsel has further pointed out that various documents on the basis of which the addition is made in the hands of the firm were those found in the possession of the partners including the diaries prepared by them in their own handwriting for the transactions of the firms kept outside the books of account. Further, Annexure A-14 on the basis of which peak chart was prepared and the addition was made is the diary of one of the partners of the firm viz., Shri Rajesh Vasudeva. Annexure A-23 is another diary of another partner Mukesh Vasudeva. Additions are being made in the hands of firm on the basis of these diaries as well. The entries in this diary show that the transactions a....
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....r consideration and set off would emerge as follows: Rs. Rs. Income surrendered 62,43,640 PB TT/5 (a) Deduct: Investments and expenses 34,55,589 PB TT/12 --------- Balance...... 27,88,041 PB TT/9 (b) Adjust: ....
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....endered 1,15,000 4,92,958 --------- --------- Balance in surplus 12,39,503 --------- NOTE: Without prejudice, it is further submitted that if any amount of addition is sustained over and above the surrendered amount of Rs. 62,43,640, that may be further available to the assessee." 52.8. The learned Departmental Representative on the other hand, relied upon the order of the AO and he has further made a submission that though the various firms have been constitute....
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....n was constituted in October 1966 and the first assessment year involved was 1968-69. The firm has carried on business all through and the same has been progressive year after year. The other concerns were, however, constituted much later by the family members, i.e.: Delhi Advertising Services March, 1985 Syndicate Advertisers September, 1986 P.K. Advertising Services April, 1987 P.K. Advertising Service (P) Ltd. October, 1992 52.11. The constitution of various firms and the shareholders of the company have been given elsewhere. The firms as well as the company undisputedly carried out independent business; maintained their accounts separately. They also filed returns and assessed also separately. Therefore, for all practical purposes the various firms and the companies are separate entities. There has been nothing brought on record to show that all the firms and the companies had common management and control and there was interconnecti....
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....It would be seen from the assessments made that the undisclosed income have been computed for various years falling in the block period on account of undisclosed receipts and also on account of undisclosed expenses incurred. In our considered view the unaccounted receipts were available for incurring unaccounted expenses and, therefore, necessary adjustment or set off is required to be given for that unaccounted expenses against the unaccounted receipts in each case of the firm if the facts so warrant. 52.13. We have given our findings in respect of the disputed receipts, income and expenses incurred outside the books in the cases of various concerns and it would not be fair and proper to compute undisclosed income both on account of unaccounted receipts/income and unaccounted expenses as unaccounted expenses could only be incurred out of the funds available from unaccounted receipts/income and we are fortified in taking such view by the decision of the Hon'ble Supreme Court in the case of Anantha Ram Veera Singhaiha & Co. wherein it was observed that secret profits or undisclosed income of an assessee earned in an earlier assessment may constitute a fund even though concealed f....