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TMI Blog2004 (9) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... s completed by the Assessing Officer under section 143(3)/158BC by his impugned order assessing the undisclosed income of the assessee for the block period at Rs. 22,02,591. Aggrieved by the same the assessee has preferred the present appeal before the Tribunal. 3. Ground Nos. 1 to 3 raised by the assessee in his appeal have not been pressed by the learned counsel for the assessee at the time of hearing before us. The same are, therefore, dismissed as not pressed. 4. Ground No. 4 in general seeking no specific decision from us. 5. Ground Nos. 5 to 9 relate to the issue of addition of Rs. 2,68,187 on account of unexplained investment made in jewellery found as a result of search. 6. During the course of search, jewellery valued at Rs. 4,86,587 (including silver wares/coins worth Rs. 14,400) was found. In his preliminary statement recorded during the course of search, the assessee had stated that jewellery owned by him is only to the extent of 35-40 tolas. As regards the excess jewellery found during the course of search, he explained that the same belonged to his married daughter Smt. Sharda Devi who had visited her parents house on the eve of Rakshabandhan on 28- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e remaining jewellery being owned by his married daughter was a plausible explanation and since the same was also supported by an affidavit of the said lady filed before the Assessing Officer confirming the position stated by the assessee, there was no reason for the Assessing Officer to disbelieve the same without bringing anything contrary on record. The learned DR, on the other hand, strongly relied on the impugned order of the Assessing Officer in support of the Revenue s case on this issue. 9. We have considered the rival submissions and also perused relevant material on record. It is observed that in his preliminary statement recorded during the course of search, the assessee had stated of having owned jewellery only to the extent of 35-40 tolas and nothing was stated by him about the jewellery of her married daughter in the said statement. Although the affidavit of his daughter Smt. Sharda Devi was filed by the assessee before the Assessing Officer, the same was found to be unreliable by the Assessing Officer for the specific reasons given in his impugned order. First of all, the said lady had failed to even recollect/recognize any item of the jewellery carried by her to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Rs. 5,95,000 for assessment years 1996-97 1997-98 on the basis of the following peak credit working made by him from the capital account of the assessee appearing at page Nos. 5 to 8 of the ledger identified as Annexure A-3 : Date Particular CB Folio Dr. Cr. Balance 6/2 By cash 1 2,000 2,000 7/2 By cash 2 2,50,000 2,52,000 18/2 To cash 4 1,50,000 1,02,000 19/2 By cash 5 1,50,000 2,52,000 9/3 To cash (Mandir) 12 100 15/3 By cash 14 10,000 2,62,000 19/3 To cash 15 20,000 2,82,000 Date Particular CB Folio Dr. Cr. Balance 19/3 By cash 15 1,000 2,81,000 26/3 To cash 19 20,000 3,01,000 1/4 By cash (To) 20 330 4/4 To cash (By) 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact, the total investment found to be made in the undisclosed business was Rs. 9,96,000 as mentioned by the Assessing Officer on page No. 9 of his impugned order out of which only Rs. 8,86,000 was considered in the hands of the assessee ignoring the balance investment of Rs. 1,00,000 pertaining to his son. Secondly, it is evident from the peak credit working given by the Assessing Officer at pages 8 9 of his impugned order as reproduced hereinabove that peak credit from assessment year 1997-98 was worked out by him at Rs. 5,95,000 separately without taking into consideration any opening balance for assessment year 1996-97 which clearly means that the peak credit of Rs. 5,95,000 represented entirely fresh investment made by the assessee in the unaccounted copper business and the same being in addition to the investment of Rs. 3.01 lakhs already made in assessment year 1996-97, there was no case to adjust the peak credit for assessment year 1996-97 or reduce the same from the peak credit of Rs. 5.95 lakhs worked but by the Assessing Officer for assessment year 1997-98. As such, considering all the facts of the case, we find no infirmity in the additions made by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MGF by M/s. Multi Metal Traders- Down payment out of books : 55,000 Loan from MGF : 1,50,000 = 2,05,000 11,58,330 18. As regards the marriage expenses of Rs. 4,31,779 incurred by him, the sources were explained by the assessee as follows : ( a )Spent from the books of M/s. Metachem Rs. 80,000 ( b )Spent from the books of M/s. Multimetal Traders Rs. 23,000 ( c )Miss Mamta s own cash in hand (as per her statement of affairs as on 31-3-1995) Rs. 21,500 ( d )Sale proceeds of jewellery utilized for the purchase of jewellery further expenses Rs. 73,964 ( e )Cash gifts received on 25-6-1995 on the occasion of engagement of Godh Bharai Rs. 21,400 ( f )Cash gift received on 2-7-1995 on the occasion of marriage Rs. 1,27,020 ( g )Withdrawals by Shri Nem Chand Gupta from books of Metachem India for marriage expenses Rs. 30,000 ( h )Withdrawals made by Shri Dinesh Gupta from the books of M/s. Multi Metal Traders Rs. 30,000 ( i )Cash expenses gifted by Shri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of Rs. 5,21,551 reflected therein was on account of construction of the factory building by assessee s son Shri Rakesh Gupta. He further submitted that nothing was found during the course of search to show that the expenditure to that extent was incurred by the assessee on marriage of her daughter and in the absence of the same, the addition of that amount made by the Assessing Officer to the undisclosed income of the assessee was totally unjustified in the block assessment. According to him, merely because the construction expenditure incurred by the assessee s son was noted on the same paper in which marriage expenditure was also noted does not go to prove that the same was also incurred in connection with the marriage and in the absence of any corroborative evidence found during the course of search, the Assessing Officer was not justified in drawing adverse inference against the assessee in the matter. He submitted that the investment made by the assessee s son in construction of factory building was duly declared by him in the declaration filed under the VDIS, 1997 and the Department having accepted the said declaration, there was sufficient evidence to show that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g it highly unlikely that these two activities of marriage and construction which were blatantly dissimilar in nature and were also incurred at different points of time could have been written by the assessee on one page. It is worthwhile to note here that nothing was brought on record by the assessee either before the Assessing Officer during the course of assessment proceedings or even before us during the course of appellate proceedings to show any nexus of the relevant entries appearing on page 148 of Annexure A-1 with the construction expenses of factory building by his son Shri Rakesh Gupta. Even the declaration filed by the said son under VDIS, 1997 is hardly sufficient to support the assessee s case on this issue in the absence of any nexus of the construction expenditure reflected in the relevant bills and vouchers and the relevant amounts found recorded in page 148 of Annexure A-1. We, therefore, hold that the Assessing Officer was fully justified in rejecting the explanation offered by the assessee in this regard and in treatng the entire expenditure of Rs. 11,58,329 found recorded on page 148 of Annexure A-1 to be expenditure incurred by the assessee on marriage of her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire rent of Rs. 2,16,000 as having been paid by the assessee out of undisclosed income, he added the same to his undisclosed income for the block assessment. 26. The learned counsel for the assessee invited our attention to the year-wise details of drawings of the assessee as well as his family members given at page 186 of his paper book and pointed out that drawing for assessment years 1993-94 1994-95 were sufficient enough to meet the payment of rent. He contended that the Assessing Officer, however, considered only the figures of drawings for assessment year 1992-93 to add the entire amount of rent in question to the undisclosed income of the assessee. The learned DR, on the other hand, relied on the order of the Assessing Officer on this issue. 27. After considering the rival submissions and perusing the relevant material on record, we are inclined to agree with the contention of the learned counsel for the assessee. As is evident from the statement showing yearwise quantum of drawings by the assessee and his family members, although the withdrawals for assessment years 1991-92 and 1992-93 were not sufficient to cover the payment of rent amounting to Rs. 42,000 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer found it difficult to believe that the assessee being one of the partners of M/s. Metachem India was not aware of the cash of Rs. 80,000 stated to be brought by his son Shri Dinesh Gupta to his custody for depositing in the bank account. The Assessing Officer also found it beyond comprehension that the partner Shri Dinesh Gupta who had stated to have brought the cash of the firm for depositing in the bank account would leave the said money at the house of another partner when he himself was residing separately in an independent house. He, therefore, rejected the explanation offered by the assessee in this regard and treated the cash found during the course of search to the extent of Rs. 85,000 as unexplained allowing relief to the extent of Rs. 8,944 on account of cash attributable to savings of the assessee s household. 30. The learned counsel for the assessee submitted before us that cash found during the course of search was explained to the extent of Rs. 80,000 as belonging to M/s. Metachem India by the assessee and since cash to the extent of Rs. 2,78,509 was available with the said firm on the date of search out of which only an amount of Rs. 39,000 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of search, the assessee was required to state about the availability of cash at his residence and, in reply to question No. 6 put forth in this regard, the assessee categorically stated that no cash belonging to his firm was lying in his house. Moreover, as pointed out by the learned DR before us, even none of the family members had stated about the availability of any cash belonging to the said firm in their house during the course of search. During the course of assessment proceedings before the Assessing Officer, the assessee however changed his stand and tried to explain that cash to the extent of Rs. 80,000 belonging to M/s. Metachem India in which he was a partner, had been brought to his house by Shri Dinesh Gupta for depositing in the bank account. This explanation, however, was not found to be acceptable by the Assessing Officer giving cogent reasons in his impugned order which have already been discussed hereinabove while narrating the facts of the case. Having regard to the said reasons given by the Assessing Officer as well as the categorical statement made by the assessee during the course of search, we are of the view that the Assessing Officer was fully justi ..... 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