2002 (11) TMI 276 - AT - Income Tax

Issues Involved:
1. Addition of Rs. 1,94,100 in each of the five assessment years for assessee Shri J.R.C. Bhandari.
2. Validity of initiation of reassessment proceedings u/s 148.
3. Charging of interest u/s 234B.
4. Deletion of addition of Rs. 3,50,000 for assessee Shri Swaroop Chand Sethi.
5. Sustenance of addition of Rs. 25,000 in assessee's C.O. No. 112/Jdpr/1999.

Summary:

1. Addition of Rs. 1,94,100 in each of the five assessment years for assessee Shri J.R.C. Bhandari:
The Tribunal addressed the appeals of Shri J.R.C. Bhandari concerning the addition of Rs. 1,94,100 for assessment years 1990-91 to 1994-95. The addition was based on a loose sheet (A-1/71) found during a search at the residence of a third party, Shri A.K. Chajjer, which allegedly indicated additional payments to employees. The Tribunal emphasized that the burden of proof lay on the Department to substantiate the entries with positive evidence. Citing various precedents, including the Supreme Court's decision in CBI vs. V.C. Shukla, the Tribunal held that loose sheets without corroborative evidence could not justify the addition. Consequently, the additions were deleted.

2. Validity of initiation of reassessment proceedings u/s 148:
Ground No. 4 in ITA Nos. 196 to 198/Del/2002, disputing the validity of reassessment proceedings u/s 148, was not pressed by the assessee's representative during arguments and was dismissed accordingly.

3. Charging of interest u/s 234B:
Ground No. 5 in ITA Nos. 196 to 198/Del/2002 and Ground No. 4 in ITA Nos. 199 and 200/Del/2002 disputed the charging of interest u/s 234B. The Tribunal directed the AO to accord consequential relief to the assessee regarding the charging of interest.

4. Deletion of addition of Rs. 3,50,000 for assessee Shri Swaroop Chand Sethi:
The Tribunal considered the appeal by the Revenue against the deletion of an addition of Rs. 3,50,000 made by the AO on account of alleged additional payments over salary. The Tribunal found the case identical to that of Shri J.R.C. Bhandari and upheld the CIT(A)'s order deleting the addition, reiterating that no liability could be fastened based on loose sheets found from a third party without corroborative evidence.

5. Sustenance of addition of Rs. 25,000 in assessee's C.O. No. 112/Jdpr/1999:
The Tribunal addressed the cross-objection by the assessee disputing the sustenance of an addition of Rs. 25,000. The addition was made as unexplained cash found during a search, which the assessee claimed belonged to his wife. The Tribunal found no error in the CIT(A)'s order sustaining the addition, as the cash was not shown in the wife's balance sheet in the previous year's return. The cross-objection was dismissed.

Conclusion:
The Tribunal allowed the appeals of Shri J.R.C. Bhandari in part, deleted the additions based on loose sheets, and directed consequential relief for interest u/s 234B. The Revenue's appeal against Shri Swaroop Chand Sethi was dismissed, and the assessee's cross-objection was also dismissed.

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