9911796707
TMI Blog2009 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... , who were interested in sale or purchase of agricultural lands in the area of Faridabad used to come to assessee, their requirements in respect of area, locality, rate, preferences, etc. were noted. According to assessee some of these transactions materialized and many of them could not be effected. According to AO, these registers/entries were the actual transactions carried out by assessee in respect of purchase or sale. Further, the AO was of the view that these documents have been registered at a lesser value. According to AO, these entries were sent to Tehsildar, Faridabad to give correct valuation of their market value. On the basis of report, AO estimated the sale or purchase value of these alleged transactions and further estimated assessee's brokerage commission on the basis of these estimated valuations. Assessee's contention is to the effect that this valuation was neither given to assessee nor does it make any basis for estimation as being material extraneous to search and on the basis of a presumption that all these entries noted in the register were actual transactions. The incriminating material has been inventorized into various pages of Annexures as AI, A2, A3, A9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws. 4. Learned Departmental Representative in his contentions also has relied on various pages of paper book, the important ones are referred in our observations and references to CIT(A) and AO's paras, therefore, for the sake of brevity, we do not wish to repeat it again and again as their reference will be found in the relevant paras. With this general description of facts, we proceed to decide these appeals. ITA Nos. 552 and 555.Del/2003 (Shri Subhash Verma): 5. Assessee's appeal raises various grounds out of which ground Nos. 1 (i) to (xii) are not pressed and hence, dismissed. Remaining grounds are as under: "2. The learned CIT(A) erred on facts as well as in law (i) in sustaining addition of Rs. 40,000 on account of unexplained investment in construction of shop. (ii) in sustaining addition of Rs. 1,25,000 on account of investment in property at Katra. (iii) in sustaining addition of Rs. 50,000 on account of expenses on marriage of the assessee's son. (iv) in sustaining addition of Rs. 40,000 on account of the assessee's alleged visit to Nepal. (v) in sustaining addition of Rs. 15,000 on account of expenditure on repair of car No. 61290. (vi) in sustaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment was completed. On appeal of the assessee, some relief was given, against which the Revenue filed further appeal before the Tribunal. The assessee filed appeal to the extent that he was not given relief by the CIT(A). During the course of hearing before the Tribunal, there was a difference of opinion, which led to reference to Special Bench vide order dt. 11th Sept., 2006, on the question whether in absence of 115 days' notice to the assessee, assessment under s. 158BC will be rendered void. Special Bench answered the reference against the assessee. Special Bench held that defect in complying with the procedure of giving 15 days' clear notice was curable. The AO was directed to issue fresh notice under s. 158BC and thereafter proceed in accordance with law. The assessment proceedings were quashed. 3. Learned counsel for the Revenue submits that view taken by the Tribunal was erroneous as even in the absence of notice of 15 days, the proceedings could be sustained, as there was no prejudice to the assessee. 4. Learned counsel for the assessee supports the stand of the Revenue and submits that quashing of all proceedings was not justified. He gives up the objection raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause assessee has not pressed the grounds about jurisdiction and validity of proceedings as raised in ground Nos. 1(i) to (xii) in original appeal memo. 8. Coming to the merits, we proceed to decide the appeal of Revenue with corresponding assessee's grounds first and proceed to decide each ground separately in following order. Ground No. (i): Undisclosed commission income-Rs. 23,25,800 9. As the facts emerge Shri Subhash Verma was originally a deed writer and thereafter became a leading property dealer of Faridabad, activities comprised of purchase and sale of agricultural lands on his own account and on commission basis. Assessee was filing regular returns of income showing estimated commission income for real estate dealings enclosed with statement of accounts including balance sheet, capital account, etc. Assessee contended to have earned this estimated commission only from Faridabad agricultural lands. Seized material included a register and other documents which was confronted to him. Seized documents inventorized as A-1, A-3 and A-4 of 16th April, 1999 pertained to period 1990-91 onwards and asked the assessee to furnish the details about these papers. Assessee's reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging in unrecorded property transactions at Faridabad and HUDA plots. The seized material was confronted to the assessee, it was incumbent upon him to explain the same. Since proper reply was not furnished, AO made these additions. Annexs. A1, A3, A4 were referred and it was argued that these are agricultural land transactions of Faridabad and HUDA plots. They contain details and rates of property transactions. CIT(A) has not given reasons as to why seized documents A-1, A-3 and A-4 did not contain such details, therefore, the finding of CIT(A) is not based on proper reasons or evidence, the same should be reversed. 12. The learned counsel for the assessee, in reply, vehemently argues that the AO has failed to consider the assessee's explanation and facts of the case. The assessee was in real estate business from asst. yr. 1991-92 onwards and was a deed writer prior to that. Therefore, there cannot be any question of earning undisclosed commission from this business for asst. yrs. 1989-90 and 1990-91. In real estate brokerage business, it is a regular practice to maintain a register and note down the name of clients, their requirements, contact details, area required and approxim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to A6; there is no mention of any HUDA plot or any dealings in HUDA plot. Document No. A-4 does not belong to the assessee. The same is also not in assessee's handwriting. (vii) In the absence of any seized document indicating any undisclosed income over and above already declared in the returns, registered sale deeds and even the receipts available with the assessee in support of the investments made are conclusive evidences as held by the Hon'ble Punjab & Haryana High Court in case of CIT vs. Satinder Kumar (2001) 169 CTR (P&H) 325 : (2001) 250 ITR 484 (P&H). (viii) In any case, no addition is possible on account of commission income from HUDA land in asst. yrs. 1989-90 and 1990-91 because assessee was not in the business of property dealing till asst. yr. 1990-91. This is also evident from the returns of the assessee for asst. yrs. 1989-90 and 1990-91 and also from the fact that the seized documents A-1, A-3 and A-4 of 16th April, 1999 relied upon by the AO pertain to period 1991 onwards as admitted by the AO in his assessment order. (ix) Assessee's return for asst. yr. 1996-97 was the subject-matter of assessment under s. 143(3), wherein the commission income declared by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fers to purchase enquiry-Vijay Arora No. (phone) 280282 wants plot in Sector 8 or 9. Assessee contends that the same is only enquiry register and only few of them could materialize as the sale or purchase of immovable property requires various negotiations, enquiry, title verification, price parity, etc. Therefore, all the entries in the register cannot be held as sale transactions. Assessee further explains that he was dealing only in agricultural lands and not HUDA plots. The assessee has filed regular return of income disclosing his commission income, therefore, the aspect of commission income or brokerage assumes the nature of disclosed income. Be that as it may, the assessee contends for asst. yrs. 1989-90 and 1990-91, he was not in real estate business at all and was a deed writer whereas such estimates have been made for those years also. We have reproduced CIT(A)'s findings above, same deserves to be upheld. 14. In block assessment the AO cannot summarily hold that the market prices of all entities were high and the assessee must have arranged these sales at double the price mentioned and understated by one-half and for this purpose a summary report of the Tehsildar canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. (iii) Tehsildar's report neither was confronted to assessee nor was the assessee given a chance to give its objections to Tehsildar's report. (iv) In the absence of any seized material indicating any undisclosed income or investment, sale deeds and even receipts available with the assessee as evidence of payment are conclusive evidence of the amount invested as held by the Hon'ble jurisdictional High Court of Punjab & Haryana in CIT vs. Satinder Kumar. 17. We have heard the rival contentions and perused the material placed on record. The CIT(A) deleted the addition by following observations: "8.6 It has been stated by the learned counsel that such an addition could not at all be made. The price stated was as per the registered deed and when there was no incriminating material in the possession of the AO he was not correct in law to make any such addition. It has been stated that the AO could not under any circumstances by simply relying upon the rate given by the Tehsildar make an addition by estimating the undisclosed investment. 8.7 The issue has been examined. Once again the AO has made the above additions simply by relying on the intimation provided by the Te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. Learned Departmental Representative relied on the order of AO on behalf of all these additions contending that the market value was properly applied by AO on the basis of valuation report of Tehsildar. 20. Learned counsel for the assessee, on the other hand, contends that this addition has been made by AO on following summary observations: "7.1 During the previous year 1991-92, the assessee purchased the following agricultural lands: 1. Dhatir 11 Kanals 15 Marlas from Shri Om Aggarwal on 99 years lease basis for Rs. 2,400 per annum on 21st Dec., 1991. 2. 8 Kanals 19 Marlas at village Dhatir on 99 years lease basis on 2nd Nov., 1991 @ 1,000 per annum. 3. 8 Kanals 12 Marlas for Rs. 1,000 per annum on 2nd Dec., 1991. It is common knowledge that 99 years lease is almost equal to the purchase of property. Hence, after adopting the market rate of plot at Rs. 1.50 lacs per acre as intimated by the Tehsildar, Faridabad the market value of 29 Kanals 6 Marlas comes to Rs. 5,49,375. Thus the assessee has concealed the investment in the purchase of agricultural land to the tune of Rs. 5,49,375 which is assessed as undisclosed income of the block period under s. 69 of the IT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal heir of the original mortgagee Sri Lakhi Ram confirming that they have received Rs. 3,500 from Subhash Verma being the redemption money and that the possession had been given to the owner, who then is not Subhash Verma, is placed at p. 304 of the paper book. The said land was purchased from Rita Jowal by the original owner/mortgager Shri Mithari Singh S/o Shri Lakhi Ram. This property was purchased by assessee from one Smt. Rita Jowal Raj, therefore, this is a disclosed property. In view of these facts, the property being disclosed the AO's finding is erroneous and the addition being purely on the basis of estimation of Tehsildar, which is neither part of seized record nor any evidence found during the course of search, deserves to be deleted. Further, AO has made double addition in respect of this item in as much as in para 6.1 of his order, it has been held that this land was purchased by assessee for Rs. 48,000 from Mrs. Rita Jowal and the addition is included in Rs. 10,56,125. Therefore, the addition deserves to be deleted on these counts. (iii) Rs. 4,06,000: 23. AO made the addition by following observations: "During the year the assessee has sold 25 Kanals 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes to Rs. 4,70,625 and when it is reduced from the alleged imaginary sale price of Rs. 4,70,625, there is no question of any profit which could be added in the hands of the assessee, AO cannot assume prices in selective manner, addition may be deleted. (iv) Rs. 1,73,562: 26. AO made the addition by following observations: "12.1 During the year under consideration, the assessee sold 11 Kanals 11 Marlas land at village Dhatir of Dr. Satbir Gupta on 9th Sept., 1996 available at pp. 14-15 of document A-9 for Rs. 1,40,000. But since the market rate of agricultural land in village Dhatir was not less than Rs. 1.50 lacs per acre, as stated by the Tehsildar, Faridabad, the sale value at the market rate of this land comes to Rs. 2,16,562 and after deducting the cost price at Rs. 43,000. The undisclosed profit on this sale transaction of property comes to Rs. 1,73,562, which is added back to the taxable income of the assessee and there is no question of capital gain, since the assessee is regularly doing the work of property dealer." 27. Learned CIT(A) deleted this addition. 28. Learned Departmental Representative relied on the order of AO. 29. Learned counsel for the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land under dispute was not purchased by the assessee nor the investment was made by him. The said agricultural land was purchased by Naveen from Sumit (owner and minor) through Smt. Kishni mother of Sumit on 16th June, 1996 for Rs. 1 lac and Rs. 25,000 was paid as advance. Permission for sale of land was obtained by the Court in favour of Naveen on 25th Sept., 1997 as Sunil was minor (Annex. A13). This is further evident from the statement of mother of Sunil (Annex. A14). Balance Rs. 75,000 was paid when lease deed was got done in favour of Naveen. Rates given by the Tehsildar, if there are any, and relied on by the AO are extraneous to seized material and therefore, cannot be made the basis for addition in the block assessment. On the contrary, the rates given by the Collector which are binding even on the Tehsildar were never Rs. 1.5 lacs/acre as claimed by the AO. This fact can be confirmed from the Collector's office or the District Collector. (vi) Rs. 82,500: 33. AO made the addition by following observations: "On 14th July, 1998, assessee transferred land through power of attorney to Shri Ranjbir Singh at village Dhatir measuring 4 Kanals 8 Marlas. Market value of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price has been estimated by AO solely relying on the valuation given by the Tehsildar on fair market value of these agricultural lands, the contents of such report are not clear. In our considered view, if the assets are declared in the original returns on which assessments are framed, they do not become undisclosed assets or investments or sale proceeds, Further, in the absence of any incriminating material found during search, the estimates of valuation made by Tehsildar cannot be upheld as evidence to hold undisclosed income. What has been found during the course of search are registered sale deeds or the receipts which are shown in regular returns. In view of these facts, we find merit in the contentions of learned counsel for assessee and the additions in question, being neither in respect of undisclosed assets nor on the basis of any material or evidence found during the course of search or enquiries cannot be upheld. Therefore, we find no infirmity in order of CIT(A) deleting the additions of Rs. 17,00,549. This ground of the Revenue is dismissed. Ground No. (iv): Gain on sale of plots Rs. 48,182 (Plot No. 2719/10 DLF)-Rs. 30,500 (Plot No. 21, Sector-7, Faridabad) 38. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in same block/locality and has better commercial position being in the comer of main market dividing Sectors-7 and 10, Faridabad. The AO correctly held that assessee had not disclosed the correct value of the plot purchased by him, therefore, the undisclosed income was determined at Rs. 10,20,000 and added to taxable income. 44. Apropos the investment in construction of house, AO rightly held that assessee had constructed residential house in the area 1,420 sq. ft. on this plot along with five shops of each 10" X 8". AO held the construction of this at Rs. 400 per sq. ft. per house and Rs. 30,000 for each shop and the addition of Rs. 6,18,000 was made. Cost of investment was not shown by assessee, therefore, CIT(A) erred in deleting both the additions. 45. Learned counsel for the assessee contends that the assessee in the return of income duly disclosed purchase of plot in question for asst. yr. 1990-91, a fact which has been admitted by AO cannot be held as undisclosed by any stretch of imagination so as to be added in block assessment as undisclosed income on the basis of an estimate. CIT(A) rightly appreciated the assessee's contentions and deleted the addition by following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the prospective sellers desire that he will sell the plot at Rs. 2,200 per sq. yd. It does not lie with AO to hold somebody's claim of future sale of his plot as a determinative factor to estimate the assessee's purchase price. There is no incriminating material whatsoever found during the course of search in respect to the assessee's purchase of this plot. The AO has relied on a proposed sale of some other party to hold the assessee's cost disclosed in the return of income as understated. No evidence has been brought on record by AO to suggest that whether Dr. Ashok Bhan has sold his property at this higher rate or not. A person can demand anything for proposed sale of his plot, but the same in any case cannot lead to addition in a block assessment of third person in respect of disclosed transaction. 46. Apropos cost of construction, learned counsel referred to its sale deed and that the plot in question was purchased along with six rooms (in weak conditions), therefore, apropos residential house, it cannot be held that assessee has made any undisclosed investment. Apropos five shops, it was contended that as per HUDA Regulations, the assessee could not have constructed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be accepted. In our view, as this construction of Pucca house and shops was not disclosed, CIT(A) was not correct in deleting addition of Rs. 5,68,000 in respect of construction. The order of CIT(A) is reversed on this issue. Ground No. 5 of Revenue in respect of plot is dismissed and ground No. 6 in respect of cost of construction is upheld; assessee's ground No. 2(i) is dismissed. Revenue's ground. No. (vii): Investment in purchase of Badhkal Land-Rs. 9,54,000 Assessee's ground. No. 2(vi)-Rs. 2,24,891 50. Brief facts in respect of additions in question in respect of 7.5 acres of agricultural land at village Badhkal are a receipt of part payment in respect of purchase of land dt. 28th Sept., 1998 was found during the course of search from assessee's premises, which was inventorized at p. 6 of Annex. A12; as per this document, an amount of Rs. 7,78,500 in cash was received by vendors (Jagir Hussain, Maman, Ismail, Yaseen, Zohra) out of this consideration of Rs. 15,57,000. The receipt further indicates that the land has been divided in 5 irrevocable power of attorneys and the possession has been delivered to the assessee. AO was of the view that as assessee was in unauthorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d only in July, 1997 by the order of Punjab & Haryana High Court. Evidences of these facts were filed, it is only after the title became clear in the hands of the owners, the advance payment for the land could be started and assessee made payment of Rs. 6 lacs towards his share during the financial year 1998-99. Nothing more was paid by the appellant as in the meantime, search took place. There was no basis or evidence with AO to make addition of Rs. 9,54,000 when the cash flow statement is not disputed. (iv) It was explained to AO vide para 11 of letter dt. 25th April, 2001 that no expenditure was incurred by the assessee in respect of the said land except the amount advanced. The seized material contains certain details of expenditure incurred by either the owners or by the first buyer Mr. Madan Mohan Lal Malhotra till July, August, 1997 since litigation was on between the owners and Mr. Malhotra. Since agreement could not be entered prior to the settlement of dispute between the owners and Mr. Malhotra, there can be no question of any amount which could be spent by the assessee or his associates. These details were given by owners to the appellant at the time of negotiation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the title in the property itself was in dispute. Without possession, assessee cannot be inferred to have incurred expenditure about 3 years in advance. We find merit in the argument of learned counsel, as far as the seized material is concerned, the same pertains to year 1995-96. AO has drawn an inference on the basis of a notice issued by HUDA authorities and further linking it to the purchase of plot by seized material in the form of receipt as part payment of Rs. 8,75,000 which indicates the delivery of possession. The clear facts, which emerge, are the title of this Badhkal property was in dispute and assessee had given only advance part payment with possession. The seized material pertains to year 1995-96 on which inference (sic) cannot be called to have been paid by the assessee. Therefore, the inference drawn in respect of construction expenses is not supported by seized material. In view thereof, the amount of Rs. 3,74,819 has to be deleted. In view thereof, the Revenue's prayer in this behalf is dismissed and that of assessee acceded. 54. In the result, ground No. (vii) of Revenue is dismissed and ground No. (vi) of assessee's appeal is allowed. Ground No. (viii): U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative supported the order of AO. 59. Learned counsel for the assessee drew our attention to paper book pp. 446 and 447 and contends that this transaction is relatable to one Mr. Satpal, who purchased the land from M/s Tools India Ltd. Mr. Shubh Karan Jain is director of M/s Tools India Ltd. On question by AO, assessee filed a detailed reply in this behalf vide letter dt. 20th April, 2001 stating that nowhere the seized papers indicate village Manger, documents at page Nos. 444 and 445 pertain to the said M/s Tools India Ltd. and the inaccuracy in the area was also pointed out. Assessee explained details about how Mr. Satpal paid the consideration by cheque to M/s Tools India Ltd. and requested him to verify it from the end of both the parties. AO did not enquire into this transaction from both these parties and on surmises held it to be a completed transaction of sale and estimated commission through assessee on presumptions. It was contended that burden under s. 132(4A) was discharged, on record explanation of the assessee is not controverted by AO, therefore, addition in this behalf cannot be made as undisclosed income as the alleged sale did not take place. 60. We have hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 per cent. Nowhere comes the land of Rs. 17,59,000 besides against the Entry 20275 VE 35 per cent, AO has presumed that VE means Verma 35 per cent, the share of land purchased whereas the assessee's reply is that it is an enquiry register for customers and not of assessee's holding. Neither there is description of land nor assessee's name. The earlier entries on the same page clearly indicate it to be enquiry register. Before CIT(A) assessee categorically reiterated his stand, who deleted addition by following observations: "18.1 Page 61 of document A-1 and p. 72 of document A-1 has been carefully perused. These documents form paper books 451 and 452 submitted by the learned counsel. These documents contain transactions of Vidur Sharma, Dharam Singh. Younger Motors, Grover Sahib but does not refer to any transaction of a sum of Rs. 17,59,000 or to anyone by the name of Mohan Singh Bhatia. The comments of the AO on p. 9 of his reply also does not refer to any such transaction recorded in the aforesaid referred pages on which the AO has relied upon." It was contended that even AO in his reply was not able to demonstrate such specific transaction. 63. We have heard the rival co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on some local enquires to state that the sale to M/s Jagdamba Properties was to the tune of Rs. 52 lacs. At the same time the AO while referring to p. 11 of document A-3 states that these entries show that Shri Subhash Verma has received a sum of Rs. 1 lac only. In fact it will be relevant to take note of the fact that as has been pointed out by the learned counsel, the Department has itself in the case of Shri Naveen Verma and Shri Sanjay Verma vide orders dt. 30th April, 2003 passed under s. 158BD of the IT Act made an addition on a substantive basis, in their respective hands of their share of investment in the PNB building at Ballabgarh. The learned counsel has pointed out to para 3(iv), p. 6 of the order in the case of Shri Naveen Verma and para 3(iii), p. 5 of the order of Shri Sanjay Verma. It is also fact that the law shifts the entire onus on the AO when it is alleged that the assessee is the real owner and has made benami investments in the names of the different persons. The law is clear. One who makes the assertion has to establish the same. It is clear from the above facts that the onus has not been discharged. There is no evidence to support the claim of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-Registrar, Ballabgarh." 67. We have heard the rival contentions and perused the material available on record. As the facts emerge, both the sons of the assessee i.e. S/Shri Sanjay and Naveen have been assessed under s. 158BD on the basis of information gathered by way of search on the assessee in both the cases the respective shares have been added in their hands on substantive basis. There is nothing on record to suggest that assessee was benami in respect of this deal. We have verified p. 11 of Annex. A3, there is no reference to any sale as mentioned by AO in p. 24 of his order. The inscription does not indicate any such factum of sale to Mr. Gautam of Jagdamba Properties. There is nothing on record to suggest that Smt. Rajni Verma was also benami holder on behalf of assessee. On this page certain cheque entries from Rajni Verma and Subhash Verma appear, if the AO wanted to examine the issue these entries could have been verified from the cheque books of the assessee and further verified from the office of Registrar or banks. In the absence of anything indicating assessee's benami ownership, fact of sale of the property to Shri Gautam of M/s Jagdamba Properties and the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any household expenses clandestinely incurred. The assessee has filed regular returns of income showing year to year withdrawal, assessments have been made. In our view, the adequacy of the household withdrawals become subject of regular assessments and not block assessment. Further, in block assessment household expenses cannot be estimated on the basis of drawing an assumption on the basis of imagined lifestyle of assessee. It was contended that CIT(A) has observed these facts but, however, an amount of Rs. 6 lacs has been retained on ad hoc basis. It was queried from the assessee what was the amount spent on the education of his son, we could not get a satisfactory reply. 71. We have heard the rival contentions and perused the material available on record. We find general merit in the argument of learned counsel that the household withdrawals for each year having been shown in the regular return, the adequacy thereof becomes subject-matter of regular assessment and not block assessment. Besides, it has not been disputed that except above no other incriminating material in respect of undisclosed household withdrawals was found during the course of search. Coming to the aspect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel has stated that an oral trust had been created and the property was acquired out of petty offerings made by the relatives and visitors to his house. In the rejoinder the, learned counsel has referred to the cash flow statement at paper book 159 to explain the investment. 12.1 The issue has been examined and it is held that the appellant has not been able to satisfactorily explain the sources of investment in the property at Katra. The onus was on the appellant to bring forth all such evidences to support his claim of accumulated savings. The onus has not been discharged. The addition of Rs. 1,25,000 is, therefore, confirmed." 76. We see no infirmity in the order of CIT(A) inasmuch as the collection of offerings to deity as source of investment is on the basis of hearsay and oral contention, the addition being on the basis of seized document, the investment in the property at Katra in the name of assessee's mother has to be treated as undisclosed income. The order of CIT(A) is upheld. This ground of assessee is dismissed. Ground No. (iii): Marriage expenses of son-Rs. 50,000 77. The facts are the assessee son's marriage was proposed to be solemnized on 22nd Jan., 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 which has been estimated by AO at Rs. 20,000. There is no scope for making any estimate of income or expenditure in case of block assessment proceedings as submitted earlier also and case laws relied." 80. After hearing both the parties, we are of the view that the undisclosed income is to be added on the basis of search material and explanation of the assessee. Since the boarding pass was in the name of S. Verma and assessee's son is Sanjay Verma, who is also separately assessed under s. 158BD. In our view, it will not be justified to make the addition in this behalf on the assessee, whose contention that he has never visited Nepal has not been controverted. The AO could have proceeded in the block assessment of Mr. Sanjay Verma. In view thereof, we hold that the addition being not relatable to assessee and he has furnished an explanation has discharged his burden, the addition is deleted. This ground by the assessee is allowed. Ground No. (v): Expenditure on car repairs-Rs. 15,000 81. Apropos ground No. 5 on car repairs of Rs. 15,000, CIT(A) confirmed this addition by following observations: "15.1 The issue has been examined and the explanation given by the appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the written submissions and the rejoinders filed by the appellant it has been argued that the AO has made this addition without any evidence at all. The AO did not have any material in his possession to come to the conclusion that the cost price had been understated and without any material the AO could not have made any addition on this account. 8.2 The issue has been carefully examined and it is held that the AO was not correct in making this addition. The addition made by the AO cannot be sustained in law or on facts. There is no law which can support the view of the AO that the stated cost price can be enhanced without bringing on record such material/evidence which can clearly show that the stated price is below the actual price paid by the appellant. What the AO has done in this case is nothing but to have relied upon a document which merely gives the names of prospective buyers and sellers and the market rate at which the prospective buyers and sellers have indicated their price rate. This material on which the AO has relied upon cannot at all be taken into account for determining the understatement of cost price. There is nothing other than this document which can show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed to the loan having been given to the appellant. It is also undisputed that the loans had been duly shown in the balance sheet as outstanding liability. What has to be taken into account is whether the AO had any material or any evidence except the fluid statement of Shri Mehar Singh recorded on 25th April, 2001 that he had received back the amount over a period of 4-5 years. Shri Mehar Singh in his statement has neither given the date, months of even specific years when he allegedly received the money back, if at all. Keeping in view the above facts and circumstances and the fact that the AO did not have any evidence to come to his conclusion, did not consider it proper and correct to even confront the appellant with the statement of Shri Mehar Singh and that the outstanding liability of Shri Mehar Singh had been duly shown in the balance sheet in the regular returns of income, the addition of Rs. 2,25,000 is deleted." 90. Learned Departmental Representative relied on the order of AO. 91. Learned counsel for the assessee reiterated the facts and contends that this loan was shown by the assessee in the balance sheet filed with the return of income for the year 1988-89, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical basis. No addition at least under the IT Act can be made by bringing into consideration 'costly and commercial times'. The addition is accordingly deleted." 94. Learned Departmental Representative relied on the order of AO. 95. Learned counsel for the assessee reiterated the facts and contentions and relied on the order of CIT(A). 96. We have heard the rival contentions and perused the material available on record. It has not been disputed that these loans were shown by the assessee in her balance sheet filed with return of income for asst. yr 1998-99. The AO's addition is guided on presumption that no interest was paid on such sundry credits and no sensible person would advance to a stranger free of interest. In our view, since the loans in question are disclosed in the return of income, the addition cannot be made on the basis of presumption that because interest has not been paid, disclosed loans become bogus. In view thereof, the CIT(A)'s order is upheld and this ground of Revenue is dismissed. Ground No. (iv): Deletion of addition of Rs. 39,970 on account of silver jewellery 97. AO held that assessee has not given any explanation for the silver jewellery weighin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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