TaxTMI 
TaxTMI 
2005 (6) TMI 216
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....gned order. 4. Confirming the disallowance of depreciation claimed by the assessee and allowed in the regular assessments for the assessment years 1996-97, 1997-98 and 1998-99 amounting to Rs. 14,61,131 and for the assessment years 1999-2000 to 2001-02 (30-9-2000) amounting to Rs. 10,01,161 in respect of Office Premises bearing Nos. 1701 and 1702 as well as 1601 and 1602 at Brook Hill Apartments, Lokhandwala Complex, Andheri (W), Mumbai. 5. Confirmation of the addition of Rs. 7,05,193 on account of creditor written back in the Books of Account on 31-3-2000. 6. Confirmation of the addition of Rs. 1,18,237 on account of credits appearing in S.B. A/c No. 52774 for the assessment year 1992-93. 7. Confirmation of the addition of Rs. 10,28,404 in respect of credits in Maharashtra State Co-operative Bank instead of Rs. 17,28,404 offered by the assessee, in respect of the entire deposits made in the said account. 8. Finding of the Assessing Officer's view of Rs. 5,00,000 has been utilized by the payment of 'on money' for purchase of property at La-mer and Rs. 2,00,000 is utilized for payment for the interior decoration of flat at La-mer building. 9. Confirmation of addition of Rs. 50....
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....99 to 26-9-2000 declaring undisclosed income of Rs. 35,00,000 on 22-2-2001 in response to notice issued by the Assessing Officer under section 158BC dated 8-11-2000. The break up of the undisclosed income declared is as under: --------------------------------------------------- 1. Outstanding Liabilities Rs. 5,70,964 2. Credit entries in Maharashtra State Co-op. Bank Rs. 17,28,404 3. Capital Account difference (Year 1992-93) Rs. 10,000 4. Self Assessment Tax Rs. 1,42,000 5. To cover up possible discrepancies in the Block Period Rs. 10,48,632  ....
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.... 50,00,000 11. Unaccounted cash paid to Carpenter Rs. 7,25,000 12. Remuneration as Ms.World Rs. 35,79,000 13. Amount credited in City Bank Rs. 3,214 14. Amount transferred from Royal Bank - NRI A/c Rs. 13,14,210 15. Amount transferred from City Bank - NRI A/c Rs. 13,09,597 --------------- Total undisclosed income Rs.1,94,07,940 --------------------------------------------------- 7. Being aggrieved the assessee carried the matter in appeal. The first appellate authority gave partial relief as d....
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....ashtra Co-op. Bank Ltd. 10,28,404 -- 10,28,404 8. Unaccounted investment in La-mer Flats 50,00,000 -- 50,00,000 9. Unaccounted cash paid to Carpenter 7,25,000 -- 7,25,000 10.Remuneration as Ms.World 35,79,000 10,00,000 25,79,000 11.Amount credited in City Bank 3,214 -- 3,214 12.Amount transferred from Royal Bank NRI A/c 13,14,210 &nb....
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....e. Therefore he treated Rs. 3,50,000 as explained and the balance Rs. 4,95,200 was treated as undisclosed income of the block period. 9. During the course of first appeal the assessee reiterated her earlier submissions and also filed a table explaining the sources of cash. It was stated that cash belonged to the family members. The table submitted by the assessee before CIT(A) reads as under: ---------------------------------------------------- Sl.No. Name of the Amt. (Rs.) Remarks family member ---------------------------------------------------- 1. Aishwarya Rai 4,96,000 Balance as per cash book 2. Aishwarya Rai 1,95,000 Balance out of  ....
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.... cash balance shown in the cash book includes opening balance of Rs. 76,531 as on 1-4-2000. Further a sum of Rs. 2,00,000 was stated to be received from one producer Shabnam towards professional receipts on 24-9-2000. A sum of Rs. 1,95,000 was lying out of total cash withdrawals of Rs. 7,00,000 from Maharashtra State Co-op. Bank Ltd. This account was found to be undisclosed and the assessee in her return for the block period shown the entire credits in this account as undisclosed income amounting to Rs. 17,28,404. The assessee withdrew Rs. 7,00,000 in aggregate from Maharashtra State Co-Op. Bank Ltd. during the period from 1-4-1999 to 18-7-1999 and Rs. 1,20,000 was lying as cash in hand as on 1-4-1999 out of the cash withdrawals from Maharashtra State Co-Op. Bank Ltd. in earlier period. Out of which Rs. 6,25,000 was stated to have been paid to Mrs. Nupur Doshi, an interior decorator. The CIT(A) did not accept the cash balance shown by the books of account and he concurred with the version of the Assessing Officer that the books were not maintained regularly as the same were not found at the time of search. The CIT(A) relied on the decision of the Bombay High Court in the case of Sh....
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....roduced in the scrutiny assessment proceedings before the Assessing Officer prior to the date of search. The Assessing Officer and CIT(A) were wrong in ignoring this vital fact. He further submitted that barring this the Assessing Officer and CIT(A) has nothing to say in this regard. The Assessing Officer and CIT(A) did not find any fault with the books of account produced. The contents of the books of account were found to be in order. The entry of receipt of professional fee of Rs. 2,00,000 appearing in the cash book was summarily rejected. The Assessing Officer did not bring any material on record to substantiate that the said sum was not received from the party concerned. Without making inquiry from the party concerned this cannot be rejected just on assumptions and presumptions. Similarly the opening cash balance is coming in the cash book as per the closing balance of previous year's cash book. The books of account of previous year 1999-2000 were duly audited. No fault of any nature whatsoever was found or noticed and brought on record. It was, therefore, submitted that the cash balance as per cash book maintained by the assessee is required to be accepted. He also argued tha....
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....time of search. The father of the assessee spontaneously explained the source of cash to the extent of Rs. 3,50,000 which was in his memory at the time of search. The rest of the entries which are appearing in the books of account could not be explained as the books of account were not available at the time of search. However, later on, in the assessment proceedings and before the CIT(A), the assessee explained the source of cash found with proper reconciliation supported by books of account and other relevant documentary evidence. The Assessing Officer & CIT(A) rejected the existence of books of account and accordingly rejected the explanation of cash balance as reflected in the cash book. The cash balance remained in hand out of the cash withdrawals from Maharashtra State Co-op. Bank Ltd. was also not considered. From the perusal of the table appearing in para 3.3 on page 6 of the CIT(A)'s order, it is observed that the assessee explained the source of cash found at the time of search. The table is reproduced hereunder for the sake of understating the explanation in a proper perspective: ---------------------------------------------------- Sl.No. Name of the &nbs....
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....; from bank on 4-9-2000 ---------- 8,46,000 ---------------------------------------------------- The total cash found at the time of search was Rs. 8,45,200. The ld. representative of the assessee contended that the whole cash is found to be explained. As regards cash balance as per cash book of the assessee, which was produced before the Assessing Officer and no discrepancy was noticed by him, the same needs to be accepted. The Assessing Officer did not point out any fault with the entries appearing in the cash book which leads to the cash balance of Rs. 4,96,000 as on 26-9-2000 (th....
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....etween the date of withdrawals and date of search. Therefore, it is the apprehension of the Assessing Officer & CIT(A) that the cash withdrawn might have been used for some other purposes and the assessee cannot possess the same cash on the date of search. From the perusal of the records we find that there is no other material to support the version of the Assessing Officer and CIT(A). It is a settled position that bare apprehension is not enough to reject the explanation of the assessee which otherwise is quite probable. It cannot be ruled out that the assessee might have utilized the cash withdrawn for some purposes but the converse is also equally possible. It is quite possible that the assessee might have withdrawn the cash for some purpose but the same remained to be unutilized for one reason or the other and the cash continued to remain with her. Some times it may also happen that cash withdrawn from bank continue to remain as cash balance with the assessee even for months and some times cash withdrawn is unutilized on the same day. All these probable aspects of the matter cannot simply be ignored or brushed aside. But the fact remains that cash was withdrawn from the bank an....
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.... was accepted but the addition was sustained for difference in market value on the date of search and the purchase price. The addition relates to the two items. These items are appearing in the valuation report dated 26-9-2000 of departmental valuer at S. Nos. 34 (Diamond Pendente with chain) and 42 (Diamond Tops Set in Gold). The assessee purchased the items on 15-11-1997 and 3-6-1997. The purchase price of these items are Rs. 1,44,000 and Rs. 3,15,200 respectively totalling Rs. 4,59,200. The copies of purchase invoices are placed at paper book pages 113, 114 and 115. The CIT(A) accepted the cost of these items as explained. He further submitted that once the acquisition of the items are treated as explained then how the addition for the same can be made for mere appreciation in value. In view of this it was argued that the addition is misconceived and liable to be deleted. On the other hand the ld. D.R. supported the order of CIT(A). He argued that the addition was rightly upheld by CIT(A). 15. We have considered the rival submissions. We find that the CIT(A) accepted the acquisition of these items which are supported by purchase invoices. The payments for purchase of the same a....
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....s letter has been extracted in the assessment order at pages 15 and 16. The contents of the letter are that Bhagat Erectors & Development Services (I) Ltd. had written to the appellant on 30-3-1996 that for flat Nos. 1701 and 1702 in Brook Hill Tower occupation certificate from Bombay Municipal Corporation has not been received and in view of this the alteration in the flats could not be carried out and proper electricity and water supply would be connected only after receipt of occupation certificate from the Bombay Municipal Corporation. The Assessing Officer considered this letter as an incriminating evidence found during the course of search and, therefore, he concluded that wrong claim of allowance of depreciation in regular assessments can be assessed as undisclosed income of the block period. The Assessing Officer drew inference that since the occupation certificate from Municipal Corporation was not received for the premises being flat Nos. 1701 and 1702 in Brook Hill Apartment the appellant could not have used the flats for her professional activities. He also took support from the fact that the appellant has not shown electricity expenses for the flats in her Income & Exp....
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.... the amount of depreciation claimed in the regular returns for the assessment years 1996-97, 1997-98, 1998-99, 1999-2000, 2000-01 and 2001-02 (up to 30-9-2000 broken period). 18. Before the Commissioner (Appeals), the assessee reiterated her arguments as were advanced before the Assessing Officer. The assessee submitted before the CIT(A), that she was using these premises for her professional purpose. She had purchased the premises and taken possession from the Builder. Thereafter she was using these premises for her professional purposes without any interruption. To rebut the contentions of the Assessing Officer as regards the letter of Bhagat Erectors & Development Services (I) Ltd. which forms part of seized documents and also the adverse inference drawn regarding the statement of the brother of the assessee Mr. Aditya Rai, the assessee submitted to CIT(A) that the letter of Bhagat Erectors & Development Services (I) Ltd. talks of non-receipt of occupation certificate from the Municipal Corporation and for that reason the developers denied for carrying out any alteration in the flats. But the possession of the flats were given to the assessee way back in the second half of 1996....
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....re given to the assessee before 31-3-1996. He submitted that nothing incriminating is mentioned in the said letter to prove that the flats were not used or were not in usable condition. He further submitted that the inference drawn by the Assessing Officer from this letter about no electricity in the flats was totally wrong. This letter merely says that "proper electricity and water" will be provided after receipt of occupation certificate from BMC. It does not mean that the electricity and water is not there. It was stated by him that till such time the occupation is received the builders provide the electric supply and water from their connections. This is a general practice prevailing in Mumbai. Therefore, he submitted that this letter is not at all an incriminating document found in the search. As regards flat Nos. 1601 and 1602 he submitted that the statement of Aditya Rai recorded on 26-9-2000 is also not incriminating. He merely stated "Nobody stays in the flat No. 1601/1602 as the same is under renovation." He argued that this statement was in the context of the present position as on the date of search. He stated that possession of these flats were taken in the year 1996-9....
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....g 3 hours after sunset) if there is no electricity in the flats. In view of all this he concluded his arguments to the effect that both the flats were used for professional activity of the assessee and, therefore, the assessee is entitled for depreciation in law. 21. The learned Departmental Representative supported the order of lower authorities. He submitted that there was incriminating material found in the search in the form of letter of builders and the statement of Mr. Aditya Rai. Therefore, the Assessing Officer was justified in invoking this issue in block assessment. He supported the action of the Assessing Officer even on merits. He stated that in absence of proper electricity and water connection how one can work in the premises. This boils down to the point that these premises were not used for the profession of the assessee and therefore she is not entitled for depreciation. Accordingly he pleaded to uphold the impugned additions. 22. We have carefully considered the rival submissions. We have perused the orders of Assessing Officer & CIT(A). We have appraised the relevant documents supplied to the Tribunal regarding the issue in hand. To adjudicate this issue, first....
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....ipt of occupation certificate from the Municipal Corporation. Till such time the assessee was asked not to carry out any alteration in the flat. The Assessing Officer picked up the words 'proper electricity and water connection' and arrived at a conclusion that there was no water and light in the said flat and, therefore, the same could not have been used for business purpose and the assessee claimed the depreciation wrongly. From the records we find that the Assessing Officer did not make any further inquiry in the matter as to whether there was any electricity even on temporary basis provided by the builders, which normally the builders do at the time of giving possession of the flats. The water is also normally provided by the builders out of their construction line water connection or from borewell or from tankers. We are of the firm view that before giving possession normally these things are provided by the builders, otherwise there is no point in giving possession of the flat. Even for furnishing work of the flat, electricity is required by the carpenters etc. to run the drill machines, polish machines etc. We are afraid to accept this proposition of the Assessing Officer. A....
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.... to 9.15 p.m. in the night. There is no evidence of any complaints from them is available on records regarding non-provision of electricity and water. Considering all these aspects and totality of the circumstances we are of the considered view that the premises 1701/1702 and 1601/1602 were used for the profession of the assessee and the claim of the assessee was in order on merits. As regards the statement of Mr. Aditya Rai regarding flat No. 1601/1602 we don't find any justification for drawing any adverse inference. The premises 1601/1602 were purchased by the assessee and she took possession on 30-3-1997. The documentary evidence is available on the record. The assessee paid maintenance charges for this flat from April 1997 and onwards. From the statement of Mr. Aditya Rai it cannot be inferred that the flat was under renovation right from April 1997 till 26-9-2000 (the date of search). It is highly improbable. We don't find this statement in providing any adverse information against the assessee so as to give jurisdiction to the Assessing Officer to proceed in the block assessment proceedings. At the same time the fact remains that Assessing Officer has not made any local inde....
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....ee filed the return before that date, therefore, in view of provisions of section 158BB(1)(d) this addition could not have been legally made. On the other hand the ld. DR supported the order of Assessing Officer and CIT(A). 25. The arguments were considered carefully by us. After perusal of the order of Assessing Officer & CIT(A) we find that no specific seized document is referred as basis for making this addition. In spite of a query from the Bench, the ld. DR could not point out any seized document, which could be the basis for making this addition. In absence of that the addition cannot survive. We find from the records that the assessee wrote back this amount of sundry creditors as on 31-3-2000 in her books of account which is prior to the date of search. On the date of search the time limit for filing the return in the case of the assessee was not expired. There was no incriminating material found or seized in the course of search action carried out. Therefore, the Assessing Officer does not get any jurisdiction to include this amount in the block assessment which was otherwise offered by the assessee in her regular return for the assessment year 2000-01. In assessment order....
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.... Officer did not accept the explanation of the assessee as no evidence was filed. Since no return was filed for assessment year 1992-93 and the due date of filing the return expired he treated these credits as unexplained cash credits and included in the block period. Before the first appellate authority the assessee explained that one credit of Rs. 8,347 is the maturity value of recurring deposit and the other credit of Rs. 1,09,890 is a telegraphic transfer which is on account of gift from a relative. The CIT(A) observed that the assessee has changed his explanation in the appellate proceedings. In absence of any evidence he agreed with the Assessing Officer's conclusion and upheld the addition. 27. Before us the ld. AR of the assessee contended that these credits are in the bank account of the assessee. The existence of this bank account has been duly disclosed to-the department before the date of search. There was no incriminating material found with regard to this bank account in the search 'and, therefore, no undisclosed income results on account of these credit entries in this bank account. He further submitted that the copy of the bank statement was filed on the 'records o....
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....making assessment of undisclosed income on the basis of material found in search action. It has been the view of the Hon'ble Courts by now that block assessment should be restricted to the material gathered in search proceedings. Section 158BB states that undisclosed income is required to be determined on the basis of evidence found as a consequence of search. In the instant case no such evidence to support this addition was detected in search proceedings. We, therefore, are of the view that this addition is not warranted in the block assessment. The case laws relied on by the learned Authorised Representative fully supports this view. We therefore, hold that this addition is not based on any seized material and therefore cannot be made in block assessment and we therefore delete this addition of Rs. 1,18,237." 29. In ground No.6 the assessee relates to the manner and reasoning of the addition and not the quantum. Briefly stated the facts are that assessee was having a saving bank account with Maharashtra State Co-op. Bank Ltd. (MSCBL). This bank account was not disclosed to the department. The total credits/ deposits made by the assessee in the bank account since inception to the....
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....hase of flat and also there was no unexplained cash payment for interior decoration. The issue to be decided here is whether the action of the Assessing Officer is correct or not. The assessee declared the entire deposits in the bank of Rs. 17,28,404 as undisclosed income of the block period on account of the credit entries appearing in the bank account with Maharashtra State Co-op. Bank Ltd. All the credits in the bank was declared as income as the same was probably not explainable in the opinion of the assessee. The undisclosed income, in the case of entries in the books of account or other documents, needs to be determined normally on the basis of credit entries. The debit entries merely represent the deployment or application of the funds. The income results because of inflow of funds in the bank account. Outflow is the cash withdrawals from bank. In our view the credits of the bank account need to be considered to determine the undisclosed income. The subsequent utilisation is not the income but it is a mere application of income. The Assessing Officer, if at all wanted to link these withdrawals with the other investments, should have given credit for these amounts while makin....
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....e Hill Tower Rs. 11,10,000 (iii) 12th floor, Mistry Palace (La Mer Building) Rs. 50,00,000 ----------------------------------------------------- During the post-search inquiries before the Dy. Director of Income-tax, the father of the assessee filed one letter dated 29-11-2000. In this letter he stated that additional payment made for flat Nos. 1601/1602 and 1701/1702 at Brooke Hill Tower was towards stamp duty, club house and car parking etc. In respect of flat at 12th floor in La Mer Building no additional payment was made in cash beyond the agreement value. It was stated by him that the statement on 26-9-2000 was taken at midnight at very odd time and he was also not in proper state of mind due to mental and physical fatigue. He has inadvertently given a wrong statement about payment of 'On-Money' in regard to property dealings which he could not support. A statement of the father of the 'A' was rec....
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.... worthwhile to reproduce the assessee's submissions before CIT(A), which finds place in para 9.10 on page 32 of CIT(A)'s order. The same reads as under: "The A.Rs. emphatically argued the case and the written submission placed by the appellant is reproduced as under: Addition made by the Assessing Officer is unjustified as the same has been made purely on the basis of statement recorded under section 132(4) of Shri K Rai on 26 and 27-9-2000 in an exhausted condition. The alleged payment of on-money of Rs. 50 lakhs has been retracted by Shri K Rai during the search proceedings. This being the fact the Assessing Officer ought to have brought further evidences on record to justify the addition made by him. The Assessing Officer has not even brought on record any confirmation from the builder M/s. Jay Construction to whom the alleged on-money was paid. It is submitted that Shri K. Rai repeatedly denied that any on-money was paid for purchase of house property at La-Mer Building. During the course of assessment proceedings of M/s. Jay Construction the statement of Shri K. Rai was recorded under section 131 wherein Shri K. Rai categorically stated that no money was paid to M/s. Jay Co....
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....case of Pushpa Vihar v. ACIT 48 TTJ 389 wherein the ITAT in para 10 has held that it cannot be concluded that what the assessee said originally was sacrosanct and the assessee is not at liberty or it does not lie in his mouth to correct the error, originally committed by giving a different version of truth. Similar were the views in the case of Shri Krishanan v. Kurushestra University 1975 SC-2 GJX 0473 (SC) and Krishnalal Shivchandra v. CIT 88 ITR 293 (Punj. & Har.). In view of the above it is submitted that the initial statement of my father which was corrected later on cannot be relied upon and the impugned addition is bad in law. As regards the page Nos. 5, 44 and 45 of file A-31 submit that these pages do not at all show any payment in cash as has been inferred and alleged by the Assessing Officer. Your honour will find from the perusal of these papers that all the cheque transactions are recorded on these pages as reproduced by the Assessing Officer in the assessment order. Page No.5 contains the notings regarding payment by cheques to M/s. Jay Constructions. The full details such as cheque No., date, name of the bank account and the name of the persons from whose account the....
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....; From 3/98 to Dec. 59 1/99 5 4/2/99 4 13/2/99 5 2/3/99 2 5/99 9 &n....
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....made by December, 1998 only Rs. 3 lakhswas paid. Similarly in January, 1999 Rs. 5lakhs.was paid as per the promise. On 4-2-1999 Rs. 8 lakhs was paid against the promise of Rs. 4 lakhs. On 13-2-1999 Rs. 4 lakhs was paid as promised. On 2-3-1999 Rs. 8 lakhs was paid as against promise of Rs. 2 lakhs. On 29-3 -1999 a further sum of Rs. 6 lakhs was paid, though there was no promise, as per our convenience and request of the party we have made the payments. Thus the figures of 59, 5, 4, 5, 2 and 9 are not the amounts paid in cash as inferred by the Assessing Officer on page Nos.32 and 33 of the assessment order. The Assessing Officer. states in the assessment order as under: "On 2nd line it is written as 1/99 against which figure is mentioned at 5, which shows the cash payment of Rs. 5 lakhs in January, 1999. On 3rd line it is written as 4-2-1999 against which figure is mentioned at 4, which shows the cash payment of Rs. 4 lakhs on 4-2-1999. On 4th line it is written as 13-2-1999 against which figure is mentioned at 5, which shows the Gash payment of Rs. 5 lakhs on 13-2-1999. On 5th line it is written as 2-3-1999 against which figure is mentioned at 2, which shows the cash payment o....
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....e received by them over and above Rs. 90 lakhs. Thus the Assessing Officer has not corroborated his version of alleged payment of Rs. 50 lakhs in cash and therefore there is no substance in his findings. The Assessing Officer has given instance of the agreement price of the flat purchased by Mr. Sachin Tendulkar in the same building on 10th and 11th floors in the assessment order. It is submitted that we have purchased the flats in May, 1998 whereas Mr. Sachin Tendulkar has purchased the flats in June/July 1999 much after our purchase. As such no comparison of the price of his flats can be made with our purchase price. We also don't know on what terms and conditions he has purchased the flats. We don't know what are the amenities given to him. The Assessing Officer did not give any opportunity to us before relying on the sale instance of Mr. Sachin Tendulkar. As such the action of the Assessing Officer is in gross violation of principles of natural justice. In any view of the matter this issue is not at all relevant for making assumptions in our case in the block assessment. It is worth to be noted that Mr. Sachin Tendulkar has not purchased the flats on 10th and 11th floors direct....
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.... recorded on 16-10-2000 Mr. K.R. Rai denied to have paid any on-money in cash to the builders for purchase of flat in La Mer building. He drew our attention to page No. 29 of the assessment order where the relevant portion of the statement recorded on 16-10-2000 by Dy. Director of Income-tax has been extracted by the Assessing Officer. In answer to Q.No. 52 Mr. Rai stated that for La Mer flat no cash was paid up to date. He further stated that Mr. Rai again wrote a letter dated 29-112000 to Dy. Director of Income-tax and stated that initial statement was wrong and no cash was paid for 'La Mer' flat. In assessment proceedings vide letter dated 20-9-2002 again this fact was denied. He strongly argued that the initial statement of the father of the assessee which was subsequently retracted on many occasions by him cannot be considered for making additions in the assessment. More so when there is no other evidence brought on record by the Assessing Officer to support the fact that any on-money was paid in respect of flat in La Mer building. In view of this he submitted that the initial statement was not correct and the same was corrected later and this cannot be used as a foundation of....
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....e Assessing Officer has not given reference to any other sale transaction of builders with other purchases which can be compared with the case of the assessee. Sachin's case is a case of resale by a third party and not a sale by builders. It was, therefore, submitted that no cash payment was at all made in this property deal and the inference drawn by the Assessing Officer is purely a guess work and therefore the addition cannot stand for legal scrutiny. He therefore pleaded to delete the addition. 35. The ld. DR supported the order of Assessing Officer & CIT(A). He argued that the Assessing Officer has made addition after detailed analysis of the seized papers. The statement of Mr. K.R. Rai is duly corroborated by the seized material. His partial retraction is not valid and only the original statement which was given spontaneously at the time of search needs to be considered as correct. The subsequent denial belatedly is merely an afterthought and not supported by any material. He pointed out that the assessee did not allege any coercion on the part of the department and the statement under section 132(4) was given voluntarily and without any pressure and, therefore, no retractio....
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....ictions in the observation of the Assessing Officer. For instance on page 32 of the assessment order in 5th para the Assessing Officer gave his finding regarding first line of page No. 44 of A-3 as under: ".... In the first line, it is written as from 3/98 to December. As against this figure is mentioned at 59. This shows that from March 1998 to December, payment was made at 59 lakhs. As discussed in succeeding paras on this issue figure of 59 includes cheque component of Rs. 34 lakhs and cash payment of Rs. 25 lakhs... " From the above it is seen that the Assessing Officer says that up to December 1998 payments by cheques of Rs. 34 lakhs was made. On page 26 of the assessment order the seized pages 5 and 44 have been extracted by the Assessing Officer. Both these pages contain the payments to the builders by cheques. As per the noting on these pages up to December 1998 only Rs. 3,00,000 was paid by cheques. This is in sharp contradiction to the observation of the Assessing Officer. On page 32 of the assessment order where he says up to December 1998 payment by cheque was Rs. 34 lakhs. The Assessing Officer has not given any details of payment by cheques of Rs. 34lakhs up to Dece....
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....ditya Rai (by cheques) --------------------------------------------- Date Amt. (Rs.) --------------------------------------------- 4-2-1999 8,00,000 13-2-1999 4,00,000 29-3-1999 1,00,000 14-12-1999 1,00,000 ------------ ....
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....p; 18,00,000 --------------------------------------------- Admittedly all the above payments were found to have been reflected in the accounts of the assessee and other family members. From the perusal of the above payments it is seen that only Rs. 3,00,000 was paid before December 1998. This amount was paid by Krishna Raj Rai on 17-5-1998. All other payments mentioned above were made after December 1998. Thus the finding of the Assessing Officer regarding first line of page No. 44 of Annexure A-3 given on page 32 is incorrect. The contradiction lies in the findings recorded in the assessment order itself. We may point out at this stage that CIT(A) chose to remain silent on this aspect in spite of objected to by the assessee in her submissions in the proceedings before him. Needless to mention here that the finding of first line is the starting point of the issue. We find from the finding of the Assessing Officer that subsequent figures mentioned on this page was assumed as payment made in cash. Now the question arises as....
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.... Hills and La Mer was paid? Ans.: For Brook Hill Towers, the promoter's office bearer who were in the office at that time, I do not recall the name at present. For La Mer no cash is paid up to date ...." 38. Perusal of the above shows that Mr. K.R. Rai clarified that for flats 1601/1602 and 1701/1702 the additional amount was paid for stamp duty, car parking and club house. As regards flat in La Mer building no cash was paid till date. He also stated that the additional amount for flats 1601/1602 and 1701/1702 was paid as the transaction was complete but the transaction of La Mer building flat was not completed for amenities and stamp duty etc. and, therefore, no additional amount was paid till date. Later on a letter was written on 29-11-2000 by the father of the assessee Shri Krishna Raj Rai. In this letter he again clarified that for flat Nos. 1601/1602 and 1701/1702 in Brook Hill Tower the extra amount was paid as the possession of the flats were taken and the transaction was complete. He further stated that the amount was paid towards stamp duty, club house, car parking etc. Where no possession was taken nothing was paid beyond the agreement value. The Assessing Officer foun....
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....e it has not been paid he denied. In our view the subsequent correction cannot be termed as a mere afterthought. We are not inclined to accept the proposition of the CIT(A) that selective retraction is casting a doubt on the veracity of the retraction. Taking into consideration the circumstances and facts of the instant case we incline to agree with the arguments of ld. AR that the retraction is valid and it cannot be rejected altogether. 39. The CIT(A) also supported the conclusion of the Assessing Officer on the ground that the Assessing Officer after making elaborate inquiries brought on record one comparable case of sale instance of flat in the same building. The Assessing Officer stated that Mr. Sachin Tendulkar had purchased flat in the same building in June/ July 1999. This flat was situated on 10th floor of the same building in which the assessee also purchased a flat on 12th floor. The area of the flat was equal to that of the flat of the assessee. His agreement value was Rs. 153 lakhs and the value in the case of assessee was Rs. 90 lakhs. According to the Assessing Officer this proves the fact of on-money payment by the assessee. We find from the records that the assess....
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....e other side. The Assessing Officer asked for the explanation of the assessee. The assessee explained that she has appointed Mrs. Nupur Doshi, an interior decorator and the said interior decorator in turn employed the other persons like Ajay Vishwakarma & others. The assessee submitted details of payment made along with source of the funds to the extent of Rs. 10,00,000 paid on different dates as reproduced in the assessment order at page 44. The Assessing Officer did not accept the explanation of the assessee on the ground that the dates of payments to Nupur Doshi and date of cash withdrawal from bank does not exactly match. He considered those payments as explained where cash was withdrawn from bank on the same day on which the payment was made to Nupur Doshi The remaining payments were considered by him as unrecorded payment and he accordingly included the same in the undisclosed income of the block period. Before the CIT(A) the assessee contended that Assessing Officer was clearly in error in making the impugned addition. The CIT(A) rejected the explanation of the assessee and upheld the addition. 41. Before us, the ld. AR of the assessee contended that the Assessing Officer &....
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....7,28,404 was offered by the assessee as undisclosed income of the block period. The assessee withdrawn cash from this bank account on different dates. In our view, once the entire credits of this account is taxed as undisclosed income, the claim of assessee for utilization/application of amounts withdrawn in cash from this account deserves to be considered on the principles of telescoping, mere non-matching of dates cannot be a ground to reject the claim of the assessee altogether. We find that the date of payment to Mrs. Nupur Doshi is not prior to the date of cash withdrawal from bank. Since the bank account was not earlier disclosed, the assessee might have kept the cash in hand for some time and thereafter paid to Mrs. Nupur Doshi. The possibility of payment made out of the withdrawal from Maharashtra State Co-op. Bank Ltd. cannot be ruled out. Particularly in view of the fact that the withdrawal of cash is prior to the date of payment. The application of income assessed needs to be set off against the investment/expenses of the assessee. Taxing both may result in double taxation which is certainly not permissible in law. Here the assessee has declared the entire credits of the....
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....amination of the regular assessment records he found that in both these assessment years i.e., assessment year 1995-96 and assessment year 1996-97 the assessments were completed under section 143(3) of the Act. The assessment orders for both the years contains elaborate discussion in the body of the order to the effect of prize money and, remuneration. In the assessment year 1995-96 the then Assessing Officer on the reply of the assessee's representative accepted the fact that this amount will be considered in the assessment year 1996-97 as the same was not received. In the assessment proceedings for the assessment year 1996-97 the assessee's representative, on being asked specifically by the then Assessing Officer, submitted inter alia a copy of the agreement of assessee with Miss World (Jersey) Ltd. It was informed that the assessee received as prize money and remuneration of 50,000 pounds. It was claimed before him that it was not taxable in view of assessee being non-resident in the year of entering into the contract. The then Assessing Officer accepted the explanation of the assessee and passed a speaking order for assessment year 1996-97 and did not bring this amount of 50,00....
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....ed by the amended definition of undisclosed income in section 158B(b) which covers expenditure, deduction and allowance claimed if found to be false. 44. Being aggrieved the assessee carried the matter to CIT(A). The assessee reiterated the same arguments before him. He was of the view that since the assessee avoided payment of tax on this income in past in regular assessments, the Assessing Officer was right in taxing this income in block assessment. 45. Before us the ld. Advocate Mr. Sonde vehemently argued that both the lower authorities were wrong in arriving at the conclusion that this issue can be taken up in the block assessment proceedings. He submitted that the loose paper No. 87 of Annexure A-3 as referred to by the Assessing Officer in the assessment order can by no stretch of imagination be termed as incriminating material with regard to prize money and remuneration of 50,000 pounds. He pointed out that this is a letter from Royal Bank of Scotland, London. It shows interest payment to the assessee on this bank account. It nowhere talks of any prize money and remuneration received. Secondly he stated that whatever prize money and remuneration was received by the assess....
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.... Bank of America N.T. & S.A. v. Dy. CIT [1993] 200 ITR 739 (Bom.), Adamas Gem Industries Ltd v. Smt. Neela Krishnan, Asstt. CIT [1993] 203 ITR 737 (Bom.) and Makum Tea Co. (India) Ltd v. Dy. CIT [1999] 235 ITR 484 (Gauhati). He pointed out that these decisions were rendered on section 143(1)(a) of the Act which dealt with the prima facie adjustments for inadmissible claim of any deduction, allowance or relief. He pointed out that the ratio of the above decision is that any item of income cannot be considered to be covered by the words deduction, allowance or expense. In view of the above he submitted that the conclusion of the Assessing Officer in this regard is illegal and void. He, therefore, pleaded that the impugned addition is not warranted and be deleted. 46. On the other hand the ld. Departmental Representative relied on the orders of Assessing Officer & CIT(A). He submitted that the assessee had made misrepresentation before the Assessing Officers in regular assessment proceedings for the assessment years 1995-96 and 1996-97 and successfully avoided the payment of tax on this prize money and remuneration of 50,000 pounds. There is no reason why this income is not taxable. ....
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....e income or to run the business. The expenses are like establishment expenses, salaries of staff, value of purchases, rent of the premises used for the business and so on. It is an outflow of money for the business. Therefore, to arrive at the net profit this is set off against the gross revenue, sales etc. The relevant sections of the Act dealing with the claim of expenses are 30, 31, 36 and 37. The claim of deduction is in the nature of special deduction provided by the statute against any income. The deductions provided in the Act are contained in Chapter VIA of the Act. The income is taxable but to give incentives and keeping other considerations in mind the Government grants a deduction from the income included in the gross total income. There are various deductions provided in the Act and the relevant sections are 80CCC to 80U. For example for the new industries set up in specified areas a deduction is provided in section 80-IB. The income is included in the gross total income but a specified percentage of the income or fixed amount is granted as deduction. Similarly the allowance is like depreciation allowance which is provided by section 32 of the Act. The question arises i....
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.... Assessing Officer could make adjustments for any claim of expense, deduction or relief which was prima facie inadmissible. Meaning thereby if any such claim was inadmissible the Assessing Officer could add back this amount to the returned income. In past the Assessing Officers tried to make adjustments for items of income which were either claimed as exempt or not shown in the return etc. The matter came to be examined by the judicial authorities. In the cases relied by the ld. AR of the assessee the issue was whether the phrase claim of expense, deduction or relief could include in its ambit the items of income. The courts were of the unanimous view that the items of income cannot be said to be covered in the phrase expense, deduction or relief. This view is supported by the decisions in Namdang Tea Co. (India) Ltd.'s case, Bank of America N.T. & S.A.'s case, Makum Tea Co. (India) Ltd.'s case and Adamas Gem Industries Ltd.'s case. In our view the similar words are also contained in section 158B(b) which were added by the Finance Act, 2002. The receipt of 50,000 pounds by the assessee is an item of income and it certainly cannot be a case of claim of expense, deduction or allowanc....
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....t. Moreover this issue was discussed in the regular assessments and, therefore, the Assessing Officer completing the block assessment cannot take this issue in the block assessment. In our considered opinion this addition was not warranted in the block assessment. The opening words of section 158BB(1), which deals with determination of undisclosed income, clearly state that the undisclosed income of the block period shall be computed in accordance with the provisions of the Act and on the basis of material found in search. This issue was judicially examined in the cases of Ravikant Jain, Bhagwati Prasad Kedia, Smt. Usha Tripathi, Rajendra Prasad Gupta, Vinod Dhanchand Godawat, Sunder Agencies and P.K. Ganeshwar. The Courts were of the view that unless there is material found in search the Assessing Officer does not get jurisdiction to proceed in the block assessment. Accordingly we hold that the action of the Assessing Officer was without any jurisdiction and, therefore, we delete the impugned addition. The alternative grounds of the assessee regarding non-taxability of the income, deduction under section 80RR etc. are not adjudicated as we have deleted this addition. 49. The next....
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....t escaped taxation and, therefore, he subjected this to tax in block assessment. Before the Assessing Officer it was contended that this issue is covered in regular assessment and there was no material found in the search and, therefore, this cannot be considered in block assessment. The Assessing Officer rejected the contentions of the assessee. Before the CIT(A) the assessee reiterated the same arguments. It was contended that this amount cannot be covered in block assessment in terms of sections 158B(b) and 158BB(1) of the Act. The CIT(A) did not accept this explanation. Alternatively it was claimed before the CIT(A) that on this amount tax has been deducted in U.K. and in view of the provisions of Double Tax Avoidance Agreement between India & U.K. This amount cannot be taxed in India. The proof for deduction of tax was filed before him. The CIT(A) accepted this argument of the assessee and directed the Assessing Officer to give relief after verification. The assessee is contesting the action of the CIT(A) for upholding the addition on legal grounds. Before us the ld. AR of the assessee contended that this cannot be a subject-matter of block assessment. He repeated his argument....
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....t of credit over and above the remittances received escaped assessment. Therefore, this income of Rs. 9,85,461 needs to be assessed in the block period as undisclosed income. We are in full agreement with the conclusion of CIT(A) on this point. We, therefore, dismiss this ground. The addition of Rs. 9,85,461 is, therefore, confirmed. 52. The technical objection raised by the learned DR was cured by the assessee by filing the revised Form No. 36 duly signed by the assessee herself. 53. In the result the appeal of the assessee is partly allowed. Per Ahmad Fareed, Accountant Member. - I have perused the order proposed by my learned brother and I am unable to persuade myself to agree with the conclusions arrived at by him with regard to the Ground No.7. In respect of the other grounds I am in agreement with the conclusions reached by my learned brother. I, therefore, proceed to write a dissenting order with regard to the Ground No.7. 2. The Ground No.7 is as under- "On the facts and circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs. 50,00,000 on account of alleged unexplained investment in purchase of flat ....
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....nbsp; 9 -------- Total 84 +34 6/99 10 18 10/99 12 84 1.40 56 --- 102 12.99 10 66 6/99 12 -------- &nbs....
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....nt recorded under section 131(1), the assessee repeatedly stated that her father was taking care of all her savings and investments. And her father in his statement recorded under section 132(4) of the Act on 26-9-2000 stated in reply to Question Nos. 7, 8, 12 and 23 as under: "Q. No.7: Please state, whether any cash money has been paid over and above the agreement money shown in the agreement of aforementioned investments in properties? Ans.: In following flats the additional money which has been paid over and above the agreement rates are as follows:- ---------------------------------------------------------------- (i) 1601/2, Brook Hill Lokhandwala Complex - Rs. 13,80,000 (ii) 1701/2, Brook Hill Lokhandwala Complex - Rs. 11,10,000 (iii) 12th Floor, Mistry Palace - Rs. 50,00,000 ---------------------------------------------------------------- Q.No.8: Do you confirm that the aforesaid amounts were paid in cash and no receipts were provided? Ans.: Yes, I confirm. Q.....
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....ction 255(4) of the Income-tax Act, vide order dated 25-2-2005, for my opinion as Third Member. "Whether on facts and circumstances of the case, the addition of Rs. 50,00,000 made by the Assessing Officer and confirmed by the CIT(A) is to be sustained or not?" 2. The appeal involves various other grounds, on which there is no dispute. The difference of opinion between the learned Members, is on the issue raised in Ground No.7 of the assessee's appeal, which is as under: "7. On the facts and circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs. 50,00,000 on account of alleged unexplained investment in purchase of flat in La-Mer Building." 3. Brief facts are - the assessee is a famous model/cine artist. She along with her father, mother and brother by agreement dated 26-9-2000 purchased a flat on 12th Floor of the building La-Mer at Bandra (W), Mumbai from M/s. Jay Construction Company ("JCC" for short), who were builders and developers of the building for a consideration of Rs. 90 lakhs. Search and seizure operations were carried out in the premises of the assessee on 26-9-2000, during the course of which, s....
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....the hands of other family members on protective basis. 5. The learned Judicial Member, who wrote the lead order, held that subsequent retraction by the KRR was a correction of the statement and the same was valid. The flat purchased by Shri Sachin Tendulkar was from third party and not from the builder, ICC, as against which, the assessee had made agreement with the said builder directly much prior to purchase by Shri Sachin Tendulkar, therefore, no fruitful comparison could be made with the same. If the Assessing Officer had made inquiries from the builder, he could have easily found out the details from other various flat purchasers who booked flats, which was not done. It was held that deciphering of the seized papers was self-contradictory and reliance thereon was on the basis of suspicion, which cannot take place of proof. In consideration of circumstances and facts of the case, the addition was deleted. 6. The learned Accountant Member, on the other hand, held that deciphering and interpretation of seized paper provide a strong corroboration of statement given by KRR under section 132(4) accepting on-money payment of Rs. 50 lakhs. The purchase instance of Shri Sachin Tendul....
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....bsp; UBI (Khar) 300,000 KRR 2. 19-1-1999 (148178) VB(S-cruz) 500,000 KRR 3. 4-2-1999 (746476) VB (-do-) 800,000 AR 4. 13-2-1999 (746477) VB (-do-) 400,000 AR 5. 2-3-1999 (028118) UBI (Khar) 400,000 KR 6. 2-3-1999 (534455) UBI (Khar) 400,000 VR 7. 29-3-1999 (028141) UBI (Khar) 300,000 KR 8. 29-3-1999 (374535) VB (S-cruz) 100,000 AR 9. 29-3-1999 (48093) &nbs....
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....----- Total : Rs. 174 lakhs ------------------------------------------------------ 13. It was contended that this total itself defeats the theory of the department. The price of Rs. 174 lakhs will result in addition of Rs. 84 lakhs, as against which the Assessing Officer has made an addition of Rs. 50 lakhs, which has been confirmed by the CIT(A). The amount of Rs. 174 lakhs, if it is the correct value, the department should have made necessary additions in the case of Shri Sachin Tendulker and others. It was contended that the theory of department, in interpreting the loose paper, is blown out of proportion, which has lead to inherent contradictions. If the addition called for was Rs. 84 lakhs, there was no point in ignoring this paper and basing the addition on comparison of prices of flats purchased by Shri Sachin Tendulkar, which is not comparable. The department is not clear in its mind as to how it wants to make addition. Much is made out of this paper, but when it came to make the addition,....
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.... departmental inquiries, the same is corrected. Thereafter, father of assessee filed a letter dated 29-11-2000, explaining the facts in this behalf to the effect that due to search proceedings, he was under physical and mental fatigue and nervousness. The official started recording his statement late in night, which continued till next morning. Due to mental pressure, he replied some questions in casual manner without understanding proper meaning and accounting aspects of the same. He made a request for supply of photocopies of the statement, so that things may be clarified properly, which were not supplied till the writing of the said letter. He requested the officials to allow his Chartered Accountant to sit during the course of recording of the statement, which was denied. The learned counsel stressed that the assessee has given proper clarification of the facts in an inquiry by the department. Copies of the earlier statements were not supplied to enable proper verification in this behalf, though, the department while recording statement under section 131 dated 16-10-2000 made KRR to believe that the builders have confirmed on-money receipt, he still denied having made any payme....
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....yance at the stipulated price. Besides, assessee has given a logical explanation and interpretation of the loose paper which tallies with the books of account. The builder has denied having received any cash payment in this behalf, therefore, necessary inference shall be drawn in this behalf. The interpretation of the Assessing Officer about inscriptions of paper are self-contradictory and do not go beyond suspicion. 16. Coming to the comparability with the price paid by the Shri Sachin Tendulkar in respect of Flats at Floor Nos. 10 and 11, which is stated to have been purchased for Rs. 1,53,00,001 for each flat, the learned counsel contended that the assessee had booked the flat at the time of starting of construction, directly from the builder in March, 1998, whereas, Shri Sachin Tendulkar purchased these flats from a third party and not from the builder at about June 1999. The Assessing Officer has tried to compare between un-comparables, if at all, the comparison of the flat was material, the correct person for this purpose would have been those who originally booked flats with builders and not Shri Sachin Tendulkar, who is an ultimate buyer. It is a common practice in luxury ....
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....lakhs i.e., Rs. 1.40 crores which has been written in the loose paper on the left hand side. The assessee is totally silent about the meaning of "1.40". 19. Coming to the theory of payment, as canvassed by the assessee, it was contended that the promises for payments are generally made on month basis, whereas in this case promises are date specific, facts about the papers are known to the assessee. The learned DR pointed out that the Assessing Officer from undisclosed saving bank account of Maharashtra Co-operative Bank Ltd., has seen a cash withdrawal of Rs. 5 lakhs on 19-5-1999, which coincides with the cash payment of Rs. 9 lakhs made in May, 1999, indicating cash payment was made, a proper set off of this amount has been made. The learned DR relied on the interpretation given by lower authorities and learned Accountant Member. 20. Adverting to non-production of record regarding builders inquiries, the learned DR pointed out that they are third-party and loose papers have been found from the assessee's premises. Onus to explain the papers lies with the assessee and not on the third-party. Therefore, no adverse inference can be drawn on this aspect. 21. Coming to the comparabi....
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....r not paying the commission in connection with purchase of flat at La-Mer building. The said broker further reported that Ms. Aaishwarya Rai and family members paid Rs. 1.75 crores, for the said flat to builder. 3. This press release supports the stand of the Department "whether on the facts and circumstances of the case the addition of Rs. 50 lakhs made by the Assessing Officer and, confirmed by the CIT(A) is to be sustained? Sd/- (K.C. NAREDI) Commissioner of Income-tax ITAT-VII, H-Bench, Mumbai. Encl: as above. Copy to: The CCIT-VI, Mumbai with reference to the personal discussions; the undersigned held with him on 29-3-2005." 23. Regarding its admissibility, the learned DR made out t....
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....be given a logical meaning. In fine, it amounts to correction of earlier statement deposed before the appropriate authority under oath. Having done so, there is no further requirement for the assessee to file separate affidavit or a separate letter in this behalf. It was for the Investigating officer to ask further questions to cross verify the assessee, about his correction, therefore, it does not lie with the department to say that the assessee's correction was in an improper format. Relying on the case laws cited above, the, learned counsel contends that subsequent correction of statement, during the course of post-search inquiries and being on oath, supported by sufficient reasons, was admissible and cannot be rejected. 27. Coming to loose paper, the learned counsel contends that the department is not sure about the base of addition whether it is the loose paper in question or the comparability with Shri Sachin Tendulkar's flats. If the version of the department is accepted, then the middle column represents cash payments and right hand amounts represent the cheque payment. The flat purchased by the assessee for Rs. 90 lakhs and the total on extreme right hand side shows "78" ....
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....hat first statement of KRR was properly corrected in the second statement under section 131 deposed before the competent authority, which has not been controverted, therefore, the first statement dated 26-9-2000 cannot be held to be binding on the assessee, as subsequently, the assessee corrected that for La Mer flat, no cash was paid till date. KRR co-operated in the search proceedings fully and it cannot be assumed that he will reply each and every question accurately and the same will not involve any subsequent corrections. Therefore, the subsequent correction by KRR in this behalf has to be accepted in view of facts of the case. 0. Coming to the silent stand of the department about the investigation carried in JCC, the learned counsel pointed out the Assessing Officer and CIT(A) have given finding that the said builder have accepted the version of the assessee. Despite several requests, the department has not produced the material at any stage, at the time of original hearing or before Third Member. Under these circumstances, the finding about the builders having corroborated the assessee's version becomes final. Regarding verification of schedule of promised payments or cash ....
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....efore the original Bench. 34. Coming to the merits of the case, in order to decide the controversy, the following four facets arise for the consideration. (i) Evidentiary value of the statement made under section 132(4) and subsequent corrections/retraction in statement under section 131. (ii) Interpretation of loose paper seized. (iii) Inquiries conducted at builders' end and its effect on the aspect Nos. (i) and (ii) above and merits of the case. (iv) Reliance on the comparable case cited by the revenue i.e., flats purchased by Shri Sachin Tendulkar to make the same as a basis for addition. 35. Coming to the first issue, the initial statement dated 26-9-2000 was given by the assessee's father, KRR during the course of search, accepting on-money payment of Rs.50 lakhs. Thereafter, post-search inquiries continued and further statement under section 131 was recorded at the behest of the Investigating Officer, in which KRR was informed that builders of La Mer have been examined and who have accepted the factum of receipt of cash payments. The assessee despite this leading information replied that no cash for La Mer was paid till date. Thereafter by a letter dated 29-11-2000, KR....
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....ation given by him "has to be accepted as proper explanation of earlier statement during the course of search. The plea about not filing of the affidavit is of no consequence as KRR has made statement under oath in section 131, which has to be considered as a deposition on oath. Under these circumstances, addition cannot be retained only on the basis of earlier statement ignoring the subsequent clarification, given before the conclusion of search inquiries. 36. Coming to loose paper, the same was written in coded manner. One interpretation of the revenue is that extreme right column of figure totaling "78" represents cheque payments and the middle column represents cash payments and cheque payments. Apropos that, assessee's contentions is, the word "promise" is clearly written on the side of inscription, therefore, these were promises made, actual payments are duly recorded in the books of account, which have been verified. Oral agreement for the property was executed in March, 1998 and till December, 1998 an amount of Rs. 59 lakhs was promised to be paid. The assessee's contention is, words written had to be given proper effect, therefore, the word "promise" has 'to be given prop....
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....partment should have produced the relevant record of the inquiries from the builders, irrespective of results, which the inquiries would have led to. In the absence thereof, it has to-be appreciated that both the Assessing Officer and the CIT(A) have given finding that builders have accepted the price of Rs. 90 lakhs paid by the assessee, this is to be given due effect on the basis of preponderance of probabilities. Therefore, as a logical consequence, the findings of the lower authorities in respect of builders' statement, have to be considered to be corroborating the version of the assessee. It cannot be held that the builders are third-party and non-production of record has no consequence, as both the lower authorities have referred to these inquiries. The builders being a necessary party, the effect of such inquiries cannot be held as irrelevant. The explanation of the assessee stands corroborated by the undisputed observations of the lower auth9rities in this behalf. 38. Coming to the support derived from the comparable cases of Shri Sachin Tendulkar, the fact that the assessee agreed to purchase the flat in March, 1998 directly from the builder at booking stage, has not been....