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TMI Blog2005 (12) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... . 158BC and that the notices under s. 142(1) and 143(2) having not been issued within prescribed time under the law, ought to have held the assessment as invalid and therefore ought to have cancelled the same. 3. The learned CIT(A) erred in holding that your appellant had made investment of Rs. 4,47,700 in shares and debentures which was unexplained and further erred in confirming the addition of Rs. 2,47,700 on this account (Rs. 2,00,000 was already offered by the appellant). 4. The learned CIT(A) erred in holding that the stock of silver article seized of Rs. 15,17,000 belonged to your appellant only and further erred in confirming addition of Rs. 4,93,367 on this account. 5. The learned CIT(A) erred in holding that investment in gold ornaments of Rs. 20,6000 was unexplained and further erred in confirming the addition of Rs. 20,600. 6. The learned CIT(A) erred in holding that the total advance as per Annex. A-6 and A-12 of Rs. 11,15,315 were unaccounted as against Rs. 5,00,000 disclosed by your appellant and further erred in confirming the addition of Rs. 6,15,315 on the account. 7. The learned CIT(A) erred in holding that the investment made in house property by Mrs. Sohin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,47,700 only. He, therefore, sustained the addition to the extent of Rs. 2,47,700 (Rs. 4,47,700 - Rs. 2,00,000). Both the parties are aggrieved with the order of CIT(A) hence in appeal before us. 6. At the time of hearing before us, the learned Authorised Representative of the assessee argued at length. He also filed the break up of investment in shares/debentures person-wise/date-wise and pointed out that total investment was actually of Rs. 4,68,800 and not Rs. 4,47,700 as taken by the CIT(A). However, this investment was made by five persons and the person-wise summary of the investment was as under: Summary of Investments ----------------------------------------------------- Name of the Amount Assessment Remarks person invested particulars ----------------------------------------------------- C.J. Choksi 2,59,200 ABNPC Rs. 2 lakhs (Appellant) 1373L were offered and have been assessed accordingly against investment in shares Abha Choksi 59,200 Not Got married (Appellant's assessed to Shri Sarang Daughter) to tax Shah on 21-11-1994. Left India in May, 2002 and presently settled and staying at Canada Sarang Choksi 5,000 Not Got married to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our opinion the investment in shares by Smt. Sohiniben C. Choksi and Shri Ankit C. Choksi cannot be considered in the hands of the assessee. They have to be considered in their respective hands. So far as Ms. Abha Choksi is concerned, we find that she is not assessed to tax and the assessee has not explained the source of investment by her. No confirmation is filed from her that the shares actually belonged to her. At the time of search these shares were found from the assessee's premises though she was married on 21st Nov., 1994. In view of the above facts, in our opinion, investment by Ms. Abha Choksi is to be considered in the hands of the assessee. The investment by Shri Sarang Choksi son-in-law is only Rs. 5,000. However, no confirmation from him is filed. The assessee also could not explain why those shares were found from the assessee's possession. In view of above, we accept the contention of learned Departmental Representative that the above investment was made by the assessee in the name of his daughter/son-in-law. Thus the total investment to be considered in the hands of assessee is Rs. 2,59,200 + Rs. 59,200 + Rs. 5,000 = Rs. 3,23,400. The assessee has already offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he forfeited ornaments were repolished or remade and thereafter were being sold. From the business premises 332.920 Kgs. of silver ornaments valued at Rs. 15,83,470 were found. The above silver ornaments included the ornaments of Ankit C. Choksi 18.332 Kgs. and Chandravadan J. Choksi HUF 61.289 Kgs Thus the total 79.621 Kgs. (18,332 Kgs. + 61.289 Kgs.) of silver articles were belonging to others. The remaining silver articles of 253.299 kgs. (332.920 - 79.621) valued at Rs. 10,23,633 is offered as income of the block period. The above silver articles were of the pawning business carried on by the assessee. The assessee is not well educated and is not conversant with the proper accountancy procedure or the provisions of the IT Act. The assessee by mistake further offered a sum of Rs. 5 lakhs for unexplained investment in the pawning articles. When the assessee is carrying on the pawning business either the money advanced against the pawned articles could be treated as unexplained investment or the pawned articles can be valued and treated as unexplained investment. However, under no circumstances, the amount advanced as well as the pawned articles both can be treated as unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has offered sum of Rs. 10,23,633 for unexplained investment in the silver articles and Rs. 5 lakhs for unexplained advances in the pawning business. Thus the total income offered by the assessee is Rs. 15,23,633. The total money advanced by the assessee as per AO himself is Rs. 11,15,315 which is less than the income already disclosed by the assessee. Even if the value of silver articles are to be considered, we find that the total ornaments found from business premises is 332.920 kgs. valued at Rs. 15,83,470. Shri Ankit K. Choksi son of the assessee is carrying on business of trading in silver ornaments and he is assessed to tax prior to search. At p. 39 of assessee's paper book there is computation of income of Ankit Choksi for asst. yr. 1999-2000 which is filed on 17th June, 1999 i.e. prior to the search. At p. 40 there is trading account showing closing stock of silver articles at Rs. 1,09,575. Similarly Shri Chandravadan J. Chokshi HUF is also assessed to tax prior to the search, and stock of silver ornaments with him as on 31st March, 1999 was Rs. 2,30,754. In the above circumstances, we do not find any justification for disbelieving the submission of the assessee that at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed in the month of November, 1992. Return for asst. yr. 1993-94 was filed in March, 1994. In the balance sheet of 31st March, 1993 which was filed along with that of asst. yr. 1993-94, the land as well as the building under construction was disclosed In the statement of affairs of March, 1994 again the land and building under consideration was disclosed and this return was filed on 29th March, 1995. Similar is the position in the subsequent years. Thus when year after year Smt. Sohiniben Choksi has filed her returns of income and in the balance sheet the purchase of land as well as investment in the building construction is disclosed, in our opinion there is no justification for coming to the conclusion that the investment in the building was made by the assessee. The AO has presumed the investment in building to be made by the assessee on the only ground that during the course of search in her statement she stated that she did not know how much was incurred towards the construction of the house. However, this by itself is not sufficient to hold that the investment in the house was made by the assessee. Smt. Sohiniben Choksi is residing in a small place Dahod and it was for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and further erred in confirming the income of Rs. 2,67,675. 3. The learned CIT(A) erred in confirming the addition of Rs. 20,093 being disallowance of business loss on sale of silver ornaments." 18. Ground No.1 is only the statement of some facts and not a ground at all. Ground No.3 is not pressed by the learned Authorised Representative of the assessee at the time of hearing. Accordingly the only ground surviving is ground No.2 which is with regard to the addition of Rs. 2,67,675 made by the AO for interest income on the advances on moneylending business. 19. At the time of hearing before us it is submitted by the learned Authorised Representative that there was search at the residential-cum-business premises of the assessee on 20th Jan., 2000. During the course of search it was found that the assessee was carrying on moneylending business which was not disclosed. The pawned silver articles belonging to the moneylending business were seized at the time of search and the assessee has offered the investment in the moneylending business as undisclosed income. To pay the tax on such undisclosed income the assessee has sold such pawned articles. When the pawned articles have been so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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