TaxTMI 
TaxTMI 
2005 (6) TMI 216
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....668 allowed by him in Para No. 4.5 of the impugned 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....
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.... Aditya Rai. 6. The assessee filed return of income for the block period 1-4-1999 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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....La-mer Flats Rs. 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 ----------------------------------------....
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....18,237 -- 1,18,237 7. Undisclosed Bank A/c with Maharashtra 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 &nbs....
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....ather of the assessee Shri Krishna Raj Rai recorded under section 132(4) of the Act wherein he explained the cash to the extent of Rs. 3,50,000 withdrawn from Bank accounts of the assessee. 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 &....
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....------- 8,46,000 ---------------------------------------------------- The 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 wi....
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....this is not tenable. Mere non-finding of books of account at the time of search cannot be a ground to hold that the assessee is not maintaining the regular books of account in view of the fact that the same were produced 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 fau....
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....s of the assessee and of her father recorded under section 132(4) were also perused. The major controversy lies about the maintenance of regular books of account. Admittedly the books of account were not found at the 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 ....
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.... 7-9-2000 5. Krishnaraj Rai 80,000 Cash withdrawals 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 ....
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..... The remaining amount of Rs. 1,95,000 was claimed to be available with the assessee on the date of search. The Assessing Officer & CIT(A) rejected the explanation of the assessee merely on the ground that there is a substantial time gap between 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 w....
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....ed the addition to this extent. The assessee is in appeal for this addition being upheld by the CIT(A). 14. The ld. counsel for the assessee argued that this addition is totally unwarranted in view of the fact that the source of acquisition 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 argu....
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....vily relied on one letter dated 30-3-1996 written by Bhagat Erectors & Development Services (I) Ltd. to the appellant. This letter was found during the course of search and was also seized vide page No. 32 in the file marked as Annexure A-3. Copy of this 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 ....
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....did not say that otherwise it could not be used in its present condition. The Assessing Officer rejected all the contentions of the assessee and determined the undisclosed income of the block period to the extent of Rs. 24,17,297 being the amount equal to 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. tal....
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....der at pages 15 and 16 regarding flat Nos. 1701 and 1702 in Brook Hill Tower. He submitted that this letter is dated 30-3-1996 and talks of giving possession of the flats. He stated that this clearly establishes the fact that the possession of the premises were 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. H....
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.... to the copy of panchnama made during search on the premises 1701 and 1601. In the panchnama in column No.8 it is written that search commenced at 9.30 a.m. and closed at 9.15 p.m. He submitted that how the income-tax people worked for nearly 12 hours (including 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 th....
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....y the Builders of the Apartment Bhagat Erectors & Development Services (I) Ltd. to the assessee. It shows that the builders have given possession of the premises to the assessee on 30-3-1996. It further says that the proper electricity and water connection would be provided at a later date after receipt 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....
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....a the assessee was using these premises. Besides a substantial sum of Rs. 2,00,000 was found and seized from these premises. The case of the assessee also gets justified from the fact that income-tax search party carried out in these premises their search operations nearly for 12 hours from 9.30 a.m. 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 sear....
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.... and the order of CIT(A) and pointed out that no reference of any specific seized document is made for making this addition. Therefore, the Assessing Officer was not justified in making this addition. He further argued that even otherwise the time limit for filing the return was 31-10-2000 and the assessee 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 incr....
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....ank of India being account No. 56/52774. The Assessing Officer asked for the explanation of the assessee regarding the nature of these credits. The assessee explained that these credits are the result of past accumulation on account of gifts on various occasions like Holi, Diwali, birthday etc. The Assessing 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 depa....
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.... bank account with State Bank of India, Linking Road Branch, Bandra (W), Mumbai 400 052, vide A/c No. 56/52774. Perusal of the above shows that the Assessing Officer noticed this fact in the assessment proceedings and he did not rely on any specific seized material. The block assessment is a special procedure for 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 r....
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....ch we will consider little later. Accordingly he determined the undisclosed income of Rs. 7 lakhs in different head of the same block period. By doing this the quantum of the income does not get affected, but the assessee contends that bifurcation should not have been done as there was no alleged cash payment for purchase 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 c....
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....-------------------------------------------------- (i) Flat No. 1601/1602 at Brooke Hill Tower Rs. 13,80,000 (ii) Flat No. 1701/1702 at Brooke 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 ....
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....ya Rai (brother) in equal proportion i.e., Rs. 12,50,000 in each case on protective basis. 32. In the first appeal, the assessee contested that there was no on-money payment for purchase of this property and the addition ought not to have been made. The assessee tried to rebut all the observations of the Assessing Officer. It is 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. ....
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....as categorically stated that no cash was paid for La-Mer flats. As such the Assessing Officer was clearly in error in not considering this aspect regarding the statement of my father. It is therefore submitted that no cognizance of the initial statement of my father be taken. In this regard I also draw the attention of your honour to the 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 the....
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.... that the payment by cheque was Rs. 34,00,000 up to December, 1998 (as alleged by him in the assessment order). In fact it was mere Rs. 3,00,000 which is written on this very paper on the extreme right. Below that on this page No. the following dates and figures are written: ----------------------------------------- Promise Diwali 98 From 3/98 to Dec. 59 1/99 5 4/2/99 4 13/2/99 5 2/3/99 2  ....
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....p; -------------- Total 34,00,000 -------------------------------------- The above payments are reflected in the seized page No.5 of file A-3. Thus you will find that as against promise of Rs. 59 lakhs to be 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 l....
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....t is to be made only with reference to the cogent material and not on the basis of suspicion. Your attention is also drawn to the fact that the Assessing Officer has made inquiry with the builders M/s. Jay Constructions. The builders have furnished the details that the agreement value was Rs. 90 lakhs and they have received payment of Rs. 90 lakhs only. No payment was stated to be 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 ....
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....ontinued till early morning on 27-9-2000. This was a first search action in the family. Before this Mr. Krishna Raj Rai never faced any search proceedings. The initial statement was given in exhaustive conditions. He was not in a proper state of mind due to mental strain and physical fatigue. There was no occasion to read the statements at that time. Later on immediately in the statement 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 occa....
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....y, 1999 whereas the assessee purchased the flat much before in May 1998. He said that it is not known what was the arrangement between the seller (original purchaser from the builders) and Sachin Tendulkar. But that does not prove any cash payment. The ld. AR further argued that there are many other flats in the same building. Many other persons have purchased the flats from builders. The 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 sta....
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....r says that the figures mentioned are total amount paid including cash component. The assessee says that the promise was made to pay the amount by certain dates but in fact it could not be paid fully as per the promise. The Assessing Officer made inquiries with the builders who admittedly denied to have received any on-money in cash over and above the agreement value. We find certain contradictions 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 payment....
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....; -------------- Rs. 21,00,000 --------------------------------------------- Payments made by Aditya Rai (by cheques) --------------------------------------------- Date Amt. (Rs.) --------------------------------------------- 4-2-1999 8,00,000 13-2-1999 4,00,000 29-3-1999  ....
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....sp; 12,00,000 4-6-2000 6,00,000 ------------ 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 assessme....
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....r, additional money of Rs. 11,10,000 was paid. Regarding flat on 12th floor, Mistry Palace, La Mer bldg. additional money of Rs. 50,00,000 was given. Later on another statement was recorded on 16-10-2000 before the Dy. Director of Income-tax. The question and its answer as extracted in the assessment order reads as under: Q. No. 52: Can you specify the names of the persons to whom, cash for property dealings for both the properties Brook 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 29-11-2....
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....any cash money paid for purchase of flats 1601/1602 and 1701/1702 in Brook Hill Tower. In spite of this Mr. Rai later on confirmed that the cash money was paid for these properties. He could have easily denied for cash payment for these properties also. No body could stop him from doing so. But he had not done so. This gives credence to his subsequent correction. This only clarities that wherever cash was paid he confirmed subsequently but where 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 ....
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....s. 7,25,000. This issue has been elaborately discussed by the Assessing Officer in the assessment order at pages 43 to 46. During the course of search one loose paper being page No. 51 of the Annexure A-3 was found and seized. This page is placed at paper book page 185. The Assessing Officer found that certain payment made to Mrs. Nupur Doshi are reflected on this page on one side. This paper also contains payment to Ajay Vishwakarma & others on the 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 ....
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.... assessee. The CIT(A) endorsed the view taken by the Assessing Officer on the ground that utilization of cash withdrawn from Maharashtra State Co-op. Bank Ltd. for payment to Mrs. Nupur Doshi was not supported by any material/document and payment out of cash balance cannot be accepted as a plausible explanation. We find that the bank account with Maharashtra Co-op. Bank Ltd. was not disclosed prior to the search and all the credits aggregating to Rs. 17,28,404 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....
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....a contract with Miss World (Jersey) Ltd. for a period of one year. She was to be received 10,000 pounds as a prize and 40,000 pounds as remuneration. An agreement was also executed in writing. This agreement inter alia provided for duties, obligations, remuneration etc. The Assessing Officer found that in the assessment year 1995-96 (previous year 1994-95) and in the assessment year 1996-97 (previous year 1995-96) this amount has not been taxed. After examination 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 ....
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....e assessee misrepresented before the then Assessing Officers in the regular assessment proceedings about the taxability of this item and, therefore, the assessee claimed this income exempt by giving false information. He accordingly proceeded to tax the income of 50,000 pounds equivalent to Rs.25,79,000 as undisclosed income of the block period. He also rejected the claim of the assessee for deduction under section 80RR. In his opinion this case is covered 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 ....
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....ied to rebut the stand of the Assessing Officer that this issue can be taken up in view of the amended definition of undisclosed income as provided in section 158B(b). He argued that Assessing Officer's conclusion is wrong to the effect that this clause deals with false claim of any expense, deduction or allowance under this Act. In support of this proposition he relied on the decisions in Namdang Tea Co. (India) Ltd. v. Dy. CIT [1997] 226 ITR 867 (Gauhati), 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....
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.... in the regular assessment and in the search proceedings if it is found that the claim of expense, deduction or allowance was false then to the extent of the amount of such expense, deduction or allowance, the amount will be treated as undisclosed income for the purpose of Chapter XIVB of the Act. The amendment brought in the ambit of undisclosed income any false claim of expense, deduction and allowance. The term expense is something, which is incurred for earning the 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....
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....hall be disallowed: Provided further that an intimation shall be sent to the assessee whether or not any adjustment has been made under the first proviso and notwithstanding that no tax or interest is due from him: Provided also that an intimation under this clause shall not be sent after the expiry of two years from the end of the assessment year in which the income was first assessable ....." The third proviso to this section provided that after filing the return of income the 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 co....
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.... earned, the Assessing Officer has failed to point out this. It is not the case of the Assessing Officer that remuneration was more than 50,000 pounds which was already disclosed by the assessee. We are of the view that this letter cannot be an incriminating document or material with regard to the prize money and remuneration received from Miss World (Jersey) Ltd. of 50,000 pounds. The Assessing Officer, therefore, does not get jurisdiction to proceed in the block assessment for this amount. 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 ....
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....ital account was filed along with the return of income filed for assessment year 1998-99. The return for assessment year 1998-99 was filed prior to the date of search. The assessment for assessment year 1998-99 was completed under section 143(3) after taking the details etc. on record. The Assessing Officer noticed this entry from the return filed for assessment year 1998-99. He found that this amount was credited in the capital account but was not shown as income of that year. He found that it 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 provi....
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.... Ltd. was filed. We find from the records that one letter of Royal Bank of Scotland, London was found in search which gives the information of the existence of this bank account. This bank account was not disclosed to the department in the regular returns. What the assessee disclosed in the regular returns are the remittances received from this account to her bank account in India. The remittances already disclosed to the department have been dealt with in the regular returns. However this amount 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 wi....
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....; 5 4/2/99 4 13/2/99 5 2/3/99 2 5/99 9 -------- Total 84 +34 6/99 10 18 10/99 12 84 1.40 56 --- 102 &n....
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....nts aggregating to Rs. 56,00,000 made up to October 1999 are written on the extreme right in the form of coded figures of 84 and 56 respectively. The sum total of these two figures of Rs. 84,00,000 and Rs. 56,00,000 is Rs. 1,40,00,000 and is mentioned as 1.40 between the two figures of 84 on the extreme left and 56 on the extreme right. The above analysis/interpretation of the transactions appearing in the aforesaid seized paper provides strong corroboration of the statement given by assessee's father under section 132(4); 8. In her statement 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)  ....
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....therefore, the matter is referred to the President, Income-tax Appellate Tribunal, with a request that the following question may be referred to a Third Member or the President may pass such order as he may desire. "Whether on the facts and the circumstances of the case the addition of Rs. 50,00,000 made by the Assessing Officer and confirmed by CIT(A) is to be sustained?" THIRD MEMBER ORDER R.P. Tolani, Judicial Member. - On a difference of opinion between the Members, who heard this appeal, the following question has been referred to me by the Hon'ble President under section 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 th....
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....dulkar of the same area for Rs. 153 lakhs each, which he adopted as a comparable case for cost of flat. The Assessing Officer, deciphered the loose paper found during the course of search, which shall be dealt with later. The Assessing Officer based on his inquiries and loose paper etc. held that unaccounted cash amount of Rs. 50 lakhs was paid for this flat, and since the assessee had major share in earning of the family, it was held that the entire on money was paid out of her undisclosed sources, the amount was accordingly added to her block income on substantative basis and proportionately in 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 o....
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....e to pay a sum of Rs. 59 lakhs by December 98, the column below figure "59", totalling "84" represents the promise to pay the instalments as mentioned therein. However, the assessee made the payment through cheques against the promised schedule as under: Payments to Jay Construction ------------------------------------------------- Sr. Date of cheque Bank Amount By No. No. ------------------------------------------------- 1. 17-5-1998 (103700) 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) &n....
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....nt towards flat made by the assessee will come as under: ------------------------------------------------------ (i) By cash (on-money) : Rs. 84 lakhs (ii) By cheque as recorded in paper : Rs. 78 lakhs (iii) By cheque paid thereafter : Rs. 12 lakhs -------------- 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 a....
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....search inquiries were conducted by the department, and KRR was asked a leading question by the department that builders have confirmed the cash receipt, despite that it was replied that no cash in respect of La Mer was paid up to that date. This amounts to a correction of statement during the inquiries conducted by the department itself. It may be appreciated that it was the first search in the family, the assessee's father was looking after the accounting and financial aspects of the assessee's professional activities as well as the family as a whole. It cannot be held to be improbable, if the assessee makes one wrong assessment of facts and in later 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 sta....
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....ced. Following suit, the department has not produced any such record even at the time of present hearing. Non-production of record of such inquiries, suggest that the builders have clearly denied having received any on-money/cash payment in this behalf. When the inquiry is conducted in respect of any transaction, which involves two parties, examination and investigation of other party, becomes a logical consequence, which though has been undertaken in this case, the department is not forth-coming-with the relevant record. The Assessing Officer and the CIT(A) have made observations that builders have confirmed the agreement of flat for Rs. 90 lakhs and the conveyance 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 Flo....
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....ot been retracted by subsequent statement, and the addition made on this basis is perfectly justified. 18. Coming to the interpretation of loose paper, the learned DR contends that the assessee is totally silent about the middle column starting from "59" to "84". The total of "84" contains cash and cheque entries and if the cheque entries are reduced, then the balance amount works out to Rs. 50 lakhs, which corroborates with the statement of the assessee's father. The learned DR then adverted to figure of "1.40" written on the left side of "10/99", on the extreme right hand total of the last column is "56"; "84" is paid earlier, the total whereof comes to Rs. 140 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 B....
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....96 Taxman 323 (Mum.)(Mag.), (vi) Dr. S.C. Gupta v. CIT [2001] 248 ITR 782 (All.), (vii) Mahendra Chimanlal Shah v. Asstt. CIT [1994] 51 ITD 244 (Ahd.), (viii) Hotel Kiran v. Asstt. CIT [2002] 82 ITD 453 (Pune), (ix) Lallubhai Bhikhabhai Tandel v. Competent Authority [1990] 186 ITR 117 (ATFP), (x) Param Anand Builders (P.) Ltd. v. ITO [1996] 59 ITD 29 (Mum.). 22. At the time of hearing the learned DR moved an application for admission of additional material dated 29-3-2005 with the following contents. "2. I am submitting herewith a press release, published in Midday on 15-10-2003 indicating that the broker Shri Krishna Kumar Sethi filed a complain against Ms. Aaishwarya Rai for 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? &nbs....
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....29-8-2003, a news item which has come into existence after the order of the CIT(A) cannot be called an additional evidence by any stretch of imagination. (iv) If the additional evidence is accepted, it defeats the calculations and method of interpretation of the entries of loose paper as advanced by the revenue. 26. Coining to the merits of the case, the learned counsel contended that the retraction is a general word and what has to be seen is whether the assessee corrected statement of his own or during the course of further investigations. In the instant case, the assessee corrected his statement during the course of post-search inquiries conducted by the department itself by a statement on oath under section 131, which has to 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 co....
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....rden on the assessee is to offer reasonable explanation, a proper explanation that the flat was orally booked in March, 1998 and promised to pay the sum of Rs. 59 lakhs till December to the builders JCC is given. These promises are noted in the paper and till May, 1999 an amount of Rs. 84 lakhs was promised to be paid. Inscription "promise" against these entries supports the explanation of the assessee. The schedule of payment could not be adhered and assessee paid only Rs. 34lakhs by this date. Subsequent payment on the right hand side also has been verified from the bank accounts of the assessee. Therefore, in the given facts and circumstances, the assessee has given a reasonable explanation of the loose paper. 29. The learned counsel stressed that 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 ....
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....my considered opinion, Third Member has to decide the question referred on the basis of facts and material as existed before the Division Bench, who originally heard the same. There is no-merit in the contention that since words "material available on record" are not mentioned in the question referred, the Third Member can admit the additional material. The words "whether on the facts and circumstances of the case" will automatically include availability of the material so as to decide what were the facts and circumstances of the case. Under these circumstances, respectfully following the authorities cited by the learned counsel, supra, the additional evidence adduced by the revenue cannot be admitted and the matter will be decided on the basis of record available before 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....
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....ding question that builders had confirmed on-money, which as the facts emerge was not a correct leading question, as the builders have not confirmed the same. Non-availability of copies of statement may in certain circumstances be handicap for the person concerned, at the end of the proceedings to realise the full impact. The subsequent statement was by the inquiries of the department itself, if Investigating Officer was not satisfied with the answer of KRR further question may have been asked in this behalf, which has not been done. As the facts emerge, copies of the statement were not given, leading questions though were asked, still KRR replied that no on-money was paid for La Mer property. Consequently, the logical conclusion which springs up is that the subsequent clarification 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,....
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....hough not fully verifiable, appears more reasonable. Non-disclosure of builders' inquiry also affects the revenue's case adversely. In the given facts and circumstances, the loose paper does not support case of the revenue. 37. Coming to the effect of builders' inquiries, it appears that the revenue conducted inquiries from builders, JCC, since the record has not been produced, it cannot be ascertained the level and depth of such inquiries. In the given facts, it has to be assumed that the department was serious in conducting these inquiries, in the absence of record, no comments can be made, but the fact remains that Assessing Officer and CIT(A) have given finding that builders confirmed the price paid by the assessee. In my considered opinion, in the interest of justice the department 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 pro....