1998 (9) TMI 123 - AT - Income Tax

Issues Involved:
1. Addition of Rs. 10,69,500 as income from undisclosed sources.
2. Addition of Rs. 5,50,000 on account of premium paid for a flat.
3. Addition of Rs. 3,61,166 for unexplained investment in house construction.
4. Addition of Rs. 91,000 for investment in movable assets.
5. Addition of Rs. 67,800 for investment in debentures and UTI units.

Summary:

1. Addition of Rs. 10,69,500 as income from undisclosed sources:
The AO added Rs. 10,69,500 as undisclosed income based on a seized document indicating a sale consideration of Rs. 39.50 lakhs for the Pitampura property. The assessee argued that the document did not constitute valid evidence and that the figures were arbitrarily deciphered by the AO. The Tribunal found that the document lacked corroborative evidence and could not be considered as a document under the Indian Evidence Act. The Tribunal held that the receipt of Rs. 39.50 lakhs was not proved and directed the deletion of the addition.

2. Addition of Rs. 5,50,000 on account of premium paid for a flat:
The AO treated the figure "550" in the seized document as Rs. 5,50,000, alleging it was a premium paid for a flat in Rohini. The assessee contended that the addition was presumptive and lacked corroborative evidence. The Tribunal agreed with the assessee, noting the lack of independent material evidence and directed the deletion of the addition.

3. Addition of Rs. 3,61,166 for unexplained investment in house construction:
The AO estimated the cost of construction of the N.S. Park house at Rs. 31,53,500 based on the DVO's report and seized documents, resulting in an addition of Rs. 3,61,166. The assessee argued that the DVO's report was not conclusive and that the seized documents pertained to both the N.S. Park and Model Town houses. The Tribunal found that the DVO's revised report estimated the cost at Rs. 20,07,220, which was less than the disclosed amount. The Tribunal directed the deletion of the addition, citing the lack of conclusive evidence.

4. Addition of Rs. 91,000 for investment in movable assets:
The AO added Rs. 91,000 for investment in movable assets found during the search. The assessee claimed that some items were acquired before the block period and that the withdrawals for household expenses were sufficient to cover the acquisitions. The Tribunal accepted the assessee's explanation and directed the deletion of the addition.

5. Addition of Rs. 67,800 for investment in debentures and UTI units:
The AO added Rs. 67,800 for investments in debentures and UTI units, which the assessee claimed were funded by unaccounted income and gifts. The Tribunal confirmed the addition of Rs. 12,800 for debentures but allowed a partial relief of Rs. 15,000 for gifts, resulting in an addition of Rs. 40,000 for UTI units.

Conclusion:
The Tribunal partly allowed the assessee's appeal, deleting the additions for undisclosed income from the sale of the Pitampura property, premium paid for the flat, unexplained investment in house construction, and investment in movable assets, while confirming a partial addition for investments in debentures and UTI units.

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