9911796707
TMI Blog1998 (7) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 & 3 are stated to be clarificatory in respect of original ground Nos. 16 and 31. Being legally permissible, the ld. Departmental Representative had no objection to the admission of the additional grounds of appeal and hence, we proceed to decide this appeal after hearing the ld. counsel for the assessee and the ld. Departmental Representative. 2. The first objection taken by the Id. counsel for the assessee is that the assessment is time-barred. He submitted that in this case the authorisations for searches at various places i.e. business premises of the assessee, his residence in Bombay and in his village were issued and "executed" on 30-10-95. He pointed out that as per section 158BE, the order has to be passed before the end of one year from the end of the month in which the last of the authorisations issued under section 132(1) (which is applicable to this case) was "executed". Thus, this assessment should have been completed latest by 31-10-1996. But since it was completed on 31-12-1996, the order is barred by limitation and hence, it has to be cancelled. 3. The ld. counsel did not press ground Nos. 1 & 2 of the original grounds and hence, they are dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those papers. He pointed out that though an amount of ₹ 50,000 is written on each of them, assessee's signatures are only on the side. Both are undated and do not contain either the name of the lender nor the borrower and hence, Assessing Officer had no basis to presume that they represented loans given or taken by the appellant and represented assessee's undisclosed income. 8. Similarly, he argued, that the addition of ₹ 3,18,305 (challenged in ground No. 5) was made on the basis of a "shred" of paper found during the course of search (p. 69 of paper book). He pointed out that it only contains date 30-9-1995, "monthly balance" written in Kannad "Bala" which according to Shri Raheja means "Balance" 3,18,305; exp. 2,08,152. Below this is figure of 1,10,153 and below that again there is figure of 79,928. He stated that such pieces of papers were not too unusual to be found in restaurants and could not be ascribed to be assessee's account. Secondly, it showed only subtractions and no additions. Thirdly, it was a 'dumb' document and could not be the basis of such huge additions. He referred to the Tribunal decision in the case of As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer had inferred that these were purchases of diamond jewellery, from undisclosed income. He submitted that no item of this description was found anywhere during the searches nor even diamonds of these weight/description were found during the search. The assessee had throughout denied the purchase of these diamonds and jewellery (assessee's statement recorded during search on 20-4-1995 p. 356 of paper book) and nobody's name appears on that paper nor is it in the handwriting of assessee nor any member of his family. He also referred to assessee's reply - p. 60 of paper book, para 3, where he had stated that nothing like that was purchased and nothing such was found and that it was only intended to be purchased for which the estimates were obtained. The ld. counsel pleaded that the addition made in this regard on the basis of presumptions, hypothesis and subjective inferences be deleted. 11. Ground No. 8 is against an addition of ₹ 22,52,219. The Id. counsel referred to page 6 of the Assessing Officer's order and pp. 79-80 of the paper book. He submitted that the assessee had explained that these were some notings pertaining to assessee's horse-racing activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any legal basis and deserves to be deleted. 13. Ground No. 10 deals with the addition of ₹ 4,33,500. This addition has been made on the basis of a slip of paper, photocopy of which is given on p. 92 of the paper book. It shows certain numbers written as under as reproduced by the Assessing officer in his asst. order. (We have seen the photo copy but the captions "Amount" and "Date" mentioned by the Assessing Officer in this order are not there nor are the totals "160" and "273.500" given in the order are given in that paper. The original, which is stated to be in the possession of the department, has not been produced before us)- Amount Date Amount Date 20 19-10-94 57 Kane 30 10 10 7-2-95 5 15.7 10 16-2-95 56,500 Kane 25 6-3-95 20 Hasin 20 24-3-95 85 10 22-4-95 25 10 23-5-95 5 SM 25 Hasin 10 20-10-94 160 273.500 The Assessing Officer observed that assessee's financial status is not so small that he shall record ₹ 20 or 10 and hence, he inferred that these are coded figures as at p. 71 of paper book (supra) and 3 zeros are missing and hence, the total amount is 1,60,000 + 2,73,500 = S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreed money in white and "40" as "on money". The assessee agreed to surrender the "on money" income for tax when the building was completed. Three of these papers showed "on money" at ₹ 1,78,560, ₹ 1,66,320 and ₹ 1,54,700 from three different persons. The Assessing Officer, added this amount as undisclosed income of the assessee because, according to him the assessee had not disclosed these amounts in his block period return of income. Shri Raheja referred to a note (p. 44 of paper book) and explained that, in fact, it was a joint venture with one Shri Vasudev Shetty who has 50% share with assessee. Shri Vasudev Shetty had confirmed in his statement dated 19-12-1995 and it was also seen from some papers (pp. 329-330 and 331 of paper book) that in fact this break up was 60% for without furnishings plus 40% with furnishing. He submitted that the statement of one of these persons Shri Ratnakar Suvarna was recorded by the department and he had confirmed that 60% of the amount was for the flat and another 40% was for furnishings. He submitted that copy of that statement has not supplied to the assessee and requested that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is one line written giving some figures on each page. Annexure A-4 (pp. 145-146) is another diary which has three written pages giving some names and amounts. On p. 1 of Annexure A-4 names Khatri and then Sivram Shetty and some cheque numbers are written. Against each one amount in lakhs are written which total upto ₹ 9 lakhs. Below them is written "cash 1.5" and "8". On p.1 of Annexure 8 is written as under: "(p. 174 of PB) T.No. 1 42 17 B J.S. 25 (Something illegible) 17 Bala P.2. K.P 10 Bala P.3 Atul Bhai 2 P.4 Sadasiv Motor Parts 1 and so on till p. 22 "Bala to pay" On the basis of these diaries the Assessing Officer presumed that assessee had taken loans of ₹ 9 lakhs by cheques and ₹ 9.5 lakhs in cash and had advanced loans of ₹ 88,75,782, which he added to assessee's income. For raising this presumption he mentioned in the order that since the entries in Annexure 4 are in 'lakhs' and since assessee cannot have transactions of small amounts of ₹ 1 or 10 or 25, these figures in Annexure 8 also represent "lakhs". The total of pp. 1 to 21 of Annexure 8 is ₹ 88,75,782 because the figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are given on pp.175 to 191 of the PB. The originals have not been produced before us, which are stated to be in the possession of the Deptt. He submitted that the assessee was not aware of any 'Chit Fund' referred to in the asst. order. He referred to Qs. 2 & 3 (pp. 63-66 of PB) and pointed out that the assessee had clearly reaffirmed in his statement dated 20-12-1996 that the diary did not belong to him or any member of his family or any employee and that he has stated so in his statement before the A.D.I. also. Shri Raheja argued that when this diary was found, the assessee was not in Bombay and if the diary really belonged to assessee in which he had recorded transactions of more than ₹ 28 lakhs, no one can believe that assessee should have kept such diary in the open in the restaurant. He urged that this baseless addition should be deleted. 21. At this stage, the ld. counsel took up the additional ground of Appeal 'B' which is against an addition of ₹ 55,16,000, which are cash credits and included in ground No. 16 of the original grounds of appeal. The Assessing Officer has dealt with this issue on p. 13, para 5.3(a) of his order. He referred to pp. 144-145 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. Hence, no addition can be made on the basis of DVO's report. On merits also, he explained that this was not a new hotel/restaurant but was taken over by assessee in a running condition and was only renovated by him which is clear from DVO's report itself at p. 195 (top) of the paper book. He submitted that the assessee had also stated at the time of search itself that assessee had spent about ₹ 1.5 lakhs on its renovation. This was also confirmed from the statement of Wagle the architect (p. 369 of PB). 23. Ground No. 18 is against an addition of ₹ 64,79,000 on the basis of allegations of assessee's undisclosed investment in assessee's Bungalow "Shri Krishna Chhaya" at his native village Bantakal, P.O. Shirva, Distt. Udipi in Karnataka. Shri Raheja stated that the Valuation Officer visited this place only on 4-12-96 and the assessment was completed on 31-12-96. This would indicate that there was hardly any time with the Valuation Officer to consider assessee's reply, to apply his mind, to give his report and for the Assessing Officer to apply his mind before adopting the valuation at ₹ 89,14,000 + ₹ 20,00,000 on his own estimate and making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erior decoration, etc. (pp. 360-61). Moreover, the flat belongs to 3 persons and even if there remains something unexplained, the entire addition cannot be made in the income of the assessee. 25. In ground No. 21 the assessee has objected to addition of ₹ 4,48,000 for alleged undisclosed investments in Hotel Shri Krishna. He submitted that the expenses/investments in the hotel were all supported with bills, but the DVO/AO never asked for them. He repeated that DVO's report is in advisory capacity and the Assessing Officer should have applied his mind. In the absence of this, the addition deserve to be deleted, particularly when here also the expenditure was on renovation (p. 35 of PB) in a running hotel. 26. Ground No. 19 is against addition of ₹ 3,51,000 for alleged undisclosed investment in Santhana Towers (supra). He submitted that it was wrong to infer that assessee had made investment of ₹ 3,51,000 when the details were furnished by Vasudev Shetty, whose statement was recorded by Deptt. He pointed out that pp. 373 to 379 would show that ₹ 91,000 was invested by one Jaya Kalachur Shetty who is a different person, ₹ 6 lakhs by Vasudev Shetty and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educated/illiterate and had to affix her thumb impression for signatures and, yet, she had given all the details regarding the agricultural activities and income and there was no basis for this addition in assessee's income. He also referred to p. 297, which is a certificate from the Tehsildar to the effect that her agriculture income was about ₹ 80,000 p.a. 29. Ground No. 24 is against addition of ₹ 4,50,000. The assessee has explained it with the help of purchase deed of the agricultural land which was purchased in 1974. But the Assessing Officer has added it because the assessee had not been showing income from agriculture. The ld. counsel submitted that assessee was under a bona fide belief that agricultural income was not taxable; but since he has proved the source, this amount may not be added to his income. 30. In ground No. 25, assessee has challenged the addition of ₹ 7,79,468 for alleged low withdrawals. Shri Raheja submitted that the assessee had shown his own withdrawals at about ₹ 4 lakhs in 10 years and the husband and wife together had withdrawals of ₹ 7,25,600 in this period. Hence, there was no justification or basis for estimation h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Baroda. He submitted that no opportunity was given by the Assessing Officer to explain this and hence, these baseless additions deserve to be deleted. 33. Ground No. 28 is against addition of ₹ 12,00,000 and ₹ 20,00,000 for taking over tenancy rights. The Assessing Officer had made these huge additions on the presumption that assessee had paid these amounts for the transfer of tenancy rights in BMC properties to two sons of assessee viz., Manohar J. Shetty and Mohan J. Shetty respectively. Shri Raheja submitted that both the tenants of BMC had transferred their tenancy rights with the approval of BMC and had stated that they had charged no money and, in fact, Shri R.R. Malsha had even sworn an affidavit and hence, the Assessing Officer could not make additions on the basis of presumptions and on the basis of Newspaper reports, that too in Accommodation Times which cannot be said to be a reputed paper. Further, the Assessing Officer had admitted that these were in favour of assessee's sons, who were majors, whose statements were recorded, and there could be no presumption that the investment was made by the assessee. Hence, he prayed that these additions should be del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e guess work that the assessee had generated undisclosed income of ₹ 2,29,94,048 from Shri Krishna Restaurant. He submitted, that the assessee had himself shown GP @ 46% to 58% from this restaurant which was not a posh or high class restaurant and hence, this estimate made by Assessing Officer deserves to be cancelled. 39. In ground No. 33 the assessee has challenged the power of Assessing Officer to estimate income while completing assessment under section 158BC of the I.T. Act. He submitted and argued that the Assessing Officer could not make an estimate; he had to assess the income only on the basis of evidence or material found in search. Further, even in the estimates the Assessing Officer had committed patent errors in as much as, while he had included ₹ 37,45,853 as income in computation of ₹ 2,02,71,726 on p. 38 of the assessment order, he had also included the same amount in expenditure on p. 42. Thus, according to the ld. counsel for the assessee even as per Assessing Officer's own working the addition could not have been more than ₹ 3,23,47,641 for which the ld. counsel has filed a computation of income which can be assessed on the basis of estim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to the case of Ashwani Kumar ( supra) made by the ld. authorised representative, Shri Jha referred to p.185 of the report where it is written "As regards slip found. . . .". He argued that in that case there was nothing to show that it was found from the physical possession of the assessee. He submitted that in the instant case it was found from two places, viz. (i ) Bed room of his residence (ii) Hotel office of the assessee and not the place where customers sit. This would show that the papers were found from the possession or control of the assessee and hence, the ratio of Ashwani Kumar's case (supra) does not apply. The ld. D.R. went ahead with the submissions that the legal presumption under section 132(4A) was in favour of the Deptt. and it was for the assessee to rebut it. The assessee could not get away merely by stating that he did not remember the events or details etc. He referred to the decision of the Supreme Court in the case of Sumati Dayal v. CIT [1995] 214 ITR 801/ 80 Taxman 89 where according to the D.R., the documents were not dumb but barking documents and, yet, the apex court relied on the circumstantial evidence and not on the documents. He submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. 43. Regarding ground No. 3 he argued that since there were no entries in account books, the Assessing Officer was justified in adding ₹ 55,950 to assessee's income. Similarly in the absence of any proof the amount of ₹ 66,625 for silver articles was rightly added against ₹ 25,000 declared by the assessee. 44. Regarding ground No. 4 he submitted that two blank Hundies of ₹ 50,000 each bearing assessee's signatures were found. The assessee stated that he did not remember whose hundies they were. The assessee could have filled any name in them even if his signatures were as a witness, he has to prove who was the drawer and who was the drawee. 45. For the addition of ₹ 3,18,305, challenged in ground No. 5, the ld. D.R. submitted that the papers were found from the bed-room of the assessee and he has already argued for inferences to be drawn from the circumstances. 46. Regarding ground No. 6 pertaining to additions of ₹ 2,96,655 the ld. D.R. referred to para 4.3(a) on pp. 5-6 of the assessment order, which shows that initially the assessee accepted them to be donations and hotel expenses but later on contradicted himself and said that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he restaurant. According to him, this diary gives names of various persons in abbreviated form like J.S. i.e. the assessee, Bala who is assessee's joint venture partner, K.P. who is K.P. Shetty. He relied on the arguments of the Assessing Officer on pp. 16-17 of the order, where he has shown that the diary in fact belonged to the assessee and that the figures written there were in coded form. As per the arguments of Shri Raheja that if Bala was a borrower, his name should have not appeared at 3 places, he submitted that it was only a memoranda record and not a formal accounts book and hence, each transaction has to be separately noted. As for the contention that the assessee was a heavy borrower and these could be the borrowings, he claimed that in that case the assessee should have proved the genuineness of these cash credits. 53. Regarding ground No. 15 for addition of ₹ 28,11,600 the ld. D.R. referred to para 5.5 of assessment order and pointed out that no details were furnished by the assessee, although some names could be clearly decoded as P.J. for Prafulla Shetty wife of assessee, Goal for Golden Crown restaurant run by assessee's wife etc. and hence, in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er's order with reference to ground No. 27. 58. Regarding the additions made by the Assessing Officer for allegedly getting tenancy rights by paying money amounting to ₹ 12,00,000 + ₹ 20,00,000, the ld. D.R. referred to the Special Bench decision of the Tribunal in the case of Cadell Weaving where it had been accepted that huge payments are received on surrendering of tenancy rights. He argued that if the seller was the tenant of the B.M.C., why should he not have surrendered the building back to the BMC instead of the assessee. The only and inevitable conclusion is that it should have been done in return of some substantial amount of money, which in a posh locality like Nana Chowk in Mumbai, would have been the amount estimated by the Assessing Officer. He again referred to the case of Sumati Dayal (supra) and also to the decision in the case of CIT v. Durga Prasad More [1971] 82 ITR 540 (SC) where the Supreme Court had held that the Departmental Officers could not be expected to work with blinkers on their eyes. Ground No. 29 has not been pressed and he had already dealt with contentions pertaining to ₹ 6 lakh loan from the Trust raised in ground No. 30. 59. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded during the search. Yet, on 29-8-1996 the Assessing Officer issued the first notice and as recorded on p. 2 of the assessment order, the first inspection was allowed only on 13-9-1996. The assessee supplied all the information which he could supply and there is nothing to show that assessee did not co-operate. 61. For the allegation that no books of accounts were maintained by the assessee, he referred to p. 5 line 5 of the assessment order which says that cash book was not written upto the date of search, which means that books of account were maintained and the show-cause notice also required the assessee to explain the books of account. 62. Coming to the legality and validity of the order the Id. counsel referred to the decision of the Chennai Bench of ITAT in the case of Shanta Kumar c/o Kirti Kumar Kalidas & Co., a copy of which has been filed before us, and drawing our attention to para 9 of that order submitted that the Tribunal in that case had quashed the assessment order in a similar search case because the CIT had not given an opportunity of being heard to the assessee before approving the assessment order as required under section 158BG. So far its legality w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present when these documents, diaries etc., were discovered by the search party. He claimed that no person "K.P. Shetty" is known to the assessee. Regarding the case of Smt. Amar Kumari Surana (supra) he submitted that in that case the valuation was not disputed but in assessee's case the valuation by the Valuation Officer is being disputed by the assessee. Regarding assessee's own declaration disproving the correctness of registered valuer's report, he submitted that it is not correct to say that assessee has admitted so, but it only meant that in order to buy peace, assessee had made the disclosure equal to his amount estimated by the registered valuer. Regarding the loans he submitted that assessee was not required to prove the source of the credit. Once, assessee had given the names, addresses, GIR Nos. and confirmation letters from the creditors, except in one case he had discharged his onus. He submitted that the Assessing Officer in his questionnaire had never required the assessee to produce the parties. Regarding telescoping of income referred to by the Id. D.R. and cases e.g. CIT v. Tyaryamal Balchand [1987] 165 ITR 453/ 32 Taxman 64 (Raj.) he submitted that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount for Hotel Shri Krishna. Regarding objection and Chennai ITAT decision quashing the order for no opportunity being given by the CIT before approving the order, he submitted that as per the scheme of the I.T. Act, wherever the legislature intended that an opportunity of being heard should be given, e.g. in penalty provisions or formerly under section 144B proceedings, it was specifically provided in the Act and hence, the Tribunal was not justified in holding that when the Act provided for approval of the orders by the CIT, he was legally bound to give an opportunity of being heard to the assessee and his failure to do so would invalidate the assessment order. He argued that if it were to be so interpreted then when action under section 132(1) (for search) is taken against the assessee, it would imply that before issue of authorisation of a search, the CIT should give assessee an opportunity of being heard, otherwise search proceedings would become invalid. 65. We have carefully considered the detailed and learned arguments advanced from both the sides with relevant references to the very comprehensive paper book, and have perused the orders of the Assessing Officer and the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper cannot be said to have been found from the possession or control of the assessee. Hence, even if at all the provisions of section 132(4A) are applicable to assessment of income under Chapter XIVB, no presumption to the effect that it should be assessee's transactions or assessee's handwriting can be drawn against assessee. Moreover, we agree with the arguments of Shri Raheja that if this paper represented assessee's transactions in cash, it should not have been left lying in the restaurant and that too when assessee was outside Bombay. Thus, ground No. 5 is allowed. We agree that the case law cited by ld. counsel for assessee is applicable to the facts and circumstances of the case. 70. Similarly, the addition of ₹ 2,96,655 based on a similar paper is deleted for similar reasons are given in para 70 above. Accordingly ground No. 6 is allowed. 71. A careful consideration of arguments of Shri Raheja & Shri Jha lead us to conclude that the addition of ₹ 6,76,471 for alleged investments in diamond jewellery cannot be sustained. The first and foremost reason is that this is the case of a search in which assessee's residence, including residence in the native village ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown deducted from ₹ 4,31,360 against which assessee's name is written. This would show that assessee had received ₹ 1 lakh which he is not able to explain. Hence, addition of an amount of ₹ 1 lakh is upheld. The assessee gets a relief of ₹ 4 lakhs. 74. The addition of ₹ 4,33,500 has been made on the basis of a paper found in assessee's Shri Krishna Vegetarian Restaurant. Hence assessee's explanation that 'Kane' and 'Hasin' are types of fish and the paper might be showing either the weight or quantity of fish has no relevance, because in that case it should not have been found in the vegetarian restaurant. Moreover, the dates mentioned are also not in quick or regular succession. They are 19-10-1994, 7-2-1995, 16-2-1995, 6-3-1995, 24-3-1995, 22-4-1995. It cannot be believed that the fish would have been purchased at such long intervals. The assessee had admitted in his statement that they might represent some expenses. We are satisfied that this pertains to assessee's transactions and hence we agree with the Assessing Officer and the ld. D.R. and uphold the additions. This ground is dismissed. 75. Ground No. 11 regarding addition of ₹ 60,000 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly, ground, No. 13 is allowed. 78. We have given our anxious consideration to ground No. 14 pertaining to addition of ₹ 88,75,782. We have applied our minds to the rival submissions. While we find a lot of substance in the explanations and arguments given by the ld. counsel for the assessee, we find that the stand taken by the Assessing Officer is not only illogical but inconsistent. On the one hand he has taken the view that the figures of "1831=887" and "370=782" (detail of all entries in Annexure 8 given in the assessment order on p.16) would mean ₹ 18,31,887 and ₹ 3,70,782 respectively, on the other hand, he has sated that all the figures have to be multiplied by one lakh. If this is done, the figures of ₹ 18,31,387 would become ₹ 18,31,88,700 and the figure of ₹ 3,70,782 would become ₹ 3,70,78,200. In that case the total of the transaction, excluding 1831.887 would not be 88,75,782 lakhs but would be about ₹ 4,25,82,200. It would be too naive to believe that a note book having transactions in about more than 22.56 crores would be lying unattended in the restaurant. The more plausible explanation is that & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egible scribblings. Hence, we are not prepared to accept that these represent assessee's undisclosed income to the tune of ₹ 28,11,600. We have also taken not of the argument that the assessee was not in Bombay when this diary was discovered. There is nothing to prove the exact place from where it was discovered. We are of the opinion, that this is nothing but a dumb-diary and, in accordance with the ratios of various decisions cited before us, no adverse inference can be drawn against the assessee on the basis of this diary. The addition of ₹ 28,11,600 is, therefore, deleted. Ground No. 15 is allowed. 80. Addl. ground B challenges addition of ₹ 55,16,000. As already mentioned, this is based on 3 pages of a Diary, Annexure A 4. On the one hand assessee has stated that he did not know the various parties like Bihari or Popular Automobiles, but he has owned the loans taken through cheques from Khatris. We would, therefore, uphold Assessing Officer's view that this diary records the transactions of loans taken by assessee from various parties, only cheque transactions of which are recorded by the assessee in regular books/bank accounts and other loans are unrecorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his hotel. As stated by the Assessing Officer, if the loans are from undisclosed sources, which the assessee does not want to or cannot disclose, he cannot show them to increase the capital cost of his hotel. 81. Regarding the addition of ₹ 3,80,000 alleged to be investment in the "Shri Krishna Chhaya" restaurant in Khar, we agree with the arguments of Shri Raheja. There is nothing to show that when the assessee has himself declared an investment in renovating running Bar and Restaurant which was taken over by him, the entire expenditure as estimated by the DVO at ₹ 3,80,000 should have been made by the assessee himself in the block period itself. We are of the opinion that the arguments of the ld. D.R. and Assessing Officer cannot be upheld in the absence of any specific evidence regarding the period and the amounts of expenditure, merely on estimate basis. This addition is deleted and ground No. 17 is allowed. 82. Ground No. 18 is against estimated cost of the village bungalow at ₹ 1,09,14,000 by the Assessing Officer and consequent addition of ₹ 64,79,000 as undisclosed income of the assessee. In view of the ratio of decision in the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, the estimated additions of ₹ 5,27,000 challenged in ground No. 20 and ₹ 11,46,000 challenged in ground No. 21 for alleged undisclosed investments in renovation of assessee's residential flat Blue Bird and Hotel Shri Krishna respectively, are directed to be deleted. We may mention that while reaching these decisions we have taken into account the facts mentioned in the grounds of appeal and arguments of Shri Raheja also. Accordingly, ground Nos. 20 and 21 are also allowed. 84. For ground No. 19, we have perused the various documents/statements of assessee and Vasudev Shetty and also the arguments of Shri Raheja already mentioned in the preceding part of this order. The assessee has challenged the addition of ₹ 3,51,000 for alleged investment of assessee in the "Santana Towers". Pp. 373-375 of the paper book show that the investment of ₹ 91,000 was by Shri Jaya Shetty Kalachur, who is stated to be a different person from the assessee. ₹ 6 lakhs are admitted by Vasudev Shetty in his statement. Assessee's investment remains at only ₹ 60,000 which he has sought to explain with the sale of Timber of his old house. However, no evidence fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be accepted that she does have agricultural income, the specific details of which she knows. Hence, the addition of ₹ 5,50,000, being her contribution from her agricultural income in the construction of the bungalow in the village etc., has to be deleted. Ground No. 23 is thus allowed. 87. However, assessee's explanation to exclude ₹ 4,50,000 as his agricultural income cannot be accepted. Even if it is accepted that he did have agricultural income, since he had never disclosed income from agriculture, this amount has to be treated as undisclosed income in terms of sections 158B(a) and 158BB(1). This addition is, confirmed and ground No. 24 is dismissed. 88. Regarding the additions for a unadequate household expenses, while we agree that in Dr. Ashok Gandhi's case the additions were not seriously contested and in the case of Raj Kumar Jain (supra) there was no material to substantiate the additions, we find that in the instant case the Assessing Officer has brought material and "information", gathered during search, in his assessment order. The description of the life style of the assessee and the expenditure which the assessee and the family should hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside to be decided afresh. Accordingly, ground No. 26 is partly allowed. 90. Regarding Ground No. 27 challenging an addition of ₹ 4.57 lakhs, we are of the opinion that it would be in the interest of justice if we accept the reasonable suggestion of Shri Raheja that the assessee may be given a fresh opportunity to explain the deposits in the bank account in the Shirva Village, which he has sought to explain before us, as he claims that sufficient time was not given to him to prove it before the Assessing Officer. We, therefore, set aside the order of the Assessing Officer on this issue also with the direction that he shall give a reasonable opportunity to the assessee to prove his case and to redecide the issue afresh according to law. 91. Although ground No. 28 is regarding addition of ₹ 12,00,000 and ₹ 20,00,000, we feel that the order of the Assessing Officer has got hardly any merit in it. The first and foremost factor which closes the issue is that the Assessing Officer has admitted in his order that the tenancy rights of the two concerned properties are in the names of assessee's two major sons individually. There is no evidence or material on record to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther of assessee and father of Ashok Shetty. There is no evidence or material to show that this house was purchased by assessee or is registered in his name. Hence, this addition of ₹ 7,00,000 which has been incorporated in the list of alleged unexplained expenditure on p. 38 of assessment order is deleted. This Addl. Ground No. 'C' is also allowed. 95. In our opinion, ground No. 31 challenging the computation of income at ₹ 2,02,71,726 is otiose, and it is not proper to allege that this is "further addition" made to the income of the assessee. We find that it is almost a summary of various additions made by the Assessing Officer with which we have already dealt and allowed relief to the assessee. Hence, we reject this ground as such and direct that the Assessing Officer shall give effect to our orders on the basis of various items included in this figure and ignore this figure as a separate item. This ground No. 31 is rejected as mentioned above. 96. We have seen that ground No. 32 dealing with estimation of income generated from Shri Krishna Restaurant at ₹ 2,29,94,048 is also otiose because the Assessing Officer has not made addition to assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the total "undisclosed income" under Chapter XIVB in assessee's case shall be assessed on the basis of the provisions contained in that chapter and from the assessment done by the Assessing Officer which is challenged before us there shall be deleted the amounts which have been directed to be deleted by us, and in respect of which relief has been given by us. 97. In the light of what we have mentioned above in para 97 above, ground No. 33 becomes infructuous and is dismissed as such. 98. Now coming to assessee's objection regarding the legality of the assessment order, we have not been able to agree with the arguments of Shri Raheja. The meaning of "executed" both according to Law Lexicons and simple dictionaries like Concise Oxford Dictionary and Chamber's Dictionary is to the effect that when a work task, or duty assigned is completed. Thus, in the present context, it cannot be said that the task which was assigned to the Authorised Officer was only to serve the authorisation on the assessee. In our view, the CIT or DI had given a "warrant of authorisation for search" which was executed when the search was completed and that was on 28-12-1995. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
