TaxTMI 
TaxTMI 
1998 (1) TMI 108
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....reasons that the directions given in appeal were not properly followed by the AO. The AO had again made the additions without making any inquiry or investigation on the lines as were indicated by the order of the CIT(A). Another assessment was framed which was made subject of appeal before the learned CIT(A)-an order appealed against on both sides. It is in this background that the decision of the learned CIT(A) on the issues agitated against on both sides has to be considered. 3. Coming to its appeal in ITA No. 2164, it is submitted by the learned counsel C.S. Agarwal that the first ground raised relates to four additions. The first addition relates to a sum of Rs. 43,000 made on account of unexplained investment in Hindustan Textile Industries. It so happened that during the course of search proceedings, in a statement recorded on 30th April, 1985, the assessee submitted that his initial investment in the newly established concern namely Hindustan Textile Industry amounted to Rs. 75,000 to Rs. 80,000. It was, however, found that the assessee had disclosed investment of Rs. 37,000 only. The difference in the amount of Rs. 80,000 and that of Rs. 37,000 which worked out to Rs. 43....
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.... that the AO would take a decision with regard to the addition in view of the finality arrived at in the asst. yr. 1985-86. In view of the fact that the issue has been contested again in the two other appeals, we would consider the same in detail. The appeal on the ground is dismissed. 6. The 4th addition raised in the ground of appeal pertains to alleged unexplained difference in stock found during search operations. Aforesaid addition has been discussed in the order of the AO on p. 6 of his order. The addition made at Rs. 84,908 was on account of discrepancy found in the stock discovered in the premises of the assessee vis-a-vis the stock worked out as per books of account. The learned CIT(A) restored the matter back to the file of the AO with certain directions. As the issue has again been raised in two other appeals taken along with the aforesaid appeal, the same would be considered therein. In view of the latter, the order of the CIT(A) would stand confirmed and the appeal of the assessee on the issue stands dismissed. 7. In the second ground of appeal, the sustaining of addition of Rs. 7,000 on account of unexplained investment in jewellery is contested. According to Sh....
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....Kitchanware 7. Record change Gerrad As the assessee could not explain the source of the above articles, the income was estimated at Rs. 25,000 on estimate basis. The learned CIT(A) confirmed the addition on the ground that the assessee could not prove that the articles were acquired in the earlier years and as such the same had to be considered in the year when these were discovered. The argument of the learned authorised representative in this respect was that as would be evident from the articles, the same were not acquired in the financial year as was the case of the Revenue. The assessee has been assessed to tax since 1952-53 onwards and as such they were acquired much prior to the year in which the addition on their account has been made. In any case, the addition, if called for, should have not been made on estimate basis but for the amount for which the assets were acquired for. In the circumstances, the same need to be deleted. 10. The learned Departmental Representative on the other hand, submitted that when asked to explain the source of acquisition of articles, it was the stand of the assessee that the same were acquired by his wife Mrs. Kumkum Gupta. It was als....
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.... Sl. Nos. 1 to 16, while items mentioned against Sl. Nos. 1 to 9 were in respect of yarn, against Sl. No. 10, 11 and 12 were in respect of cotton yarn on cones they were again in respect of cotton yarn on beams and machines against Sl. No. 13 and 14. Item Nos. 15 and 16, on the other hand, were in respect of canvas yarn and cloth. The quantity of the cloth both in respect of yarn and cloth was found to be as follows: Cloth 1364.0 metres Yarn 4403.0 Kg. The value of cloth @ 9 per metre was worked out at Rs. 12,276 and that of yarn of Rs. 4,403 at Rs. 4.75 and the stock of yarn as found on30th April, 1985, is valued at Rs. 1,09,018. As at the time of original assessment proceedings, yarn and cloth mentioned against Sl. Nos. 15 and 16 were not taken into consideration, the same were considered and the total value of the stock was arrived at Rs. 1,32,029 against Rs. 1,21,294 arrived at earlier. The trading account was recast as under: Particulars Amt. Particulars Amt. Purchases 1,16,154 Sales 89,970 Wages/salaries for30-4-1985 12,550 Closing stock (Balancing figures) 51,760 Electricity till30-4-1985 2,824 -- -- Gross pro....
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.... case this is also accounted for, the difference to the extent of Rs. 69,328 stands explained. The remaining difference works out to Rs. 10,941 which needs to be ignored in view of the estimate of gross rate of profit while accounting for the stock at Rs. 52,021. Meeting the objection of the learned authorised representative it was submitted by Shri S.K. Srivastava, the learned Departmental Representative that in case the document listed at p. 10 of the paper book is pursed, it would be clear that the same is dt.28th April, 1985. Surprisingly enough, on the same date, assessee records that the yarn as sent cannot be converted into cloth. If it was so, why was the same not returned back to the assessee who took more than a month to return the goods. This apart, the document could not be relied upon as despite requisitioning made, the assessee could not show that it had paid freight and octroi charges for either receipt of the goods or despatch of the same. Grave doubts are cast on the genuineness of the documents and as such the assessee's version could not be accepted. The learned CIT(A) rightly confirmed the addition on account of goods received from M/s Mehrotra Textiles. As to t....
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....as been tested by way of any evidence brought on record. On the other hand, as mentioned by the learned authorised representative, M/s Mehrotra Textiles has regular dealings with the assessee which are recorded in the ledger stated to be still in possession of the Department. In absence of any material to controvert the statement of the assessee effectively, in our considered view, confirmation of addition on this count cannot be upheld. 16. Coming to the addition on account of yarn found on looms, it was conceded by the learned Departmental Representative that the same was made on estimate basis. In this respect we also find that no attempt was made to verify as a fact whether yarn on a particular beam could be to the extent as estimated by the AO or the one as stated by the assessee's counsel. Thus, the addition made on this account has been rightly held to be not sustainable by the learned CIT(A). After holding so, we do not find any merit in again remanding the case back to the file of the AO without giving any specific directions in this regard. In case the AO has not been able to make out a case for addition during a period of 10 years, it would be of no purpose to give hi....
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.... be produced for examination was not unreasonable. The same should have been complied with. In absence of it, the only conclusion drawn by the AO could be that the same represented unexplained money in the hands of the assessee. In the absence of any evidence brought before us, to support the stand of the assessee, we would uphold the addition as sustained by the learned CIT(A). 19. In the result, the appeal is allowed in part. 20. In ITA No. 1872, appeal filed by the Revenue, the first ground relates to addition of Rs. 1 lakh made by the AO. Shri Srivastava the learned Departmental Representative submitted that during the course of searches, a diary marked as Annexure A-4 was seized. The aforesaid diary contained the details of the investment in the moneylending business and the income earned therefrom. Accordingly, the addition was made at Rs. 19,85,109 which was set aside by the learned CIT(A). Subsequently, addition of Rs. 1 lakh was made in respect of interest earned on account of investment in moneylending business. At the first moment, the assessee denied as to the diary having been written by him. However, subsequently it was proved that the same was written by him an....