9911796707
TMI Blog2003 (10) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... e details and explanation filed by assessee. 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 46,495 2,97,800 1988-89 3,47,780 2,09,260 85,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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, then there must be some agricultural income also. It was further stated that after the block period, the assessee herself has shown agricultural income from these two orchards and the assessments for the subsequent years have been completed under s. 143(3), accepting the agricultural income shown by assessee. The attention of the Bench was drawn on copies of assessment orders for asst. yrs. 1998- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that has to be taken into account. And it is also seen that where the assessee has not disclosed any income and the same is detected by the Department either by way of search or by way of survey, etc., then in that case, that part of income is always treated as undisclosed income of the assessee and the same is added accordingly. In the present case there is no dispute that there were two orchards a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 existence of various assets, the same has been shown as opening cash-in-hand. Therefore, the explanation of the assessee was rejected and the addition of Rs. 4,32,651 was made to the income of the assessee for the block period. 11. Here, before the Tribunal again, the contentions raised before the AO were reiterated and it was further stated that there were two agricultural farms, one at Kullu and the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rma 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, daughter of the assessee, wherein we have held that amount of Rs. 4,00,000 belongs to Smt. Kavita Gaur and source of the same has also been accepted as explained while disposing her appeal in IT(SS) Appeal No. 39/Del/1997, vide order dt.23rd Oct., 2003. Therefore, we are not inclined to discuss the issue further. Accordingly, this addition of Rs. 4,00,000 is deleted. 13.3. Regarding the balance amount it was stated that all the persons are assessed to tax and they have disclosed in their regular returns. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, 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 the cost of farm house (new) and farm house (F&F) declared by the assessee by Rs. 8,17,536. In this way, the difference of Rs. 33,12,464 was found by the AO. 15. The assessee further has shown an investment of Rs. 3,02,912 towards renovation of residential house at Samketpur, Mandi. This investment has been shown during financial years 1995-96 and 1996-97, against which the Engineering Cell of CBI has evaluated the investment towards such renovation at Rs. 5,69,000. In this way, a difference of Rs. 2,66,088 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 further stated that no incriminating document/material was found as a result of search, which could lead to the conclusion that the assessee had spent more than what she has declared as her investment in the said properties. It was further stated that even the AO has ignored the valuation of its own Department, which was near to the valuation shown by assessee. It was further added that the AO has not given any benefit on account of agricultural income and cash-in-hand which could not be disclosed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial 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-39, Syndicate Bank, R.K. Puram in the joint names of assessee, Sh. Anup Sharma & Smt. Shailja Sharma ............ 11,89,205 Residence-12 Safdarjang Lane ............... 10,29,404 10,60,000 31,82,156 16.1. An addition of Rs. 4,00,000 on account of cash and jewellery amounting to Rs. 4,50,472 found from locker No. N-6, Syndicate Bank, R.K. Puram was made in the hands of the assessee by the AO on substantive basis; whereas on protective basis the addition was made in case of Smt. Aruna Vashist, the daughter of the assessee. In fact, during the course of search the statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 evidence whatsoever in support of the claim made. It was further observed by the AO that 'Furthermore, the period in which the said gifts have been stated to have been received, Shri Sukhram, husband of the assessee, was a Minister in the Central Government and as such if any gifts had been received, the same were on account of his official position. Any such gifts received over and above the certain value are required to be deposited in Government depository called "Toshakhana" and are not supposed to be retained as personal property. As earlier observed by the AO that the assessee could not substantiate her claim of having received the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Her parents are also very rich of the State ofHimachal Pradesh. The AO has also observed in his order that the status of the assessee is very high. Therefore, the amount of jewellery found from the residence of the assessee amounting to Rs. 5,72,373 is not such, which can be said that the assessee could not have possessed the jewellery to this extent. It is also worth noting here that the assessee was married as early as in 1953 and at that point of time the rate of jewellery was very meager. It is also an undisputed fact that in Hindu families, the daughters are given heavy jewellery by the parent side as well as the by in-laws side. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 by the AO. Accordingly, we direct the AO to allow the credit of the amounts shown in the regular returns for asst. yrs. 1988-89 and 1989-90 on the basis of returns filed by the assessee. Regarding asst. yr. 1987-88, we have already restored the matter to the file of the AO for ascertaining the quantum of agricultural income, which was not shown for the asst. yr. 1987-88, and other years which falls in the block period. Therefore, after ascertaining the same, the credit has to be allowed to the assessee. We order accordingly. 19. There is another issued raised by the assessee in this ground, i.e., in regard to non-allowing the credit on account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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