TaxTMI 
TaxTMI 
1998 (10) TMI 92
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.... undisclosed Income ------------------------------------------------------------- 1 2 3 4 Rs. ------------------------------------------------------------- (i) Other 2,84,29,400 89-90 & 92- Para (D) on p. 9 to valuable 93 to 96-97 1st para on p. 11 assets read with Annexure A (shares) (ii) Bogus 5,42,21,070 91-92 to 96- Last par....
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.... 20 and 21 read with deposit in Annexure (B-3) and respective (B-4). bank accounts of unaccounted a/c holders, being clients of the appellant. (viii) Aggr- 80,75,145 94-95 & 95-96 Last para on page 20 egate of and subsequent deposits/ paras on p. 21. credits in bank account of o....
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....sp; para (B) investment in jewellery (xix) Unexp- 1,00,000 97-98 Page 5 para (e) of lained para (B) investment in silver ------------ Total 25,50,69,506 ------------------------------------------------------------- (2) That without prejudice to the generality of the aforesaid grounds, all and every addition made in the impugned assessment as undisclosed income of the appellant is vitiated in law on, inter aha, one or more of such grounds, as lack of jurisdiction, want of authority of law, lack of evidence, lack of proper opportunity to the appellant to adduce evidence to prove his case and failure on the part of the AO to discharge his burden of proof. (3) That consequently, the total demand of tax of Rs. 15,30,41,703 determined by the impugned block assessment against the app....
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.... 302-304 (e) Sh. Manoj Tayal, B.P. Marketing Ltd. 305-309 (f) Sh. Shyam Sunder Garg, Leher Chemicals 310-312 (P) Ltd. (g) Sh. Praveen Chandra, Sital Developers 313-314 (h) Sh. Vijay Singh, Indradhan Agro Products Ltd. 315-319 (i) Sh. Umesh Kumar Shukla, Real Overseas (P) Ltd. 320-322 (j) Sh. Tarun Kumar Sahai, Trousseau Overseas 323-324 (P) Ltd. (k) Sh. Pradeep Aggarwal, Parul Poly Products 325-326 (P) Ltd. (l) Sh. Mukesh Gupta, Npar Cans (P) Ltd. 327-329 (m) Sh. Mukesh Gupta, Npar Drugs (P) Ltd. 330-332 (n) Sh. Rajbir Singh Makhni, Rush Chemicals 333-335 (P) Ltd. (o) Sh. R.P. Aggarwal, Excel....
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....ck of the assessee without giving him opportunity of cross-examination. (iii) The above evidence goes to the root of the matter." 4. Since the additional grounds as well the additional evidence to be admitted are intimately connected with the specific grounds taken in respect of the lack of proper opportunity allowed to the assessee, we would first advert to the aforesaid issue before coming to the admission of the additional ground and the additional evidence. Shri O.P. Sapra who appeared oh behalf of the assessee, submitted that the assessee is a qualified chartered accountant. The firm was constituted under the name and style of Alok & Co. wherein he was one of the partners. The other partners were stated to be qualified chartered accountants. Along with the aforesaid work the assessee also executed various professional assignments for corporate and non-corporate clients. This included various companies as also the concerns promoted by the relatives and the friends. Since a few concerns were managed by the persons who were inexperienced the assessee rendered assistance relating to the management and the carrying on of his business affairs. In 1991 the family concern was fo....
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....nbsp; undisclosed income Rs. -------------------------------------------------------------- (1) Other valuable assets (shares) 2,84,29,400 89-90 & 92- 93 to 96-97 (2) Bogus shareholdings 5,42,21,000 91-92 to 96- &nbs....
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....ch the assessments have been framed for the earlier assessment years was not accepted. The reasons given for bringing to tax the income of these companies in the hands of the assessee were that many of these companies had given the address of their registered office or premises as that of the assessee. Secondly the companies were controlled and managed by the promoters who were either dummy directors or the assessee himself, his wife or close relatives. The assessee failed to produce shareholders in these companies and no one was there at the addresses given in the share application forms and as per the statements recorded under s. 131 of the Act. As per the Inspector's report, the shareholders were not men of means. The fact that the share certificates of various companies were found at the premises of the assessee and the share as well the blank documents bearing signatures of the shareholders showing a receipt of shares clearly showed that these were benamidars of the assessee. The assessee refuted all the allegations as levelled against it. It was explained that the assessee rendered managerial assistance to these companies because they require it for which the fees were charge....
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....s fact alone the assessment needs to be set aside. This is more so in case the statements of various parties as recorded are examined. The perusal of these statements would show that while few parties owned up the investment made out of their own sources which is the case of Narender Kumar Rajgaria, Smt. Sushila Saxena, Dinesh Narain, Manoj Aggarwal etc., Ms. Fariya Rizvi was a minor when an investment was made and as such it was her father Shri H.H.S. Rizvi who should have been examined instead of the assessee. From the statement of Shri Surender Garg it is clear that nowhere he mentioned that the money for purchase of shares came from the assessee. Shri Vinay Gupta on the other hand is an advocate and has funds to invest the money. The statements of other parties reflect similar position. As to the placement of share certificates in the premises of the assessee, the same were maintained in his professional capacity and as such no adverse inference could be drawn. The AO brought no material on record to show that the usufruct of these companies was enjoyed by the assessee. In any case the question whether the income of these companies which are held to be benamidars of the assesse....
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....keting (P) Ltd. This was done since the payment was made out of the funds available with the assessee. The same could not be added to the income of the assessee. 7. The AO also made additions on account of undisclosed investment in various immovable properties which were not owned by the assessee. The addition made was at Rs. 85,29,890. Relying on the details given on pp. 41 to 45 it was submitted that the additions were based on entries found noted in the seized diary of the assessee. The fact that the assessee noted the market value of certain properties could not show that the same belonged to the assessee. His explanation on this account should have been accepted or subjected to further probe. Since there was no conclusive evidence brought on record, the addition could not be sustained. The additions made at Rs. 4 lakhs on account of advances through Shri N.N. Goyal, Rs. 9,75,000 on account of commission of M/s Lehar Chemicals (P) Ltd. Rs. 20 lakhs on account of unexplained investment in the names of children, Rs. 20 lakhs on account of undisclosed children's savings, Rs. 2 lakhs on account of VB treating it as balance with Vijaya Bank, Rs. 42,350 on account of unexplained c....
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....ps the time available at the disposal of the AO was very short. However, the statements of third parties before they could be relied upon have to be confronted to the assessee and it is his right to cross-examine them if he so wants. This would be in the fitness of the principles of natural justice. Similar was the case in respect of the addition made on account of deposits/credits in the bank accounts. Not only the deposit in the names of relatives who had been assessed to tax were assessed in the hands of the assessee, deposits of third parties who were stated to be unconnected with the assessee were added in his income on the basis of the information collected at the back of the assessee and without confronting him the same. The information so collected had to be confronted to the assessee and opportunity be allowed to rebut the same. The assessment framed under the present section has to be in respect of income which is undisclosed. The expression has been defined in s. 158BA and has to be construed as such. The AO is not permitted to go beyond the material discovered as a result of search and to make roving enquiries in order to rope in certain income which apparently belongs ....