TaxTMI 
TaxTMI 
2009 (12) TMI 440
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....e dated February 12, 1997, under section 158BC of the Act to the assessee. Similar notice dated December 11, 1997 was issued to the company as well. Enquiries were thereafter made, particularly regarding annexure A-6 which was, as mentioned above, a sheet of paper and contained the following hand written text : (Rs.) " Architect 140.00 Mutation 150.00 Brokerage 650.00 Expenses for Register 172.09 K. Lal (M.M. Suri) 50.00 Registration for name, etc. 100.00 Cost of L. 50,500.00 51,762.00" 2. According to the Assessing Officer the figures were in hundreds and the dot in between the figures had no meaning. For example, against architect where the figure of 140.00 is mentioned, it actually meant Rs. 14,000. In this way the total consideration in respect of agricultural land purchased by the assessee in village Bhigan, Tehsil Gannaur, District Sonepat was Rs.51,76,200. The company submitted its reply dated July 23, 1997 inter alia stating that the company had purchased the said agricultural land which was duly recorded by it in its books of account. It never made any investment of Rs. 51,76,200 nor did annexure A....
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.... income being the investment in the purchase of land at village Bhigan. The Assessing Officer also made further addition of Rs. 8,86,794 as the appellant' s undisclosed income from alleged investment in the purchase of jewellery relating the same to the assessment year 1997-98. As far as the addition on account of jewellery is concerned, the assessee' s explanation was that the jewellery found with him included jewellery worth Rs.10,96,379 which belonged to his mother-in-law Smt. Raj Rani Kapoor and was kept with him for safe custody. The assessee had also furnished reconciliation of jewellery found from the premises and jewellery owned by the assessee and his family members vide his letter dated September 16, 1997, however, the explanation of the assessee was rejected by the Assessing Officer resulting in the aforesaid addition. 6. The additions made by the Assessing Officer, as aforesaid, were challenged in appeal before the Income-tax Appellate Tribunal (ITAT). The Income-tax Appellate Tribunal by a common order passed both in the case of the assessee and the company upheld the two additions made in the case of the assessee as his undisclosed inc....
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....Chaudhary [2008] 296 ITR 619 (Delhi), which is a Division Bench judgment of this court against which even SLP filed by the Revenue in the Supreme Court has since been rejected vide order dated February 15, 2008. It was argued that the appellant had made no purchase of any agricultural land. It was the company which purchased the agricultural land, which was duly recorded in the books as per its balance-sheet as on March 31, 1996. The details of the investment in land, including the names and addresses of the vendors and the price paid was duly disclosed by the company in its letter dated July 23, 1997 addressed to the Assessing Officer who issued show cause to the company. The vendors of the land had even filed affidavits in support of the transactions, the correctness of which has remained uncontroverted. The assumption that the appellant as one of the promoter directors made investment in the purchase of agricultural land for the company was totally misplaced and unfounded, based on no evidence, but on surmises and conjectures on which no assessment could be founded in law. The Income-tax Appellate Tribunal, it is contended, merely reproduced the Ass....
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....to prove any undisclosed income which may be attributed to the assessee. This burden in the present case has not been discharged by the Revenue. The Revenue has by reaching its conclusion acted only on surmises and conjectures without there being any such material to support its findings and conclusions. No material has been found to show that the assessee in the present case has invested any amount in the purchase of land. The fact that the assessee happens to be one of the promoter directors of the company and, therefore, could be deemed to have invested some amount which is interpreted to be a fabulous figure of over Rs. 51 lakhs for the purchase of land in the name of juristic person which is totally different under the law is too far fetched to sustain the conclusion reached by the Income-tax Appellate Tribunal which is the final fact finding authority and has to act on some material and not to go by irrelevant and erroneous consideration, basing their conclusion on mere conjectures and surmises. The Income-tax Appellate Tribunal has to act judicially and has to weigh all the pros and cons of the case for and against the assessee to reach its conc....
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....s document or state that it did not belong to him. His explanation was that this document had no connection with the purchase of the land by M/s. D. D. Industrial Corporation Limited at village Bhigan, Tehsil Gannaur, District Sonepat. It is only a rough estimate of the cost of setting up of a new project in and around Gurgaon and that this paper did not have any description of khasra number of any land and it also did not contain the address of any person. In this backdrop, the Assessing Officer dealt with the aforesaid contention to find out as to whether the document has any connection with purchase of the land by M/s. D. D. Industrial Corporation Limited at village Bhigan, Tehsil Gannaur, District Sonepat or it related to setting up of a new project in and around Gurgaon only. Since there was no denial that the said paper was related to the purchase of the property, it was for the assessee to demonstrate how it was related to the proposed purchase of land in and around Gurgaon. The Assessing Officer found that the assessee had failed to furnish any details of land which he proposed to purchase in and around Gurgaon. No project details, which he was planning....
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....age Bhigan. 13. The Assessing Officer also observed that page 36 of annexure AA-140 was the site plan for the said land and no expenses of this account had been shown to have incurred in the books. The expenses/payment to architect and Shri K. Lal as reflected in page 34 of annexure A-6 would further substantiate that this paper related to the unaccounted expenditure of the assessee on account of purchase of land at village Bhigan for DD Indl. Corpn. The assessee failed to furnish the details of the persons who had made this site plan. When specifically confronted in question No. 14, the assessee replied that one Shri S. K. Arora had made this plan. . . . 15. The Assessing Officer further noted that pages 4 and 5 of annexure A-6 which were the sketches of the land in village Bhigan showed the land rate was thus ranging from Rs. 17 lakhs to 20 lakhs per acre. Thus the Assessing Officer observed that this also proved that the consideration of Rs. 16,00,000 for 4 acres of land shown by the assessee in its books of account was understated value of land. The unexplained investment had been shown in page 34 of annexure A-6." 14. On that basis ....
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.... to accept this contention of the learned counsel for the assessee. Concurrent findings are arrived at by all the three authorities below and it is not a case where these findings can be treated as perverse. In view thereof, reliance placed upon the judgment of this court in Girish Chaudhary [2008] 296 ITR 619 (Delhi) or the judgment of the Supreme Court in V. C. Shukla [1998] 3 SCC 410 (SC) and Lalchand Bhagat Ambica Ram [1959] 37 ITR 288 (SC) would not be of any assistance. This question is thus answered in the affirmative, i.e., in favour of the Revenue and against the assessee. Re : Question No. 2 18. In so far the addition on account of jewellery is concerned Mr. Monga submitted that during the course of search proceedings, the appellant was found to be in possession of jewellery worth Rs. 54,70,063 both at residence and bank lockers. Vide letter dated July 25, 1997 in reply to the Assessing Officer' s query, the total shortfall of jewellery including the silver utensils was valued at Rs. 6,44,416 which was surrendered as undisclosed income of the appellant in the return filed pursuant to notice under section 158BC of the Income-tax Act. It is furthe....
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....bsp; violation of the principles of natural justice. 19. We find that the addition of Rs. 8,86,794 on account of unexplained jewellery is worked out by the Assessing Officer on the basis that during the course of search at the residence and other locker of the assessee, the following jewellery was found : (Rs.) 1/14 West Patel Nagar 22,43,506.00 1/14 West Patel Nagar 3,33,053.00 Locker at Punjab & Sind Bank Patel Nagar (in joint name with his wife) 14,68,195.00 Bank of India, Karol Bagh (in the name of Urmila Gambhir and her brother Sharavan Kapoor) 14,25,309.00 54,70,063.00 20. The value of the jewellery as per the wealth-tax return of Shri Subhash Gambhir, his wife Smt. Urmila Gambhir and his unmarried daughter was as under : (Rs.) Subhash Gambhir (Valuation report dated 31-3-95) 15,46,783.00 Smt. Urmila Gambhir-wife-do- 14,05,927.00 Ms. Bhavna Gambhir-daughter 31-3-92 52,641.00 30,05,351.00 21. The assessee was thus required to furnish the source of jewellery. The assessee vide his letter dated July 25, 1997, stated that out of jewellery found at the residence and t....
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.... rejected by the Assessing Officer by observing that the same did not require any further consideration as this issue had been considered in the hands of Smt. Urmila Gambhir. The Assessing Officer further observed that the contention of the assessee regarding wealth-tax return filed by his mother-in-law and will found at the time of search in the locker had duly been considered while arriving at the above figure. Thus, he worked out the unexplained investment in the jewellery in the hands of the assessee at Rs. 40,44,774 and after reducing the value of jewellery at Rs. 25,13,564 as shown in the wealth-tax return of Shri Subhash Gambhir, Smt. Urmila Gambhir and Miss Bhavana Gambhir and also taking appreciation factor as on August 20, 1996, into consideration arrived at the unexplained jewellery of Rs. 15,31,210. From the unexplained jewellery of Rs. 15,31,210, the Assessing Officer further reduced the surrendered amount of Rs. 6,44,416. Thus the total addition made on account of unexplained jewellery came to Rs. 8,86,794. 23. It is thus clear that jewellery which was found during search was ....