TaxTMI 
TaxTMI 
2004 (9) TMI 570
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....od at Rs. 4,50,000. The assessment, however, was completed by the Assessing Officer under section 143(3)/158BC by his impugned order assessing the undisclosed income of the assessee for the block period at Rs. 22,02,591. Aggrieved by the same the assessee has preferred the present appeal before the Tribunal. 3. Ground Nos. 1 to 3 raised by the assessee in his appeal have not been pressed by the learned counsel for the assessee at the time of hearing before us. The same are, therefore, dismissed as not pressed. 4. Ground No. 4 in general seeking no specific decision from us. 5. Ground Nos. 5 to 9 relate to the issue of addition of Rs. 2,68,187 on account of unexplained investment made in jewellery found as a result of search. 6. During the course of search, jewellery valued at Rs. 4,86,587 (including silver wares/coins worth Rs. 14,400) was found. In his preliminary statement recorded during the course of search, the assessee had stated that jewellery owned by him is only to the extent of 35-40 tolas. As regards the excess jewellery found during the course of search, he explained that the same belonged to his married daughter Smt. Sharda Devi who had visited her parents'....
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.... offered by the assessee about the remaining jewellery being owned by his married daughter was a plausible explanation and since the same was also supported by an affidavit of the said lady filed before the Assessing Officer confirming the position stated by the assessee, there was no reason for the Assessing Officer to disbelieve the same without bringing anything contrary on record. The learned DR, on the other hand, strongly relied on the impugned order of the Assessing Officer in support of the Revenue's case on this issue. 9. We have considered the rival submissions and also perused relevant material on record. It is observed that in his preliminary statement recorded during the course of search, the assessee had stated of having owned jewellery only to the extent of 35-40 tolas and nothing was stated by him about the jewellery of her married daughter in the said statement. Although the affidavit of his daughter Smt. Sharda Devi was filed by the assessee before the Assessing Officer, the same was found to be unreliable by the Assessing Officer for the specific reasons given in his impugned order. First of all, the said lady had failed to even recollect/recognize any item of....
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....ted business at Rs. 3,01,000 and Rs. 5,95,000 for assessment years 1996-97 & 1997-98 on the basis of the following peak credit working made by him from the capital account of the assessee appearing at page Nos. 5 to 8 of the ledger identified as Annexure A-3 : Date Particular CB Folio Dr. Cr. Balance 6/2 By cash 1 2,000 2,000 7/2 By cash 2 2,50,000 2,52,000 18/2 To cash 4 1,50,000 1,02,000 19/2 By cash 5 1,50,000 2,52,000 9/3 To cash (Mandir) 12 100 15/3 By cash 14 10,000 2,62,000 19/3 To cash 15 20,000 2,82,000 Date Particular CB Folio Dr. Cr. Balance 19/3 By cash 15 1,000 2,81,000 26/3 To cash 19 20,000 3,01,000 1/4 By cash (To) 20 330 4/4 To cash (By) 21 10,000 10,000 4/4 By cash 23 5,41,500 5,51,500 300 Kg x 145 23 43,500 5,95,000 12. Since the assessee had already declared in his ret....
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....gnoring the balance investment of Rs. 1,00,000 pertaining to his son. Secondly, it is evident from the peak credit working given by the Assessing Officer at pages 8 & 9 of his impugned order as reproduced hereinabove that peak credit from assessment year 1997-98 was worked out by him at Rs. 5,95,000 separately without taking into consideration any opening balance for assessment year 1996-97 which clearly means that the peak credit of Rs. 5,95,000 represented entirely fresh investment made by the assessee in the unaccounted copper business and the same being in addition to the investment of Rs. 3.01 lakhs already made in assessment year 1996-97, there was no case to adjust the peak credit for assessment year 1996-97 or reduce the same from the peak credit of Rs. 5.95 lakhs worked but by the Assessing Officer for assessment year 1997-98. As such, considering all the facts of the case, we find no infirmity in the additions made by the Assessing Officer on this court on the basis of peak credit working and upholding his impugned order on this issue, we dismiss ground Nos. 10 & 11 of the assessee's appeal. 15. Ground Nos. 12 & 13 relate to the addition of Rs. 6,11,404 made by the Ass....
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....d (as per her statement of affairs as on 31-3-1995) Rs. 21,500 (d)Sale proceeds of jewellery utilized for the purchase of jewellery further expenses Rs. 73,964 (e)Cash gifts received on 25-6-1995 on the occasion of engagement of 'Godh Bharai' Rs. 21,400 (f)Cash gift received on 2-7-1995 on the occasion of marriage Rs. 1,27,020 (g)Withdrawals by Shri Nem Chand Gupta from books of Metachem India for marriage expenses Rs. 30,000 (h)Withdrawals made by Shri Dinesh Gupta from the books of M/s. Multi Metal Traders Rs. 30,000 (i)Cash expenses gifted by Shri Sushil Kumar son-in-law of Shri Nem Chand Gupta Rs. 11,000 (j)Amount spent by Mamta out of repayment of her loan Rs. 19,500 Rs. 4,37,390 19. The aforesaid explanation of the assessee was verified by the Assessing Officer from the relevant record and out of the total expenditure of Rs. 11,58,330 found to be relatable by him entirely to the marriage expenses, he accepted the explanation of the assessee to the extent of Rs. 5,46,926 on the basis of necessary papers/documents filed by the assessee and verified by him. The details of the source so accepted by the Assessi....
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.... also incurred in connection with the marriage and in the absence of any corroborative evidence found during the course of search, the Assessing Officer was not justified in drawing adverse inference against the assessee in the matter. He submitted that the investment made by the assessee's son in construction of factory building was duly declared by him in the declaration filed under the VDIS, 1997 and the Department having accepted the said declaration, there was sufficient evidence to show that the said entries found noted in the relevant seized document were related to the undisclosed investment made in the construction of factory building. 22. The learned DR, on the other hand, submitted that large number of vouchers, cash memos, and bills evidencing expenditure incurred by the assessee on the marriage of his daughter were found during the course of search and since the said expenditure was summarized by the assessee on page No. 148 of Annexure A-1, the only conclusion possible was that all the amounts found recorded therein represented the marriage expenditure incurred by the assessee. He, therefore, contended that the said summary by itself was sufficient evidence found d....
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....pport the assessee's case on this issue in the absence of any nexus of the construction expenditure reflected in the relevant bills and vouchers and the relevant amounts found recorded in page 148 of Annexure A-1. We, therefore, hold that the Assessing Officer was fully justified in rejecting the explanation offered by the assessee in this regard and in treatng the entire expenditure of Rs. 11,58,329 found recorded on page 148 of Annexure A-1 to be expenditure incurred by the assessee on marriage of her daughter. As regards the source of the said expenditure as explained by the assessee before the Assessing Officer, it is observed that the same was accepted by the Assessing Officer to the extent of Rs. 5,46,926 on the basis of relevant documentary evidence filed by the assessee before him and the source of the remaining amount explained by the assessee was not accepted by him in the absence of such supporting evidence after giving elaborate reasons in his impugned order. Before us, the learned counsel for the assessee has not pointed out any infirmity in the order of the Assessing Officer on this aspect and this being so as well as keeping in view the cogent and specific reasons gi....
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....the Assessing Officer on this issue. 27. After considering the rival submissions and perusing the relevant material on record, we are inclined to agree with the contention of the learned counsel for the assessee. As is evident from the statement showing yearwise quantum of drawings by the assessee and his family members, although the withdrawals for assessment years 1991-92 and 1992-93 were not sufficient to cover the payment of rent amounting to Rs. 42,000 and Rs. 72,000 paid in the said years, the withdrawals shown in the subsequent two years i.e., assessment years 1993-94 and 1994-95 at the total figure of Rs. 1,34,472 and Rs. 1,41,337 were sufficient to support and substantiate the explanation of the assessee that the rent paid in the said two years at Rs. 72,000 and Rs. 30,000 was met from the said withdrawals. We, therefore, find no justification in treating the amount of rent paid for assessment years 1993-94 and 1994-95 as undisclosed income of the assessee and, accordingly, restrict the addition on this count to Rs. 1,14,000 as against Rs. 2,16,000 made by the Assessing Officer. Ground Nos. 14 & 15 are, accordingly, partly allowed. 28. Ground No. 16 relates to the ad....
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....wing relief to the extent of Rs. 8,944 on account of cash attributable to savings of the assessee's household. 30. The learned counsel for the assessee submitted before us that cash found during the course of search was explained to the extent of Rs. 80,000 as belonging to M/s. Metachem India by the assessee and since cash to the extent of Rs. 2,78,509 was available with the said firm on the date of search out of which only an amount of Rs. 39,000 was found in the business premises of the said firm, there was no reason for the Assessing Officer to reject the explanation offered by the assessee on this count. He also invited our attention to the copy of cash book extract of the said firm placed at page 202 of his paper book to show that cash balance to the extent of Rs. 2,78,509 was available with the said firm on the date of search. 31. The learned DR, on the other hand, submitted that the availability of sufficient cash balance as per the cash book of M/s. Metachem India alone was not sufficient to explain the cash found at the residence of the assessee during the course of search and it was also necessary for the assessee to establish that cash belonging to the said firm wa....