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TMI Blog2002 (5) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... nd at the time of search amounting to Rs. 5,69,000. During the course of search carried out at the residence of the assessee 9/8 East Patel Nagar the cash amounting to Rs. 77,200 was found. Another cash amounting to Rs. 5,45,000 was found from the premises 44/72. West Punjabi Bagh,New Delhi. The Assessing Officer added an amount of Rs. 5,69,000 as unexplained cash while completing the block assessment. 3. In this connection the learned authorised representative argued that Rs. 69,000 were withdrawn from M/s. Remy Industries where the appellant is partner and in support of this copy of cash book ledger account in the books of Remy Industries were placed on record. It was submitted before the Assessing Officer that the amount in question was remitted through courier on 7-8-1995, the Assessing Officer has not accepted the claim on the ground that theory of withdrawal of Rs. 69,000 from the books of Remy Industries is an after thought and it has not been proved conclusively that any amount was sent by M/s. Remy Industries. The Assessing Officer also held the cash as unexplained on the ground that at the time of search Shri R.P. Monga himself surrendered Rs. 5,50,000 as unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven though this is part of the composite surrender made by the Assessing Officer, this cash cannot be added in the hands of the appellant because neither it was found nor seized from the possession of the appellant. If at all this addition requires to be made, it can only be in the hands of Shri Anil Monga son of the appellant and the other family concerns operating from that premises. We feel that addition of this amount in the hands of the appellant is unjustified. We, therefore, sustain the addition of Rs. 40,000 alone and allow relief of Rs. 5,29,000. 7. Next ground of appeal is in regard to addition of Rs. 39,62,000 under the head unexplained investment in properties. During the course of search a loose paper at page No. 15 of Annexure A-3 was found and seized. This document is placed at pages 189 and 190 of the paper book. This is a hand written letter by Shri Anil Monga to his father, the appellant, on the letter pad of AKM Engineering Industries. This reflects some difference between the father and son in regard to investment in the immovable properly. Part of the contents of this letter reads, "I do agree that you had given me total amount to the tune of Rs. thirty lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief between the father and the son and gives the details of each and every property where unexplained investment was made. This was found during the course of search and authenticity of this document is not being doubted or challenged. Now coming to the assessment under chapter XIVB, computation of undisclosed income of the block period has to be worked out under section 158BB which reads-- "... On the basis of evidence found as a result of search or requisition of books of account or documents and such other material or information as are available with the assessee......". While making the addition of Rs. 39,62,000 the Assessing Officer had no other document or material in his possession except the letter written by Mr. Anil Monga. Under these circumstances and keeping in view the legal position we are of the opinion that action of the Assessing Officer in making an addition of Rs. 39,62,000 instead of Rs. thirty lakhs is unjustified and unreasonable. Keeping in view the totality of facts and circumstances of this case we restrict the addition to Rs. thirty lakhs only. 12. The next ground of appeal taken by the appellant is against addition of Rs. one lakh on account of unexp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We, therefore, uphold this addition. 16. The next ground of appeal is regarding addition of Rs. 9,90,000 representing gifts received from various parties. In this connection the learned authorised representative submitted that the amount of gift received by the assessee and various family members was disclosed by filing the regular assessment returns and also part of the balance-sheet filed along with the return of income much before the operations under section 132 started. It was, therefore, submitted that these items are not covered in the chapter XIVB while completing the block assessment and hence this addition is highly unjustified. It was also argued that even for the purpose of assessment under chapter XIVB this item was discussed in the case of various family members especially R.P. Monga HUF and therefore this addition cannot be made at two different places because one source of income cannot be added in more than one hands. 17. We have heard the rival parties and have also examined the documents relied upon. In this connection the I.T.A.T. order in the case of R.P. Monga Sons IT Appeal No. 5269 (Delhi) of 1996 dated29-11-2000is worth mentioning. This issue was di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the appellant. Under these circumstances we are of the considered opinion that this addition cannot be sustained. 20. The result is that the appeal filed by the assessee is partly allowed. Per Diva Singh, J.M.-- I have gone through the draft order of my learned Brother and after going through the same, I am unable to persuade myself to concur with a part of it for the reasons given hereafter. 2. Before alluding to the difference of opinion, I would like to state that I concur with the reasons and finding of my learned brother in para 5 of the draft order whereby the addition made by the Assessing Officer to the extent of Rs. 40,000 has been sustained. 3. It is also concur with the reasons and finding given by my ld. brother from paragraphs 7 to 11 of the draft order pertaining to the addition made to the tune of Rs. 39,62,000 by the Assessing Officer and sustained to the extent of Rs. 30,00,000 in the proposed order. 4. Paragraphs 12 to 14 of the draft order dealing with the addition of Rs. 1lakh on account of unexplained investment on household items are also concurred with by me. 5. I concur with the finding relating to the addition of Rs. 9,90,000 represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Anil Locks Ltd. Q.2. What is your source of income? Ans. I am partner is the following firms: 1. Remy Industries - 60% drawing salary of I do not know. 2. Anil Lock Ltd. - I am director and as regards to salary I do not remember. 3. I am not drawing any salary from R.P. Locks Co. I am representing Anil Locks Ltd. in this concern. 4. Property income from 44/72 Punjabi Bagh from M/s. Uttranchal Leasing Ltd. M/s. R.P. Lock Co. and M/s. Monga Sales Exports (P.) Ltd. I do not remember the monthly rent from this property. I am the 100% owner of this property. The plot of this property was purchased in 1974 for Rs. 27,000 measuring 1100 sq. yards and it was constructed from 1980 to 1982 and the total cost of investment is recorded in the books of account. 5. I am Prop. of M/s. R.P.M. Industries Noida. This concern is manufacturing Lock parts like lever, locking bolts, keys etc. Apart from the above I am having income from interest, dividend and directors fee etc. LIC units and agriculture income of Rs. 8,000 to Rs. 9,000 per year. Q.3 Please furnish the income-tax particulars. Ans. My income tax GIR No. 479-R Ward 11(5) and my file have been transferred to Circle 11(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of his family members and family concerns. Accordingly, the Assessing Officer is directed to come to a finding after pertaining the fate of the assessments made in the hands of the family members and other related concerns. A perusal of the arguments put forth by the assessee before the Assessing Officer as well as before us shows that the assessee has tried to put forth a case that the amount pertains to M/s. Uttranchal Leasing Ltd. The books of account of M/s. Uttranchal Leasing Ltd. were neither found nor seized at the time of search. Nevertheless, the issue requires examination. Accordingly, the ground raised by the assessee pertaining to this addition is restored back to the Assessing Officer. 11. Before parting, I would also like to address an argument put forth by the authorised representative of the assessee which has been stated at pages 2 and 3 of the draft order proposed by my ld. brother in the second half paragraph of page 3. To recapitulate the issue, it may be pertinent to reproduce the same here:-- "... The learned authorised representative submitted that just before the carrying on search assessee was relieved by the hospital wherein he was going on tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice. Nevertheless, the matter requires a 'composite approach' to this composite surrender and thus deserves to be restored back to the file of the Assessing Officer to ascertain the fate of the appeals of the related family members and concerns and decide the issue in accordance with law. This would violate the principles of promissory estoppel and have very grave and serious consequences and ramifications. 14. Similarly due to the aforementioned reasons, I am of the opinion that the issue pertaining to the addition of Rs. 8,25,000 on account of unexplained investment in jewellery also deserves to be restored back to the file of the Assessing Officer to decide after ascertaining the position of the assessments in the hands of the ladies on this count. The arguments before us that the jewellery does not belong to the assessee in the present case has to be appreciated in the context that as a result of search, surrender has been made by the assessee and merely because the surrender has been made on account of jewellery should not lead to the presumption that it has to belong to the ladies only as it is not the prerogative of only ladies to own jewellery. Jewellery can be owned b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. R.P. Lock Co. are functioning in the hands of the assessee or the matter be restored to the file of the Assessing Officer? 2. Whether on the facts and circumstances of this case, value of gold and silver ornaments of Rs. 8,75,000 be added in the hands of the assessee merely on the basis of statement recorded under section 132(4) of the Act where the assessee surrendered Rs. 20,00,000 out of which the ladies of the family have disclosed Rs. 11,75,000 as unexplained investment only or the matter be restored to the file of the Assessing Officer?" 2. Relevant facts are that a search under section 132 of the Income-tax Act, 1961 (hereinafter referred to as the "Act") was carried out at the residence and business premises of the assessee and other related concerns which was concluded on9-8-1995and some incriminating documents and valuables were found and seized. The assessee in pursuance of the notice under section 158BC of the Act filed return at undisclosed income of Rs. 30.50 lakhs and assessment was completed at a undisclosed income of Rs. 64.96 lakhs. Aggrieved by the aforesaid assessment order appeal was preferred before the Tribunal under Chapter XIVB of the Act. 3. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was that jewellery found at the time of search belonged to Smt. Shakuntla Monga and Smt. Rati Monga. Addition of Rs. 11.75 lakhs had been made in the hands of these two ladies as undisclosed income and there was no other jewellery found at the time of search. The Assessing Officer admitted that already these two ladies had made disclosure of Rs. 11.75 lakhs jewellery as their undisclosed income but there remained difference of Rs. 8.25 lakhs out of disclosure made by assessee in his statement that there was undisclosed jewellery worth Rs. 20 lakhs and that has not been explained and the Assessing Officer made the addition of Rs. 8.25 lakhs in the hands of the assessee. 6. The assessee came in appeal before the Tribunal and learned AM did find force in the submission of the assessee and noted that already Smt. Shakuntla Monga and Smt. Rati Monga had made disclosure of Rs. 11.75 lakhs as undisclosed jewellery and there is nothing on record to conclude that any part of jewellery belonged to the assessee. Further, he noted that there was no material on record to indicate that jewellery worth Rs. 8.25 lakhs was found at the time of search which may belong to assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Uttranchal Leasing Ltd.; M/s. R.P. Lock Co. and M/s. Monga Sales Exports (P.) Ltd. and assessee being owner of the said property was deriving rental income. If any amount was found in that premises, owner of the house could not be made liable to explain the source. Best person to explain were the tenants and in this case those tenants had given out the source of the amount available in that premises. In this connection my attention was drawn to page No. 156 of the paper book which is the explanation given by the assessee in respect of cash of Rs. 5.45 lakhs found at 44/72 West Punjabi Bagh. It was submitted that M/s. Uttranchal Leasing Ltd. was having a cash balance of Rs. 6,41,430.92 as on8-8-1995and that was the sum available as per cash book, copy of which is appearing at page No. 160 of the paper book. The contention is that once assessee had come with explanation and Assessing Officer had not recorded categorical finding that explanation was false or pot corroborated by evidence, the amount which was found in the property owned by the assessee but under tenancy of tenants, the addition was totally unwarranted. 10. About jewellery the learned counsel submitted that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for that reliance has been placed by the learned D.R. on the decision of ITAT Delhi Bench "C" in the case of Surendra M. Khandhar v. Asstt. CIT 76 CTR 121 (sic) in which it was observed by the Bench that once assessee agreed to offer peak of its accounts as undisclosed income then assessee cannot be allowed to resile from the same. Other citation referred to by the learned DR is that of Hon'ble Kerala High Court in the case of V. Kunhambu Sons v. CIT [1996] 219 ITR 235 in which Their Lordships held that assessment on the basis of voluntary statement was valid. The contention of the learned D.R. is that assessee surrendered Rs. 5.45 lakhs treating the cash found as unexplained and also admitted in his statement that he had invested unexplained income to the extent of Rs. 20 lakhs for acquiring jewellery and thus addition was based on the statement which was given in perfect state of health and there was no coercion or undue influence subjected by the Department and thus addition was rightly made and learned J.M. was more than fair to restore the matter although it was a case where addition should have been confirmed and thus order of learned J.M. should be confirmed. 12. After c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e who was looking after the three concerns which were carrying on their business in property No. 44/72 West Punjabi Bagh. Merely because assessee was owner of the property and he had given composite statement as observed by the learned J.M. also, the addition could not be made when assessee explained the same and Assessing Officer did not find it untrue. There was no justification for restoring the matter back to the file of Assessing Officer as it was the duty of the Assessing Officer to record categorical finding in the case at the assessee as well as in the case of son of assessee which has not been done and thus addition was rightly directed to be deleted by the learned AM. 14. So far as amount of Rs. 8.25 lakhs on account of unexplained investment in jewellery is concerned, the addition has rightly been deleted by the learned AM because at the very beginning statement was given by the assessee which was merely an estimate jewellery which was found during search belonged to two ladies and Assessing Officer himself has held Smt. Shakuntla Monga and Smt. Rati Monga as owner of the jewellery. The amount of unexplained investment in the jewellery stands assessed in the hands of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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