TaxTMI 
TaxTMI 
2010 (3) TMI 932
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....249. For this, the assessee has raised the effective following ground: "1. Rs. 61,249 on account of unexplained cash found The learned Commissioner of Income-tax (Appeals) has erred on facts and in law in confirming addition on account of cash of Rs.61,249 found at the time of search by treating the same from unexplained sources. It was explained that cash found and seized from residence is out of explained sources, i.e., business, family withdrawals, and received by Smt. Sonia at the time of marriage from her parents. It is therefore prayed that the cash found is explained therefore, the addition so made may kindly be deleted." At the outset, learned counsel for the assessee stated that he was instructed by the assessee that he is not interested in prosecuting this issue due to smallness of amount as the tax effect will be very small. Accordingly, the same is dismissed as not pressed. Coming to the Revenue's appeal in IT(SS)A No. 214/Ahd/2005. The first issue in this appeal of the Revenue is against the order of the Commissioner of Income-tax (Appeals) in deleting the addition made by the Assessing Officer on account of unexplained investment in fixed deposits. For ....
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....ssions of the assessee vide paragraph 4.4 of his appellate order as under : "4.4 I have gone through the assessment order, arguments of the appellant and written submissions by the appellant before the Assessing Officer and before me. I am of the opinion that fixed deposits in the name of Deepali Meni of Rs. 2,38,520 are kept out of her income as architect, salary and other funds from her bank account are from explained sources, maturity of Rs. 2,65,699 along with other maturities totalling to Rs. 2,86,451 is deposited in Bank of Baroda savings bank account 14070 and this amount is further reinvested in the IDBI tax free bonds of Rs. 3,00,000. Similarly fixed deposits in the name of Vishal Meni and Kunal Meni of Rs. 3,60,000 (Rs. 1,80,000 + Rs. 1,80,000) are kept out of sale proceeds of shops of Rs. 4,50,000 by the appellant are from explained sources maturity of Rs. 1,92,736 is deposited by Shri Vishal Meni with Central Bank of India, savings bank account 3110 and this amount is further reinvested in the IDBI tax free bonds of Rs. 2,00,000 along with other maturities and maturity of Rs. 1,92,736 is deposited by Shri Kunal Meni with Dena Bank, savings bank account 464 and this a....
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....rom explained sources, maturity of Rs.5,403 is redeposited as fixed deposit with Central Bank of India. In view of this, the fixed deposits of Rs. 6,71,020 in the name of family members are kept from explained sources, interest income is shown in income-tax returns, fixed deposits of daughters and grand daughter are out of their savings, fixed deposits were encashed due to co-operative banks problem. Accordingly the addition made by the Assessing Officer is deleted." Aggrieved, the Revenue came in appeal before us. Before us, the learned Commissioner of Income-tax-Departmental representative Shri Shelley Jindal stated that these fixed deposits are not reflected either in return of income or in the books of account of the assessee. He stated that these fixed deposits were encashed prematurely as noted by the Assessing Officer and there is no source of these fixed deposits, in the name of various family members of Shri Y. R. Meni, i.e., the assessee. He stated that the Investigation Wing of the Department during the course of search found xerox copies of fixed deposits inventorised as annexure BF/1 at pages 23-57 and these fixed deposits were made with the Kalupur Comme....
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.... Interest amount (Rs.) Yudhvir R. Meni 3,28,026 Kunal Y. Meni 2,21,387 Deepali K. Meni 87,573 Vishal Y. Meni 2,68,124 Total 9,05,110 Learned counsel for the assessee has taken us through the assessee's paper book and stated that these fixed deposits were explained as clearly brought out by the Commissioner of Income-tax (Appeals). From these documents, he stated that the Commissioner of Income-tax (Appeals) has considered the documents and arguments of the assessee and evidence year-wise by him and thereafter deleted the addition. Accordingly, he urged the Bench to confirm the order of the Commissioner of Income-tax (Appeals), deleting the addition. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the assessee's paper book, wherein in the statements of income the depositors have declared this interest income from fixed deposits as well as the copies of returns income, it is clear that the interest received on account of these fixed deposits were declared in the returns income prior to date of search. Similarly, we find that the Commissioner of Income-tax (Appeals) has considered the ind....
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....essee and treated as undisclosed income of the block period. The Assessing Officer also estimated the cost of construction of the third floor at Rs.14,68,229 and taken the same as undisclosed investment. The Assessing Officer treated the third floor construction as unauthorised and no deduction under section 37(1) of the Act was allowed in respect of this expenditure. The Assessing Officer noted that the expenditure of Rs. 7,35,043 is spent out of books of account and the same was treated as explained and the balance was treated as unexplained investment in the third floor in Kunal Complex at Rs.7,23,186. The Assessing Officer thereby treated these two additions, i.e., the depositing in the bank accounts on account of 24 shops and unaccounted cost of construction at Rs. 85,18,776 and Rs.7,23,186 as invested in the third floor in Kunal Complex unexplained for the block period. Aggrieved, the assessee preferred appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) after considering the submissions of the assessee deleted the addition. Before the Commissioner of Income-tax (Appeals), the assessee submitted the complete explanation of facts....
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....d establish a basic cut off price for selling of shops. The assessee explained the noting in a note as under: Page No. Particulars Cost of construction 25 and 26 Excavation 4,000 sq.ft. x 25 sq. ft. = 1,00,000 (cost not quantified in the note pad. But market sources reveal that the cost of excavation per cub. ft. is Re. 1) 1,00,000 27 and 28 Foundation 35 columns at Rs.10,000 per column 3,50,000 27 and 28 Slab of basement (for beam, columns, slab 4000 sq. ft. at Rs. 150 per sq.ft.) 6,00,000 29 and 30 Slab of ground floor (cost of material, labour, brick, work, plaster, shutter, colour, flooring) 4000 sq. ft. at Rs. 200 per sq.ft. 8,00,000 31 and 32 Slab of first floor 3,500 sq.ft. at Rs. 320 per sq.ft. 8,05,000 33 and 34 Slab of second floor 3,500 sq.ft. at Rs. 250 per sq.ft. 8,75,000 3 and 35 Slab of terrace floor Rs. 3,500 sq.ft. at Rs. 150 per sq.ft. 5,25,000 Total 40,55,000 Learned counsel for the assessee stated that this is only a noting on estimate....
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.... FDR maturity 10,41,370 Inter-group transfer 10,000 Other deposits 33,40,411 Total deposits-3431 Therefore, there is not a single rupee deposit out of sale proceeds. The deposits are part of regular transactions. (e) CBI-A/c. No. 3008-Yudhvir R. Meni-The Assessing Officer has worked out deposits of Rs. 50,78,664 and the same are added as sales consideration. A summary of bank account along with photocopy of bank passbook is enclosed. Amount Nature of deposit 68,104 Interest and dividend 8,16,484 FDR maturity 2,00,000 8,19,661 Inter group transfer 7,87,219 Other deposits and advance 25,28,600 Sale proceeds of shops 52,20,068 Total deposits-3008 Therefore, in this bank account sale proceeds of Rs. 25,23,600 is deposited which is part of total sale proceeds of Rs. 25,68,600. The other deposits are part of regular transactions. (f) CBI-A/c. No. 3110-Vishal Y. Meni an Yudhvir R. Meni-The Assessing Officer has worked out deposits of Rs. 13,44,518 and the same are added as sales consideration. A summary of bank account along with photocopy of bank passbook is enclosed Amou....
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....posits in bank account No. 3431, 3008 and 3089 of the Central Bank of India for block period and treated the deposits in these three bank accounts as sale consideration and also not accounted in books of account. The summaries and analysis of bank accounts shows that in bank account No. 3431, 3110 and 3089 of the Central Bank of India, the sale proceeds from shops are not deposited, bank account No. 3110 is belonging to the assessee' s son Shri Vishal Y. Meni, which is his regular bank account and accounted for in the regular returns. The sale proceeds of shops received in cheques of Rs. 25,28,600 was deposited in bank account No. 3008, other deposits in this bank accounts are mainly interest and dividend, maturity of fixed deposits inter-group transfers, loan refunds other deposits and advances which are not in the nature of sale proceeds of shops as considered by the Assessing Officer in the absence of any seized material or confrontation by the assessee. The presumption that all deposits in bank accounts are sale proceeds of shops is based on conjecture and surmises of the Assessing Officer. Further on one hand, the Assessing Officer is estimating construction cost at nil and on....
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.... of unexplained investment of Rs. 7,23,186. We confirm the deletion. The next issue in this appeal of the Revenue is as regards to the order of the Commissioner of Income-tax (Appeals) in deleting the addition made by the Assessing Officer on account of unaccounted investment in jewellery. For this, the Revenue has raised following ground No. 4 : " 4. The Commissioner of Income-tax (Appeals) has erred in law and in facts in directing to delete the addition of Rs. 71,26,000 made on account of unaccounted investment in jewellery." We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the Assessing Officer noted in his assessment order from the loose papers inventorised at pages 36 and 38, i.e., loose paper filed annexure-A/4, which contains notings for purchasing of jewellery in grams and value written on pages 36 and 38 and value written, the relevant pages as translated in English reads as under : Jignesh Panchal Jignesh Panchal 5890 gram gold 5890 gram gold + 540 gram less + 540 gram less 6630 gram total 6630 gram total + 95 carat + 95 carat 6300 gram....