TaxTMI 
TaxTMI 
1984 (11) TMI 87
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.... 3. Shri Mahendra 4. Shri Radhey Mohan 5. Shri Gerekmes It will be relevant to mention here that the ITO has granted registration to this new firm meaning thereby that the had no doubt about its existence from 1st Oct., 1974. 3. The Police Department conducted a search at the business premises of the above firm on 9th Oct., 1974. In that search, besides cash of Rs. 47,850, they also found silver ornaments weighing 64,100 Kgs. and gold ornaments weighing 7.39 Kgs. The information about these findings was passed on to the ITO. The ITO was of the view that the above ornaments were pawned articles and that the pawning business had been carried on by Shri Hira Lal and Shri Sudama Seth, who were also brothers. His further view was th....
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....had arrested him and had recorded the recoveries also in his name. The ITO, therefore, made a protective assessment on him treating the entire amount of Rs. 2,19,660 and the cash of Rs. 47,850 as his income. The assessment in his case was made on an income of Rs. 2,69,310 which included his salary of Rs. 1,800. 5. The ITO also initiated proceedings under s. 147 of the Act against the firm of M/s Triloki & Co. The firm returned an income of Rs. 3,038. The ITO made a protective assessment on this firm treating the entire unexplained investment of Rs. 1,97,526 referred to above as its income. 6. All the above assessees appealed to CIT(A). The CIT(A) passed more or less a common order in all the cases and then added some concluding paragr....
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....re, gave a new dimension to the case. In the first place he enhanced the weight of the gold from 7,39 Kgs. found by the Police authorities to 8.316 Kgs. and in the second place he also valued it at the higher figure. The CIT(A) was of the view that the ITO had not done his job carefully and, therefore, the case required setting aside for a fresh valuation. However, he proceeded to dispose it of as considerable time had already elapsed from the date of the search till the matter came for his consideration. 8. The first finding of the CIT(A) was that Shri Triloki Nath was only an employee and, therefore, his presence at the time of the search was not any surprise. He was also residing in the same premises. In fact, the other partners also ....
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.... period 1st April, 1974 to 30the Sept., 1974 after which the business was taken over by the firm of M/s Triloki & Co. He, therefore, on the basis of his earlier finding, included half of this amount each in the assessments of Shri Hira Lal and Shri Sudama Seth. This finding to the CIT(A) has been challenged by the department in the cases of Shri Hira Lal and Shri Sudama Seth, the contention being that the CIT(A) had erred in holding that only a portion of the ornaments were acquired in the year under appeal. 12. Here also, we have heard the parties. We have already stated above that as per the remand report of the ITO himself the investment in pawning business in the year under appeal was found to be of Rs. 7,344. The department cannot, ....
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....d in the hands of Shri Hira Lal and Shri Sudama Seth and Rs. 15,429 was assessable in the hands of M/s Triloki & Co. 15. The above findings of the CIT(A) have also been challenged by the department. It was contended by the ld. departmental representative that the CIT(A) had not basis to hold that gold ornaments weighed only 5 kgs. as against 7.39 kgs. found in the search and further that only 1.5 kgs. could relate to the asst. yr. 1975-76 and still further only 0.5 kgs. related to the period 1st Oct., 1974 to 9th Oct., 1974. 16. In our opinion, there is not merit in the departmental appeal here also. It was found by the CIT(A) that the ornaments contained some alloy. The ITO did not help him by giving full details as was required thro....
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....ing to Shri Hira Lal and Shri Sudama Seth should have been set off against the value of the investment worked out by the ITO. The CIT(A)did not give any set off. He only gave a set off Rs. 25,000 out of the cash of Rs. 47,850. We agree with him, Admittedly, the capital was as on 1st Oct., 1974. The ITO has calculated the value of only those investments, which were found in the case of M/s Triloki & Co. for the period 1st Oct., 1974 to 9th Oct., 1974. The capital as on 1st Oct., 1974 could not, therefore, cover these new investments as it represented the old investments. He has very fairly given set off for the cash balance of Rs. 25,000. Similar position will apply to other cases also as there is not evidence that any part of this capital r....