9911796707
TMI Blog2011 (11) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... notings in various slips were indicative of the cost of gold, the labour charges and sales tax leviable etc. 3. The CIT(A) has erred on facts and law in deleting the addition of Rs. 91,770/- on account of an unexplained investment without appreciating the fact that the paper containing the expenses was found from the premises of the assessee during the course of search and seizure operation and the onus cast upon the assessee in terms of section 132(4A) was not discharged. 4. On the facts and in law the CIT(A) has erred in deleting the addition of Rs. 91,770/- without considering the fact that entry of Rs. 2100/- pertains to school fees and also in correlating that the expenditure have been made by Urja Gas Company. 5. CIT(A) has erred on facts and in law in deleting the addition of Rs. 4 lakhs on account of unexplained investment without considering the statement of affairs filed by the assessee where no loan from Satvanti Monga is reflected. 6. CIT(A) has erred on facts and in law in deleting the addition of Rs. 34,631/- without appreciating the fact that the assessee has failed to explain the investment in FDR. 7. CIT(A) has erred o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Shri Suresh Monga and Shri Tarun Monga, at M-103, Greater Kailash II, New Delhi. No valuable articles/cash/jewellery/documents/bullion were seized, since they were apparently found to be within the prescribed limits. However, some loose slips of torn papers containing scribblings were found and seized. Block return was filed declaring nil undisclosed income. The AO assessed the income at ₹ 34,79,087/-, vide block assessment order dated 30.4.04. 7. As per the block assessment order, a search and seizure operation was carried out on 26.4.02, on Kishorilal Joginderlal group of cases, Kanpur; that as a part of that search, a search was also conducted at the business and residential premises and the lockers of the in-laws of Shri Manish Bhatia and Shri Kunal Bhatia. The assessee, Smt.Avinash Monga is a member of the family in-laws of Shri Kunal Bhatia, son of Kishori Lal Bhatia. Suresh Monga is the husband of the assessee. 8. The AO observed that the assessee was a school teacher, regularly filing her Income Tax return and declaring income from salary, house property and other sources; that in the seized documents annexure A-I, the following pages reflected expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On query, the assessee stated that the slips at annexure A-11 had nothing to do with the assessee; that she disowned the content thereon; and that it could not be treated either as the income or the expense of the assessee. 12. The AO observed that by disowning the content of annexure A-11, the assessee had not discharged her obligation to explain the expenses contained in the seized documents. The amount of ₹ 91,770/- was thus treated as unexplained expenditure of the assessee and added her undisclosed income for the block period. 13. By virtue of the impugned order, the ld. CIT(A) deleted these additions giving rise to ground Nos. 1 to 4. 14. Challenging the impugned order in this regard, the ld. DR has contended that the ld. CIT(A) has erred in deleting the additions of ₹ 12,72,707/- and ₹ 91,770/-; that while doing so, the ld. CIT(A) has failed to take into account the fact that the slips containing the entries were found from the premises of the assessee during the search and seizure operation; that the ld. CIT(A) has failed to consider that the assessee had miserably failed to discharge the onus cast upon her u/s 132(4A) of the Act with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of surmises, conjectures and suspicion; that even otherwise, the units of the figures scribbled on the papers were wrongly increased by the AO; that further, these amounts had also been added to the income of Shri Suresh Monga, husband of the assessee, u/s 158 BC of the Act, vide assessment order dated 30.4.04 and as such, they could not be taxed twice; that as maintained before the Authorities below, the assessee had nothing to do with the seized papers or the writing thereon; that the assessee had regular visitors/guests in the house who was staying with the assessee and her family; that the slips might have been written or scribbled by some of the guests; that the assessee was not aware of the whereabouts or details of such guests, as had also been stated by her husband, Shri Suresh Monga, in his statement; that the jewellery found in the house had been purchased out of the assessee s own sources, or gifts from relatives, as also stated by the assessee s husband, Shri Suresh Monga, in response to question No. 37, in his statement; that the jewellery was stridhan of the assessee, received at the time of her marriage and on other occasions, as also stated by Suresh Monga; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nu Leekha 10,000 The person who has scribbled various figures on the loose slip, purpose, nature date/period not known/not corroborated. 2. 2,00,000 2,00,000 The person who has scribbled above on loose slips, purpose, nature, date, period not known, no address, no signature. 3. 43,500 43,500 The person who has scribbled above on loose slips, purpose, nature, date /period not known, no address, no signature. 4. 24,000 240/- i) The person who has scribbled above on loose slips, purpose, nature, date/period not known, no address, no signature. ii) The figure 240 on the loose slip has been read as ₹ 24,000. 5. 13,500 135.00 i) The person who has scribbled various figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income. 14. 49,00t0+ 22,000+ 63,950+ 28,000 49,000 22,000 63,950 28,000 The person who has scribbled above on loose slips, purpose, nature date/period not known, no address, no signature. 15. 25,500+ 38,000 25,500 38,000 Rough estimate only. No address, not known who has scribbled the figures, whether sale or purchase, not corroborated. 16. 48,000 480.00 i) Rough estimate only, no address, not known who has scribbled the figures, whether sale or purchase, not corroborated. 17. 32,224 32,224 The person who has scribbled above on loose slips, purpose, nature date/period not known, no address, no signature. 18. 15,850 158.50 i) The person who has scribbled above on loose slips, purpose, nature date/period not known, no address, no si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2100 school fees 91870 19. While making the addition, the AO observed that by disowning the slips in question, the assessee has tried to escape the responsibility of explaining the source of purchase of jewellery. 20. The addition of ₹ 12,72,707/- has been deleted by the ld. CIT(A) to the extent of ₹ 12,62,707/- by observing that the slip at page-1 of annexure- 1 showed various figures, totalling to ₹ 95,000/-; that this slip contained the name of Smt. Monga, with 10,000/- written against her name; that the slip did not contain any detail of the nature of the figures; that there was no indication as to the purpose of the entry, what to talk of any mention of the amount having been utilized for investment in jewellery; that in any case, it could not be presumed that the entire amount had been spent for jewellery purchases, as observed by the AO; that in all likelihood, the amounts against the various names, who all happened to be ladies who represented various contributions towards a common activity, like a kitty party, in which the share of the assessee was only S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 91,770/-, the ld. CIT(A) observed that it seemed that the slip No.11, annexure A-3 pertained to Urja Gas Service, where the assessee s son was working as a Manager; that this slip could not be treated as unexplained expenditure of the assessee; and that it was therefore, that the addition made on the basis of this slip was being deleted. 23. Concerning the addition of ₹ 12,72,707/-, this figure represented the total of the figures appearing on pages 1 to 22 of the seized annexure A-1. Out of these, page 1 of Annexure A-1 contained various figures, total amounting to ₹ 95,000/-. This slip contained the name of Smt. Monga, with 10,000 written against her name. The ld. CIT(A) sustained the addition to this amount of ₹ 10,000/-, which was mentioned against the name of the assessee. We do not find any error in this action of the ld. CIT(A). The seized slip did not contain any detail of as to what the figures contained therein represented the names mentioned on the slip were only of ladies, leading the CIT(A) to the observation that the amounts represented some sort of contribution like a kitty party. Since the remaining amounts, totalling to ₹ 85,000/- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of unexplained investment, without considering the statement of affairs filed by the assessee, where no loan from Satwanti Monga stands reflected. 28. The facts in this regard are that the assessee, in her return of income, declared purchase of property. The source of investment in such purchase was stated to be sale of plot for ₹ 4,50,000/-, payment from bank account of Satwanti Monga, amounting to ₹ 4 lakhs and housing loan from Central Bank of India, amounting to ₹ 10,00,000/-. 29. As per the AO, the sale deed of property No. M-103, Greater Kailash- I, Delhi, was seized as annexure-III, page 54. The sale deed was between the seller, S.N. Oberoi and the purchaser, the assessee. It was executed on 5.2.99, at a consideration of ₹ 18 lakhs. Since the purchase of the house by the assessee had been done in F.Y. 98-99, it was within the block period. The assessee was asked to explain the source of the purchase of the property. The assessee submitted that she had bought the first floor of the property for ₹ 18 lakhs, vide registration deed dated 5.2.99 and had paid stamp duty also, amounting to ₹ 1,44,000/-; and that this had been show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Satwanti Monga from Smt. Avinash Monga, the assessee; that as such, it was incorrect to state that a loan of ₹ 4,00,000/- had been taken from Smt. Satwanti Monga; and that it might have been true that the amount referred had been paid through Smt.Satwanti Monga, but it was not understandable as to why Smt. Satwanti Monga would make payment on behalf of the assessee. In this manner, the AO treated the amount of ₹ 4,00,000/- as unexplained investment in property by the assessee and added it to the income of the assessee u/s 69 of the I.T. Act, for assessment year 1999-00. 31. While deleting the aforesaid addition, the ld. CIT(A) observed, inter alia, that admittedly, the payment made from the bank account of Smt. Satwanti Monga had been repaid to her; that while adding the amount as unexplained investment by the assessee, the AO had admitted that the loan from Smt. Satwanti Monga had been repaid; that it was seen that the assessee had purchased the property for ₹ 18,00,000/-, vide registration deed dated 5.2.99 and had paid stamp duty of ₹ 1,44,000/-; that this had been shown in the return of income and the statement of affairs filed with the Department, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 4,00,000/-. Nothing has been brought to persuade to differ from the deletion of the addition by the ld. CIT(A). Accordingly, ground No.5 is rejected. 36. Apropos ground No.6, as per the assessment order, in the search, annexure A-2, page 21, i.e., a copy of FDR worth ₹ 34,631/- was seized. This FDR was in the name of K.Chawla and Avinash Monga, the assessee. The assessee asked the assessee to explain the source of the purchase of the said FDR. The assessee submitted that the FDR had been held with the Bank during 97-98 and it was encashed during 98-99; that it had been properly reflected in the Income Tax return of the assessee in the past; and that it had also been declared in the statement of affairs of the assessee during 97-98, with the return filed. 37. The AO, while disagreeing with the reply of the assessee, observed that from the Income Tax return of the earlier year, it was not clear as to which FDR had been disclosed; that on further query, no specific reply had been given by the assessee. It was therefore that the AO treated the FDR as undisclosed investment and added the amount of ₹ 34,631/- u/s 69 A of the Act, for assessment year 99-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income by the AO. 44. As per the assessment order, during the search, vide annexure-V of Panchnama dated 26.4.02, certain bank accounts where the assessee s name figured were found, but were not seized:- 1. Avinash Monga A/c 9980 CBI, G.K.II 2. Avinash Monga Suresh Monga A/c 9994 CBI, G.K.II 3. S. Monga Avinash Monga A/c 16488- CBI, Kashmiri Gate 4. Dr. Meeta Monga A.Monga A/c 9995 CBI, G.K. II 5. Avinash Monga A/c 11223, BOI, Janakpuri 6. Ms. Meeta Monga A. Monga A/c 16171, BOI. The assessee was asked to furnish copies of all the bank statements for the block period. This was, however, not done. The AO, therefore, obtained the copies of bank statements u/s 133(6) of the Act. It was observed that as per the bank statement of A/c No. 16488, standing in the name of Smt. Avinash Monga and Shri Suresh Monga, various credit and debit entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26,920 ---- 99-00 00-01 6,79,066 The max.credit balance is ₹ 7,05,986/-.But ₹ 26,920 is of F.Y. 98-99. Therefore, difference between ₹ 7,05,986/- `26,920 is peak credit of this year. 2000-01 01-02 NIL As max. credit balance is ₹ 6,04,409/- which is explainable from credit balance of F.Y. 99-00. 01-02 02-03 NIL As max. credit balance is ₹ 4,40,581/- which is explainable from credit balance of F.Y. 99-00. 02-03 03-04 NIL As max. credit balance is ₹ 3,21,114/- which is explainable from credit balance of F.Y. 99-00. 46. As such total peak credit balance for the block period in Account No. 16488 came to ₹ 9,30,750/- and the peak credit balance for the block period thus came to ₹ 7,05,986/-. This was treated as the assessee s unexplained income found for the block period. 47. The AO observed that since the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Suresh Monga, with Central Bank of India, GK II, New Delhi; that while doing so, the ld. CIT(A) has failed to appreciate that the assessee had not co-related and explained the entries in the bank account and had failed to substantiate the same. 51. The learned counsel for the assessee, on the other hand, has strongly stood by the order passed by the ld. CIT(A) in this regard. He has submitted that as correctly noted by the ld. CIT(A), the assessee had duly explained the credit entries in the account; that however, the AO had not considered the explanation offered by the assessee; and that more-over, these accounts had been declared in the returns filed by the assessee over the years. 52. In this regard, it is seen that the ld. CIT(A) has taken into consideration the entries in Bank Account No. 9994, maintained by the assessee along with her husband, Shri Suresh Monga. Besides, it has also been taken into account, that all the accounts maintained by the assessee were declared in the return filed by the assessee over the years. 53. In these facts, we do not find any error in the action of the ld. CIT(A) in deleting the addition of ₹ 7,05,986/-. Accordingly, ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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