9911796707
TMI Blog2004 (2) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... several transactions in shares as per seized material found during the search - that one of which was treated to be the contract note for purchase of shares of IPCL; that from the details of the transactions it was seen that the assessee had entered into valid contract for purchase and sale of shares; that brokers have raised bills for the same; that the assessee had made payments in full for purchase of shares; and that the delivery was effected; that the transactions were at market price. He, therefore, held that in such a situation to hold that only because the payment was made even subsequent to the contract for sale, the transaction was colourable device would be purely on surmise and contrary to the facts. According to him, the assessee had discharged the onus of proving the genuineness of the transactions. He also observed that the assessee cannot be said to be controlling the record of the broker and only because the broker could not produce certain material called by the Assessing Officer or could not appear in person would not be a valid ground for holding the transaction as bogus or colourable device. According to him, the assessee had actually incurred the loss which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexure A-9 which were confronted to the assessee during the course of search vide question No. 39. He, therefore, formed an opinion that the Assessing Officer was fully justified in taking the view/that the alleged loss in the purchase and sale of shares was a colourable device to siphon off the income declared by the assessee during the course of the search. He gave an additional finding also stating that the assessee has not produced evidence of delivery i.e., distinctive numbers and certificate numbers before the departmental authorities or even before the Tribunal and, therefore, it was a speculation loss not allowable to be set off against his income except against profits and gains if any of any other speculation business. The Judicial Member, on the other hand, held that in the statement u/s 132(4) t he assessee had stated that he had made investment for renovation, furniture, purchase of TV, etc. for about Rs. 2 lakhs which is evident from the perusal of details given in answer to question No. 46 of the statement making disclosure of Rs. 2 lakhs and the reply to question No. 7 clearly giving the source of earning of undisclosed income. It was a voluntary statement and was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the majority opinion, in Revenue's Appeal, we reverse the order of ld. CIT(A) allowing short term capital loss with regard to 1300 IPCL shares and 400 ICICI shares and further upheld the order of ld. In the result, the appeal of the revenue for the assessment years 1990-91 to 1992-93 are dismissed and for the assessment year 1993-94 partly allowed. The appeal of the assessee for the assessment year 199394 is dismissed. - HON'BLE R.P. GARG, VICE PRESIDENT, T.K. SHARMA, MEMBER (J), DEEPAK R. SHAH, MEMBER (A) AND A.L. GEHLOT, MEMBER (A) For the Appellant : G.C. Pipara For the Respondent : R.C. Gupta Per Shri Deepak R. Shah, A.M. 1. These four appeals by revenue for assessment years 1990-91 to 1993-94 and the appeal by the assessee for assessment year 1993-94 are arising out of order of ld. CIT(A) V, Ahmedabad dated 13-10-1995. Since certain common issues are involved, all these appeals are disposed of by this common order. 2. We shall first take up the appeal of revenue for assessment years 1990-91, 1991-92 and 1992-93. The only issue in all these appeals are relating to deletion of addition made on account of unexplained investment in shares for Rs. 19,580, Rs. 40,400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question No. 46 of said statement. Since this statement under section 132(4) was categorical about the source of investment in shares, no credence can be given to the source stated to be out of HUF income from agricultural source. Though the return for assessment years 1990-91, 1991-92 1992-93 in respect of HUF of father of assessee was filed earlier to the date of search, the investment was not shown in the said return or in the balance sheet accompanied in the returns. Thus, ld. CIT(A) has erred in believing that out of the withdrawals from HUF funds the investment in shares is to be treated as explained. 2.3 The ld. Counsel for the assessee Shri G.C. Pipara also took us to the same statement recorded under section 132(4) whereas in respect of certain share transaction, it was stated to be out of several benami accounts. However, the investment in shares is not out of the said bank accounts. All the credit entries in these bank accounts has been offered for taxation. Referring to question Nos. 17, 18, 19 20 of the said statement it is found that HUF is holding 17 acres of agricultural land wherein various crops are grown. The crops are sold at market yard. The HUF is also assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as shown as invested but Rs. 57,957 was treated as explained and balance was treated as unexplained. From the paper book filed, we find that Ramanbhai Rewabhai Patel HUF has filed all the returns of income much prior to the date of search. The withdrawals shown in all these three years are Rs. 55,000, Rs. 60,000 Rs. 65,000 respectively. The withdrawals are much higher than the household expenses. The investment in shares were out of cash funds. The other transaction in shares out of benami bank account has been differently treated for assessment purposes. We are, therefore, of the opinion that the withdrawal from HUF funds, are available for explaining the investment in shares. It is the contention of ld. DR that if the investment was made in earlier year the same is not reflected in the balance sheet filed for subsequent years. We are unable to accept such a contention as since the amount was shown as withdrawal the amount will be taken out of the balance sheet. The investments are therefore not reflected in the balance sheet filed subsequently as that is the only possible accounting treatment for showing the withdrawals. We are, therefore not inclined to interfere with the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving ornaments to the wife and sons of the assessee on various occasions. The ld. CIT(A) believing the explanation as reasonable deleted the addition. 5.2 The ld. DR referring to the statement recorded under section 132(4) drew our attention to answer to question No. 7. It was stated therein that Rs. 1 lakh was invested in purchase of gold ornaments from the unaccounted income. Thus the story that the ornaments were received from the father-in-law of assessee is not a plausible explanation. The learned counsel of the assessee submitted that in respect of the entire family, the total jewellery found was hardly 390 grams. As per the customs prevailing and the community to which the assessee belongs, the lady member of a family is supposed to possess ornaments of approximately 500 grams. Such a quantity is also treated reasonable as per instruction of CBDT. It is also instructed that if the jewellery is found to the extent of 500 grams the same need not be seized. This can be interpreted that up to 500 grams of the jewellery found is to be treated as explained. Apart from the lady members credit is also required to be given for male members up to 250 grams and for children up to 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequence of these dealings are as follows:- Purchase and sale of 1300 IPCL shares through Adinath Investment Prop. Bhagehand G. Jain Purchase Sale of ICIC1400 through Jagdish P. Patel 1. Date of contract for purchase 2-11-1992 12-2-1993 2. Date of delivery of shares 1-3-1993 27-2-1993 3. Date of payment 23-3-1993/356200 10-3-1993 4. Dated of contract for sale 4-3-1993 5-3-1993 5. Dated of delivery of sold shares 22-3-1993 6-3-1993 6. Dated of receipt of payment 26-3-1993 139100 17-3-1993/1,24,000 22-3-1993/3,00,000 7. Short term loss claimed 2,17,100 1,31,200 7.2 The Assessing Officer issued summons under section 131 on the respective share brokers for examining them. One of the share broker of M/s. Adinath Investment appeared but without relevant books of account. The other broker Shri Jagdish Patel though did not appear confirmed the transaction by filing a letter and giving particulars thereof. The Assessing Officer concluded that since the brokers were not produced QY the assessee there is a strong belief that earlier transactions are fishy and loss claimed is fictitious. The ld. CIT(A) considered the relevant proof by way of bills contract notice and payment details etc. allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contract note was also found during the course of search. The assessee is not occasionally but frequently trading in shares for which necessary evidence was found during the course of search. The broker is not under the direct control of the assessee. If the broker does not maintain certain records, the assessee cannot be put to fault. All that was required to be done on part of assessee has been done and the onus has been discharged. The dates of transaction only gives some ground for suspicion. This does not necessarily result to hold that transactions are sham or bogus. 7.5 We have carefully considered the rival submission and relevant facts of the case. The assessee is found to be carrying on several transactions in shares as per the seized material found during search. One of which is treated to be the contract note for purchase of shares of IPCL. From the details of transaction as narrated above, it is seen that the assessee has entered into valid contract for purchase and sale of shares. The share brokers have raised bills for the same. The assessee has made payments in full for purchase of shares. The delivery is effected. The transactions are at market price, the fact is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished the valuation report according to which there was no addition during the relevant financial year in the construction or renovation of the house. However, since the amount was disclosed, addition of Rs. 2 lakhs on account of renovation of house etc. was made. The ld. CIT(A) upheld the addition since the same was disclosed during the course of search. The assessee is in further appeal. 9.4 The counsel of the assessee drew our attention to answer to question No.7 wherein the amount was disclosed towards purchase of furniture, household goods etc. only. There was no mention about the renovation in the house. The house belongs to the HUF property of assessee's father. Thus though in answer to question No. 46, it is mentioned as invested in house and furniture, in fact there is no addition in the house as proved by the valuation report furnished before the Assessing Officer. In respect of household articles and furniture found during the course of search as per Annexure 5 it consists of items of meagre value and not a substantial as Rs. 2 lakhs. He, therefore, pleaded that addition of Rs. 2 lakhs be deleted. 9.5 The ld. DR supported the orders of authorities below. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00). We, therefore, uphold the addition of Rs. 12,500 as against Rs. 2 lakhs made by the Assessing Officer. 10. No other grounds were pressed before us. 11. In the result, the appeal of assessee is partly allowed. Per Shri T.K. Sharma, Judicial Member. 12. Since I have not been able to pursue to agree with the finding and conclusion of my learned brother in respect of ground No.2 of revenue appeal and assessee appeal for the assessment year 1993-94. I, therefore, propose a separate order on these two grounds of appeal relating to assessment year 1993-94. 13. The ground No.2 of revenue appeal is against deletion of loss on sale of shares amounting to Rs. 3,48,300. In this case a search was conducted at the residential premises of the assessee on 16-2-1993. During the course of search, cash amount of Rs. 10,000, ornament of Rs. 53,487 and share certificates of about Rs. 10 lakhs were seized. In the search proceedings, 10 bank accounts were found in the names of different persons but all these were operated by the assessee for purchase of shares etc. During the course of search, statement on oath under section 132(4) was recorded on 16-2-1993 and in reply to question Nos. 45 46, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of shares .-The assessee has declared short term loss on sale of 1300 IPCL shares at Rs. 2,17,100 and on sale of 400 shares of ICICI at Rs. 1,31,200, in aggregate a total loss of Rs. 3,48,300 has been shown in the computation of income. Against this loss, the assessee has claimed set off of capital gains on share transactions deposited in bogus bank accounts for Rs. 1.37,286 as also against the other income as well. I have called for the details in respect of the so called share transactions. The sequence of these dealings are as follows: Purchase and sale of 1300 IPCL shares through Adinath Investment, Prop. Purchase and sale of ICICI 400 shares through Jagdish P. Patel 1. Date of contract for purchase 2-11-1992 12-2-1993 2. Date of delivery of shares 1-3-1993 27-2-1993 3. Date of payment 23-3-1993/3,56,200 10-3-1993 /2,00,000 17-3-1993 /2,00,000 /1,55,200 5,55,200 4. Dated of contract for sale 4-3-1993 5-3-1993 5. Dated of delivery of sold 22-3-1993 6-3-1993 6. Dated of receipt of payment 26-3-1993/1,39,100 17-3-1993 /1,24,000 (encashed on 27-3-1993) 22-3-1993 /3,00,000 4,24,000 7. Short term loss claimed 2,17,100 1,31,200 Summons under section 131 have been issued to M/s. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purchased and sold. A Xerox copy of purchase memo in respect of ICICI shares have been filed. Summons under section 131 have been served on 25-1-1995, calling for the books of account, bank accounts, contract form, sauda vahi etc. on 2-2-1995 but, on the appointed date, the alleged broker did not turn up. Therefore, the assessee has been informed on 7-2-1995 that Shri Jagdish Patel, the alleged broker has not present in response to summon. He should, therefore, produce the broker on 9-2-1995 at 10AM when the assessee should also present. But on 9-2-1995, the assessee has not produced the broker not the assessee has presented himself. The assessee has filled confirmatory letter from Shri Jagdish P. Patel dated 16-1-1995 for purchase, delivery, sale and receipt and payment of purchase and sale considerations. I fail to understand when a broker can given in writing to the assessee confirming the transactions, why he cannot remained present in spite of summons issued to him, and why the assessee could not produce him. There is a strong belief that the alleged transaction of ICICI shares are fishy and the loss claimed is a fictitious one to siphon off the income declared as bogus tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that in respect of shares of ICICI also the assessee has not furnished the copy of contract form, delivery memo and distinctive number of shares purchased and sold. In this case also assessee claimed that payment to broker was made on 10-3-1993 and 17-3-1993 whereas shares were sold through same broker on 5/6th March, 1993. The payment was received on 17-3-1993, 22-3-1993. In this case also instead of making the payment of entire purchase price, the assessee could have paid the difference i.e., Rs. 1,31,200 only. The ld. DR concluded that the alleged loss on the purchase and sale of shares is a colourful device to siphon off the income declared by the assessee during the course of search through bogus transaction. The ld. DR further submitted that even if for the sake of argument it is presumed that assessee has actually made the payment for sale and purchase but in the absence of evidence of delivery of shares, loss in question incurred by the assessee is loss in speculative business within the meaning of section 73 of the I.T. Act and same can be set off only against any other speculative business and not against the income declared by the assessee under Exp. 5 of section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. Explanation 2 to section 28 clearly states that speculative transactions carried on by an assessee are of such a nature as to constitute the business, the speculation business which shall be deemed to be distinct and separate from any other business. Section 43(5) defines speculative transaction . Since there is no proof of delivery and transaction is in question are not hedging transactions covered by exception to section 43(5) of the I.T. Act, I am of the firm opinion that both the transactions which resulted in loss of Rs. 3,48,300 are speculative transaction. Moreover, section 73 clearly states that any loss computed in respect of speculation business carried on by assessee shall not be set off except against profits and gains, if any, of another speculation business. I am, therefore, of the view that even if it is presumed that alleged loss on sale and purchase of shares amounting to Rs. 3,48,300 is genuine in that event also same is not allowable keeping in view the Explanation 2 to section 28, Definition of speculative transaction contained in section 43(5) and provisions contained regarding set off of speculative losses in section 73 of the I.T. Act, 1961. 20. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad. No investment has been made by him. The assessee has furnished 2 different reports of the same date in respect of valuation as on 1-10-1987 when the construction of this property was completed for Rs. 2,08,000 including the cost of land at Rs. 25,000 and furniture at Rs. 35,000. The second report dated 31-3-1993 is for a valuation for Rs. 3,27,500, which includes additions and alterations made for Rs. 40,000 during the assessment year 1993-94 and increased in the value of existing house by Rs. 79,494 on account of increase in cost of the existing structure. From these two reports the assessee wants to believe the department that he has no made any investment in this house. From this report, one thing is very clear that some addition and alterations have been made for which value has been shown at Rs. 40,000 and there has also been increase in value of existing structure to the extent of Rs. 79,494. There has been no depletion in the value of house on account of depreciation being an old structure. Thus the report of the valuer cannot be believed in its true spirit. There is an evidence that renovation has been carried out. The assessee has made disclosure for renovation, furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that disclosure of Rs. 2,00,000 was made in respect of purchase of furniture, house hold goods etc. in assessee's house. Before the search party, in reply to question No. 27, that assessee has stated that his monthly expe9-diture is Rs. 4,00Q. In reply to Q. Nos. 28 29, the assessee had admitted that telephone bills are paid by HUF out of agricultural income. The ld. DR further drew attention of Bench to the assessment order for the assessment years 1990-91 to 1992-93 wherein addition of Rs. 19,580, Rs. 40,400 and Rs. 57,957 respectively made by Assessing Officer, which has been deleted by ld. CIT(A). It was pointed out by ld. DR that after making all these investments there is hardly any cash left with the assessee. It appears that alongwith the return of income of HUF no Balance Sheet was filed and the assessee has not furnished cash flow chart of HUF either before the Assessing Officer or CIT(A). In these circumstances, CIT(A) is legally and factually correct in holding that there was no amount left for any such expenditure for renovation, repairs etc. in HUF property. 27. I have carefully gone through the orders of authorities below. Rival submissions were also considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and circumstances of the case, the Accountant Member is justified in upholding the order of CIT(A) allowing the short term capital loss of Rs. 3,48,300 or Judicial Member is justified in reversing the order of ld. CIT(A) on this issue for the assessment year 1993-94? ITA No. 4646/A/95-A.Y. 1993-94 Whether on the facts and circumstances of the case, the Accountant Member is justified in reducing the addition of Rs. 2 lakhs to Rs. 12,500 or Judicial Member is justified in upholding the order of ld. CIT(A) confirming the addition of Rs. 2,00,0007 THIRD MEMBER ORDER Per Shri R.P. Garg, Vice President 1. These two appeals came up for consideration before the Division Bench and there struck a difference of opinion between the two Members on the following two points:-- ITA No. 5228/Ahd./1995 - Asst. Year 1993-94 Whether, on the facts and circumstances of the case, the Accountant Member is justified in upholding the order of CIT(A) allowing the short term capital loss of Rs. 3,48,300 or Judicial Member is justified in reversing the order of ld. CIT(A) on this issue for the assessment year 1993-947 ITA No. 4646/Ahd./1995 - Asst. Year 1993-94 Whether, on the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n off the income declared as bogus transactions. He also noticed that a sum of Rs. 2 lakhs which was stated to be the investment in house and furniture out of the undisclosed income of Rs. 25 lakhs was not disclosed in the return of income even though the said income was agreed to have been declared pursuant to question Nos. 45 and 46 of the statement under section 132(4) of the Act. 4. As regards the loss in the share the Assessing Officer noticed that the claim pertained to the sale of 1300 IPCL shares and 400 ICICI shares. The respective loss of Rs. 2,17,100 and Rs. 1,31,200 aggregating to Rs. 3,48,300 was claimed set off against the capital gains on the share transactions deposited in the bogus bank account of Rs. 1,37,286 as also against the income from other sources. The sequence of dealings in these two shares are tabulated by the Assessing Officer on page 8 of his order as under:- Purchase and sale of 1300 IPCL shares through Adinath Investment, Prop. Shri Bhagehand G. Jain Purchase and sale of ICICI 400 shares through Jagdish P. Patel 1. Date of contract for purchase 2-11-1992 12-2-1993 2. Date of delivery of shares 1-3-1993 27-2-1993 3. Date of payment 23-3-1993/356200 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the sale of shares of ICICI he noticed that the assessee has not furnished the copy of contract form, delivery memo and distinctive numbers of the shares purchased and sold, though a Xerox copy of the purchase memo in respect of ICICI shares was filed. Summons were issued to Shri Jagdish Patel to attend the office with books of account, bank accounts, contract form, Sauda Vahi, etc. but on the appointed day the broker did not turn up. The Assessing Officer, therefore, informed the assessee to produce the said broker and present himself on a subsequent date but on that date also neither the broker was produced nor the assessee presented himself. However, the assessee filed a confirmatory letter from Shri Jagdish Patel dated 16-1-1999 for the purchase, delivery, sale and receipt and payment of purchase and sale consideration. The Assessing Officer in these circumstances failed to understand that when the broker can confirm the transaction in writing to the assessee, why he could not remain present before him in spite of the summons issued and why the assessee could not produce him either. He, therefore, formed a strong belief that the alleged transaction of ICICI shares was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the brokers have confirmed the transactions as per bills and contract notes raised by them, the transaction in sale and purchase of shares had taken place and the loss incurred on such transactions was, according to him, therefore, allowable. The Judicial Member, on the other hand; observed that the counsel of the assessee could not furnish the share certificate number, distinctive number; that in the delivery note dated 1-3-1993 the distinctive numbers and share certificate numbers have not been mentioned against the column of distinctive number and share certificate number and similarly in the correspondence with Jagdish P. Patel the assessee could not point out the distinctive number or share certificate number of ICICI shares delivered to the assessee. He also observed that the search was conducted on 16-2-1993 and there was no evidence regarding the purchase of shares of IPCL and ICICI found by the search party though from the perusal of the statement recorded and seized material it could be seen that the search party seized loose papers which were contained in file Annexure A-9 which were confronted to the assessee during the course of search vide question No. 39. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the date of contract as on 12-2-1993 which contract also is not brought on record. 9. Both the middlemen are not brokers of any stock exchange nor were they appointed by the Government of India as stated (wrongly) by CIT(A). One of them is now said to be a sub-broker and the other is only a consultant. A person who is not a broker is normally not allowed to transact business of forward transaction by virtue of section 13 of the Securities, Contract (Regulation) Act, 1956, the exception being for spot delivery transactions under section 18 of the said Act. The press note referred to by the learned counsel of the assessee regarding the working of brokers and sub-brokers does not throw any light on this aspect. 10. The shares of IPCL are stated to be through Adinath Investments whose proprietor is stated to be Shri Bhagchand Jain and who is claimed to be broker originally. The party was not found available on enquiries made by the Inspector as they had closed their business and on being told, the assessee produced said Shri Bhagchand Jain who though acknowledged the transaction but affirmed for having not maintained any books of account. He could not file any details or as to from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t but that is the account of the assessee and not of broker or to whom or from whom the money was received or paid. At best the bank entries could vouch for the payment and the transaction as such. 15. The cumulative effect of all these, in my opinion, was that the transaction was not genuine and a show was made to create a loss to reduce the tax on the income of the assessee. The Judicial Member was, in my opinion, justified in holding the transactions to be not genuine and alternatively also, for holding that the loss was speculative loss as the transactions were settled without delivery of shares. It is true that the brokers are not under the control of the assessee but when the loss is claimed as a deduction it is for the assessee to prove that he had incurred the loss and in absence of the examination of broker, his books of account and other material, it was not proved particularly when no details of the distinctive numbers/certificate numbers of the shares purchased and sold was claimed to have been taken or given through the brokers were brought on record. 16. The second point of difference is for the addition of Rs. 2 lakhs under the head investment in the renovation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been made for which value has been put at Rs. 40,000 and that there was an increase in the value of the existing structure to the extent of Rs. 79,494; and that there was no depletion on the value of the house on account of depreciation being an old structure. He, therefore, held that the report of the valuer cannot be believed in its true spirit. The assessee had made disclosure for renovation and furniture, etc. and the report did not reflect any investment in furniture. He also rejected the contention of the assessee that the disclosure was made under threat and pressure in view of the fact that there was an evidence for renovation in the house property. He, accordingly, made an addition of Rs. 2 lakhs to the income of the assessee. 19. The CIT(A) sustained the addition by observing in paragraph 28 as under:- 28. I have considered the facts and I find that there is no house property in the name of the individual but the assessee can make the investment of for renovation and furniture in the property of HUF also. The accounts of the HUF of last four years have been discussed above while considering the household expenses and some investment in shares. There was no amount left ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o question No. 46 of the statement making disclosure of Rs. 2 lakhs and the reply to question No. 7 clearly giving the source of earning of undisclosed income. It was a voluntary statement and was binding on the assessee in view of the judgment of the Kerala High Court in the case of V. Kunhambu Sons according to him, neither before the Assessing Officer nor before the CIT(A) the assessee has furnished the cash-flow statement of the HUF and in the return of HUF for assessment year 1993-94 the assessee had disclosed agricultural income of Rs. 1,86,987 which was furnished in the month of February, 1994 even though in reply to question No.7, the assessee had stated that approximately the yearly agricultural income of the HUF was Rs. 1 lakh which, according to him, indicated that the assessee had inflated the agricultural income to cover up the undisclosed income in the absence of any cash-flow chart. The CIT(A), according to him, gave cogent reason for upholding the addition and he upheld the same. 21. The submissions of both the sides were heard and considered. The addition was made by the Assessing Officer primarily on the basis of the statement given by the assessee under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or household goods or furniture therein. The valuer has stated that he has inspected the property on 24-12-1994 for both the valuations. Both the reports were signed on 26-12-1994. These dates are much after the dates of search. As to what were the construction earlier and what were made during the period under consideration and upto the date of inspection is not known. The furniture and household goods for which the declaration was made might not be there in existence on the date of the inspection. Therefore, not much reliance can be placed on the valuation reports vis-a-vis the declaration made by the assessee. The Panchnama only shows the household goods and furniture and not the investment in the house and therefore, this also cannot be a ground for demolishing the version of the assessee made under section 132(4) of the Act stating that he has invested Rs. 2 lakhs in the house and household goods. Not only at one place, the assessee has stated at other places that he has invested Rs. 2 lakhs in repairs / renovation, furniture and household goods. (see question No.7 and answer thereto which are extracted in the order proposed by the Accountant Member) and for the sake of conv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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