TaxTMI 
TaxTMI 
1999 (2) TMI 671
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....ith his wife and their son came away to Bombay. Even before coming to Bombay, Mrs. Raj Rani Gupta was said to be running a beauty parlour at Bathinda. 2. Unrest in Punjab and consequent violence that reputed in that part of the country seems to be the cause for the family to come down to Bombay with a view to settle themselves down and try their prospects, Mrs. Raj Rani Gupta opened a sex clinic called "Kaya Kalp" firstly at Borivli and later they have opened branches to the same clinic at Charni Road in May 1991 and at Dadar in November 1991. Dr. Shoanlal Gupta has been a Dental Surgeon whereas Shri Arunkumar Gupta and Mrs. Renu Gupta have both passed B.A.M.S. (Bachelor of Ayurvedic Medicines & Surgery). Dr. Sohanlal Gupta, his son Dr. Arunkumar Gupta as well as his Dr. (Mrs.) Renu Gupta were all employed in the sex clinic run by Mrs. Raj Rani Gupta. They have also opened another clinic called "Kaya Kalp International". Smt. Raj Rani Gupta has been running a beauty parlour called "Mona Lisa" even in Bombay. From 1991 to 1996, the family was able to acquire 15 items of immovable properties large sums of money towards NRI gifts, substantial amounts of ....
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....Undisclosed income Rs. NIL As against the `Nil' income disclosed, the A.O. (Dy. Commr., Spl. Range 2, Mumbai) completed the assessment in which the total undisclosed income including the undisclosed income surrendered in the block return was taken at ₹ 11,06,228 in the hands of the assessee. Broadly stated, the following items were taken to be the undisclosed income in the hands of the assessee which is assessable in asst. years 1992-93, 1994-95 and 1995-96 : 1.A.Y. 1992-93 Rs. Undisclosed investment in property. Rs.4,06,666 2.A.Y. 1994-95 NRE Gifts (Hawala) Amount 2,11,000 Premium thereon @ 8% 16,880 2,27,880 3.A.Y. 1995-96 Non-NRI Gifts (Bogus) 1,46,112 Unexplained investment in jewellery 3,25,570 4,71,682 Total undisclosed income including the undisclosed income surrendered in the block return. 11,06,228 Against the assessment thus framed for the block period, the assessee came up in appeal before this Tribunal. 6. We have heard the three appeals of the assessee, her father-in-law (HUF) as well as her mother-in-law's appeals together. 7. As far as the assessee is concerned, the additions made under the following heads are stated to be unjusti....
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....the amount thus realised on the sale of jewellery was also credited in the capital account of the assessee. The Assessing Officer addressed letters dated 6-12-96 from his office both to the assessee as well as her mother-in-law to explain the nature of possession and the source of acquisition of the above jewellery. It did not evoke any response except the earlier version that the jewellery belonged to both the ladies of the house. Even during the assessment proceedings, the Assessing Officer stated that no supporting evidence was filed before him during the enquiry stage. Ultimately, a show-cause notice dated 12-3-97 was issued setting out all the facts and calling upon the assessee to show cause why the jewellery to the extent of 748.40 gms. valued at ₹ 3,25,570 should not be considered as unexplained and added to her income for the asst. year 1995-96. On the appointed day, i.e., 14-3-97, no reply was filed. However, in a letter addressed by the assessee along with other family members, it had been contended that all the jewellery found at the residence as well as sold to M/s. Vipul Jewellers belonged to her as well as to Smt. Raj Rani Gupta, her mother-in-law. It was also....
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.... to accept the explanation of the assessee regarding the jewellery found and sold to M/s. Vipul Jewellers. However, he accepts that it is common in Hindu society for women to wear some jewellery. Therefore, he concedes 250 gms. each of gold to the two ladies of the house and 50 gms. each to Dr. Arunkumar Gupta and his father Dr. Sohanlal Gupta and 50 gms. to his minor daughter. Therefore, out of the seized gold of 802.90 gms., he excluded 400 gms. as explained and has taken the balance of 402.90 gms. valued at ₹ 1,72,890 to be the unexplained jewellery and he determined to consider it as unexplained jewellery in the hands of Dr. Arunkumar Gupta from whom the jewellery was seized. The Assessing Officer also clearly stated that 250 gms. of gold conceded to the assessee should be deducted from out of 998.40 gms. of gold sold to M/s. Vipul Jewellers. Thus, the jewellery weighing 748.40 gms. (998.40 minus 250) valued at ₹ 3,25,570 was considered to be unexplained jewellery in the case of the assessee and he has determined to add the unexplained jewellery in the hands of the assessee u/s. 68 of the Income-tax Act for the asst. year 1995-96. 9. Now, the question is whether th....
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....ses, paper No. 18 of Annexure-A-41 of panchanama dated 14-5-96 revealed that the assessee had sold in her name jewellery weighing 998.40 gms. to M/s. Vipul Jewellers on 30-3-95. The amount realised on the sale of jewellery was also credited in the capital account of the assessee. The Assessing Officer by addressing his office letter dated 6-12-96, called upon the assessee as well as her husband, Dr. Arunkumar Gupta, to explain the nature, possession and source of acquisition of the jewellery sold to M/s. Vipul Jewellers. However, except reiterating that the said jewellery belonged to both the assessee and her mother-in-law, who are the two ladies of the house, no other explanation was offered. The assessee could not furnish any supporting evidence to back her version during the assessment proceedings. The Assessing Officer ultimately issued letter dated 12-3-97 listing all facts and calling upon the assessee to show cause why jewellery to the extent of 748.40 gms. valued at ₹ 3,25,570 should not be considered as unexplained in her hands and added to her income for the assessment year 1995-96 for the purpose of block assessment. The Assessing Officer gave time upto 14-3-97 to ....
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....ewellery found at her residence as well as sold to M/s. Vipul Jewellers. 10. In the block assessment framed by the Assessing Officer against the assessee, what he did was the following. Out of the seized jewellery of 809.90 gms., on the assumption that it is natural for the ladies in a Hindu family to hold reasonable quantity of jewellery on their persons, the Assessing Officer had conceded that 250 gms. of gold jewellery to each of the two ladies in their house. So also he conceded 50 gms. each to Dr. Arun Kumar Gupta and Dr. Sohanlal Gupta and 50 gms. to the daughter of the assessee. Thus, from out of 802.90 gms. of seized gold jewellery, 400 gms. was taken to have been reasonably explained and the remaining 402.90 gms. out of the seized gold was taken to be unexplained gold jewellery and was considered in the hands of Dr. Arunkumar Gupta in his block assessment made for the assessment year 1996-97. Thus, the Assessing Officer stated clearly that he would consider the value of 402.90 gms. valued at ₹ 1,72,890 in the hands of Dr. Arunkumar Gupta under section 69 of the Income-tax Act. 11. Coming to the seized material which disclosed that 998.40 gms. of jewellery was sold ....
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....tituted her wealth was her version from the very beginning and in the face of her wealth-tax assessments referred to above, it cannot be said to be her later innovation invented for the purpose of the block assessment. Thus, according to Shri Khare, the whole of the gold jewellery of 998.40 gms. sold to M/s. Vipul Jewellers was completely and clinchingly explained by her. Further, it is the contention of Shri Khare that Chapter XIV-B of the Income-tax Act does not confer jurisdiction on the Tribunal, while completing the block assessment, to go into anything other than the seized material. According to him, the block assessment must be completed on the basis of the seized material only and no alien evidence could be considered in the block assessment and for that purpose he relied upon Sunder Agencies v. Dy. CIT [1997] 63 ITD 245 Mum. decided by this Tribunal. In the headnote of the said decision at page 248, the following is what is held : "It is abundantly clear from the perusal of the prescription of section 158BA that within the pale of Chapter XIV-B assessment could be made only in respect of the undisclosed income and such undisclosed income must come as a result of se....
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.... to the knowledge of the department from the seized material, then there is nothing wrong in adding the value of the said gold ornaments under Chapter XIV-B as undisclosed income. He argued that it cannot be successfully argued by the other side that 998.40 gms. of gold jewellery sold to M/s. Vipul Jewellers has no connection whatsoever with the seized material at the time of search conducted on 26-3-96. One of the papers found in the seized material disclosed the sale of the jewellery. Therefore, it is quite within the province of the Assessing Officer to find out whether it was previously disclosed or not. Further, he argued that even though the assessee filed only her computation of total income at page-1 of paper book No. 2, she discreetly avoided filing the assessment order, if any, completed against her for the assessment year 1995-96. There is no evidence that her regular assessment for the assessment year 1995-96 was completed much prior to the block assessment now under consideration. Therefore, the legal argument should fail. However, the Ld. Departmental Representative was not able to comment anything against the wealth-tax assessments for assessment years 1991-92 and 19....
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....er of Bombay Mercantile Co-op. Bank Ltd., Colaba, is provided. In the said certificate, it is stated that the donor was holding NRE A/c No. 5334 with the said Bank. However, he purchased pay order No. 8293 for ₹ 2,11,000 in favour of the assessee, Dr. (Mrs.) Renu Gupta and the certificate was said to have been issued at the instance of the "party". 15. As already stated, we have heard three appeals together and we have considered similar NRI gifts in the case of Mrs. Raj Rani Gupta in whose case we have passed our order dated 25-2-1999. We have elaborately discussed therein about the credibility of the NRI gifts. We want to adopt the same reasoning as given in that order even in this case also. The Assessing Officer asked the assessee to produce the donor for examina- tion and confirmation of gifts. However, she failed to produce him, though several opportunities were given to her. The Indian address of the donor was also not provided by the assessee to the Assessing Officer. There is no reason why a fat sum of money like ₹ 2,11,000 be given as gift to the assessee. Her claim that she is intimately known to the donor does not appear to be correct in view of t....
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....essment order passed in the case of Smt. Raj Rani Gupta. Since the contents of the seized paper are pertinent in this connection, the same is extracted as under : Desai Builders Nimesh Mehta (Manager) Phone : 6149661, 6171818 Shop area : Vacant 3600 carpet ₹ 11,000 Rate per sq. ft. Ratio 7/30 11th floor Building : 1380 sq. ft. 3 Bed 1550 sq. ft. 4 Bed Ratio : 60/40 W/B (Building - Carpet + 22%) Rate ₹ 3,300 per sq. ft. The above slip is unsigned but, according to the Assessing Officer, the slip was in the hand-writing of family members of the assessee-family. It is the case of the revenue that the assessee-family members indulged in property transactions which had a ratio of black and white money at 40:60 approximately. It is also the case of the revenue that from out of the information gathered from the Appropriate Authority, Bombay, the comparative sale instances show higher market value of property purchased by the assessee and her family members. Considering all these aspects, the Assessing Officer held in the order of the assessee's husband, Dr. Arunkumar Gupta, and other family members that the ratio of 40:60 would be applied in the case of p....
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....4) Dr. Renu Gupta happened to live for some time in Bombay. It was also never her case that her parents belong to Bombay. As already stated, the assessee and her husband sent a common reply dated 19-3-97 with reference to the block assessment proceedings started against them from 1-4-1985 to 23-6-1996. In the reply dated 19-3-97, copy of which is marked as pages 28 & 29 of paper book No. 1 filed by the assessee, which represents the reply signed by Dr. Arunkumar Gupta, specifically stated that Dr. Sohanlal Gupta studied and graduated as a Dental Surgeon from J.J. Hospital (Now Govt. Dental College, V.T.) from 1955 to 1963 and after graduation he went to his ancestral state of Punjab in 1963 and all their family members stayed in Punjab at Bathinda which is described as the ancestral town till 1990. It is stated that at that time the Punjab State was infested with militancy and terrorism severely endangering the security of the family and the career prospects of the family's only property, Dr. Arunkumar Gupta. Subsequently, they migrated to Bombay with all their belongings leaving their well established clinics at Bathinda to start a new life at Bombay. It is stated that they st....