9911796707
TMI Blog2003 (10) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO dealt with itemwise and then completed the assessment under s. 158BC on a total income of Rs. 1,08,37,830 against the total income disclosed by assessee at Rs. 65,14,400 of the block period. 3. As stated above, the assessee filed return of income of the block period at Rs. 65,14,400 and out of this income, the assessee has claimed credit for returned/assessed income at Rs. 43,00,080. Thus, the total undisclosed income declared by assessee was at Rs. 21,96,320. Out of this undisclosed income, the assessee has claimed a further deduction of Rs. 14,22,896 on account of undisclosed agricultural income and in this way, balance sum of Rs. 7,73,424 was declared as non-agricultural and undisclosed income. The chart showing income of Rs. 65,14,400 and then claiming deduction on account of undisclosed agricultural income and net undisclosed income, which was filed by the assessee, is reproduced at p. 2 of the order of the AO, which is reproduced here as under: Asst. yr. Total income Returned/Assessed income Undisclosed income Agrl. Non-agrl. Total 1987-88 3,15,800 Nil 2,51,305 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot satisfied with the reply filed by the assessee. It was observed that no cogent reasoning or evidence has been filed to establish the agricultural income earned by the assessee during the block period. It was also observed by AO that the assessee was in the net of highest group of income, therefore, there was nothing in not showing the agricultural income while filing the regular returns. It was also observed by the AO that the onus was on the assessee to substantiate her claim which she failed to do so. Accordingly, the claim of the assessee of undisclosed agricultural income of Rs. 14,22,896 was not admitted and the same was treated as undisclosed income of the assessee. 5. At the time of hearing here before the Tribunal, the learned counsel, firstly, reiterated his contentions raised before the AO. Further, it was submitted that there is no dispute the assessee was owning two orchards which were acquired by the assessee in the years 1962 and 1972. The attention of the Bench was drawn on the various papers establishing that the orchards were belonging to the assessee. It was further stated that it is a matter of common knowledge that if any person has some agricultural land, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod was ranging between Rs. 85,000 to Rs. 1,62,500. From the chart it is also seen that assessee has shown agricultural income from one orchard ranging between Rs. 1,73,000 to Rs. 7,05,975 during the block period. We further noted that from asst. yr. 1998-99 to asst. yr. 2002-03, the total income shown by assessee from these two orchards is ranging between Rs. 8,60,000 to Rs. 5,48,000. From these facts it is seen that there is a much variation in the agricultural income of the block period as well as in subsequent years. We further noted that the assessee s family, i.e., husband of the assessee, sons and daughters of the assessee are also having similar orchards in the State of Himachal Pradesh, and they were showing agricultural income from those orchards while filing their regular returns of income for the years which fall under the block period searched. In some of the cases, the Bench has held that there were agricultural income in the hands of the family members of the assessee, as the appeals of family members of the assessee have already been heard and disposed of. It is settled principle that if there is any income and could not be shown for any reason, then it that case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO was in regard to opening cash balance of Rs. 4,32,651 as on1st April, 1986. The assessee was required to substantiate the existence of such a large amount as cash-in-hand and source of the same. In response to this the assessee has stated that the same was on account of her savings from out of agricultural income earned before the block period. The assessee has also stated that the opening cash balance has been estimated by her after fairly analyzing the income and expenditure related to agricultural produce. After considering the submissions and perusing the other material on record, the AO noted that during financial year 1991-92, there was only a cash balance of Rs. 23,894 with assessee. Therefore, he drew an inference that an attempt has been made by assessee to explain the assets in existence in the balance sheet enclosed with the return of income for the block period. It was further observed by the AO that during financial year 1991-92 there was a cash balance of Rs. 23,894 only and to explain the investment made in assets, the assessee has worked out backward in framing the balance sheet for different years and whatever cash-in-hand was required to explain the exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -a-vis other family members of the assessee. Accordingly, we restore the matter to the file of the AO to decide this issue afresh and after affording a proper opportunity to the assessee to explain her side once again. 13. Next issue pertains to unexplained cash credit. The assessee in her balance sheet for financial year 1996-97 (upto16th Aug., 1996) has shown the following loans: Rs. Shri Anoop Sharma 43,903 Shri Vinod Mahanta 15,000 Smt. Kavita Sharma (Gaur) 4,00,000 Mayfair Hotel, Mandi 2,72,759 Shri Anil Sharma (for purchases) 50,000 Sundry creditors 30,153 13.1 The loan in the name of Shri Vinod Mahanta was old one. Therefore, the same treated as explained. The loan shown in the name of Smt. Kavita Sharma (Gaur) was stated that Smt. Kavita Sharma has received a sum of Rs. 4,00,000 from her in-laws at the time of demise of her husband in the year of 1975. This amount was added in the hands of assessee on substantive basis and a protective assessment was made in the hands of Smt. Kavita Gaur. 13.2. We have already disposed of the appeal of Smt. Kavita Gaur, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this ground. The assessment of almost all the creditors, i.e., Shri Anoop Sharma, Kavita Sharma and Shri Anil Sharma, who is proprietor of Mayfair Hotel, were completed of the block period and the appeals of all these assessee have already have heard and disposal of by the Tribunal, wherein such deposits with the assessee have been held as genuine. We further noted that all these loans are part of regular books of accounts and the return for the asst. yr. 1997-98 was not due at the time of search, therefore, these cash credits cannot be treated as undisclosed. In view of all these facts and circumstances, we delete the entire addition, i.e., of Rs. 7,96,815. 14. Next issue relates to investment in immovable property. During the block period the assessee has constructed a farm house at Surath (Mandi) and also renovated residential house at Samkhetpur, Mandi. The investment in both these properties has been worked out by Engineering Cell of CBI and the Departmental Valuation Officer under s. 131(1)(d) of the IT Act. The assessee has shown investment in these two farm houses at Rs. 8,17,536. The investment in farm house at Surath, Mandi was taken at Rs. 41,30,000 as against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious items other than the basic structure. She could also have furnished report from any registered valuer about the cost of construction. The AO further observed that the assessee could not controvert the valuation report of CBI Engineering Cell neither assessee has filed any supporting evidence justifying the cost of construction in these houses. Therefore, the valuation adopted by the Engineering Cell, CBI was taken by the AO in regard to investment in farm house (new) and farm house (F F), and renovation of residential house of Samketpur, Mandi. The difference in the valuation shown by the assessee and in the valuation made by CBI Engineering Cell was arrived at Rs. 35,78,552. Accordingly, the same was added to the income of the assessee by holding that the investment was from undisclosed sources of the assessee. 15.1. During the course of hearing, the learned counsel of the assessee has drawn the attention of the Bench at p. 3 of written synopsis and it was stated that the Engineering Cell of CBI has completely ignored the period of construction and estimated the investment on the basis of current rate in Surath farmhouse and residential house at Mandi, respectively. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore parting, we will like to mention that we do not find any weight in the contention of the learned Authorised Representative that no incriminating document or material was found during the course of search. The items and articles mentioned in the report of Engineering Cell of CBI are very clear and specific and if these items were there in the farmhouse or in the renovated house, then it cannot be said that there was no material on which basis the AO has made the addition. Therefore, we hold that there was material for estimating the valuation in the properties. However, we have restored the matter to the file of the AO to examine afresh as stated above. 16. Next issue relates to an addition of Rs. 30,20,780 on account of unexplained cash and jewellery. During the course of search and seizure operation, the following assets were found from the various premises: Details of Premises Cash Jewellery Locker No. N-6, Syndicate Bank, R.K. Puram,New Delhiin the name of assessee 4,00,000 4,50,472 Locker No. 664, Punjab Sind Bank, Vasant Vihar, New Delhi in the name of assessee 6,60,000 5,13,075 Locker No. F-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Kavita Gaur, the additions of Rs. 6,60,000 on account of cash and Rs. 5,13,075 on account of jewellery is deleted in the hands of the assessee. 16.3. The total jewellery in the hands of the assessee was taken by the AO at Rs. 22,10,780. Out of this total jewellery, we have already deleted the additions of Rs. 4,50,572 belonging to Smt. Aruna Vashist and Rs. 5,13,075 belonging to Smt. Kavita Gaur, the daughters of the assessee. The remaining jewellery now remains at Rs. 6,74,860 found from locker No. F-39, Syndicate Bank, and Rs. 5,82,373 found form the residence of the assessee. The explanation regarding jewellery found from locker No. F-39, Syndicate Bank, amounting to Rs. 6,74,860 was given by the assessee that this jewellery was received by her as gift from King of Nepal and from Minister of Communication, Malaysia. It was further stated that the assessee s husband was the Central Minister of Communication, who visited Malaysia and Nepal during the block period and at that time the gifts were given to the assessee by the Minister of Malaysia and King of Nepal. The explanation of the assessee was not accepted by the AO by observing that assessee could not furnish any evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received by assessee as gifts in the capacity of wife of a Central Minister, then in that situation these items should go to "Toshakhana" as per rules. Therefore, if it is ascertained that these items were received as gifts by assessee, then fresh order may be passed in regard to these jewellery that how they will be transferred to Toshakhana. The AO is further directed to give a further opportunity to the assessee to explain her side on this issue. With these observations, we restore this matter to the file of the AO to dispose of the same as per our observations above. We order accordingly. 16.5. Regarding the remaining jewellery of Rs. 5,72,373 found from the residence of the assessee, the AO has allowed the benefit of 500 grams and taking the value at Rs. 2,50,000 for 500 grams jewellery, the remaining amount of Rs. 3,22,373 was added in the hands of the assessee as jewellery acquired from undisclosed sources. 16.6. After hearing rival submissions, we find that assessee deserves to succeed on this issue. Undisputedly, the assessee belongs to a very high class family, as she was wife of a Central Cabinet Minister and is a very rich family of the State ofHimachal Pradesh. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn, then in that case it cannot be treated as income from undisclosed sources. Accordingly, we delete this addition of Rs. 1 lakh. 18. Next issue relates to credit of returned/assesseed income allowed by the AO at Rs. 36,05,370 as against Rs. 43,00,080. The credit by the AO was not given on account of agricultural income relating to asst. yrs. 1987-88, 1988-89 and 1989-90, by observing that the assessee has not filed returns for these years. 18.1. At the time of hearing it was stated by the learned counsel of assessee that the returns for asst. yrs. 1988-89 and 1989-90 were filed and acknowledgement receipts of the same were produced before the AO. It was further stated that, of course, the return for asst. yr. 1987-88 was not filed, but there is no dispute that there was an income from agricultural produce. Therefore, the credit on account of agricultural produce and credit of income shown in the returns for asst. yrs. 1988-89 and 1989-90 has to be allowed by the AO. 18.2. After considering the rival submissions and perusing other material on record, we are of the view that if the photocopies of the returns were produced by the assessee, then credit should have been allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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