TaxTMI 
TaxTMI 
1996 (9) TMI 161
X X X X Extracts X X X X
X X X X Extracts X X X X
....ensils. (Ground of appeal Nos. 11 to 30) (d) Addition on account of low household expenses. (Ground of appeal Nos. 14 & 15) (e) Rs. 17,737 on account of Lonavala expenditure. (Ground of appeal Nos. 16 & 17) (f) Rs. 28 lacs on account of unexplained investment/expenditure as recorded in loose paper Nos. 22, 23, 24, 25 & 30 found and seized at the time of search. (Ground of appeal Nos. 18 to 24) Ground Nos. 1 & 25 are general in nature and call for no comments. 2. ITA No. 2462 is the appeal by the Revenue wherein the grounds taken are as under : (i) The ld. CIT(A) has erred both in law and on facts in holding that the weight shortage of 1429.650 gms. in gold ornaments and 8.850 cts. of diamonds will not be treated as long-term capital gain and consequently deleting an addition of Rs. 1,39,507 being taxable capital gains. (ii) The ld. CIT(A) has erred both in law and on facts in adopting figure of Rs. 1,000 only for decoding of page Nos. 24 & 25 as against Rs. 1,00,000 adopted by the Assessing Officer and consequently in deleting unexplained investment/advances and expenses amounting to Rs. 96,36,000 and Rs. 15,90,000 added as a result of decoding of various figur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....concerns. The Assessing Officer, however, rejected the explanation given by the assessee and treated the amount of Rs. 50,000 as the income from undisclosed sources while passing the order under section 132(5) of the Act. 4.2 In the course of assessment proceedings also, the assessee repeated the statement made earlier during the course of proceedings under section 132(5), but the Assessing Officer was of the view that the explanation cannot be accepted as the cash books of various concerns of which cash was claimed to be belonging, were found incomplete. The Assessing Officer has noted the explanation of the assessee submitted vide letter dated 25-2-1993 (at page 3 of the assessment order) according to which the cash balances available with the various concerns as on 12/15 July, 1988 was as under : (i) Amar Structures Pvt. Ltd. Rs. 21,334.58 (ii) Amar Housing Corporation Rs. 2,943.65 (iii) Kamal Construction Rs. 2,862.20 (iv) Vishal Builders Rs. 4,808.00 (v) Vishal Construction Rs. 8,096.08 (vi) N.K. Enterprises Rs. 9,803.57 (vii) Kishore B. Desai & Co. Rs. 13,083.00 (viii) Urmi Enterprise Rs. 2,386.00 ------------------------------ Total Rs. 65,29....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ighing 1968.300 gms. valued at Rs. 7,85,945 were found ; out of which gold ornaments weighing 359.5 gms. valued at Rs. 95,283 and diamond items valued at Rs. 2,53,500 were seized on 13-7-1988. Subsequently, gold ornaments weighing 430.600 gms. valued at Rs. 91,359 recovered from the locker were seized on 5-9-1988. Total seizure of gold ornaments and diamond items valuing Rs. 4,40,142 was effected. 6. In the course of assessment proceedings, the assessee claimed that valuation of gold ornaments in terms of weight, grouping and identification of individual items has not been done properly and, therefore, he had made a request for re-grouping, re-weighing and re-identification. The above request was initially rejected by the Assessing Officer, later on the CIT, Central, Ahmedabad has allowed the request of the assessee vide letter No. HQ. Cent./134-4/88 dated 11-3-1992. Accordingly, re-grouping, re-weighing and re-identification was done of the seized jewellery/ornaments on 20th March, 1992. During the course of proceedings under section 132(5) as well as during the course of assessment proceedings, it was claimed on behalf of the assessee that 2 Kangans mentioned at Item No. B--19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent order. 7. The Assessing Officer while making the addition rejected the explanation of the assessee that the gold jewellery/ornaments found and seized from the premises as well as locker were duly accounted for by the assessee and his family members in their wealth-tax returns which were filed prior to the date of search on the ground that the items mentioned in the valuation reports annexed with the returns filed varied from the items found at the time of search. The Assessing Officer also concluded that the items which were declared in the wealth-tax returns filed prior to the date of search and which were not found actually at the time of search must have been sold by the assessee outside the books of account. He, accordingly, made a further addition of Rs. 1,39,507 on account of long-term capital gain on sale of jewellery as per the reasoning given in Part-III of the assessment order at pages 32 & 33 of the assessment order. 8. Aggrieved with the order of the Assessing Officer, the assessee filed appeal to the CIT(A) and the ld. CIT(A) vide his order dated 24-9-1993 upheld the addition of Rs. 3,19,452 on account of unexplained investment in jewellery, but deleted the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce the paper was found from his residence, the expenditure must have been incurred by him. He, accordingly, made an addition of Rs. 17,737. The assessee appealed and the ld. CIT(A) for the reasons given in para 7 of the impugned order upheld the action of the Assessing Officer. The assessee is aggrieved and has come up in second appeal against the action of the ld. CIT(A). Low withdrawals for household expenses 11. During the course of assessment proceedings, the Assessing Officer found that the assessee along with his wife, mother and two minor children were living jointly whereas his brother Atul N. Shah, his wife Smt. Meena A. Shah & son Vikram Atul Shah were residing separately. The Assessing Officer found that the total withdrawals in the case of Amar N. Shah (Indl.), Amar N. Shah (HUF) and Kamal A. Shah were to the extent of Rs. 1,42,072. Out of this, the Assessing Officer found that a sum of Rs. 1,09,657 was on account of specific expenses found recorded in the seized paper as mentioned on page 37 of the assessment order. Accordingly, only a sum of Rs. 32,435, according to the Assessing Officer, was available for household expenses which was considered low. He, accordi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to explain the nature and contents and purpose for which these loose papers were written. The Assessing Officer examined the assessee again on 7-10-1988 and 14-10-1988 with a view to obtain his explanation with regard to the entries made on the loose papers and since no satisfactory explanation was offered by the assessee, the Assessing Officer decoded the figures mentioned in the seized paper Nos. 22, 23, 24 & 25 representing undisclosed receipts amounting to Rs. 1,55,88,000 vide order dated 19-10-1988 passed under section 132(5) of the Act. 14. Subsequently, when the regular assessment proceedings were taken up, the Assessing Officer required the assessee to explain the nature of those entries appearing in the seized paper vide notice dated 17-9-1990 in response to which the assessee submitted that he will not be in a position to explain the entries unless photocopies of the loose papers were supplied to him. The Assessing Officer, accordingly, supplied photocopies of the loose papers to the assessee on 26-9-1990 and the assessee then filed a detailed explanation explaining those entries vide his first written submission dated 12-10-1990. The Assessing Officer, however, rej....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee that the cash represents the cash balances of various concerns where the assessee and his family members are interested. It was pleaded that the explanation of the assessee has been rejected on the ground that cash books of various concerns were not written up to date and cash balances were not struck. It was pleaded that at the time of search, which was started on 12-7-1988 and concluded on 13-7-1988 temporarily, the assessee was not present in the residential premises, he being out of station. It was submitted that his statement was recorded for the first time on 15-7-1988 wherein he explained that the cash found from the residence represented the cash balances belonging to the various concerns in which the assessee and his family members have interests. It was submitted that in the statement recorded under section 132(4) on 15-7-1988 at 8.15 A.M., in response to Q. No. 35, the assessee has clearly stated that the cash balances as on today (15-7-1988) of various concerns are as under :-- (a) Amar Structure P. Ltd. Rs. 21,334-58 (b) Amar Housing Corporation Rs. 2,943-65 (c) Kamal Construction Rs. 2,842-20 (d) Vishal Builders Rs. 4,808-00 (e) N.K. Enterpr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that keeping in view the overall availability of cash in the books of various firms which is more than the cash found, credit for available cash has to be allowed when there is no evidence or finding that it has been utilised somewhere else. It was submitted that the Assessing Officer has, unnecessarily placed undue emphasis on the statement of Smt. Urmilaben, mother of the assessee recorded on 12-7-1988 with regard to availability of cash in the house at about Rs. 11,000. It was submitted that Mrs. Kamal A. Shah, whose statement was also recorded on 12-7-1988, has stated that the cash in the house may be about Rs. 30,000. It is also pertinent to note that Rs. 15,000 was found from the Brief Case of the assessee. Accordingly, it was stated that if all the statements are appreciated in proper perspective then it will be seen that there is no flaw in their statements, and moreover, the mother as well as wife of the assessee may not be fully aware of the facts regarding the cash balances available in the various firms in which the assessee and his family members are interested as the day to day functioning of the various concerns is being looked after by the assessee, his brother and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessing them in March 1992 as per the details given on page 15 of this order and there is no adverse finding regarding the cash balances held by these concerns. As such, it is clear that since the cash found at the time of search was less than the cash available as per the books of various firms and there is no evidence or finding that the cash available with the various concerns has been utilised elsewhere, the cash found has to be treated as explained. The mere fact that the cash was found at various places in the house cannot be the ground for rejecting the explanation given by the assessee particularly, in view of the finding that the books of account of the various concerns were not written for a period of more than three months in some cases and as such, the possibility of cash with various members of the family is not destructive of the argument of availability of cash with the assessee. Moreover, it is pertinent to note that there have been withdrawals for household purposes by the assessee and his various family members, and the cash with the servant/children can be out of those withdrawals or out of savings from gifts or pocket money received by the servant/children fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....embers who are assessed to wealth-tax, the jewellery & ornaments belonging to minor children of the assessee and his brother, as per the valuation report available, is as under :-- -------------------------------------------------------------------------------------------------------------------------------------------------- Name of Owner Gold in grams Silver in Kgs. -------------------------------------------------------------------------------------------------------------------------------------------------- Vishal Amar Shah 153.050 1.400 Sagar Amar Shah 142.800 1.800 Vikram Atul Shah 73.000 1.200 -------------------------------------------------------------------------------------------------------------------------------------------------- Thus, the total of gold ornaments, diamond ornaments & silver utensils declared comes to 2943.500 grams, 106 carets & 37.645 Kgs. respectively as against the ornaments found during the search were as under :-- Gold in grams Diamond in Cts. Siver in Kgs. At " Urmi " Residence 1968.300 46.55 36.500 At " Atul " Residence 327.500 18.98 --- -------------------- ------------- --------------- Total 2295.800 6....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ros., a registered valuer and also to Shri Navinbhai V. Chokshi to verify the Avak Javak vouchers for doing repairing work on the ornaments belonging to the assessee and his family members. It was further submitted that in relation to the jewellery found and seized, the assessee had made representation for re-grouping & re-weighing to the Assessing Officer, which was not immediately allowed, but subsequently at the intervention of Commissioner of Income-tax, Central, Ahmedabad the seized jewellery was re-grouped and re-weighed by the departmental valuer and the result of the re-weighing and the original panchanama prepared indicates certain differences which are quite apparent and which indicate that the time of seizure, the weighing was not properly done. A reference was made to the panchanama prepared at the time of search on 12-7-1988 and the panchanama prepared during re-weighing on 20th March, 1992 which indicate the followings : ------------------------------------------------------------------------------------------------------------------------------------------------- As in panchanama during the search As mentioned in panchanama weighed on 12-7-1988 during reweighin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Gms. were found which belonged to following : (1) Smt. Urmilaben 325.700 gms. (2) Mrs. Kamal A. Shah 497.700 gms. (3) Mrs. Meenaben Atul 268.550 gms. Shah -------------------------------------- 1091.950 gms. -------------------------------------- (C) 30.25 Tolas were explained as under : 167.5 gms. belonged to above three members and covered in wealth-tax returns. 78.0 Vishal Amar Shah 59.0 Sagar Amar Shah 53.0 Vikram Atul Shah ------------------ Total : 357.5 ------------------ Total ornaments found from House & Lockers 1098.00 gms. + 357.5 ------------------ 1455.5 gms. ------------------ Silver 4400 gms. (Silver Glass : 1200 gms.) It was further submitted that the additions were made in the hands of the assessee as well as his brother on account of unexplained jewellery declared in the hands of minor children and the Assessing Officer in the assessment year under consideration has again made the addition on the ground that the jewellery belonging to the minors was not declared by the assessee and his brother in the wealth-tax returns. It was pleaded by the ld. representative of the assessee that by simply ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fication for making any addition whatsoever on account of the so-called unexplained investment in jewellery. It is also pertinent to note that the assessee has furnished evidence in the form of vouchers from Goldsmith/Jeweller for remaking/alterations of some items of jewellery and the Assessing Officer did issue summon to Goldsmith/Jeweller to verify the receipt and return of these ornaments to the assessee and nothing adverse was found against the assessee. Keeping in view the totality of the facts & circumstances of the case and also the fact that certain additions on account of unexplained investment in jewellery belonging to the minors had already been made in the assessment year 1982-83 in the case of the assessee as well as in the case of Shri Atul N. Shah, there was absolutely no justification for making any addition in the case of the assessee for the assessment year under consideration. Moreover, it is also pertinent to note that the jewellery at the residence as well as in the lockers found were in the possession of Smt. Urmilaben because the Tijori was in the bed-room of Smt. Urmilaben. Similarly, Locker No. 1742 from where the jewellery was found and seized belonged to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....am Atul Shah 1.200 Kg. ------------------------ Total 4.400 Kg. ------------------------ During the search carried on 26-8-1981, besides the above silver utensils, certain other ornaments weighing 75 gms., 83 gms. & 53 gms. were claimed as belonging to the minors Vishal, Sagar & Vikram which were claimed as gifts received by the minors from their maternal-uncle, aunty, grand-mother, etc. The above explanation was not accepted by the Assessing Officer and he made addition on account of investment in gold ornaments and silver utensils claimed to be belonging to the minors in the hands of their father/natural guardian Shri Amar N. Shah and Shri Atul N. Shah. Non-acceptance of explanation offered by the assessee resulted into fastening of additional income-tax liability for the assessment year 1982-83 in the case of Shri Amar N. Shah and Shri Atul N. Shah. However, this did not change the ownership of silver utensils and as such, these were not shown by the assessee as well as his brother Shri Atul N. Shah in their wealth-tax returns from assessment year 1983-84 onwards to 1988-89. These facts are available on records of the department and the assessments of the assessee an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustified in sustaining the addition of Rs. 20,000 on account of low household expenses. 26. Shri M.K. Meerani, the ld. Sr. DR supported the order of the Assessing Officer as well as the CIT (Appeals) and further submitted that a perusal of details of expenditure for which specific withdrawals were made amounting to Rs. 1,09,657 clearly indicates the standard of living of the assessee. It was submitted that the electricity bill alone was an amount of Rs. 33,304 which gives an indication of standard of living of the assessee. Besides that, the assessee was having a gardener, a servant and a mali. As such, the estimate of household expenses made by the Assessing Officer at Rs. 5,000 per month was rather on the lower side and as such, the Assessing Officer as well as the CIT (Appeals) were justified in making the addition. It was further submitted that the monthwise details of withdrawals as mentioned at page 39 of the assessment order indicates that there were practically nil withdrawals in the month of April, May and July ; whereas as per the admission of the assessee's wife, they were incurring Rs. 5,000 per month as expenditure. He, accordingly, submitted that the addition of Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by him and, he, accordingly, made an addition which was wrongly and unjustifiably confirmed by the ld. CIT (Appeals). He, accordingly, submitted that the addition of Rs. 17,737 should be deleted. 29. Shri M.K Meerani, the ld. Sr. DR supported the orders of the Assessing Officer as well as the CIT (Appeals) and further submitted that since the complete address of Shri Subodh Gandhi could not be summoned. 30. We have considered the rival submissions and have also gone through the orders passed by the Assessing Officer as well as the CIT (Appeals). The addition has been made by the Assessing Officer simply on the ground that the assessee has failed to produce and confirmation letter from his friend Shri Subodh Gandhi that the expenditure on account of stay and hotel bill was borne by him. However, the Assessing Officer failed to issue any summons to Shri Subodh Gandhi in this regard. Admittedly, the Hotel Bill was in the name of Shri Subodh Gandhi and the assessee has requested the Assessing Officer to issue summon to Shri Subodh Gandhi in this regard. On the other hand, the assessee has in fact debited a sum of Rs. 4,000 on account of Lonawala tour in his books, which accordi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he opinion that the learned first appellate authority was perfectly justified in deleting the impugned addition of Rs. 1,39,507 on account of alleged long-term capital gains on a hypothetical basis. It is an admitted position that no evidence of the alleged sale of jewellery was found by the search party from the residence as well as the business premises of the assessee, and the presumption of sale was made by the Assessing Officer only on the ground that some of the items shown in the Valuation Report annexed with the wealth-tax returns filed for the assessment year 1986-87 were not found at the time of search from where the Assessing Officer presumed that these must have been sold. The explanation of the assessee was that those items were modified/altered by family members of the assessee and in respect of the above contention, copies of vouchers were produced indicating that labour charges, etc., were paid by the assessee to Goldsmith/Jeweller. The Assessing Officer also verified these vouchers issued by the Goldsmith/Jeweller by issuing summons to them. In this view of the matter, we are of the opinion that there was no basis for assuming that part of the jewellery was sold by....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appeal, pertain to the loose papers torn from the letter-pad kept in the Briefcase of the assessee athis residence. These papers are numbered 22, 23, 24, 25 & 30, photo copies of those have been given to us at pages 115 to 121 of the paper-book and the English Translation of these papers have also been given at pages 290 to 292 of the paper-book. The addition made by the Assessing Officer was of Rs. 1,35,99,434 under the heading "Unexplained expenditure, advances/income". The pagewise addition as mentioned at page 75 of the assessment order is as under :-- (i) Total of page Nos. 30,23 & 22 Rs. 23,73,434 (right side only) as decoded (ii) Total of entries on page 25 as decoded Rs. 15,90,000 (iii) Total of entries at page 24 as decoded Rs. 96,36,000 ---------------------------------- Rs. 1,35,99,434 ---------------------------------- The ld. CIT (Appeals) has held that wherever multiplier of Rs. 1 lac has been used by the Assessing Officer, the same be substituted by Rs. 1,000. Accordingly, the addition consequent to the above direction of the CIT (Appeals) is sustained to the extent of Rs. 28 lacs. The Revenue as well as the CIT (Appeals) both are aggrieve....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee drew our attention to the statement of the assessee recorded under section 132(4) on 15-7-1988 and in reply to question No. 26 the assessee has categorically stated that no code is utilised for writing figures and hence, the question of these amounts being in code does not arise. As per question No. 27 of the statement, the figures according to the department, were in code of 100 ; whereas as per the assessment order finally passed code of 10, 100, 1,000 & 1,00,000 has been applied which indicates that whole exercise of decoding by the Assessing Officer is imaginative. It was further submitted that as per the order passed under section 132(5), the loose paper No. 30 as decoded as nil may be as the entries on the page seems to be struck off, whereas in the assessment order, it has been decoded for an amount of Rs. 12,93,300. It was submitted that the Assessing Officer at page 45 of the assessment order to justify the decoding theory has mentioned that the assessee when a statement was recorded about the nature of entries on the seized paper has been replying that he do not remember and then all of a sudden the entries have been remembered after two years of search and as such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f coding merely on imagination. It is apparent from different yardsticks having been applied to different places as mentioned below :-- Different Manner of Decoding : (a) Page No. 23 has been decoded by multiplying figures by 100 but 1000 AR Corpn. appearing on page 4 Annexure I attached to the assessment order has been decoded as 1000 as it is, similarly 3900 Azad has been decoded as 3900 as it is. Dushyant 14000 has been decoded as 140000 only taking multiplier of 10 only as against multiplier of 100 applied to other figures. Page 2 of Annexure I Naribhai 500 has been decoded as 5000 applying multiplier of 10 only. (b) On page 25 below the name Hajibhai except against entry of 9/4 (1.5) decimal is visible whereas there is no decimal against any other entries. Hajibhai ------------------------------------------------------------------------------------------------------------------------------------------------- Entry on Loose Decoding as per Decoding as per Paper 132(5) Order Regular Order ------------------------------------------------------------------------------------------------------------------------------------------------- 26/3 5 50,000 5,00,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has been accepted by the department and the said decoded addition stands deleted. On the same parity the explanation offered for assessment year 1989-90 by the assessee deserves to be accepted. (f) Loose page Nos. 22, 23 & 30 have been explained as deposits from various members of N.T.C./Society, Labour Bill, Expenses of Vimla Silk Mills Pvt. Ltd., Bills of Vimla Silk Mills Pvt. Ltd., etc., as mentioned in explanation charts appearing on page Nos. 425, 426 & 430 of the paper-book relevant bills, membership receipts, etc., have been produced and submitted to department. (g) The members who were called in person by issuing summons have confirmed the payment as it appears on the loose paper. The seventeen confirmations of such members appear on page Nos. 122 to 139 of the paper-book. In the light of the above submissions, it was pleaded that since the coding has no basis regarding the multiple to be applied in view of the decision of the Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. CIT [1954] 26 ITR 775, the entire addition is required to be deleted. 40. It was further submitted that no assets representing the receipt of alleged 'on money' have bee....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... who handled this kind of work of preparing vouchers, cash memos, etc., have not been examined. Had it been done, the clerks might have deposed that such vouchers books with different colours and negligently binding with punching holes in negligent way were sold in the market. Accordingly, it was submitted that the finding of the Assessing Officer that the vouchers are fabricated is merely based on suspicion. Shri P.F. Jain, the learned representative of the assessee further submitted that the Assessing Officer has recorded the statement of some of the flat holders under section 131 to test his theory of 'on money' received by the assessee and all of them have supported the contention of the assessee that no 'on money' was paid and the amount mentioned against the names of those flat holders were in fact represented membership/ share contribution fee of the various societies/construction projects. It was submitted that because of these statements, the Assessing Officer changed his stand of making the addition from On Money receipts to unexplained investment/expenditure in the assessment order finally passed. It was submitted that in the order proposed under section 132(5), the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sions and have gone through the order passed by the Assessing Of ficer as well as the CIT (Appeals), and the copies of loose papers which have been made as annexures to the order passed by the Assessing Officer, copies of which were furnished to us also in the paper-book. It is pertinent to note that the loose papers seized are written in Gujarathi vernacular and the year is not mentioned over any of these papers although the date and month are mentioned. The Assessing Officer has presumed that to be of 1988 and thus, made the disputed addition on the basis of alleged decoding. It is also pertinent to note that while passing the order under section 132(5), the addition proposed was on account of 'on money' receipts relating to the various construction projects undertaken by the firms in which the assessee and his family members are interested. As per order under section 132(5), the proposed concealed income relating to the assessment order under consideration was decoded as under :-- Loose Paper No. Amount 22 Rs. 6,97,000 23 Rs. 33,45,000 24 Rs. 1,02,71,000 25 Rs. 12,75,000 30 Rs. Nil. ------------------------------------ Total Rs. 1,55,88,000 -----------....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or even on 26-8-1981 was quite negligible in comparison to the huge addition of Rs. 1,35,99,434 made by the Assessing Officer on account of alleged unexplained investment/expenses, etc. It is pertinent to note that no assets representing the alleged investment of Rs. 1,35,99,434 has been found by the departmental authorities during the course of search. The relevance and admissibility of a piece of evidence, which is sought to be used against the assessee at the assessment proceedings can be questioned by him in such proceedings. The presumption created under section 132(4A) in respect of the books of account, other documents, money, bullion other valuable articles or things, etc., found in the possession or control of any persons in the course of search is limited in scope and is restricted to the summary proceedings under section 132. Such presumption does not extend to the proceedings of regular assessment in the case of the assessee. Search proceedings are neither pre-requisite proceedings nor a part of the process of assessment. Assessment proceedings are quite independent of search proceedings. Search proceedings may take place either before or after assessment proceedings an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the order was passed on 22-3-1991. 46. At the cost of repetition, we may point out that no tangible assets in the form of unexplained investment were found at the time of search which could have justified the addition of Rs. 1,35,99,434. It is no doubt true that the assessee and his family members are having interests in various firms which are engaged in the real estate/multistorey flats construction business. However, there is no evidence to show that the assessee in fact had received on money payments in respect of flats sold by various firms in which the assessee and his family members are interested. We do not for a moment suggest that there was no prevalence of 'on money' payments in the real estate/sale of flats in the multistorey building business ; but addition on account of 'on money' payments or unexplained investments would not be justified even if general note is taken of what is described by the revenue authorities as notorious practice, in the absence of tangible evidence. The only evidence available in this case is some notings in Gujarathi which resembles handwriting of the assessee in regard to which the assessee has furnished explanation to the effect tha....