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TMI Blog2004 (1) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of Rs. 84,000. He justified the addition on the ground that considering the status and style of living of assessee, there was inadequacy of drawings. This was one of the items of additions. The AO found that in the asst. yr. 1996-97, the assessee entered into certain land transactions of Arsinakunte village and in 1997-98, he entered into certain land transactions of Vishweshwarapura village. He came to the conclusion that there was on-money payment in purchase of these lands. He accordingly added a sum of Rs. 23,20,000 and Rs. 15,80,000 in respect of these two transactions as undisclosed income for the block period. The main ground on which the additions made by the Department is that the sellers of land have admitted receipt of money in the transactions and various statements recorded from vendors were taken as basis for sustaining the addition. These additions are in dispute before us. 3. The learned counsel for assessee pointed out that additions are made without any basis or material and are the result of suspicion and surmises. The learned counsel for assessee pointed out that the cash of Rs. 50,000 that was seized belonged to Manish. The cash held by Divyesh to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as undisclosed income. The addition is deleted. 5. The AO and the CIT(A) appear to have supported this addition on the alternative ground of inadequacy of drawing. For making addition under the Chapter XIV-B as part of undisclosed income, it is necessary for the Department to have found some material to show that there was undisclosed income in the form of a specific drawing, which was not recorded in the books of account of the assessee. The Department has not found any material to show that there was a drawing, which was not recorded by the assessee in his regular books of account. In the absence of the same, we cannot sustain the addition. The addition under Chapter XIV-B cannot be simply made on the basis of certain estimates and probabilities. The addition is, therefore, deleted even on the alternative ground for lack of evidence in the matter. 6. The next dispute relates to addition in respect of on-money payment in the transaction relating to purchase of land. The assessee, along with his brother-in-law Kirthi Kumar Maru of Gujarat, has purchased land from Smt. T.N. Jayamma of Arsinakunte village. The declared consideration of Rs. 13,50,000 has come in the form of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nanjappa did not contradict these transactions and, therefore, registered price of Rs. 6 lakhs per acre is reasonable and should be believed in place of the alleged market rate of Rs. 13,50,000 per acre. The learned counsel for assessee further pointed out that the Department failed to appreciate that the entire transaction of purchase of land at Arsinakunte village was made on behalf of brother-in-law of the assessee viz., Kirthi Kumar Maru, who was residing at Gujarat and, in fact, special power of attorney was executed by the said Kirthi Kumar Maru on 6th March, 1996 in favour of the assessee for negotiating purchase of these lands and the assessee has only been shown as a joint owner for completing the formalities. The assessee has not invested anything in the land and was borne by Kirthi Kumar Maru, which is clear from the DD obtained by Kirthi Kumar Maru from Rajkot in favour of the vendor. It was pointed out that even Kirthi Kumar Maru was also subject to search and astonishingly no material was found indicating the on-money payments in the transaction. It is not the case of the Department that they found some material to shows that on-money has been paid in the transaction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al buyer in the transaction has paid the money involved in the transaction through account-payee DD obtained from Gujarat and sent the same. 9. It may be pointed out that Smt. Jayamma who was the real seller was not at all examined. The only statement that was obtained by the Department in support of the addition could be said to be one from Shri Nanjappa husband of Smt. Jayamma. In fact, Shri Nanjappa, the record shows, did not admit on-money receipt when he was first examined on 27th Dec., 1999 and 28th Dec., 1999. The Department has obtained the so-called admission nearly after a gap of 22 days. Although the assessee alleges that Shri Nanjappa, acting on inducement from the Department had obliged the Department by giving the statement of admission. The record of comparable cases brought out by the assessee shows that there were sale instances ranging from 1.95 lakhs to 3.95 lakhs and there is no material evidence in support of the AO's view that the price in the market was Rs. 13 lakhs per acre. The so-called admission by Shri Nanjappa may be due to the fact that he himself was not maintaining regular books of account in respect of his business and the Department could have ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S/2 seized from the residence of Ramesh K. Shah. The learned counsel for assessee disputing these additions as part of undisclosed income, pointed out certain inaccuracies in the computation. The AO quantified the alleged on-money in three instances at Rs. 4.29 lakhs + Rs. 5.72 lakhs + Rs. 5.79 lakhs totalling Rs. 15.8 lakhs whereas in the body of the order, the said on-money payments are quantified at Rs. 4.29 lakhs + Rs. 2.17 lakhs and Rs. 5.71 lakhs which totals to Rs. 12.17 lakhs. Reading the part of the order of the CIT(A) and the AO it was pointed out that both the AO and the CIT(A) are totally confused and have gone on a misguided approach in arriving at the quantum of on-money payments. The learned counsel for assessee pointed out that no material whatsoever was found in the course of search to show on-money receipts. He drew our attention to the seized material, which the AO has referred to, and pointed out that neither the buyer's name nor the seller's name tally. Apparently, the seized material does not suggest payment of on-money by the assessee to the extent quantified by the AO. The learned counsel for assessee further pointed out that the seized document A/RKS/2, pp. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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