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TMI Blog2007 (9) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... Jolly Family at the time of recording of his statement. (2) deleting the addition in respect of rental income, maintaining that the same is assessable in the hands of Mrs. Krishna Jolly, ignoring that entire investment in the impugned property was made by M/s. K.L. Jolly & Sons (HUF)." 4. In IT(SS) A. No. 133/Delhi/2004 the revenue has taken ground No. 1 for challenging the deletion of addition of Rs. 10 lakhs on account of gift and of Rs. 1 lakh on account of premium as also for deletion and of Rs. 1,86,325 on account of another gift and of Rs. 18,632 on account of premium relating to that gift. 5. Ground No. 2 has been taken against the deletion of addition of Rs. 6,54,662 made by the Assessing Officer in respect of difference in the valuation of property No. B-205, Second Floor, Greater Kailash-I, New Delhi, ignoring the valuation report of DVO. 6. In the cross-objection No. 234/Delhi/2006 the assessee (HUF) has also challenged the validity of assessment proceedings initiated under Chapter XIV-B of the Income-tax Act. IT(SS) A. No. 132/Delhi/2004 & CO No. 233/Delhi/2006 7. Wherever the assessee has challenged the order of the Assessing Officer and that of the learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997-98 and 1998-99. It also contains details of interest paid to M/s. K.L. Jolly & Sons (HUF) and funds borrowed for investment in the house property. On the basis of these documents, it was submitted that firstly, it was not undisclosed income of the assessee and secondly, the addition could not be justified in the case of the assessee because the same income had already been considered in the case of another assessee. 10. The learned DR on the other hand, justified the order of the Assessing Officer. It was submitted by him that simply because regular assessment was made under section 143(3) in the case of the assessee in earlier year, it does not mean that the entire income was disclosed by the assessee. According to him if something requires deep scrutiny and that scrutiny was not done, then it would not mean that the income or details thereof were disclosed. 11. In rejoinder the learned counsel for the assessee further explained that the gift of Rs. 10 lakhs was received in financial year 1993-94 which was credited by bank on 13-4-1994 as is evident from the statement of bank. In this regard our attention was invited to the bank statement of the assessee of Bank of India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire facts including the amount of gift and the name of donor etc. A portion of the assessment order which is reproduced below clearly brings out these facts:-- "During the course of assessment proceedings vide Order Sheet entry, dated 16-3-1998, the assessee was asked to explain the credit entry of Rs. 10 lakhs (dated 13-4-1994) in his bank statement. In response to this the assessee filed a letter, dated 16-3-1998, in which he explained that the credit of Rs. 10 lakhs was received in the financial year 1993-94 i.e. assessment year 1994-95. The cheque was deposited on 24-3-1994 and the credit for the same was given by the Bank on 13-4-1994. This amount was nothing but a gift received from Dr. D.P. Parwal, a Non-Resident Indian, Bombay. On 18-3-1998, the assessee filed a letter from Dr. D.P. Parwal in support of this contention. In view of this the submission of the assessee that the credit of Rs. 10 lakhs is a gift, is accepted. After discussion, the returned income is accepted." 14. From the above observations it is clearly established that the gift of Rs. 10 lakhs was accepted as genuine in the assessment order made for assessment year 1995-96. The assessee has also file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of Mr. Dalip Jolly, Mrs. Shoba Jolly, Mr. Pradeep Jolly and Mrs. Neena Jolly has been pleased to allow the gifts from the same donor, Dr. D.P. Parwal to the above named family members." 16. Before the Commissioner of Income-tax (Appeals) also the assessee had raised this objection by making submission in his letter dated 16-4-2003 available at pages 63 to 66 of the Paper Book. The relevant portion of this letter is as under:-- "In fact the issue as to the gifts received by the assessee-HUF from Dr. Parwal of Jaipur NRI was examine by the learned Assessing Officer in this very case for assessment year 1995-96 in which the gifts were received by the assessee-HUF from Dr. Parwal. After making thorough enquiry and investigation into the matter and taking into account the material the gift was accepted as genuine and order passed accordingly in the case of the HUF while framing regular assessment under section 143(3) of the Income-tax Act for assessment year 1995-96. No grounds existed for taking proceedings under section 158BD of the Act to assume any undisclosed income in respect of NRI gifts from Dr. Parwal in whose case the identity, creditworthiness and genuineness stood full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich came to be detected during the above search. However, the Tribunal found that all the above-mentioned articles have been declared by the assessee in the return of wealth. The said return has been duly assessed. Under the above circumstances, the Tribunal was right in coming to the conclusion that the assessee has disclosed the value of the said articles in the wealth-tax return, which was accepted by the department and, therefore, the additions made by the department on the ground of undisclosed income was erroneous. In the present matter, the assessee had disclosed the above jewellery in his returns. The said returns were processed. The said returns were duly accepted. In the circumstances, Chapter XIV-B has no application to the facts of the case. For the above reasons, question Nos. 1 and 2 are answered in the affirmative, i.e. in favour of the assessee and against the department." 20. In the case of Bhagwati Prasad Kedia v. CIT [2001] 248 ITR 562 , where the Hon'ble Calcutta High Court has pointed out to the distinction between the block assessment and the regular assessment by making reference to Explanation to section 158BA. In that case, the assessee had taken advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown by the assessee where the Assessing Officer is free to accept the justification shown or reject the same. The said two types of cases cannot be treated at part. Hence, we hold that the Assessing Officer was not entitled to question the said loan in block assessment which is a subject-matter of the regular assessment. Hence, the Assessing Officer was wrong in holding that the said sum can be taxed in block assessment although the same featured in the regular books of account. Similarly, the Tribunal also committed error in upholding the decision of the Assessing Officer." 21. The issue relating to the meaning and scope of undisclosed income has been dealt with in detail by the Hyderabad Bench of ITAT in the case of Essem Intra-port Services (P.) Ltd. v. Asstt. CIT [2000] 72 ITD 228 . In that case the Bench has explained the block assessment proceedings as follows:-- "Chapter XIV-B lays down special procedure for assessment in search cases. The special procedure set out in Chapter XIV-B is a separate set of rules, by itself. For the purposes of this Chapter, the term 'undisclosed income' is defined. The definition of the term 'undisclosed income' is given in an 'inclusive' ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y recourse to search operations under section 132." 22. On examination of the provisions of section 143 and other provisions relating to regular assessment as well as provisions relating to Chapter XIV-B, following proposition can be culled out:-- (1)If an item of income or expenditure has already been subjected to regular assessment, then the same cannot be re-examined in the block assessment unless some incriminating or adverse material is found during the course of search. (2)There should be positive factum of non-disclosure on the part of the assessee. Such a non-disclosure should have been detected as a result of search. 23. In the case of CIT v. Ravi Kant Jain [2001] 250 ITR 141 , the Hon'ble Delhi High Court has emphasized the need that in block assessment scope and ambit is limited to the material unearthed during the course of search. The observations of the Hon'ble Court are as under:-- "Block assessment under Chapter XIV-B of the Income-tax Act, 1961, is not intended to be a substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the assessee was that the same was disclosed to the department. In this regard before the learned Commissioner of Income-tax (Appeals) following plea was taken by the assessee:-- "The issue as to the ownership of the property and the rental income being shown in the hands of Smt. K. Jolly and interest income being shown by the assessee-HUF are all relevant facts for regular assessment. There is no incriminating material found on search to support the revenue's case for taking action under section 158BD of the Income-tax Act. Proceedings under section 158BD are not to be based on any assumptions, surmises or conjectures. In the absence of there being any tangible evidence or material to show that the property in question belonged to the HUF and not to Smt. K. Jolly who is the real and beneficial owner, the proceedings under section 158BD regarding that property also has to be dropped in the interest of justice and fair play. The assessee's case is also supported by the finding given by the learned Commissioner of Income-tax (Appeals) in the case of Smt. K. Jolly as stated above." 27. The learned Commissioner of Income-tax (Appeals) has not given any finding on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order is held to be invalid and unjustified in law, all the additions made in the assessment order against the assessee are to be deleted. Consequently the ground taken by the assessee in the cross-objection stands allowed. 31. In the result, the cross-objection is allowed. IT(SS) A. No. 132/Delhi/2004 32. Since we have deleted the additions by allowing the cross-objection in favour of the assessee, we are not required to deal with the grounds of revenue taken in this appeal on merits. However, we deem it proper to consider the grounds of appeal on merits also. 33. In ground No. 1 the revenue has challenged the deletion of addition of Rs. 10 lakhs on account of gift and Rs. 1 lakh being the premium on the gift. 34. The relevant facts concerning this matter in brief are as under:-- A search and seizure operation under section 132(1) of the Income-tax Act was conducted in Fena Group of cases on 3-9-1997. Search was also conducted in M/s. Saci Chemicals where the assessee i.e. M/s. K.S. Jolly & Sons (HUF) was a partner. During the course of search some papers were found from Shri Dalip Jolly at A 237, Okhla Industrial Area, Phase-I, New Delhi which showed that the Jolly fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(3) for assessment year 1995-96 and after the date of search. He thus rejected the submissions of the assessee that gift was accepted by the Assessing Officer and therefore, the same should be treated as disclosed income. 37. Thus the Assessing Officer made addition of Rs. 10 lakhs by treating the gift as bogus and as undisclosed income of the assessee in the garb of gift. He also added 10 per cent of the amount of gift as premium/consideration paid from undisclosed sources called gift. 37.1 The Assessing Officer also made addition of Rs. 9,500, Rs. 80,705 and Rs. 47,500 in assessment years 1996-97, 1997-98 and 1998-99 on account of income from house property. Thus the total undisclosed income was worked out at Rs. 12,37,705. The Assessing Officer has taken into account the statement of Dr. Parwal recorded by ADIT, Investigation-2, Jaipur on 22-9-1997 during post search proceedings. 38. After discussing the statement in paras 4 to 7 of his order, he has recorded his conclusion in para 8 which is as under:-- "8. In view of the above, there are sufficient reasons to believe that the gifts from NRIs are not without consideration and have been purchased. It is not unreaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and has drawn erroneous conclusion. In support of the arguments the assessee placed reliance on the following decisions:-- (1)R.K. Syal v. Asstt. CIT [2000] 66 TTJ (Chd.) 656. (2)ITO v. N. Sunitha [2001] 70 TTJ (Bang.) 27. (3)Monga Metal (P.) Ltd. v. Asstt. CIT [2000] 111 Taxman 175 (All.) (Mag.). 42. In appeal before the learned Commissioner of Income-tax (Appeals) the assessee also made detailed submissions in order to prove the identity and creditworthiness of the donor and the genuineness of the transaction. The assessee also placed reliance on the decision of Hon'ble Delhi High Court in the case of CIT v. Mrs. Sunita Vachani [1990] 184 ITR 121 and that of Chandigarh Bench of ITAT in the case of R.K. Syal (supra). 43. The learned Commissioner of Income-tax (Appeals) had dealt with similar matter in the case of Shri Dalip Jolly in which case also the same donor had made the gift to another family member of this assessee. The facts and circumstances being similar in the two cases, the learned Commissioner of Income-tax (Appeals) extracted the entire discussion and his findings for deleting the addition in that case. He therefore, following the order in the case of Shri D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly considered by the Assessing Officer. 45. The contention of the learned counsel for the assessee was that the Assessing Officer has totally ignored the subsequent letters of the donor and has not dealt with the same in the assessment order properly. According to the learned counsel, no incriminating material was found during the course of search to show that the gift was bogus and whatever documents were found, were only corroborative to the genuineness of the gift. He further submitted that the revenue has not been able to bring out any material to prove that any consideration was paid by the assessee for acquiring the gift and therefore, the addition made merely on the basis of suspicion, surmises and conjectures cannot be justified. Regarding the statement of the donor recorded by the ADIT, Jaipur it was contended by him that this statement cannot be used against the assessee because no opportunity was given to him to cross examine the witness. It was also submitted by the ld. counsel for the assessee that the donor himself appeared before the Assessing Officer on 10th August and had confirmed the genuineness of the transaction before him but he did not record the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The assessee has also furnished copy of Cheque No. 365503, dated 21-3-1994 for Rs. 1,000,000 of State Bank of India, NRI Branch, Bombay in favour of M/s. K.L. Jolly & Sons (HUF) issued by Dr. D.P. Parwal which is at page 83 of the Paper Book. 49. The assessee has also placed on record letter of Dr. Parwal written to ADIT, Jaipur, dated 11-11-1997 available at page 4 of the Paper Book. In this letter he has made reference to the discussion on 22-9-1997 in reference to summons issued under section 131 dated 18-9-1997. In this letter the donor has confirmed the gifts by giving following details. The relevant contents of the letter are as under:-- "That I personally know Mr. Dalip Jolly and Mr. Pradeep Jolly and their father Shri K.L. Jolly and their other family members very well and that we have visited each others houses several times. As desired by you I am giving below their present addresses. 1.Mr. K.L. Jolly and Mr. Pradeep Jolly S-23, Greater Kailash-II, New Delhi - 110 040. 2.Mr. Dilip Jolly, 102, Friends Colony, New Delhi - 110 065. That I have given gifts to them and their family members out of love and affection and I have no business dealing with them. Hence gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm from his own NRE A/c. (ii)That Dr. D.P. Parwal has creditworthiness, financial status and the financial capacity (both in Hongkong and in India) to give gifts to the Jolly family. (iii)That Dr. D.P. Parwal had his own finds in his own Bank A/cs. In Hongkong from where he gave gifts by A/c payee cheques to the Jolly family. (iv)That Dr. D.P. Parwal has himself established the long linkage, relationship, love and affection for Jolly family since 1956." (C) In the cases of other family members of the assessee, which were dealt under section 158BC of the Income-tax Act by the Ld. JCIT, Spl. Range 20, New Delhi (hereinafter referred as Assessing Officer), the love and affection towards the family of the assessee is proved by the following: (i )Dr. D.P. Parwal letter dated, 11-11-1997 given to the ADIT, Jaipur explaining that inaccuracies had crept into his statement recorded by the ADIT due to anxiety as he is a NRI for over 3 decades and was deposing before Income-tax Department for the first time. (ii)Dr. D.P. Parwal came all the way from Jaipur leaving his extremely busy business schedule and took pains to present himself personally before the Ld. Assessing Officer at Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, Mrs. Shobha Jolly, Mr. Pradeep Jolly and Mrs. Neena Jolly has been pleased to allow the gifts from the same donor, Dr. D.P. Parwal to the above named family members. It is also submitted that as per section 5(1)( iib) of Gift-tax Act, the gifts from NRE Account are exempt from gift-tax and as per this sub-section, relation between donor and donee is not required. The jurisdictional Hon'ble Delhi High Court ruling in the case of CIT, Delhi (Central-2) v. Mrs. Sunita Vachani (184 ITR Pages 121 to 123, Delhi), is binding and final and fully supports the assessee's case. The gist of the Hon'ble High Court of Delhi's judgment is: "Even though it may be surprising as to how large sum of money are received by a family in India by way of gifts from strangers from abroad, unless there is something more tangible than suspicion, it will be difficult to regard the moneys received in India from abroad as representing the income of the assessee in India." 52. We have referred to the letter of Dr. Parwal dated 11-11-1997 and other letters written by him to the Assessing Officer. In these letters, he has further given details of his acquaintance with the assessee. He has also given details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above portion of the assessment order it is clear (1) that during post search proceedings the ADIT, Investigation-2, Jaipur recorded the statement of Dr. Parwal; (2) that after recording statement he sent a report to the Assessing Officer; and (3) that the reasons and the purpose or the background in which the ADIT, Investigation-2, Jaipur examined Dr. D.P. Parwal during post search proceedings is not known nor the department has brought such material on record. 55. This statement is the sole testimony on the basis of which the Assessing Officer has drawn adverse inference against the assessee and about the genuineness of the gift. Hence, we would like to deal about the competence and jurisdiction of the ADIT, Investigation-2, Jaipur for recording the statement during post search proceedings and also about the evidentiary value of such statement particularly in the context that this witness was not offered for cross examination to the assessee nor was examined by the Assessing Officer despite the fact that he wrote several letters to ADIT and Assessing Officer to clarify the so-called discrepancies and remained available before the Assessing Officer for getting himself examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Arjun Singh v. Asstt. Director of Income-tax (Investigation) [2000] 246 ITR 363 the Hon'ble Madhya Pradesh High Court has dealt with the scope and ambit of the powers given to the two categories of officers. The Hon'ble High Court has observed as under:-- "The purpose of the power under sub-section (1) of section 131 of the Income-tax Act, 1961, is in aid of action under some provision under the Act and it is a well-settled principle of law that all statutory bodies must act for the purpose of the statute even though the term 'for the purpose of the Act' is not expressly stated. The purpose of exercise of power under sub-sections (1) and (1A) of section 131 is not the same, as the power under sub-section (1) operates in the field where the person is an assessee and proceedings are pending against him; whereas the power under sub-section (1A) operates in the field where there is no proceeding for assessment pending against any such person or class of persons and the enquiry/investigation is necessary for the purpose of making any enquiry/investigation on the basis of reason to suspect concealment or likelihood of concealment of income by such person or class of persons. The oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not merely some hearsay accusation, conjectures and surmise." 58. Thus the power can be exercised under section 131(1A) of the Act for conducting investigation or enquiry relating to undisclosed income or property by any person or class of persons on the basis of reason to suspect that any income is concealed or likely to be concealed. As provided under section 131(1A) such income should be concealed "within the jurisdiction of such authorities". So far as the present case is concerned, the department has not been able to show that the ADIT, Jaipur had any reason to suspect that income of the assessee was concealed income. The assessee was definitely not within his territorial jurisdiction. There was no case that the income has been concealed by the donor. No search was conducted in the case of the donor whose statement was recorded in Jaipur. Thus the legal competency of ADIT, Jaipur and authority of his jurisdiction to record the statement of Dr. D.P. Parwal is not justified and we are afraid the statement recorded by him can be justified in terms of his legal authority to do so. If the statement is found to be recorded by an authority not competent to do so, then its use i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same against the assessee but the fact remained that the said statement was recorded behind the back of the assessee and no opportunity was given to him to cross-examine her. This view of ITAT was upheld by the Hon'ble Delhi High Court and the appeal of the revenue was dismissed. 61. In the instant case also firstly in the statement recorded by the ADIT, Jaipur, the donor had confirmed the transaction of gift made by him to the assessee and this statement, therefore, could not be said to be an adverse evidence against the assessee. Secondly, if certain discrepancies were noticed in the said statement then the ADIT, Jaipur, was required to provide opportunity to the assessee to confront him particularly when the donor wrote a subsequent letter dated 11-11-1997 to him explaining all the so-called doubts and discrepancies. Thirdly, the statement of the donor was recorded by the ADIT, Jaipur and not by the Assessing Officer and if the Assessing Officer wanted to utilize the same against the assessee or wanted to draw any adverse inferences on the basis of such statement against the assessee, then it was incumbent upon him to have afforded opportunity of cross-examination to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and copies of NRE bank accounts. On these facts, it was held that initial burden which lay upon the assessee had been discharged and the same was shifted to the Assessing Officer who had failed to bring sufficient material on record to disprove the gifts in question. The deletion of addition by the CIT was upheld by the ITAT. 66. In the case of CIT v. R.S. Sibal [2004] 269 ITR 429 (Delhi), the Assessing Officer noticed two deposits of Rs. 7 lakhs and Rs. 2.25 lakhs on 8-7-1993 and 12-8-1993 respectively in the assessee's bank account. The assessee was required to explain the sources of the two amounts. The assessee gave details including the copies of gift-deeds and affidavits of the donors. However, the Assessing Officer treated the gift as non-genuine. The Commissioner (Appeals) deleted the addition which view was upheld by ITAT. The Hon'ble High Court of Delhi followed the decision in the case of Sajan Dass & Sons v. CIT [2003] 264 ITR 435 and upheld the view of the ITAT and made the following observations:-- "Held, dismissing the appeal, that the only ground on which the genuineness of the gifts had been doubted was the alleged failure on the part of the assessee to establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. The relevant observations of the concerned authority are as under:-- "...The other evidences relied upon in the Show Cause Notice i.e., the cheques and bank accounts statements made available by the Banker are not in any way a deciding factor on the genuineness or otherwise of the 'gifts' made by NRI for these documents by itself are proof of payments received from the NRI but not of any payments made to him. Further, it has been clearly laid down in the ATFE order dated 30-6-1997 in the matter of Sh. Virender Kumar Jain and others that in order to constitute the charge of contravention of section 9(1)(a) it is necessary to prove that the person proceeded against-- "(i )has made any payment; and (ii)the payment has been made to (c )a non-resident, or (d)to the credit of a non-resident. ... If there is no evidence the alleged transaction except the payment as also of the person who received the payment will be relevant. It is also to be appreciated that the evidence has to be of the specific transaction and amount involved, it cannot be in general terms". If the above ratio is applied to the present case, I find that the Show Cause Notice is seriously lacking in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing as under:-- "It is factually correct that the entire finances of Rs. 30 lakhs for purchase of property by Mrs. Krishna Jolly has been arranged from the HUF i.e., appellant. I agree with the ld. Counsel that merely on the grounds that funds have been arranged by HUF it cannot be legally said that the property purchased in the name of Mrs. Krishna Jolly becomes the property of the HUF especially in the light of the fact that HUF has advanced money in the form of loan at the rate of 4.5 per cent to Mrs. Krishna Jolly and it is not only a case of investing the money of the HUF in the name of a member of HUF. I also agree with the ld. Counsel that there is no purpose in diversion of income from HUF to Mrs. Krishna Jolly because had the property income been included in the hands of the HUF the tax liability is lesser because the interest received from Mrs. Krishna Jolly included in the income of the HUF is much larger than the rental income of the property. Therefore, there is no device to reduce the tax liability and accordingly there is no occasion to doubt the genuineness of the loan transaction, in view of above discussion it is held that the income from property belongs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10 lakhs on 17-11-1993 by debiting to the bank account No. 6424 with the Central Bank of India out of the gifted amount. It is further shown that the interest of Rs. 42,000 earned from the said FDR prepared out of the gifted amount was duly disclosed in the interest income of FDRs. 77. The assessee has filed copy of computation of taxable income filed with the return for assessment year 1994-95. In this computation interest on FDR is shown at Rs. 64,412. The assessee also pointed out that as per certificate of the bank dated 8-6-1995 the total interest of Rs. 42,000 was received on the FDR of Rs. 10 lakhs and this interest was duly reflected. The learned counsel also made reference to the assessment orders in the case of the assessee for assessment years 1993-94 and 1994-95 passed under section 143(3). Copies of these assessment orders have been placed on record. 78. On going through the copy of the bank account No. 6424 filed by the assessee at page 6 of the Paper Book, it is found that the assessee had received gift of Rs. 10 lakhs which was credited in his bank account in Central Bank of India on 5-11-1993. Entry dated 7-11-1993 in this account shows that from the same bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of addition of Rs. 10 lakhs on account of gift and Rs. 1 lakh being premium on the said gift. The Assessing Officer has made additions of Rs. 10 lakhs on account of the gift received from Dr. Parwal and of Rs. 1,00,000 being 10 per cent premium on the said gift. He also made addition of Rs. 1,86,325 and premium of 10 per cent at Rs. 18,632 as gift received from the same donor. The addition on account of undisclosed income has been made for assessment year 1994-95. This has been done on the same lines as has been done in the case of M/s. K.L. Jolly & Sons (HUF) in which case we have discussed the issue relating to genuineness of the gifts etc. in detail. 82. The learned Commissioner of Income-tax (Appeals) has discussed the issue in detail and has deleted the addition of Rs. 11 lakhs by observing as under:-- "The perusal of the relevant paras of Commissioner of Income-tax (Appeals)'s order reproduced above, clearly shows that the addition made in the case of K.L. Jolly & Sons (HUF), the appellant, is exactly on the same reasoning and the Assessing Officer has not gathered any further facts or information and has mainly relied upon the information and facts gather by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 1991. In view of the fact that the gift of Rs. 1,86,325 was received during the Immunity Scheme of 1991, no addition is called for. Even otherwise the donor is the same i.e., Dr. D.P. Parwal from whom the gift of Rs. 10 lakhs is received which has been held as genuine on the basis of detailed reasons given above and on the same reasoning the gift of Rs. 1,86,325 can also not be disputed and the same is held as genuine. Accordingly, the addition of Rs. 1,86,325 + premium of Rs. 18,632 is deleted." 84. Before us, the learned DR challenged the finding of the learned Commissioner of Income-tax (Appeals) by placing reliance on the order of the Assessing Officer. On the other hand, the learned counsel for the assessee supported the order of the Commissioner of Income-tax (Appeals). 85. We have carefully considered the entire material on record and the rival submissions. The assessee has given details to prove the genuineness of the gift in the letter dated 23-4-2001 at pages 76 and 77 of the Paper Book. Relevant portion of the letter has already been reproduced hereinabove while deciding the appeal in the case of M/s. K.L. Jolly & Sons. 86. From the documents on record, it is found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs. 48 lakhs by registered sale deed dated 28-7-1997. For determination of the value, the Assessing Officer referred the matter to the Departmental Valuation Officer who valued the property at Rs. 54,54,662. The assessee was confronted with the valuation report and was directed to explain the difference of Rs. 6,54,662. The assessee vide letter dated 23-4-2003 submitted that the reference to the DVO was not legally justified. After considering the reply of the assessee the Assessing Officer made addition of Rs. 6,54,662 on account of difference worked out on the basis of report of the DVO and the sale consideration shown by the assessee. 89. In appeal before the learned Commissioner of Income-tax (Appeals) which was submitted that no incriminating material or any other evidence was found in the course of search. It was pointed out that the purchase of property was evidenced by the registered sale deed dated 1-8-1997 and the Assessing Officer could not bring out any material to point out that the sale consideration was incorrect. It was argued that the reference made by the Assessing Officer to the DVO to determine the cost of consideration was beyond the jurisdiction given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y material on record which was found and seized during search indicating any unexplained investment in the purchase of property. The slight difference in valuation is only a difference of opinion and it cannot be made the subject-matter of undisclosed income pertaining to the block period until & unless there is some other supporting material indicating unaccounted investment found during search. The difference in valuation is below 15 per cent in the case of appellant as was in the case of Sh. Dalip Jolly (Individual). Therefore for the reasons given above and also as per reasons given by the Ld. CIT(A)-XV mentioned above the addition made by the Assessing Officer on a/c of unexplained investment of Rs. 6,54,662 is deleted." 90. The learned DR has only placed reliance on the order of the Assessing Officer whereas the learned counsel for the assessee has placed on the order of Commissioner of Income-tax (Appeals). 91. We have carefully considered the entire material on record and the rival submissions. In this case, no evidence was found either during the course of search or during the post search enquiry regarding any money which was paid by the assessee for purchasing the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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