TaxTMI 
TaxTMI 
2014 (5) TMI 1224
X X X X Extracts X X X X
X X X X Extracts X X X X
....tment in property. 3. The Ld. CIT(A) has erred in deleting the addition of Rs. 50,000/- made on account of unexplained investment of FDR purchased by the wife of the assessee. 4. The Ld. CIT(A) has erred in deleting the addition to the extent of Rs. 26,895/- made on account of unexplained investment in purchase of household items. 5. The Ld. CIT(A) has erred in deleting the addition to the extent of Rs. 35000/- made on account of unexplained investment in purchase of Maruti Car. 6. The Ld. CIT(A) has erred in deleting the addition of Rs. 14000/- made on account of unexplained investment in purchase of jewellery. 7. The Ld. CIT(A) has erred in deleting the addition of Rs. 30000/- made on account of capital gain on sale of plot. 8. The Ld. CIT(A) has erred in deleting the addition of Rs. 21,60,000/- made on account of unexplained investment in property. 3. The assessee has raised the following grounds of appeal : 1. That the order of the ld. Commissioner of income Tax (Appeals) Chandigarh in appeal No. 328/p/99-2CCO dated 23.02.2005 is bad in law and facts of the case. 2. That the Ld. Commissioner of income ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... period was filed by the assessee. Thereafter, the Assessing Officer issued a questionnaire to the assessee to explain the various issues related to the search & seizure operation. The assessee filed return of income for the block period on 16.08.1999. Thereafter, various notices were issued to the assessee but except for giving some general reply to the questionnaire, the assessee failed to furnish the information and explanation before the Assessing Officer. Summons were issued under section 131(1) of the Act to the assessee who failed to appear before the Assessing Officer on the appointed date. However, his son submitted a letter at the receipt counter stating that he could not contact his father who was posted in Patiala. The Assessing Officer completed the assessment on the basis of the reply filed by the assessee and on the basis of the enquiries conducted by the Investigation Wing and during assessment proceedings. 6. The first addition was made in the hand of the assessee vis-à-vis the credit appearing in the bank accounts of the assessee and his family for which, no explanation was offered by the assessee. Total addition was made under section 69 of the Act as t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ocument Nos. 25 to 27 in file A-3 were proforma invoice dated 11.09.1996 for purchase of another Maruti motor car for Rs. 194,021/-. As the assessee failed to produce the source of investment in the said assets, investment of Rs. 107,109/- in Maruti car purchased on 13.07.1990 and Rs. 77,153/- in the Maruti car purchased on 11.09.1996 were treated as unexplained income of the assessee. Further addition was made on account of the expenditure relatable to foreign visits of the assessee and his wife and also on account of purchase of jewellery worth Rs. 14,000/-. 8. The next addition made in the hands of the assessee was on account of unexplained investment in property on the basis of hand written documents found and seized during the course of search. Addition of Rs. 21,60,000/- was made on this account. 9. Another addition was made in the hands of the assessee vis-à-vis plot No. 422, Giani Zail Singh Nagar, Ropar amounting to Rs. 30,000/-. The Assessing Officer also fund that the withdrawals made by the assessee for meeting his household expenditure were very low and consequently estimated addition for meeting the household expenses was made in the hands of the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e requisite information as called for. The Commissioner of Income Tax (Appeals) vide para 3.2 at page 2 of the appellate order has given a finding that reasonable opportunity had not been given to the assessee but since the issues were being taken up on merit by the Commissioner of Income Tax (Appeals), the said ground of appeal as per the Commissioner of Income Tax (Appeals) had become academic in nature. On the perusal of the order of the Commissioner of Income Tax (Appeals), we find that the explanation given by the assessee which admittedly was filed by the assessee after the close of the assessment proceedings in the hands of the assessee was elaborately considered by the Commissioner of Income Tax (Appeals) and remand report was called for from the Assessing Officer vis-à-vis the various entries in the bank accounts, addition against which had been made in the hands of the assessee and also with regard to the various documents and evidences found during the course of search, additions against which were also made in the hands of the assessee. The case of the assessee before the authorities below and before the Commissioner of Income Tax (Appeals) specially was that in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ancial year 1997-98. 14. Before coming to the facts relating to the said ground of appeal raised by the revenue, we would like to make a reference to the order passed by the Commissioner of Income Tax (Appeals) under which vide para 4, the issue against the addition of Rs. 49,40,056/- on account of unexplained investment relatable to the credit entries in the various bank accounts of the assessee has been adjudicated upon. The assessee filed detailed submissions before the Commissioner of Income Tax (Appeals) vide letters dated 12.08.2003 and 14.08.2003 running into 13 & 18 pages respectively. The said written submissions were forwarded to the Assessing Officer on 26.08.2003 and the remand report dated 01.12.2004 was received from the Assessing Officer. With regard to the addition of Rs. 49,40,056/- on account of various bank deposits, the Commissioner of Income Tax (Appeals) noted that there were 106 credit entries in the banks which were noted in the remand report and were examined by the Assessing Officer in detail. The Commissioner of Income Tax (Appeals) has tabulated the details regarding credit entries in the bank accounts and comments made by the Assessing Officer in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y him, addition to which effect had been made in the hands of the son of the assessee Shri Jitender Pal Singh and the same are not to be considered in the hands of the assessee. The entries relating to the wife of the assessee are to be considered in the hands of the assessee as the wife of the assessee could not declare sources of income justifying the said investments. The holding of the investment in the name of wife of the assessee does not establish that the said investment belongs to the wife of the assessee and not the assessee as in the absence of any declared sources of income in the hands of the wife of the assessee, the presumption is drawn against the assessee. On the other hand, the assessee was salaried employee and had known sources of income but the investment made by the assessee in different assets was out of unknown sources of income and hence, addition to that effect was made in the hands of the assessee, pursuant to the search conducted at the premises of the assessee under which various documents relating to the said investments were found and seized. Merely because the investment is held in the name of the wife of the assessee, does not establish per-se that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R and source of deposit in FDR.. 13. Deposit on 31.3.92 in CBI A/c No. 13473 of Surjit Kaur 2924 1/- It is stated to be maturity of old FDR with Punjab & Sind Bank, Patiala but no evidence has been furnished to prove this fact except credit entry of Rs.29241/- bank statement in which the 78 On 1.5.96 in CBI A/c same stands deposited.No.16840 of Surjit Kaur 175427- It is stated to be maturity of FDR . 16. II. Regarding Deposits made in different bank accounts against sale of shares Deposit on 21.4.92 in CBI A/c No.11456 of A.S. Dhingra 11500/- It is stated to be on account of sale of shares. However, there is no evidence of the particulars of shares sold. 18. Deposit on 25.4.92 in CBI A/c No.11456 of A.S. Dhingra 14800/- It is stated to be on account of sale ofshares. However, there is no evidence of the particulars of shares sold. .. 40 Deposit in CBI A./c No,.13473 of Surjit Kaur on 2.2.94 26000/- The same is stated to be on account of sale of shares. The amount has been received through cheque as per bank statement furnished but no evidence regarding description of shares sold 51 On 21.7.94 In A/c furn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....- i.e. Rs. 29,414/- + Rs. 29,241/- + Rs. 17,542/-, the claim of the assessee before the Commissioner of Income Tax (Appeals) was that the said related to maturity amount of fixed deposits which were deposited in the bank account of Smt. Surjit Kaur and the source of investment in the said account was out of her past savings. The explanation of the assessee before the Commissioner of Income Tax (Appeals) and even before us was that she had independent income from tuition for which she was filing the return of income and in addition, she had other income like her savings and gifts received from her family members. The assessee failed to furnish any cogent material regarding the income of the assessee from tuition before the Commissioner of Income Tax (Appeals) or even before us. In view of the status of the family and her qualifications and considering the fact that the gifts and savings could not be ruled out, the Commissioner of Income Tax (Appeals) had considered 50% of the amount as coming out of her savings and the balance 50% was considered as income of the assessee from undisclosed sources at Rs. 38,099/-. In the entirety of the facts and circumstances, we are in conformity wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Income Tax (Appeals) in this regard since the addition was made in the hands of the assessee by the Assessing Officer as the assessee had failed to furnish any evidence of the particulars of shares sold against various entries. Where the assessee has failed to furnish the basic particulars of the name of the company, the number of shares etc., then it is not possible to determine and co-relate the investment in the said shares. In the absence of any details having been furnished by the assessee, we find no merit in the order of the C.A. in this regard and consequently, we reverse order of the Commissioner of Income Tax (Appeals) and uphold the addition of Rs. 1,41,667/-. 22. The last set of entries considered by the Commissioner of Income Tax (Appeals) were entry No. 97-106 which related to encashment of two FDRs. The Commissioner of Income Tax (Appeals) from the details noted as under : 4.9. NRE account no. 329 is maintained in Vijay Bank, Chandigarh in the name of Sh. Jasbir Singh, brother of the appellant's wife where different amounts have been deposited from time to time. There was no deposit in this account during the block period. All the deposits were bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Rs. 10,000/- on 18.2.1993 and Rs. 7000/- on 03.03.1993. The explanation of the assessee was that it had withdrawn cash of Rs. 25,000/- on 21.04.1992, Rs. 6,000/- on 07.05.1992 and Rs. 5,000/- on 27.04.1992 which were deposited later on in the bank account. The plea of the assessee in this regard was not accepted by the Commissioner of Income Tax (Appeals) because of long gap in the deposit of the cash in the bank accounts and addition of Rs. 33,000/- was upheld. The Commissioner of Income Tax (Appeals) in totality upheld an addition of Rs. 101,099/- (Rs. 38,099/- + Rs. 30,000/- + Rs. 33,000/-). We have already upheld the addition of Rs. 38,099/- in the paras herein above and also are in conformity with the order of Commissioner of Income Tax (Appeals) with regard to Rs. 30,000/-. The addition of Rs. 33,000/- in the hands of the assessee is also justified in the absence of any proof being filed by the assessee with regard to the availability of the cash in hand. In addition to the three additions upheld by the Commissioner of Income Tax (Appeals), we further uphold the addition relatable to the deposits made in the bank accounts against sale of shares totaling Rs. 141,667/-. In vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....conformity with the order of the Commissioner of Income Tax (Appeals) in this regard specially after the verification exercise carried out by the Commissioner of Income Tax (Appeals) during the appellate proceedings. Upholding the order of Commissioner of Income Tax (Appeals) we dismiss ground No. 2 raised by the revenue. 30. The issue in ground No. 3 raised by the revenue is against deletion of addition of Rs. 50,000/- made on account of unexplained investment of FDR in the name of the wife of the assessee. The FDR for Rs. 50,000/- was issued on 07.06.1997 from Central Bank of India and the assessee claimed that the said FDR was taken out of the personal income of his wife. During the remand proceedings, it was noted that the assessee had made withdrawal of Rs. 20,000/- on 13.03.1997 and Rs. 48,000/- on 26.03.1997. The Commissioner of Income Tax (Appeals) accepted the plea of the assessee in view of the said withdrawals which had been verified by the Assessing Officer and also in view of the approximate income of Rs. 75,000/- from different sources being available with the assessee. The ld. DR for the revenue has failed to controvert the findings of Commissioner of Income Tax (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd circumstances and in view of the remand report, we find no merit in the ground of appeal No. 5 raised by the revenue and the same is dismissed. We also find no merit in the issue raised by the assessee vide ground No. 6 where the old car was sold later than the date of purchase of the new car and consequently, the said sale proceeds of old car not being available with the assessee, the claim in this regard was not justified. We uphold the addition of Rs. 77,153/- and dismiss ground No. 6 raised by the assessee. 33. The next ground of appeal No. 6 is against the deletion of addition of Rs. 14,000/-. The assessee had purchased an item of jewellery from the jewellery and the Assessing Officer had made the addition in the absence of any explanation of sources of investment. The Commissioner of Income Tax (Appeals) deleted the addition because of the salary drawn by the assessee. In the entirety of the abovesaid facts and circumstances, we find no merit in ground No. 6 raised by the revenue. 34. The ground No. 7 is against deletion of addition of Rs. 30,000/-. The assessee was asked to explain sources of investment in plot No. 422 Giani Zail Singh Nagar, Ropar which was purchas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ration, I find that the addition was made on surmises and conjectures. and so the same is not sustainable and is deleted. 37. The facts relating to the issue are that during the course of search & seizure operation at the residence of the assessee, a hand written document No. 62 file No. A-3 was found which reflected the assessee to have sold the property for Rs. 21,5000/- out of which sum of Rs. 10,00,000/- was transferred to London. The assessee failed to discharge the onus of explaining the contents of the said document and in view of the provisions of section 132 of the Act, assumption was drawn against the assessee from whose possession the said document was found and an addition of Rs. 21,60,000/- was made in the hands of the assessee. 38. During the appellate proceedings, the assessee claimed that it never sold such property which was allegedly sold by the assessee. The document No. 62 written on the pad of M/s. Raj Travels & Tours Ltd. found from his premises was denied by the assessee to be not in his hand writing, not pertaining to him. In the remand proceedings, the Assessing Officer rejected that the hand written document depicted only calculation showing sale pri....