TaxTMI 
TaxTMI 
2004 (9) TMI 570
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....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' house on the eve of 'Rakshabandhan' on 28-8-1996 jus....
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....d 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 the jewellery carried by her to the assessee's house and left behi....
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....-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 return income of Rs. 2,52,000 for the block period on account of his own capital investment in unaccounted copper business, he added the balance amount of Rs. 49,000 (Rs. 3,01,000 - Rs. 2,52,000) to the undisclosed income of the assessee for assessment year 1996....
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....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 Assessing Officer on account of unexplained expenditure found to be incurred by the assessee on marriage of his daughter. 16. During the course of search, large number of vouchers, cash memos, bills etc. were found and seized from the residence of the assessee eviden....
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....a 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 Assessing Officer as given on page 13 of his impugned order are as follows : (i) Rs. 2,05,000 Purchase of car (ii) Rs. 1,63,000 Withdrawal of Shri Nem Chand Gupta and Shri Dinesh Gupta (iii) Rs. 1,59,426 Cash gifts received (iv) Rs. 19,500 Withdrawal of Mamta's deposit with M/s. Metachem In Rs. 5,46,926 20. As regards the assessee's explanation about the sum of Rs. 5,21,551 being the expenditure incurred on construction by his son, the Assessing Officer did not find the same to be acceptab....
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....zed 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 during the course of search to establish the marriage expenditure incurred by the assessee and the Assessing Officer was fully justified in making the impugned addition on the basis of the same after duly accepting the sources explained by the assessee with the help of relevant documentary evidence. 23. We have considered the rival submissions and also perused relevant material on record. It is observed that the marriage expenses evidenced by relevant vouchers, cash memos and bills and found during the course of search were duly summarized by the ....
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....penditure 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 given by the Assessing Officer in support of his order on this issue, we find no reason to interfere with the same. The addition of Rs. 6,11,404 made by the Assessing Officer on this issue is, therefore, upheld dismissing ground Nos. 12 and 13 of the assessee's appeal. 24. Ground Nos. 14 & 15 relate to the addition of Rs. 2,16,000 made by the Assessing Officer on account of unexplained expenditure incurred on payment of rent. 25. During the course of search, a rent agreement entered into by the assessee that Shri Jagdish Lal Obheroi was found and se....
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....e 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 addition of Rs. 85,000 made by the Assessing Officer on account of cash found during the course of search to the extent it remained unexplained. 29. In his preliminary statement recorded during the course of search, the assessee had stated that cash only to the extent of Rs. 15,000 is available in his house whereas actual cash to the tune of Rs. 93,944 was found during the course of search. The excess cash was explained by the assessee later on during the course of search as representing his wife's savings. During the course of assessment proceedings, the stand taken during the course of search however was chan....
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.... 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 was brought to his residence and was lying there. He invited our attention to the prelimi- nary statement of the assessee recorded during the course of search placed at pages 31 and 32 of the paper book wherein in reply to question No. 6 the assessee had clearly stated that no cash belonging to his firm was lying in his house. He also submitted that during the course of search conducted at the business premises of M/s. Metachem India, cash only to the extent of Rs. 39,000 was found as against the cash balance of Rs. 2,78,509 reflected in the cash book which clearly shows that the cash book of the said firm was not rel....