TaxTMI 
TaxTMI 
2005 (11) TMI 389
X X X X Extracts X X X X
X X X X Extracts X X X X
....and as per law, the learned Assessing Officer erred in making an addition of Rs. 2,30,000 based on loose papers 38 to 50 of bundle No. 12 found during the search at the business premises of M/s. S.V. Trading Co. 3. On the facts, in the circumstances of the case and as per law, the learned Assessing Officer erred in making an addition of Rs. 2,70,000 towards interior decoration and household expenses for assessment years 1996-97 and 1997-98. 4. On the facts, in the circumstances of the case and as per law, in making the additions as stated above, the learned Assessing Officer was not justified in holding a view that the declaration given by the appellant could not be retracted by him and the adverse inference could be drawn against the appellant on the basis of such declaration which was retracted later. 5. The appellant submits that the assessment under Chapter XIV-B of the Income-tax Act, 1961, in the case of M/s. MJS Associates is still pending. If this assessment of the appellant, the any repercussions on this assessment of the appellant, the necessary relief may be given to the appellant accordingly. 6. The learned Assessing Officer erred in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00 4 Unaccounted investment on Renovation and furnishing of Flats at Mahajan Apartments and unaccounted household expenses Rs. 2,70,000 Total Rs. 30,70,450" In the statement under section 132(4) Rs. 5 lakhs were disclosed out of item No. 1 above, and item Nos. 2, 3 and 4 were disclosed at the same figures. 3. However, in the return of block period the assessee declared out of the four items above only one item i.e., unaccounted payment of Rs. 10,00,000 made to Smt. Dolly Ghosh and retracted the disclosure made in respect of remaining three items. When the Assessing Officer sought clarification, in respect of items of concealed income retracted by him, and also in respect of NRI gifts received by his family members, investment in flat at Kasturi Tower, cash payment made to Amber Wood Packing Pvt. Ltd. and to Mr. Poly Ila Nair, the assessee filed a letter dated 29-10-1997 to CIT(A) explaining investment in flats and shops in Tulsi Shyam Building being item No. 1 of disclosure under section 132(4), (ii) house expenditure and interior decoration amounting to Rs. 2,70,000 and (iii) payment to New Suraj Builders amounting Rs. 2,30,000. He also explained inv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payments were made by either me or any other members of my family/group) 3. I again confirm that I have not made any payments as detailed above and the said investments were incorrectly recorded to have been made by me in my statements recorded under section 132(4) and under section 131(1A) of the Income-tax Act, 1961. I therefore withdraw any answer/statement which is contrary to the contents of my above affidavit. 5. I would have made this affidavit earlier, but for the severe health problems suffered by my partner Shri Rajinder Singh Saini. His health suffered a set back during the search proceedings itself and he had to be hospitalized in the middle of search action. This was further complicated by a massiva heart attack which he suffered on 21-11-1996 and for which he had to be admitted first to S.S. Singhania Hospital, Thane and then for further treatment at Jaslok and Hinduja Hospitals, Mumbai. As he was restrained under medical advise from undertaking any activity which would have aggravated his health problems, the matters relating to search proceedings could not be discussed with him. Affirmed on oath at Thane on this the 10th day of S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d under medical advice from undertaking any activity which would have aggravated his medical problem, the search problem was not discussed with him. 7. In the affidavit sworn on 10-2-1997 the assessee reiterated all the above contentions. In addition, he stated in affidavit that the said investments were incorrectly recorded in his statements under sections 132(4) and 131(1A) and therefore, he is withdrawing any answer given in the statement which is contrary to the contents of the affidavit. 8. It may be mentioned here that the authorized officer recorded the statement of Shri Manmohan Singh on 10-10-1996. In addition to this, another statement was recorded under section 131(1A) on 25-10-1996 in the office of ADIT. In the statement under section 132(4) the assessee had made disclosure of Rs. 20,00,000 for the block assessment period. Subsequently in the statement under section 131(1A) on 25-10-1996, this was revised upward to Rs. 30,70,450 already referred above. The Assessing Officer in the assessment order considered all the four items of addition, which are also discussed separately as under :- (i ) ADDITION OF RS. 15,70,450 The Assessing Officer mention....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... details are written in your own handwriting ? Ans. : It is in my own handwriting but I cannot recollect what these figures are. Q-14 On the left hand side of back side of Page 7 Bundle 14/R-6 following figures are written 5201000 2060100 3140900 The cheque payment of Rs. 20,60,100 is reduced from Rs. 52,01,000 and balance of Rs. 31,40,900 is mentioned. On the right hand side the total payment of Rs. 30,01,000 on various dates are mentioned. This shows that the 'On money' payment for purchases of six shops and four flats was Rs. 31,40,900. Please explain whether the on-money payment was Rs. 31,40,900 ? Ans. : I cannot recollect whatever is written in the above mentioned page. Q-15 Have you purchased any other properties from Mehta Enterprises than the six shops and four flats in Tulsi Shyam Building ? Ans. No. We have not purchased any other property from Mehta Enterprises. But I regularly buy steel structure, plate material etc. as and when required for my firms M/s. MJS Associates, M/s. Pal Engg. and Services Pvt. Ltd. from their trading company, India Iron Mart, Shivaji Path, Thane (W). Q-16 Give the name of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....retraction affidavit is only an after thought as this was not stated at the time of statement originally taken. Thus, the Assessing Officer rejecting the retraction and alleged explanation of the assessee added a sum Rs. 15,70,450 being half of share of unaccounted money as undisclosed income of the assessee. (ii) CASH PAYMENT TO NEW SURAJ BUILDERS OF RS. 2,30,000 FOR FLAT NO. 405 According to Assessing Officer pages 48 to 50 of bundle No. 12 of party No. R6, relate to cash payment of Rs. 2,30,000 by Mr. Manmohan Singh to M/s. New Suraj Builders towards cost of flat No. 405 in Audumbar Apartments in Thane. The schedule of payment as reflected from these documents is as under : Date Amount 29-2-1996 Rs. 1,00,000 29-2-1996 Rs. 30,000 4-3-1996 Rs. 1,00,000 The Assessing Officer pointed out that pp. 38 to 47 are the purchase documents in respect of this flat and document Nos. 48 to 50 are stamp receipts issued by M/s. New Suraj Builders in token of having received Rs. 2,30,000 from the assessee. While answering to q.28 on 11-10-1996, he admitted to have made cash payment of Rs. 2,30,000 to M/s. New Suraj Builders and the said ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Tax Act which are exempt from Gift Tax and accepted by I.T. Deptt. As regards the Cash payment of Rs. 10 lakhs to Mrs. Dolly Ghosh, I have already admitted having made the payment out of my unaccounted income earlier in this statement. I also confirm having declared this amount of Rs. 10 lakhs for the block assessment period and I conform that I will be paying the tax on the same. As regards the cash payment of Rs. 2.30 lakhs to M/s. New Suraj Builders, I have not paid any cash to M/s. New Suraj Builders. The flat in Audumbar Apts. is held by me as a guarantee for the funds provided by me for M/s. Wood Packer Ltd., Nasik. In view of the above statement confirm however now I have considered the situation in totality and I hereby admit that I have made a cash payment of Rs. 2.30 lakhs to M/s. New Suraj Builders, Thane towards purchase of flat in Audumbar Apts. I hereby declare the payment of Rs. 2.30 lakhs out of my unaccounted income for the Block assessment period and I agree to pay taxes on the same. In addition to the above I further declare Rs. 2.70 lakhs being the unaccounted expenditure on renovation and furnishing of the flat inadequate ho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment of the settler by including on-money has been made. Further, the Assessing Officer did not refer the shops and flats to DVO of the department to determine the market rate of the shops and flats as on the date of purchase. The Assessing Officer also did not consider the case of Manmohan Singh (HUF) which also purchased such shops and flats in the same building. The learned AR relied on the decision of Tribunal in the case of Manmohan Singh Vig (HUF) in [IT(SS) Appeal No. 129 (Mum.) of 2000], wherein the Tribunal deleted a sum of Rs. 18,39,000 alleged to have been paid by the HUF in cash to one Shri Dinesh Rajgore for sale of flat No. 401 in Kasturi Tower, that flat was sold in the name of Manmohan Singh Vig's wife for which a sum Rs. 30,39,000 was received by Raj Gore. Out of this, a sum of 12,00,000 was paid by cheques and remaining Rs. 18,39,000 was paid him in cash. Since the transaction did not go through Shri Raj Gore stated that entire sum of Rs. 30.39 lakhs was returned back. The Tribunal deleted the addition from the hands of HUF on the ground that transaction was being done in the name of Smt. Amarjit Kaur Vig and, therefore, the impugned addition could not be made ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r a sum of Rs. 52,01,000. Later on only 6 shops and 4 flats were acquired for a sum of Rs. 20,60,000 and the deal in respect of balance 8 flats, whose consideration was Rs. 31,40,900 was cancelled. The 8 flats were to be acquired by us for our personal residences. The entries have been explained in detail in my statement recorded on 22.20.07. B. Even if for a moment the alleged 'on money' component is included, as the cost spent on acquisition of premises actually purchased then the rate per sq. feet of the premises acquired in 1989 works out as under : Premises Area Actual rate Per sq. feet Rate per Sq. feet after including On money' component Shops (6) 1407 Sq. Ft. Rs. 765 Rs. 1,923 Flat (4) 1965 Sq. Ft. Rs. 500 Rs. 1,262 Sir, the market rate of the said premises in 1989 was nowhere near the rate per sq. feet arriving at after including the alleged 'On Money' component. I have got the said premises valued from a registered valuer to determine the market rate as at December 1989 and the said rate as per his report dated 23-10-1997 is Rs. 800 per Sq. feet for the shops and Rs. 500 per Sq. feet for the flats. A copy of the valuat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ajinder Singh Saini. His health suffered a set back during the search proceedings itself and he had to be hospitalized in the middle of search action. This was further complicated by a massive heart attack for which he was first admitted at S.S. Singhania Hospital, Thane and then for further treatment at Jaslok and Hinduja Hospitals, Mumbai. As he was restrained under medical advice from undertaking any activity which would have aggravated his health problems, the matter relating to search proceedings could not be discussed with him. Hence, there was a delay in my retraction which may please be considered in view of the genuine circumstances." 10. Finally, learned counsel for the assessee reiterated the arguments taken by him before the Assessing Officer that there was a pressure and coercion while recording the statement on 11-10-1996 and 25-10-1996. According to him, it was not a voluntary statement but was given under the duress and fear of being taxed heavily if he did not disclose some thing at that time. The statement was recorded after 24 hours of the search at 1.45 PM. So there was a long period since the search was started. According to learned counsel for the assessee,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on on account of cash credit can be undisclosed income on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer. Where there was no information, material or document with the Assessing Officer to show that cash credit was not genuine, the Assessing Officer was not justified in treating the cash credit as undisclosed income. 8. Janta Tiles v. Asstt. CIT [2000] 66 TTJ (Pune) (sic) Search and seizure - Block assessment - Computation of undisclosed income - Disallowance under section 40A(3) cannot be made in the course of block assessment - Further, undisclosed income would include only those income based on the entries in the accounts or documents which would not have been disclosed by the assessee - The entries recorded in the regular books of account cannot be said to have been not disclosed by the assessee - Entire addition deleted. 9. Kasat Paper & Pulp Ltd. v. Asstt. CIT [2000] 74 ITD 455 (Pune) The concept of undisclosed income under Chapter XIV-B is akin to concept of concealed income and, therefore, the Ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. The law empowers the Income-tax Officer to assess the income of an assessee according to law and determine the tax payable thereon. In doing so, he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppel by conduct against law nor is there any waiver of the legal right as much as the legal liability to be assessed otherwise than according to the mandate of the law (sic). It is always open to an assessee to take the plea that the figure, though shown in his return of total income, is not taxable in law. 16. Jt. CIT v. Gramophone Co. of India Ltd. [2003] 87 ITD 88 The question of any estimate of sale price so as to bring to tax the notional income, which is neither received nor alleged to have been received, is clearly beyond the scope for the scope of legal provisions. The burden is on the revenue to show that there is an understatement of consideration. . . . Moreover, to throw the burden of showing that there is no understatement of consideration, on the assessee would be to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to confirm the addition except statements of two partners recorded at the time of search - Statements recorded during search continuing for more than two days and two nights cannot be considered to be free, fearless and voluntary - There is considerable force in assessee's contention that statements were recorded under pressure and force - Retraction of statements supported by proper evidence - Additions cannot be sustained on merits. 21. K. Moidu v. Asstt. CIT [2002] 81 ITD 242 (Cochin) (TM) There is no scope for general estimations in a block assessment in the absence of specific and speaking materials. In a block assessment, generally estimated additions cannot be justified. 22. Mrs. Purnima Beri v. Dy. CIT [2002] 82 ITD 137 /123 Taxman 61 (Asr.) (TM) (Mag.) Where Assessing Officer held that there was a cash payment over and above cheque payment for purchase of certain shares by assessee on basis of statement of two persons, who later retracted their statements, in absence of cogent evidence, addition was not justified. 23. Nattu v. State of Uttar Pradesh AIR 1956 SC 56 The Supreme Court observed that the prolonged custody ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....75 (Mum.), Greenview Restaurant v. Asstt. CIT [2003] 263 ITR 169 (Gauhati). The learned DR also denied that there was any bias. He also submitted that valuation reports obtained by the assessee from approved valuer are only self serving documents. It does not lead to the conclusion that no on- money was paid on the face of seized documents and admission by the assessee. He also sought to invoke provisions of section 132(4A) wherein presumption is raised about truthfulness of contents of documents seized in the search. Since it was a rebuttable presumption and assessee has not discharged the onus to rebut the presumption, it will hold good and payment of on-money on purchase of shops and flats have to be believed. The learned DR also submitted that comparable cases are not really comparable because element of on-money was not considered in those alleged comparable cases. Regarding interior decoration and expenditure made therein learned DR submitted that it was very much visible during the search. It was pointed out to the assessee during the search and only thereafter disclosure on that account was made. Regarding payment of Rs. 2,30,000 learned DR submitted that stamps are the str....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espond to the letters/notices issued by the Assessing Officer to him on 26-2-1997 and 13-6-1997 shows that factors of pressure or coercion were not present even after the search. There was nothing which would have prevented the assessee to report to the Assessing Officer or to the higher authorities. He not only did not act at his own but also did not respond to the notices till September 1997, when he wrote the affidavit. Thus, the conduct of the assessee clearly shows that the theory of pressure or coercion is only an after- thought just to support the retraction. We are in agreement with Assessing Officer and learned DR that what was retracted subsequently was only a denial. No material was produced before the Assessing Officer or even before us, which would have indicated actual payment and which would have explained the entries in the seized documents in favour of the assessee. In fact the payment of on-money in addition to the recorded price is a very private affair between the two parties to such transactions. No third person not close to the parties can be privy to the on-money transactions. If an assessee states on oath that he paid on-money, then it has to be believed. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....group and he is ready to pay tax as per provisions of IT Act. Regarding the contention in retraction that sum of Rs. 31,40,900 was in respect of intended purchase of additional 8 flats in Tulsi Shyam Building. We are of the view that it is liable to reject out right because there is no support for this claim and it is coming too late. Had it been a fact nothing prevented Shri Manmohan Singh to state so when his statement is being recorded on 11-10-1996 and 25-10-1996. Nothing also prevented the assessee to respond to the notice issued by the Assessing Officer under section 158BC immediately after receipt thereof on 27-2-1997 and disclose the true facts. The fact that he kept quite for another 7 months demolishes theory of intended purchase of additional 8 flats. Further the seized document shows his working which is reproduced in q. 14, extracted in para of this order. The sum 20,60,100 being recorded price of 6 shops and 4 flats is subtracted from 52,01,000. The details of the payment is shown on same document i.e. page No. 7 bundle No. 4 party No. R6, which is also annexed on page 1 of APB. A perusal of this document shows that all these sums are accompanied with dates. The amoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot prove with material evidence that admission made by him of undisclosed income was incorrect. Citation No. 11 would be applicable when expenditure etc. is claimed from the undisclosed income in block assessment. Citation Nos. 12 to 14 are in relation to reopening of assessment. Citation No. 15 is for the proposition that if an item is not taxable in law, it cannot be taxed. This is also not applicable. Citation No. 16 is about estimation of sale price. In the present case, admission by the assessee is supported by the seized documents. Citation Nos. 17 and 18 are on imposition of penalty. Citation No. 19 relates to when a person discovers the truth after statement is made. As already held, there is no discovery of truth/fact/evidence. The retraction was mere denial. In Citation No. 20 the retraction was supported by proper evidence. Citation No. 21 relates to general estimation of income in block assessment. In Citation No. 22 there was no evidence to support the admission. Citation No. 23 is about prolonged custody. It has no application. Citation No. 24 is for allowing the assessee to give opportunity to produce evidence against the statement given. No dispute but no evidence h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d they were in the vicinity of the rates in which he had purchased the shops and the flats. Therefore, his recorded price is correct and therefore, it should be believed that he has not paid any on-money. We have no option but to reject this argument. No such document was found in the search. Approved Valuer's report is obtained in October, 1997. It is not contemporary. It is only a self-serving exercise. The working if any done by the Municipal Authorities was for the purposes of levying stamp duty. They had no occasion to look into the statements of the assessee and seized documents. The purpose and procedure of Income-tax and stamp duty are different. Their valuation cannot undo the inference drawn on the basis of seized documents and statements recorded under section 132(4). If at all, these valuations may only have some persuasive value and how much, it depends on facts of each case. In the present case, in our opinion they do not have even that persuasive value in light of the seized documents. 18. About the argument of the ld. counsel of the assessee that no enquiries were done from the seller of the property by the Assessing Officer, we are of the view that the admission....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ua different state of things as existing at the same'. In the celebrated book titled 'Administrative Law' by Sir William Wade (eighth edition by Wade and Forsyth-Oxford University Press), the legal position has been explained at p. 242 as under : "The basic principle of estoppel is that a person who by some statement or representation of fact causes another to act to his detriment in reliance on the truth of it is not allowed to deny it later, even though it is wrong. Justice here prevails over truth. Estoppel is often described as a rule of evidence, but more correctly it is a principle of law. As a principle of common law it applies only to representations about past or present facts." In Evidence Act also, it is clearly laid down in section 115 thereof, that when one person has by his declaration or act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative to deny the true of that thing. Section 115 of the Evidence Act also incorporates a statutory principle of common law ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich could have been discovered after lapse of time. There were no such contents in the affidavit which could have only been obtained at a later date or could not have been obtained just immediately after the search. In fact to our understanding, the affidavit of Shri Manmohan Singh is only a bald denial and nothing else. It does not contain any new evidence, fact or material. There is nothing in this affidavit to rebut the contents of the seized documents as shown on page 7 bundle No. 14 of party R6. Thus, such affidavit or even the letter written to the CIT can neither negate the declaration of disclosure given on oath by the assessee nor can it become the basis of retraction of the declaration made under section 132(4). When we compare the fact situations in two cases, one when the statement under section 132(4) was recorded and the other when the retraction was tendered, we find that, in the former, there is very little time and scope of artificiality, or stating falsity, the assessee is not in a frame of mind where he could create some explanation which is not true. Only possibility is that he may, state something or some facts of which he may not be aware. Whatever spontaneou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....statements and oaths cannot be retracted unless it is proved by legally acceptable evidence that such admission/confession or oath was not voluntarily tendered or was under coercion or duress. In the present case no such evidence has been produced or even shown to have existed. In V. Kunhambu & Sons v. CIT [1996] 219 ITR 235, the Hon'ble Kerala High Court held that where assessment has been on the statement of the assessee and no case has been made out that such statement was made under a mistaken belief of facts or law, statement being a voluntary one, then there is no scope for the assessee to challenge the correctness of the assessment made on the basis of such statements. In Hotel Kiran v. Asstt. CIT [2002] 82 ITD 453 , the Pune Bench of the Tribunal held that where during the course of search, assessee made some admission, he debars the authorized officers from making further investigation. Therefore, in their wisdom the Legislature has provided that such statement can be used in evidence and the assessment can be made on that basis. In Hiralal Maganlal & Co. v. Dy. CIT [IT (SS) Appeal No. 117 (Mum.) of 1996], the Tribunal reported in ITD, it was held as under : "35. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tement made by Shri Prataprai Sanghvi under section 132(4) was involuntarily made or made under coercion or undue influence or was made under mistaken belief or obtained by fraud or misrepresentation. Rather, the evidence available on record shows that it was voluntarily made by Shri Sanghvi with due care and caution and after necessary consultations with all concerned. Besides, there has been inordinate delay, which has not been substantiated, on the part of the assessee to retract from the confessional statement. Retraction is also not supported by any independent or reliable evidence to prove the incorrect nature of the facts confessed in the statement. The confessional statement of Shri Prataprai Sanghvi is also corroborated by other evidence. For these reasons also, the Assessing Officer was therefore, in our view, justified in basing the impugned addition on the basis of confessional statement maintained at the time of search. (iii) A confessional statement, which is not in the nature of declaration under section 115 of the Evidence Act, continues to have evidentiary value even after its retraction. However, such retracted confession/statement needs corroboration if ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e's appeal are confirmed. 22. Ground No. 4 is also rejected as we have already held that the declaration and admission made by the assessee are valid. It cannot be undone by retraction. 23. Ground No. 5. It is not explained as to how the case of M/s. MJS Associates would be relevant for the disposal of this appeal. No rational nexus or connection between the two has been shown. Addition in the present case has been made on the basis of seized documents and admission of the assessee under sections 132(4) and 131(1A). The payment of unaccounted money was made by the assessee and therefore those were rightly taxed. This ground is therefore rejected. 24. Ground No. 6 is that Assessing Officer travelled beyond the scope of Chapter XIV-B. It is not explained how. Since it is a general allegation without support of any evidence or argument, it deserves to be rejected. 25. In the result, the appeal of the assessee is dismissed. IT (SS) A NO. 279/MUM./97 In this case, the assessee raised the following grounds : "1. On the facts, in the circumstances of the case and as per law, the learned Assessing Officer erred in holding that the gifts of Rs. 4,38,000 received b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r erred in travelling beyond the scope of Chapter XIV-B of the Income-tax Act, 1961 in making the above additions." 26. The case was fixed on several occasions. Vide his letter dated 21-1-2004, the assessee sought adjournment on the ground that certain documents relating to appeal are not traceable. Vide his letter dated 15-10-2004, the assessee further sought adjournment on the same grounds. The assessee sought another adjournment on the same grounds vide his letter dated 23-9-2004. However, vide his letter dated 23-11-2004, there was another request for adjournment on the ground that his appeal and the appeal of Mr. Manmohan Singh Vig be heard together as facts of the matter are similar. Now, on 12th September, 2005, another adjournment is sought on the ground that the assessee is in the process of engaging a counsel. On all other occasions, adjournments were granted. This appeal was also consolidated with the appeal of Mr. Manmohan Singh Vig as requested, which was also fixed along with this appeal. After going through all the applications for adjournment, we are of the view that the assessee is not interested in pursuing this appeal. No documents as claimed earlier, as being....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and I once again confirm that the gifts which have been claimed to have been received from NRE a/c. of one, Mr. H.D. Shah are actually my own unaccounted income. I have purchased these gifts by paying 15 per cent commission to the broker. Cash was paid to the broker who gave me draft in exchange of cash. I am ready to pay tax on unaccounted amount of Rs. 4,38,000 + Rs. 62,000 commission given of Rs. 5,00,000. In his statement Shri Rajinder Singh Saini has also stated that he does not know the business address and residential address of Mr. H.D. Shah. He also stated that he does not know the nature of business activity of Mr. H.D. Shah and even he does not know full name of Shri H.D. Shah." 30. Vide his letter dated 2-10-1997, the assessee stated that he was pressurized and compelled to give statement under section 132(4) and under section 131(1A). As the gift is genuine, it was not disclosed as his income in the block return. An affidavit dated 10-9-1997 was also filed. The Assessing Officer considered the affidavit of the assessee, his letters dated 2-10-1997 and 17-10-1997 and rejected contention of the assessee by observing as under : "(i) On perusal of the statemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n signed in the presence of advocate." 32. Thereafter the impugned addition of Rs. 4 lakhs was made. Regarding addition of Rs. 15,70,450 being payment of on-money in respect of 6 shops and 4 flats in Tulsiyan Building, Thane (ground No. 3), in response to question Nos. 37 and 66, the assessee admitted to have paid on-money of Rs. 5 lakhs on purchase of shops/flats. In the statement, the assessee also admitted to have paid, jointly on-money on purchase of 6 shops and 4 flats in Tulsi Shyam Building, Thane to the extent of Rs. 31,40,900. It was divided equally and half of it was added in the case of Shri Manmohan Singh Vig and half being Rs. 15,70,450 is added in the case of Shri Rajendra Singh. This issue was elaborately discussed by the Assessing Officer in the case of Shri Manmohan Singh, whose appeal is decided simultaneously along with this appeal. The statement of Shri Rajender Singh was also recorded under section 131(1A) on 26-10-1996. Relevant question and answer are as under : "Q. No. 3 : On 10-10-1996 and 11-10-1996 you and Shri Manmohan Singh Vig have admitted that Rs. 10 lakhs were paid as "on money" for purchase of 6 shops and 4 flats in Tulsi Shyam Building....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame diary marked as bundle No. 2 in which date wise payments to Mahesh is mentioned and explain the nature, purpose and source of payment with a specified amount on each date ? Ans. I have made payment to Shri Mahesh in cash on the following dates for purchase of flats from Shri Mahesh : 11-2-1995 1,00,000 13-2-1995 1,50,000 27-2-1995 2,50,000 15-3-1995 1,00,000 16-3-1995 1,00,000 18-3-1995 50,000 20-3-1995 1,00,000 25-3-1995 1,00,000 25-3-1995 1,50,000 5-4-1995 5,50,000 19-5-1996 2,00,000 Total Payment 18,50,000 The payment of Rs. 18,50,000 were made out of my unaccounted income earned from our business concern. Q.No. 55 : Please give the complete details of flats for which payments were made to Mr. Mahesh ? Ans. Shri Mahesh is a broker to whom payments have been for flats to be built by LOK Group of builders. I have received money back from Mr. Mahesh. Q. No. 62 : Please summarise the unaccounted payments/investments mentioned in your own handwriting which is marked at bundle 3 No. 2 ? Ans. I confirm that diary seized at bundle No. 2 I written in my own ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....modify Q. No. 46 that sale proceeds of scraps for Rs. 93,264 as mentioned on page No. 5 of the diary has not been recorded in the books of account, however, this amount was used for making payments as mentioned in the same diary." 36. However, while filing the return, no such disclosure was made. It was explained to the Assessing Officer that (i) there was a pressure/coercion from the authorised officers, (ii) all the entries in the diary pertained to either sister concern M/s. Raj Engg. Co. or to M/s. S.V. Fabricators. There was no personal investment, (iii) It is not possible to have transaction of on-money in real estate spread off such a long period of time, (iv) the figures are in thousands and not in lakhs in the documents also, hence the figure will work out to Rs. 1,85,000 and not Rs. 18,50,000, (v) He was hospitalized due to heart ailment and hence could not remember. The Assessing Officer rejected all the submissions of the assessee and also his affidavit by observing as under : "On perusal of the statements of Mr. Rajinder Singh Saini on various occasions it is noticed that the authorised officers never pressurised and compelled to make a particular statement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egarding addition of Rs. 1,09,000 being unexplained business expenditure (ground No. 5), in the diary in bundle 2/R-1 seized in the search, and written in the handwriting of assessee, certain payments were found recorded on pages 3, 7, 8 and 40. Shri Rajender Singh, admitting that they are outside the books, explained the payments as under : "Page No. Particulars Amount 3. Payment to Bank staff people 9,000 7. Commission to Mr. A. Sen 55,000 8. Commission to Mr. C.K. Chaudhry 20,000 40. Fees to Mr. Sejpal 25,000 Total 1,09,000" 38. According to the Assessing Officer, the assessee stated that the above payments are out of books of account and out of unaccounted income and he offered to disclose the same for the block period. This amount was not disclosed in the return on the ground that it pertained to M/s. Raj Engg. Co. The Assessing Officer was not satisfied and made the impugned addition. 39. We have heard the rival submissions and considered the facts and materials on record including the statements, replies of assessee and reasonings of the Assessing Officer for making the additions. We have also considered the ....