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TMI Blog2011 (3) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... g expenses incurred by assessee on a bungalow constructed in Kerala. 3. The assessee is the Managing Director of the company M/s Sairung Developers and Promoters (P) Ltd., engaged in the business of land development and trading. Assessee is also sole proprietor of M/s Sairang Developers, which also carries on business of land development. A search action under section 132 of the Act was carried out on 11.4.2001 in the business premises of the assessee as well as the company. Certain incriminating documents indicating investment in a bungalow were found during the search in the assessee s case. In the block return for the period relevant to assessment year 1992-93 to 2002-03, assessee filed a return declaring undisclosed income of ₹ 30,85,000/-. It was submitted by the assessee that he voluntarily disclosed the additional income of ₹ 30,85,000/- to cover the errors and omissions/discrepancies, if any, in his case as well as in the case of his wife, Mrs Khadeeja Rashid. The Assessing Officer passed an order under section 158BC(c) of the Act determining undisclosed income at ₹ 61,42,000/- which included an addition of ₹ 30,57,000/- made on account of investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessee, the Commissioner of Income-tax (Appeals) observed that the affidavit of Shri B. P. Lunja was required to be properly and thoroughly investigated in the light of the facts of the case and the decision of the Delhi Bench of the Tribunal in the case of Amarjit Singh Bakshi (HUF) v ACIT (3rd Member) 263 ITR 75 (AT). The Commissioner of Income-tax (Appeals) held that in view of the various aspects of the case and legal position, the Assessing Officer has not been able to get corroborative evidence with regard to the unsigned seized papers found at the time of search; that the Assessing Officer did not make any independent enquiries to find out the total investment in the property for which an addition on the basis of seized papers made. In the opinion of the Commissioner of Income-tax (Appeals), in view of the fact that the assessee had given information about the bungalow in the return and the Assessing Officer also admitted in para 10.3 of the assessment order that investment of ₹ 23,34,879/- stood recorded in the account books of assessee and that assessee had also filed a valuation report, and in view of the settled legal position, the Assessing Officer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. In fact, the credibility of the loose papers, which are claimed to be bills raised by the carpenter, have not been established by the Revenue. The assessee has clearly explained that the said bills were in fact quotations prepared by the employees of Shri Lunja, a carpenter of Pune and the same were not even signed. The Commissioner of Income-tax (Appeals) has noticed that even in the course of the statement recorded at the time of search the assessee had explained that the same were merely quotations and not bills. Further, the assessee also furnished an Affidavit dated 4.6.2001 given by the said Shri Lunja ratifying that he had not carried out any such work for the Kerala bungalow of the assessee. During the assessment proceedings, the assessee also furnished affidavits of the civil contractor and the interior designer who averred that necessary work was carried out by them for the consideration stated by the assessee. All this material has been considered y the Commissioner of Income-tax (Appeals) in order to delete the addition. Quite clearly none of the aforesaid evidences put-forth by the assessee have been shown to be unreliable or devoid of authenticity. The fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999-2000 ₹ 36,000/- (out of cash deposits of ₹ 55,271/-) 2000-2001 ₹ 46,000/- (out of cash deposits of ₹ 256,541/-) The brief background is that assessee is stated to carry on business of land development in the name of his wife and had invested his own funds in such business. A bank account with Vijaya Bank, Nellaya Branch in Kerala maintained in the name of his wife was also claimed to have been used for such business by the assessee. The deposits made in such account amounting to ₹ 9,32,565/- for block period were considered as unexplained and addition was made in the hands of the wife of the assessee Smt Khadeeja Rashid. However, the Commissioner of Income-tax (Appeals), in the case of the wife, held that since income from such business was assessed in the hands of the assessee-husband, additions in respect of the deposits in the bank account were also to be considered in the hands of the assessee-husband. That aspect in the case of Smt Khadeeja Rashid is also a subject-matter of consideration before us, vide ITA No 612/PN/04. In this background ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. and is also engaged in the proprietary business in the name and style of M/s Sairang Developers. In the light of the fact that the income is originating in the hands of the appellant and has also been invested, according to the AO, in the construction of the house of the appellant as also admitted as under in the block return itself: The husband of the assessee Shri K.M. A. Rasheed alias Malik has been carrying on the business of land development in the name of his wife and her husband has invested his own funds for the business. Therefore, the income of the assessee has been clubbed with the income of her husband, Shri K.M.A. Rasheed. 4.2 In the light of these facts, while a decision on the existence of undisclosed income on the basis of these bank accounts is to be upheld, the total picture would emerge in the case of the appellant s husband. This issue has been discussed in detail in his case where appellate order has been passed on even date. Accordingly, it would not be reasonable to make an assessment of undisclosed income in the hands of the appellant in the light of the clear cut observations in the assessment order and admission by the appellant as well as her h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee in his return of income. The break-up in this regard can be found reproduced by the Commissioner of Income-tax (Appeals) in paragraph 3.7 of his order. Considering the aforesaid, we find that the Commissioner of Income-tax (Appeals) erred in upholding the additions of R 36,000/- and ₹ 46,000/- out of the total addition of ₹ 1,40,922/- sustained by him. For the aforesaid reason, we set aside the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to delete the additions of ₹ 36,000/- and ₹ 46,000/- out of the addition of ₹ 1,40,922/- sustained by the Commissioner of Income-tax (Appeals). Resultantly, addition of ₹ 82,000/- is deleted and balance addition of ₹ 58,922/- out of ₹ 1,40,922/- is sustained. 15. The second Ground relates to an addition of ₹ 50,000/- being investment in construction of house in Kerala sustained by the Commissioner of Income-tax (Appeals) for the assessment year 1998-99. In this connection, the claim of the assessee is that such amount has been disclosed as income towards construction of house at Kerala. The learned Departmental Representative has oppose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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