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TMI Blog2012 (9) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the Ld. ITAT erred in law and on merits in deleting the addition of Rs.27,50,000/- on account of FDRs by holding the same to be based on dumb documents? (d) Whether on the facts and in the circumstances of the case, the Ld. ITAT erred in law and on merits in deleting the addition of Rs.7,62,392/- on account of investment made by the assessee in M/s Fair Deal Garments? (e) Whether on the facts and in the circumstances of the case, the Ld. ITAT erred in law and on merits in deleting the addition of Rs.16,80,100/- on account of cash deposits made by the assessee? (f) Whether order passed by the Ld. ITAT is perverse in law and on merits? 2. The assessee is an individual. A search under Section 132 of the Act was conducted at his residence on 20.3.1996 and his bank lockers were also searched on 19.4.1996. Cash, jewellery and documents were found during the search and were seized. An assessment under Section 158BC(c) was made on 29.4.1997. An appeal against that assessment was filed by the assessee before the Income Tax Appellate Tribunal („Tribunal‟, for short), which was the first appellate authority at that time. The Tribunal s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the assessee the papers were left with him by the property dealer only for verification and therefore no adverse inference could be drawn. In support of the claim the assessee filed the property dealer from the property dealer‟s affidavit. 5. The Assessing Officer did not accept the assessee‟s explanation. He noted that the property documents were dated September, 1987 and therefore, it was not true that they were given to the assessee only a few days prior to the search. He issued summons to Fakir Chand in an attempt to probe the matter further but the summons came back unserved. Though the documents were seized, nobody came forward to claim them or sought release from the income tax authorities. From these facts the Assessing Officer drew the inference that the property was purchased by the assessee benami and that there was no explanation to the contrary. Since the investment in the property was not shown in the books of account, the Assessing Officer made an addition of Rs.2 lakhs as the assessee‟s undisclosed income. 6. On appeal the Tribunal referred to the contents of the affidavit dated 13.7.1998 of Om Prakash and held as under: - "15. On g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts relating to the property is a relevant and important piece of evidence. The payment of money can therefore be inferred and since the assessee‟s books of account did not disclose the investment, the Assessing Officer rightly drew the inference that it represented the assessee‟s undisclosed investment. The Tribunal further overlooked that neither Fakir Chand nor Om Prakash, the property dealer, came forward to claim the documents which is quite unusual if the intention of handing over the documents was only to enable the assessee to consider the proposal for buying the property. The Tribunal also overlooked that the name of the owner of the property was not mentioned in the affidavit of the property dealer. In these circumstances, the finding of the Tribunal is contrary to the evidence on record which it failed to take proper notice of. We therefore, answer questions (a) and (b) in favour of the revenue and against the assessee. 8. As regards question (c), the brief facts are that in the course of the search, a document appears to have been seized in which the assessee had recorded the value of his assets, which included FDRs (fixed deposit receipts) for Rs.27.50 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the ground is allowed." It may be noted that the Tribunal saw the seized paper as a "dumb document" which meant that nothing could be understood from it. The document, according to the Tribunal, merely noted a figure of Rs.27,50,000/- without any details whereas details of other fixed deposits made with Karnataka Bank were given including the interest figure. The Tribunal also felt difficulty in gathering the details of fixed deposits for Rs.27,50,000/- from the seized paper; there was no date or signature therein. On these facts the Tribunal has drawn the conclusion that the addition is without any basis. We are unable to say that the inference is unreasonable or is of such nature that no person, properly instructed on facts and law, would have come to. The Tribunal has properly taken note of the evidence; it has not ignored any relevant piece of evidence. Its conclusion cannot therefore be said to be perverse. We therefore, answer the question (c) in the negative, in favour of the assessee and against the revenue. 10. As regards the question (d), the brief facts are that certain documents seized at the residence of Smt. Pushpa Gupta, sister of the assessee, who was residing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 10.2.1994. Sunil Gupta, the assessee‟s nephew had not started any business during this period. He started the business only on 26.12.1994. There was therefore no possibility or reason for him to make any investment in Fair Deal Garment before 26.12.1994. Sunil Gupta was for some time employed with Jai Pal Aggarwal and that was the reason why the documents were found in his possession. The assessee has not denied this. These crucial aspects have been overlooked by the Tribunal while deleting the addition. We are of the view that the conclusion of the Tribunal is unreasonable and vitiated by perversity. Accordingly we answer question (d) in the affirmative and against the assessee and in favour of the revenue. 13. As regards question (e), the brief facts are that on scrutiny on the assessee‟s bank account No.7375 with Karnataka Bank, Connaught Place, New Delhi, Assessing Officer found the following cash deposits in the account: "Date Amount (Rs.) 07/06/94 574100/- 25/08/94 200000/- 06/08/94 166000/- 03/02/95 240000/- 01/05/95 100000/- 01/05/95 200000/- 26/05/95 200000/- Total 1680100/-" On the ground that there was no explanation from the assessee as to the source o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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