TaxTMI 
TaxTMI 
1996 (9) TMI 161
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....(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 figures recorded on page Nos. 24 & 25 respectively. (iii) Th....
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....ssee 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. 65,297.08 ------------------------------ It was explained by the assessee to the Assessing Officer that out ....
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....t 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 weighing 59 gms. belonged to Smt. Anju Arun Gupte, who is the sister of assessee's wife. Similarly, 2 Kangans ment....
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....ld 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 addition of Rs. 1,39,507 on account of longterm capital gain. Both the assessee and the revenue are aggrieved with the a....
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....37. 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, accordingly, made an addition of Rs. 20,000 on account of low household withdrawals. The assessee appealed and the ld. CIT(A) for the reasons given....
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....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, rejected the explanation given by the assessee for the reasons given in detail in the assessment order as recorded at pages 40 to 75 of the assessment or....
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....e 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. Enterprise Rs. 9,803-57 (f) Vishal Construction Rs. 8,096-08 (g) Kishore B. Desai & Co. Rs.13,083-00 (h) Urmi Enterprise Rs. 2,386-00 ------------------------------ Total : Rs. 65,297-08....
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....ere 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 his employees. As regards the finding of the cash from different places in the house, it was submitted that this alone cannot be made the basis for rejecting the good explanation that the cash available with the assessee as per the ....
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....s 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 from friends and relations of the assessee who happens to visit them. In this view of the matter, we are of the considered opinion that the addition of Rs. 50,000 made by the Assessing Officer as sustained by the CIT(A) is not at all jus....
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....----------------------------------------------------------------- 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 65.53 36.500 -------------------- ------------- --------------- It was submitted that from the details of jewellery available with the assessee it is clear that the jewellery actually found at the time of search was less than the jewellery declared and as such, no addition was called fo....
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....resentation 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 reweighing weighed on 20-3-1992 ------------------------------------------------------------------------------------------------------------------------------------------------- S. No. Gold Gross No. of Cts Gold Gross No. Cts. Wt. Diamonds Wt. of diamond -------------------------------------------....
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....d 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 making the additions in the hands of the assessee in the assessment year 1982-83 the fact that jewellery belonged to the minor does not change and as such, the jewellery belonging to the minors was not declared in the wealth-tax returns filed by the assessee, his brother and their family members. I, accordingly, it was submitted that the addition made by the Assessing Officer as sustained b....
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.... 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 Mrs. Kamal A. Shah and Mrs. Meena Atul Shah and as such, no addition on account of the alleged unexplained investment could be made in the hands of the assessee, because a person found in possession of jewellery will be the owner as per the decision of the Hon'ble Supreme Court in the case of Chuharmal v. CIT [1988] 172 ITR 250/38 Taxman 190. Thus, the addition of Rs. 3,19,452 is directed to....
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....planation 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 and his brother for wealth-tax purposes have been completed by passing orders under section 16(3). In this view of the matter, if silver utensils are once again treated as unexplained and added to the assessee's income on the very same reasoning, then it will tentamount to double addition. Accordingly, we will hold that the Assessing Officer as well as the CIT (Appeals) were not justified in making this disputed a....
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....lone 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. 20,000 is quite in order. 27. 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 assessee is a partner in various firms which are engaged in the business of construction of Multistorey Flats. Besides that, the assessee is also Director in Vimla Silk Mills Pvt. Ltd., which is engaged in the processing of textiles. A perusal of the detail....
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....val 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 according to the assessee, was his share of the total expenditure of Rs. 17,737. In this view of the matter, we are of the opinion that the departmental authorities were not justified in making the addition of Rs. 17,737 on account of Lonawala tour, the bill of which was in the name of Shri Subodh Gandhi. Even otherwise if the assessee has incurred any further expenditure over and above the amount of Rs. 4,000 accounted for in his withdrawals on a....
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....und 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 the assessee in the assessment year under consideration particularly so as there was absolutely no evidence indicating the sale of jewellery/ornaments by the assessee or his family members. Accordingly, we do not find any merit in this ground taken by the Revenue, which is, accordingly, dismissed. 34. Coming to ground No. 3, which is directed against the action of the CIT (Appeals) in deleting the addition of Rs. 13,000 on account of unexplained ....
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....vances/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 aggrieved with the order of the CIT (Appeals) and has come up in appeal before us. 37. Shri P.F. Jain, the learned representative of the assessee submitted that the entire addition based on decoding of figures found in the loose papers lacks basis and deserves to be fully deleted. It was submitted that the addition is neither tenable legally nor factually and it is based on suspicion, surmises, conjectures and imagination of the ld. Assessing Officer which went on changing fro....
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....as 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, the Assessing Officer held that the explanation offered in response to the show-cause notice is not correct. The CIT (Appeals) also in his order on pages 13 & 14 has observed that " the assessee did not choose to explain the nature of figures written on the loose papers during the course of action under section 132 as also during the course of proceedings under section 132(5). As such, the assessee's explanation can neither be considered nor accepted. The assessee's conte....
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....nst 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 5,00,000 14/4 2 2,000 2,00,000 24/4 2 2,000 2,00,000 10/6 2 2,000 2,00,000 10/6 50 50,000 50,000 On same page 15 15,000 1,50,000 10,000 ---- 10,000 (as it is) ------------------------------------------------------------------------------------------------------------------------------------------------- There is no date on figures on left side. As per assessment order addition of Rs. 96,36,000 was made for this single page only. The CIT (Appeals) directed decoding by multiplier of 1000 only. Co....
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....., 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 been pointed out by the Assessing Officer and that material evidence is absent. Accordingly, it was submitted that in respect of the alleged 'on money', without admitting but assuming that any addition can be made, then that can be done only in the income of the corresponding firms which were carrying on the business of construction and supervision of building projects in which the assessee was a partner. 41. In his detailed written replies submitted in response to the showcause notices, the assessee has explained some of the entries....
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....nt 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 Assessing Officer has decoded the additional income at Rs. 1,55,88,000. In the show-cause notice, the addition proposed to be made was Rs. 2,35,88,434 ; whereas as per the decoding in the assessment order, the total addition made is Rs. 1,35,99,434. Accordingly, it was submitted that the Assessing Officer himself was not clear as to what should be done of the entries on the loose-papers and has arbitrarily made the disputed addition of Rs. 1,35,99,434 after rejecting reasonable explanation given by the assessee. Accordingly, it was submitt....
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....ition 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 ------------------------------------ 45. Subsequently, as per the show-cause notice issued by the Assessing Officer dated 1-3-1993, the decoding of these very loose papers for the purpose of making the addition was made as under :-- Loose Paper No. Amount 22 Rs. 6,98,434 23 Rs. 11,58,700 24 Rs. 1,62,60,000 25 Rs. 25,80,000 30 Rs. 28,91,300 ------------------------------------ Total Rs. 2,35,78,434 ------------------------------------ However, at the time of passing the order dated 31-3-1993, the decoding was done by the Assessing Officer as under :-- Loose....
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....count, 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 and can have relevance to the assessment proceedings only if some incriminating evidence affecting the assessability of income of the assessee is found and seized in such proceedings. As mentioned earlier, it is pertinent to note that no year is mentioned on the seized paper; whereas the Assessing Officer has mentioned 1988 and as such, there is no basis for the addition made by the Assessing Officer in the assessment year 1989-90. A complete copy of the forensic report obtained by the Assessing Officer was not supplied to the assessee in spite of repeated requests and although there is a clear finding in ....
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....erested. 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 that entries on page Nos. 23, 24 & 30 represented receipts of share application/membership fees of the flat owners in various cooperative housing societies and non-trading corporation which were managing the projects supervised/constructed by the firms in which the assessee and his family members are interested. Entries at page Nos. 24 & 25 are stated to be on account of receipts for the sale of claimless sarees & cutpieces. The fact that page Nos. 24 & 25 relates to Vimla Silk Mills Pvt. Ltd. is supported by the writing of Vimla at the top of the loose paper No. 24. Even if the explanation given by the asse....