AI Drafter 
TaxTMI 
TaxTMI 
2003 (4) TMI 19
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....ted in the business premises of Eastern group of companies and in the residence of Shri M.E. Meeran, who is the father of the assessee. Based on the books and other documents seized in the search, proceedings were initiated, inter alia, against the assessee under section 158BD read with section 158BC of the Act. Pursuant to the notice issued under section 158BD the assessee filed returns for the block period on June 9, 1997, showing a total undisclosed income of Rs.10 lakhs. The Assessing Officer, while completing the block assessment, determined the total unaccounted investment at Rs. 14,49,127. The assessee, being aggrieved by the said order, filed appeal before the Tribunal, which, by the impugned order deleted the addition. Similarly, t....
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....ted, relate to the deletion of the addition of Rs. 14,49,127 and the direction regarding the entitlement to standard deduction. Shri P.K.R. Menon, senior Central Government standing counsel for taxes, appearing for the appellant submitted, that the Tribunal failed to consider all the relevant matters, particularly, the seized documents RM-1 and A-28, in the proper perspective. Senior counsel also submitted that the Tribunal had observed that though the assessee had filed explanation with regard to the two seized slips, the Assessing Officer was silent about the reply, but the Tribunal also failed to consider the said explanation before entering a finding that the seized material does not reflect any unaccounted transaction by the assesse....
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....xcept the surmises based on RM-I document, there is no other material to correlate the inference drawn by the Assessing Officer that the assessee had undisclosed investment in the business of Eastern group of companies. Counsel also submitted that since the assessee was drawing salary from the company in which the assessee, is a director, he is entitled to claim standard deduction and the Tribunal was justified in allowing the claim. We have considered the rival submissions and have perused the orders of the Assessing Officer and the Tribunal. We note that the Assessing Officer, in his order, has extracted the contents of A-28 document and also referred to RM-I slip and observed that so far as RM-I document is concerned, "this slip of pa....
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....mn 'land' the figure of Rs. 8,70,903 is shown, i.e., up to February 1, 1994. The Assessing Officer vide his letter dated May 6, 1997, called upon the assessee to explain the investments made by him in immovable properties. The assessee by his letter dated June 2, 1997, explained the investments in the immovable properties stating that these are all reflected in his cash flow statement. The Assessing Officer does not seem to be discussing anything about this in the assessment order and does not say why he is not prepared to accept the explanation offered by the assessee. Coming to the money said to have been introduced in the assessee's name in the books of account on various dates, the assessee explains at pages 2 and 3 of the letter dated ....
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....00,000 and another item mentioned as vehicles costing Rs. 3,75,000. There is no discussion about these items in the assessment order. The Assessing Officer accepted the papers seized from the residence of Sri Naiju Joseph as true because of the reason that softener and other items shown almost agree. However, this alone is not sufficient to warrant any addition in the absence of correlations." With reference to RM-I slip the Tribunal observed that it does not throw any light to infer whether the figures in the slip are incoming or outgoing, or what the figures in the paper stand for. It is also stated that it does not throw any light, even if the figures indicate investment, whether the investments are made by the assessee, and if they a....
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.... been added. Here also, the Tribunal did not choose to consider the explanation by itself or to direct the Assessing Officer to consider the explanation offered by the assessee in his replies before taking a final decision as to the justifiability of the addition made by the officer. Since there is no due consideration of the explanation offered by the assessee in respect of the entries contained in the two slips either by the Assessing Officer or by the Tribunal, we are of the view that the matter requires consideration at the hands of the Assessing Officer, particularly in view of the fact that the Tribunal itself has, in its appellate order, directed the Assessing Officer to consider certain matters. In the above circumstances, we ....