TaxTMI 
TaxTMI 
2002 (11) TMI 269
X X X X Extracts X X X X
X X X X Extracts X X X X
....as made on 31st Dec., 1997. In this order, the AO, inter alia, made addition on account of unexplained cash, undisclosed investment in FDRs, standing in the names of assessee and family members and also on account of undisclosed income by way of expenditure in the marriage of his daughter and unexplained investment in the purchase of moped. As the AO had made certain additions on account of undisclosed income, the appeal was preferred before the Tribunal. The Tribunal adjudicated the appeal filed by the assessee vide its order dt. 2nd Feb., 2000. The Tribunal set aside all the above four issues with certain directions to the AO. In consequence to the Tribunal's order, the AO re-examined the various issues. He noted that during the search and seizure operation, the cash aggregating Rs. 1,84,680 was found from the residence of the assessee whereas another sum of Rs. 9,250 was found from the locker. When the assessee was asked to explain the sources of these cash in his statement, the assessee stated that a sum of Rs. 1,650 belonged to him and regarding balance amount he had no knowledge. The statement of the wife of the assessee was also recorded regarding cash availability. She stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fter the search) that out of cash found on the date of search and seizure operation, a sum of Rs. 1,70,000 belonged to her husband's younger brother Shri Jai Narain Jaiswal. The affidavit to this effect is also placed at pp. 246-247 of the paper book. Even the assessee had confirmed the same in his statement recorded on 11th Dec., 1996. In the fresh assessment proceedings, the AO again recorded the statement of Shri. Jai Narain Jaiswal on 13th March, 2002. The copy of the statement is placed at pp. 444-448 of the paper book. In a specific query to Shri Jai Narain Jaiswal, he stated that on 2nd Nov., 1996, he had gone to the house of his brother (the assessee) where a deal of a property was to take place for Rs. 1,70,000 but as the other party was out of station, he left the cash with Smt. Sulochana w/o the assessee (bhabhi of Shri Jai Narain Jaiswal). He had planned to go to Rajnandgaon again after Dewali to strike the deal. But in the meantime, the amount was seized by the IT Department from her residence. The learned counsel stated that in order to prove that above statement was correct certain evidences were filed before the AO. It was stated that Shri. Jai Narain Jaiswal is par....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 1,70,000 belonged to Shri Jai Narain Jaiswal (assessee's brother) who had left the same with her on 2nd Nov., 1996. Even the assessee confirmed the same vide his statement dt. 11th Dec., 1996 which was taken after a month from the date of search. Someone may say that these were self-serving documents which were filed to support the case but the AO has overlooked a very vital piece of evidence which was in the form of entry in the cash book of M/s Ekta Agencies where Shri Jai Narain Jaiswal was a partner. On the date of search itself, a survey operation under s. 133A of the Act was conducted at the premises of M/s Ekta Agencies. The survey party also examined the cash book and entries from 16th Oct., 1996 to 14th Nov., 1996. The cash book entry on 2nd Nov., 1996, shows a withdrawal of Rs. 1,72,500 by Shri Jain Narain Jaiswal from the firm. As the entry was verified on the date of search itself it cannot be said that it was an afterthought. The statement of the assessee's wife, a day after search and seizure operation also cannot be said to be afterthought. As regards non-specific mention of leaving the amount with Smt. Salochana w/o the assessee. We find that the specific question....
X X X X Extracts X X X X
X X X X Extracts X X X X
....88,412 1,50,000 04 Navneet Jaiswal 04 4,47,014 02 86,721 06 5,33,735 3,05,000 05 Nitin Kumar Jaiswal 01 92,604 02 2,16,772 03 3,09,376 1,50,000 06 Smt. Shivkumari Jaiswal 01 2,49,077 Nil Nil 01 2,49,077 1,00,000 Grand Total 15 15,02,879 13 11,05,421 28 26,08,300 13,05,000 11. When, in the original assessment, the AO made addition on account of undisclosed investment in the above FDRs, the appeal was preferred before the Tribunal. Before it, it was claimed that (i) investment in some of the FDRs have been added more than once; (ii) the FDRs disclosed by different family members under VDIS 1997 have also been added by the AO in the assessee's hands; and (iii) certain FDRs have been received by different family members under a will of assessee's father-in-law and trust which has also been added to the income of the assessee. Similarly, it was also claimed that there were no search warrant in the names of Shri Kamal Narain Jaiswal & Sons, HUF, Smt. Indrani Devi Benefit Trust, Shri Nitin Jaiswal, Shri. Navneet Jaiswal and Smt. Alpana Jaiswal and, therefore, the invest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....found during the course of search were 15 in numbers. Full explanation regarding sources thereof was furnished before the AO. It was argued that the search warrant was in the name of "Shri Kamal Narayan & Ors." The Nagpur Bench of the Tribunal in the case of Anjana Devi Aggarwal (ITA No. 926/Nag/1996) had held that the warrant under s. 132 should be issued in the proper name. The search warrant was valid in the name in which it is issued. It cannot be said that word 'others' mentioned in the search warrant will include any other family members. The learned counsel, therefore, stated that the search warrant was valid only in the case of Shri. Kamal Narayan Jaiswal and not in the name of any other family members or his HUF. It was stated that those persons who have opted for VDIS were not the subject-matter of search and seizure operation under s. 132(1) of the Act and, therefore, they could always take the immunity of VDIS. Thus once the income declared by such persons on account of investment in the FDRs have been declared and taxed under VDIS and necessary certificate has been obtained from the concerned CIT, the question of adding the same to the income of the assessee as undiscl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and was working in State Excise Department, Government of MP. The search and seizure operation under s. 132(1) of the Act took place at the premises of the assessee. The search warrant was in the name of 'Kamal Narayan Jaiswal & Ors.' The search warrant is very important document for deciding even the validity of the search and seizure operation. Various Courts have taken the view that action under s. 132(1) of the Act is also justiciable. Thus a search warrant in the name of 'Kamal Narayan Jaiswal & Ors.', cannot be applicable in the cases of other individuals who are the family members and even in the case of the assessee HUF. The, Tribunal Nagpur Bench, in the case of Anjana Devi Aggarwal (ITA No. 926/Nag/1996 dt. 26th June, 1997) has held that the search warrant in the name of an assessee, cannot cover the family members, hence the issue of notice under s. 158BC of the Act on other family members itself was illegal. In view of this legal position, if any person, who was not a subject-matter of search and seizure under s. 132(1) was free to avail the benefit of VDIS, 1997. Some members of the family have availed this benefit which has been accepted by the CIT(A) concerned by acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs. 40,000 was purchased. On maturity, it became Rs. 59,280. The same was renewed and the maturity amount came to Rs. 66,721. It was further renewed whose maturity value came to Rs. 95,128. This FDR of Rs. 95,128 finds place at Sr. No. 33 of Annex. A This amount has already been offered for taxation under VDIS, 1997, which has been accepted by the CIT. Thus, the amount offered for taxation under VDIS was only the maturity value of the FDRs mentioned at Sr. Nos. 3 and 19 of Annex. A and, therefore, any addition on account of these FDRs does not arise. The addition in respect of these two FDRs are, therefore, deleted. Similarly, the FDRs at Sr. Nos. 6 and 10 are of Rs. 73,104. When we examined these FDRs on the basis of date and the numbers, we found that the addition has been made on the basis of maturity amount and again on the basis of its renewal. Actually, the addition if any would have been considered only once and not twice. We also find that as per bank's certificate, an FDR of Rs. 60,000 was purchased. Its maturity value was Rs. 73,104. The same was renewed whose maturity value came to Rs. 83,075. This was further renewed whose maturity value came to Rs. 92,597. This FDR was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o. 15 and 16 are of Rs. 74,224 each. As per details of the bank's certificate, a FDR of Rs. 50,000 was purchased on 15th Oct., 1987. Its maturity value came to Rs. 60,920 10 ps. The same was reinvested whose maturity value came to Rs. 74,224.90 ps. The AO had added this amount. This amount has been again renewed for further period. The AO has added this reinvestment also. The matured amount of this FDR came to Rs. 94,025 which was reinvested whose maturity value came to Rs. 1,14,560. From the certificate, it is clear that the amount of Rs. 74,224 has been taxed by the AO twice. The FDR of the value of Rs. 1,14,560 which finds place at Sr. No. 35 of Annx. A has also been added by the AO. This FDR has already been disclosed under the VDIS which has also been accepted by the concerned CIT. As the amount offered for taxation under VDIS was the maturity value of the FDRs mentioned at Sr. Nos. 15 and 16 of Annx. A, the question of again making addition of the value of FDRs at Sr. Nos. 15 and 16 of Annx. A does not arise and the addition on account of these FDRs is deleted. The entire addition in respect of FDRs at Sr. No. 7, 12, 15, 16, 21 35 and 36 are deleted. 23. Now, we will take ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd that this amount was again reinvested in the FDR whose maturity value came to Rs. 86,366. The FDR of this value finds place at Sr. No. 25 of Annex. A. Thus FDR of Rs. 86,366 has already been offered for taxation under VDIS which has been also accepted by the CIT. As the FDR declared under the VDIS was only the maturity value of the FDR mentioned at Sr. No. 9 of Annex A. the question of making any addition of the investment in the FDR at Sr. No. 9 does not arise and the same is deleted. The FDR at Sr. No. 13 is of Rs. 20,000. We have verified the entire record and in the absence of sources of investment of the same, we confirm the addition of Rs. 20,000 on account of FDR mentioned at Sr. No. 13 of Annex. A. 25. The FDR at Sr. No. 17 of Annex. A is of Rs. 1,37,167. The date of FDR is 30th Dec., 1991, Central Bank of India. This FDR was not found during the course of search and seizure operation. We have, therefore, examined the entry in the note-book which was seized during the course of search. We do not find any entry or date relatable to this figure in the seized document. In absence of any entry in the seized document, the addition of the value of this FDR is not justified ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ewed whose maturity value came to Rs. 83,075. This FDR was further renewed whose maturity value was Rs. 92,597. This FDR was again renewed whose maturity value came to Rs. 1,02,209. The FDR of the value of Rs. 1,02,209 finds place at Sr. No. 30 of Annex. A. This amount was been offered for taxation under VDIS which has been accepted by the CIT. As the FDR offered for taxation was only maturity value of the earlier FDR mentioned at Sr. No. 11 of Annex. A to AO's order, the question of any addition on account of undisclosed investments in the FDR mentioned at Sr. 11 of Annex. A does not arise and the same is deleted. 29. The entire additions in respect of FDRs in the name of Alpana are deleted. 30. The AO has made the addition on account of two FDRs (Sr. Nos. 1 and 28 of Annex. A) standing in the name of Shiv Kumari. The FDR at Sr. No. 28 is of Rs. 2,49,077 which was found during the course of search and seizure operation. The value of this FDR has been offered for taxation under VDIS which has been accepted by the CIT. Thus, the question of making any addition of the same does not arise and the same is deleted. 31. As regards FDR mentioned at Sr. No. 1, we find that its val....
X X X X Extracts X X X X
X X X X Extracts X X X X
....FDRs was made by the assessee and Shiv Kumari/Shiva/Indirani were only the name lenders. The assessee is also at liberty to adduce any evidence to rebut the presumption mentioned under s. 132(4A) of the Act. If on enquiry, the AO comes to the conclusion that no FDR in these names ever existed or there was no evidence that the actual investment was made by the assessee in their names, the addition of the value of the FDR mentioned at Sr. Nos. 1 and 2 of Annex. A will stand deleted. The addition of Rs. 20,000 is confirmed and the addition to the extent of Rs. 3,83,600 is set aside for further examination as directed above and the addition of the balance amount is deleted. 32. Ground No. 9 related to the addition on account of investment made in the Moped. 33. We find that as per seized document, an investment was made on account of purchase of a moped in the name of Shri. Navneet, s/o the assessee. The substantive addition has been made in the hands of the assessee and the protective addition has been made in the name of Shri Sadashiv Jaiswal. After perusing the record and considering rival submissions we hold that the investment was made by the assessee and as the sources of t....