1999 (1) TMI 55 - AT - Income Tax

Summary

Issues Involved:
1. Block assessment orders u/s 158BC.
2. Search and seizure operations.
3. Various additions on account of undisclosed income, unexplained investments, and expenses.

Issue-wise Summary:

1. Block Assessment Orders u/s 158BC:
The appeals were preferred by the Pioneer Publicity Corporation Group ("PPC") against block assessment orders made u/s 158BC of the IT Act, 1961. The AO initiated proceedings by issuing notices and detailed questionnaires, leading to the filing of returns and subsequent assessments.

2. Search and Seizure Operations:
Search and seizure operations were conducted on 27th Oct., 1995, at the business and residential premises of the PPC group. The Department seized valuable assets, books of account, and documents. The seized items included cash and jewellery from various premises.

3. Additions on Account of Undisclosed Income:
- Inflation of Painting Charges: An addition of Rs. 4,12,038 was made due to inflation of painting charges. The assessee-firm did not contest this addition.
- Unaccounted Payments: Additions were made for unaccounted cash payments to various parties, including Rs. 1,81,000 for site rent and Rs. 1,69,000 to M/s Paramount Publicity. These additions were contested but ultimately upheld.
- Undisclosed Receipts: Additions were made for undisclosed receipts, including Rs. 55,000 from Shri Meghraj and Rs. 2,58,000 from various parties. Some of these additions were contested and partially upheld.
- Unexplained Investments: Significant additions were made for unexplained investments in properties, jewellery, and other assets. For example, Rs. 6,95,907 was added for unexplained investments in properties based on the DVO's valuation report, which was contested and deleted.
- Unexplained Cash and Expenses: Additions were made for unexplained cash and expenses, including Rs. 1,62,800 for Diwali expenses and Rs. 80,000 for an advance payment noted on a visiting card. These additions were contested with mixed outcomes.

4. Specific Cases:
- Pioneer Publicity Corporation: Various additions were made, including Rs. 85,97,447 for undisclosed income based on seized documents.
- P.K. Advertising Services: Additions included Rs. 5,53,824 for unexplained payments and bogus expenses.
- Delhi Advertising Service: Additions included Rs. 3,02,499 for unexplained receipts and inflated expenses.
- Syndicate Advertisers: An addition of Rs. 11,31,450 was made based on a document showing transactions with M/s Baran International Ltd.
- Individual Partners: Additions were made for unexplained investments and expenses in the hands of individual partners, including Rajesh Vasudeva, Mukesh Vasudeva, and others. These additions were contested with varying results.

5. Set-off and Telescoping:
The assessee argued for set-off of undisclosed income against unexplained investments and expenses. The Tribunal directed the AO to examine the claim of set-off and telescoping, considering the interconnection and interlacing of funds among the family members and various entities.

Conclusion:
The Tribunal upheld some additions, deleted others, and directed the AO to re-examine certain claims. The appeals were partly allowed or dismissed based on the merits of each case. The issue of set-off and telescoping was remanded to the AO for fresh consideration.