AI Drafter 
TaxTMI 
TaxTMI 
2002 (12) TMI 553
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....by the Valuation Officer. 3.That the learned CIT (Appeals), Amritsar has grossly erred in not allowing 10% deduction for bona fide difference of opinion in the cost of construction as estimated by Regd. Valuer and as estimated by Departmental Valuer. 2004] DALJIT SINGH v. ASSTT. CIT (ASR.) 255 4.That the ld. CIT(A) Amritsar has grossly erred in confirming the addition of Rs. 58,000 made by the Assessing Officer on account of investment made by the assessee in FDRs. 5.That the learned CIT(A). Amritsar has grossly erred in sustaining the addition of Rs. 1,00,000 out of an addition of Rs. 3,00,000 made by Assessing Officer on account of cash found at the residence of the assessee. 6.That the learned CIT (Appeals), Amritsar, has grossly erred in not appreciating the fact that the Cash Book of the assessee-firm showed a cash of Rs. 4,76,346. 7.That the learned CIT(A), Amritsar, has grossly erred in confirming the addition of Rs. 55,000 made by the Assessing Officer on account of investment in Chit Fund. 8.That the learned CIT(A), Amritsar has grossly erred in not dealing with the ground of Appeal No. 5 pertaining to addition of Rs. 48,000 on account of Truck income ....
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....the time of search, the cash of Rs. 3,10,550 was found at the residence of the assessee. Before starting search, the Authorised Officer recorded the statement of the assessee and asked him as to how much cash was available with him. It was stated that the cash belonging to the firm was kept in safe custody at the residence. At the time of search no cash book was produced. However, subsequently, the cash book was produced which showed cash-in-hand at Rs. 4 lacs & odd. During the assessment proceedings, the assessee submitted that the cash found at the residence was available from the cash of the firm M/s. Narula Filling Station. It was stated that a sum of Rs. 1 lac was sent to the Bank for making a draft and remaining amount of Rs. 3 lacs and odd was kept at the residence. However, the Assessing Officer did not accept the contention of the assessee and made the addition of Rs. 3 lacs by stating that the availability of the cash in hand of the assessee remained unexplained. He also mentioned that a day before the search i.e., 8-10-1997, the sale from 2.30 p.m. onward amounted to Rs. 12,183 only, and there was not much of stock at the petrol station. On the aforesaid basis, the Asses....
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....roceeds of M/s. Narual Service Station. However, before the Assessing Officer it was claimed that a sum of Rs. 3 lacs pertained to M/s. Narula Service Station and was duly appearing as cash in hand in the cash book of the aforesaid firm. It was submitted that the photocopy of the cash book for 9-10-1997 was filed before the Assessing Officer and the same is available on the assessment record but the Assessing Officer as well as the learned CIT(A) both disbelieved the cash book of the assessee in which the cash in hand was Rs. 4,76,346 on 9-10-1997. The learned Counsel for the assessee submitted that it was difficult for any person to remember the exact availability of the cash in house and since cash book showed sufficient cash in hand to explain the entire cash found at the residence, there was no occasion to sustain the addition of Rs. 1 lac when the learned CIT(A) himself admitted that the cash available as per cash book was Rs. 4 lacs and odd. He stressed that the learned CIT(A) held that the Assessing Officer had not doubted or disputed the cash availability in the cash book of the firm and the cash availability for the purchase of the draft, however, he is allowed the relief ....
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.... CIT(A) in sustaining the addition of Rs. 1 lac. Accordingly, the same is deleted. In this manner, the ground raised by the department is dismissed and that of the assessee is allowed. 7. Now we will proceed to the remaining grounds of the assessee's appeal. Vide ground No. 1, the assessee is aggrieved by the confirmation of addition of Rs. 24,765 on account of unexplained investment in lands. 7.1 The Assessing Officer noted in the block assessment order dated 25-10-1999 that the value of the investment in the property was at Rs. 79,765, for which the assessee did not furnish the source of the investment. However, he accepted the submissions of the assessee that the surrender on account of investment in land amounted to Rs. 37,000 and Rs. 18,000 on account of truck income was added in the block return. According to him, the balance of Rs. 24,765 remained unexplained and the same was added to the income of the assessee as undisclosed income. 7.2 Before the learned CIT(A), it was stated that the assessee had a truck income of 24,000 and further surrendered a sum of Rs. 24,508, as such funds of Rs. 48,508 were available with the assessee for the purchase of the land for Rs. 2....
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.... purchased 1993-94 11920 12000 48000 5340 25000 111260 25000 - 1120 10100 106220 5040 900 (BR) (House) 7000 1994-95 5040 54000 29000 10800 100000 216840 - 100000 10200 14000 216000 840 18000 FDR 24000 1995-96 840 54000 17000 10800 25000 125640 25000 - - 8000 125603 37000 18000 House 60000 - - 8603 24000 1996-97 37 72000 10000 10800 - 92837 30000 - - 25437 79437 13400 ....
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....3. In this manner, cost of construction was determined by the Assessing Officer at Rs. 10,35,394. As such the differences came to Rs. 1,11,974. However, the Assessing Officer made the addition of Rs. 1,23,850 the relevant discussion of the issue is at pages 5, 6 & 7 of the assessment order dated 21-10-1999. 8.2 Before the learned CIT(A), the assessee claimed that he being a contractor he had experience and also owned a truck for carriage of goods and as such the benefit should have been given to him and the cost be reduced by another 10%. It was further claimed that the cup-boards costing Rs. 82,025 were not part of the building and were added later on i.e., after the date of survey on 9-10-1997, as such the deduction should have also been allowed for the same. However, the learned CIT(A) did not find any merit in the contentions of the assessee and observed that it had not been clarified as to what could be the items on which there was difference of opinion and the estimate made by the DVO was based on the CPWFD schedule rates which are prescribed for the construction of Government buildings in which higher value items were not used. According to him, the assessee being a rich ....
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....;66 TTJ (Pune) 692 . 8.4 In his rival submissions, the learned D.R. strongly supported the order of the learned CIT(A) and stated that the assessee had not furnished the explanation for the investment in the house properties as determined by the Assessing Officer, so the Assessing Officer was justified in making the addition. He emphasised that the Assessing Officer had already allowed the benefit to the assessee for self supervision, on account of architecture charges and builder's charges from the valuation determined by the DVO, as such the learned CIT(A) was justified in confirming the addition made by the Assessing Officer. 2004] DALJIT SINGH v. ASSTT. CIT (ASR.) 263 8.5 We have considered the rival submissions and carefully gone through the material available on the records. In the instant case, it is noticed that for making the addition, the Assessing Officer relied on the valuation made by the D.V.O. It is also true that before the search an enquiry was conducted by the ITO Survey-cum-CIB for the cost of construction and no addition was made in the regular assessment. It is also true that during the enquiry conducted by the ITO Survey-cum-CIB, the assessee explaine....
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....er was not right in making the addition only on the basis of the Departmental Valuer's Report and subsequently the learned CIT(A) was not justified in confirming the addition made by the Assessing Officer. Similarly, in the case of Agrawal Motors (supra), it has been held that : 264 SELECTED ORDERS OF ITAT [Vol. 1 "From the definition of undisclosed income, it is clear that any income or property which is either wholly or partly has not been disclosed or would not have been disclosed for the purpose of Income-tax Act would be considered as undisclosed income. The assessee had disclosed the income earned on sale of part portion of the complex was also disclosed in the respective years. In the search of the assessee's premises large number of papers and books of account were found and seized. During the course of assessment proceedings, the Assessing Officer raised the quarries relating to such paper. In the reply, the assessee had explained a large number of loose papers to be relating to the construction of the complex. However, no finding was recorded by the Assessing Officer that a single paper/document was found unrecorded in the books of account. Similarly, no evidence....
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.... 9. Vide ground No. 4, the grievance of the assessee relates to the confirmation of addition of Rs. 58,000 made by the Assessing Officer on account of investment in the FDRs. 2004] DALJIT SINGH v. ASSTT. CIT (ASR.) 265 9.1 For making this addition, the Assessing Officer noted that STDRs worth Rs. 40,000 were purchased originally by the assessee on 8-1-1988 and were renewed later on. According to him, the assessee had not furnished the explanation to the source of Rs. 40,000 invested in the STDRs. He also observed that two FDRs worth Rs. 18,000 in the name of Sh. Daljit Singh were bought in April, 1990 and January, 1991 for which the source of investment had not been properly explained. Accordingly, the Assessing Officer made the addition of Rs. 40,000 for the assessment year 1988-89 and Rs. 18,000 for the assessment year 1991-92. 9.2 Before the learned CIT(A), the assessee submitted that the investment of Rs. 40,000 in the STDRs was explained by the undisclosed cash declared by the firms namely M/s. Narula Crushing Co. M/s. Narula Stone Crushing Co. M/s. D.S. Stone Crushing Co. and M/s. Narula Service Station in their Block period returns and the shares received by the as....
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....on made by the Assessing Officer. 11.3 Before us, the learned Counsel for the assessee, Sh. Padam Behl, CA, reiterated the submissions made before the authorities below and stated that the learned CIT(A) had confirmed the addition mainly by rejecting the cash flow chart filed by the assessee. He emphasised that the learned CIT(A) had not appreciated the cash flow chart in right perspective. According to him, the assessee was having the sufficient cash for making the investment. 11.4 The learned D.R. supported the orders of authorities below. 11.5 After considering the entire facts of the present case, we are of the view that the facts of this issue are also identical to the facts discussed in ground No. 1 of the assessee's appeal. We, therefore, remand this issue also back to the file of the Assessing Officer for fresh adjudication. This ground is disposed of accordingly. 12. Vide ground No. 8, the assessee is aggrieved by the addition of Rs. 48,000 made by the Assessing Officer on account of truck income estimated under section 44AE of the Income-tax Act, 1961. 12.1 The Assessing Officer discussed this issue at page 8 of the assessment order, wherein it has been sta....
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.... tipper No. PCR-4935 was not working. The above note supports the contention of the assessee that vehicle was not operative. It is also noticed that the assessee claimed that trucks were not operative and it is true that the department has not found any documentary evidence in support of the stand taken by the Assessing Officer that the assessee was earning income from those two trucks also. In our view, no addition was called for when the search party specifically mentioned that vehicle No. PCR-4935 was not in working condition and there is no other evidence available on the record. We, therefore, are of the view that no addition was called for on account of this vehicle. As regards to another vehicle No. PCM-9762 is concerned, the assessee could not produce any plausible explanation that the same was not in working condition. We therefore, sustain the addition of Rs. 24,000 only and also direct the Assessing Officer to give the benefit of the said income against another unexplained investment for which the separate additions, if any, had been made. This ground is dispose of in the aforesaid manner. 13. Vide ground No. 9, the assessee is aggrieved that the learned CIT(A) had....
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....s, we find that the case of DCIT v. Late Rattan Lal Jain [2001] 73 TTJ (Patna), 364, the Patna Bench of the ITAT had held that : 'Although the provisions for charging interest under section 158BFA, in case of delayed filing of block return, seems to be mandatory, yet, inasmuch as, interest is of penal nature, at least to some extent, in such a case, it has got to be considered that if the delay be not attributable to the assessee, the assessee cannot be penalised by way of charging of interest under section 158BFA.' In the present case also, it has been submitted that it was beyond the control of the assessee to file the Block return within the time limit as allowed by the Assessing Officer because the photocopies of the seized documents were not supplied by the Department. In our view, there is merit in this contention of the learned counsel for the assessee that the department cannot ask the assessee to do something impossible and at the same time, penalise him for not being able to do so. Admittedly, the photocopies of the documents were made available to the assessee by the Income-tax Department in the month of October, 1998. Considering all the facts of the present case ....