Delhi High Court

Rakesh Goyal vs Asstt Cit on 12 September, 2003

Equivalent citations: (2004) 87 TTJ Del 151

ORDER

R.K. Gupta, J.M.

These are two appeals, one by assessed and one by department and a cross-objection by assessed for block period 1-4-1988 to 17-3-1999.

2. In the cross-objection filed by the assessed, which is in regard to challenging the legality of provisions of section 132(1) while completing assessment under section 158BC of the Act, was not pressed by the counsel of the assessed. Therefore, the cross-objection of the assessed is dismissed.

3. Now will late the appeal of the assessed in IT(SS)A No. 109/Del/2002.

3.1 The brief facts, as stated in the order of Commissioner (Appeals) in para 3 of his order are as under :

"3. Ultimately, in the wake of said search operation, notice under section 158BC dated 4-1-2000 was issued by the Deputy Commissioner of Income Tax Investigation Circle, Dehradun, hereinafter referred to as Deputy Commissioner of Income Tax. In compliance with the said notice the assessed filed a return in the prescribed form on 3-3-2000 before the Dy. CIT. In the return so filed by the assessed, the income was shown at Nil. After extensive inquiries, although covering a very short span, the block assessment order dated 29-3-2001, was passed. In terms of the said order the undisclosed income was determined at Rs. 1,65,35,579 made up as under :

(a) Rs. 20,00,000 on account of gifts received from NRE account standing in the name of Shri Mahendra Singh on the ground that relevant information about the gift could not be furnished and the gift deed did not appear to be genuine.

(b) Rs. 3,44,775 on account of investment in construction of house, said to have been understated by the appellant at the original assessment stage, as based on the report of Valuation Cell, which is said to have been obtained on 20-3-2001.

(c) Rs. 10,11,855 on account of capital gain arising out of sale of shares (which stood already disclosed in the income-tax return for the assessment year 1992-93).

(d) Rs. 23,75,000 on account of investment alleged to have been made by the appellant with Saharanpur Associates, as worked out in following, manner

Investment said to have been made by appellant as per associates

26,75,000

Deduct: Amount withdrawn by appellant

From Patni Chemicals (P) Ltd.

3,00,000

23,75,000

(e) Rs. 4,37,569 on account of gross receipts shown by Smt. Parul Goyal, wife of the appellant in the assessment years 1996-97, 1997-98 & 1998-99 on the ground that in her statement she did not admit any such income having been earned by her.

(f) Rs. 1,47,000 on account of gifts of. Rs. 21,000 each as received by Master Rishab Goyal (minor son of the appellant) from 7 persons during the assessment year 1991-92 on the ground that the gifts remained unproved.

(g) Rs. 18,57,038 on account of sale proceeds during the financial year 1997-98, as had been disclosed by Smt. Parul Goyal in VDIS Scheme, 1997 on the ground that in her statement recorded during the course of search, she is said to have stated that she did not sell any jewellery.

(h) Rs. 38,312 on account of commission in the business of property dealing on the basis of some loose papers containing undated stray writing found during the course of search.

(i) Rs. 10,00,000 on account of income and investment in moneylending business; as estimated on the basis of undated parchas found during the course of search.

(j) Rs. 2,75,000 representing payment of Rs. 2,50,000 said to have been made to Shri Gautam and interest thereon.

(k) Rs. 2,00,000 investment in household appliances.

(l) Rs. 99,000 unexplained expenditure on foreign visit worked as under :

(a) Cost of stay abroad

72,000 for 18 days

(b) Cost of tickets (estimated)

50,000

1,22,000

Less: Withdrawals made from Patni Chemicals (P) Ltd.

23,000

99,000

Rs. 67,50,000 : on account of undisclosed investment in purchase of property Thrill Hotels (P) Ltd.

4. The Commissioner (Appeals) has divided the additions in two parts, i.e., the additions which were made on the basis of regular books of accounts and in second part, those additions were considered by Commissioner (Appeals) which were made on the basis of material found during the course of search. The Commissioner (Appeals) has considered the detailed submissions filed on behalf of assessed and then the remand report sought from the assessing officer, and the submission of Shri Y.B.P. Singh, the Departmental Representative, who was present before the Commissioner (Appeals) during the course of hearing of appeal.

4.1 The Commissioner (Appeals) after considering the submissions of both sides and after perusing the material on record, along with written submissions and remand report of the assessing officer, allowed the appeal of the assessed in part. Some of the additions were reduced and some of the additions were deleted by Commissioner (Appeals). The Department is in appeal against reducing/deleting the additions fully. The assessed is in appeal against the finding of Commissioner (Appeals) by which some of the additions were reduced or sustained.

5. The learned counsel has relied upon the submissions filed before the Commissioner (Appeals). On the other hand, the learned Departmental Representative has placed strong reliance on the order of assessing officer and on the order of Commissioner (Appeals) to the extent to which the additions were sustained.

6. We will take first the assessed's appeal.

7. Ground No. 1 in assessed's appeal against upholding the addition of Rs. 38,312 on account of income from dealing in property was not pressed by the counsel of the assessed during the course of hearing. Therefore, the same is dismissed as not pressed.

8. Ground No. 2 is against upholding the addition of Rs. 3,44,775 made and confirmed on account of investment in construction of house property, in view of DVO's report.

8.1 After considering rival submissions, we found that the lower authorities were not justified in making this addition. Undisputedly no material whatsoever was found during the course of search from which it can be established that assessed has not shown the investment in house property properly. This is also undisputed fact that assessed has duly disclosed the investment in property while filing its regular return. Even the Hon'ble Supreme Court has now held that the assessing officer was not empowered to refer the matter to, the Departmental Valuation Officer under section 131(1) (d) in case of Amiya Bala Paul v. CIT (2003) 262 ITR 407 (SC). Therefore, in view of these facts and circumstances, we hold that there was no justification in making and sustaining the addition at the end of lower authorities. Accordingly we delete the same.

9. In third ground, the assessed is objecting in sustaining addition of Rs. 15,25,000 on account of investment made by assessed in Saharanpur Associates. Out of total addition made by assessing officer at Rs. 23,75,000, the addition of Rs. 15,25,000 was sustained by the Commissioner (Appeals). The following reasoning has been given by Commissioner (Appeals) while sustaining the above addition:

"31. The matter has been given utmost consideration by me. As per the relevant part of the block assessment from the perusal of Annexure A-4 of the seized material in the Saharanpur Associates group it is seen that page No. 78 contains details of draft, prepared for the initial payment of Rs. 71,61,033 for taking the contract of river bed mining by Saharanpur Associates. In these details total investment made by Mr. Rakesh Goyal has been shown at Rs. 26.75 lakhs. Page No. 78 of the same annexure also depicts, the details of drafts prepared balance sheet (Prepared on page No. 127 as on 6-9-1998) of M/s. Saharanpur Associates shows that Rs. 13.5 lakhs has been returned to Shri Rakesh Goel, This shows that Shri Rakesh Goel has withdrawn from the partnership and amount to the extent of Rs. 13.5 lakhs has been returned to him. Mr. Rakesh Goel initially was one of the partners of Saharanpur Associates group which is evident from partnership deed of Saharanpur Associates that forms part of seized material from page 58 to page 62 of Annexure A-4 seized from the office of Saharanpur Associates on 13-10-1998. Since Shri Rakesh Goyal has withdrawn from the group as stated by him under section 132(4) of Income Tax Act on the date of search, the claim of Mr. Rakesh Goyal that he has invested only Rs. 11.5 lakhs in Saharanpur Associates is, therefore, false. If this being the case, the Saharanpur Associates had no reason to return back the sum of Rs. 13.5 lakhs as discussed above, as is evidenced from the balance sheet at page 127 of Annexure A-4 of the seized documents from Saharanpur Associates. The reply of the assessed vide letter dated 14-3-2001 in response to this office query dated 9-3-2001 has been considered and is not found to be tenable. The investment of Shri Rakesh Goyal was exactly Rs. 26.75 lakhs, the evidence of which is available in the seized material of Saharanpur Associates as already discussed. Shri Rakesh Goyal could not produce any documentary evidence in support of his claim regarding the extent of investment to be only Rs. 11.5 lakhs. Since Rs. 3 lakhs have been shown by Shri Rakesh Goyal to be out of amount of Patni Chemicals by way of draft, the remaining amount of Rs. 23.75 lakhs is out of undisclosed sources and treated as unexplained investment under section 69 of the Income Tax Act, 1961. The addition of Rs. 23,75,000 consists of the following :

(a) Rs. 8.50 lakhs investment made by Shri Rakesh Goyal but not accepted in absence of any documentary evidence.

(b Rs. 15,25,000 being excess investment shown in the books of Saharanpur Associates in the name of Shri Rakesh Goyal but not accepted by the appellant to be belonging to him.

As regards Rs. 8. 50 lakhs :

'(a) was paid out of S.B. Account No. 14718 which has duly been disclosed in the income-tax return filed by the appellant.

(b) is duly reflected in the Bank account, which is meant for disclosing to the Income Tax department.

(c) was in the previous year, which has not expired at the time of search operation, is excluded to be considered as income in block period as per the provisions of section 158BA(3) as also discussed above being a transaction entered into regular books of accounts, which were meant for income-tax purposes and, therefore, the same is held contrary to law and is, therefore, deleted from the block assessment.

As regards the remaining sum of Rs. 15.25 lakhs, the contention of the appellant was that the documents relied upon by the assessing officer were found from the third party and those could not be considered in the case of the appellant as no evidence of corroborating nature has been brought on record. The facts as emerged from the rival contentions taken by both the parties Shri Rakesh Goyal the appellant could not said to be a stranger to the third party, viz., Saharanpur Associates. Shri Rakesh Goyal was initially one of the partners of Saharanpur Associates which is evident from the facts stated above. Moreover, he has admittedly withdrawn from the partnership as have been stated above. The appellant further contended that section 68 is also applicable only in the case of Saharanpur Associates where the credit amounts were appearing and which were not explained to the satisfaction of the learned assessing officer and, therefore, on this basis also, no addition is called for on account of undisclosed investment in the hands of the appellant. This plea taken by the appellant also does not carry any force in view of the facts stated above as per which the appellant Shri Rakesh Goyal has invested money in the said concern. The addition is, therefore, rightly made under section 69 of the Income Tax Act, 1961 in the case of the appellant-assessed by treating the sum of Rs. 15.25 lakhs as income from undisclosed sources. I, therefore, confirm the addition to the tune of Rs. 15.25 lakhs out of the addition made as unexplained investment under section 69 of the Income Tax Act, 1961.

9.1 After considering the submissions and perusing other material on record, we noted that search was also conducted in case of Saharanpur Associates and it was noted there that credit entry of Rs. 26,75,000 was in the name of the assessed. Out of this credit entry of Rs. 26,75,000 a sum of Rs. 3 lakhs has been explained by assessed, as the same was made after withdrawal from Patni Chemicals Ltd. The remaining amount was held by the assessing officer as unexplained. The Commissioner (Appeals) noted that the assessed had paid a further amount of Rs. 8.5 lakhs out of savings Bank Account No. 14718 with Oriental Bank of Commerce, Saharanpur and the same was duly disclosed in the income-tax return year after year. Accordingly to this extent the addition was deleted and the remaining amount was held as unexplained.

9.2 The counsel of the assessed has stated that neither the assessed was partner during the relevant period when the paper was found. It was further stated that though initially the assessed was partner, however, during the relevant period the assessed was not partner in the firm. The attention of the Bench was drawn on pp. 3 and 4 of the paper book where no name of the assessed is mentioned, as on these pages the copy of Panchnama is placed. The attention of the Bench was drawn on pp. 24, 25 & 26 where a copy of account of Saharanpur Associates is placed on which basis the addition of Rs. 23,75,000 was made by the assessing officer. It has been stated by the counsel of the assessed even no name of assessed is mentioned in these papers. Therefore, it is not known that on which basis the addition has been made by the assessing officer and how the addition of Rs. 15,25,000 has been sustained by the Commissioner (Appeals).

9.3 The learned Departmental Representative also could not controvert the submissions of the learned counsel. Neither any material was brought on record that on what basis the addition has been made by the assessing officer. Though a copy of account is placed in the paper book, but nowhere the name of the assessed is appearing in that paper. Therefore, without any basis and without raising any specific query, the addition of Rs. 23,75,000 made by the assessing officer was not justified, and the Commissioner (Appeals) was also not justified in sustaining the part addition of Rs. 15,25,000. If any adverse inference was to be drawn that could have been drawn in the case of Saharanpur Associates and not in case of assessed, because the onus lay upon the person from whose possession the alleged paper was found. It any unexplained credit appearing in the name of any person in the books of such person, then the adverse inference can be drawn against such person under section 68. Therefore, no addition can be made under section 69 against such person, i.e., assessed. Neither the copy of document on which basis the additions were made of Rs. 15,25,000 was confronted to the assessed nor any other material was brought on record which suggests that there was direct nexus between the entry credited in the books of accounts of Saharanpur Associates with the evidence found from the possession of the assessed. Therefore, in view of these facts and circumstances we delete the addition of Rs, 15,25,000 sustained by the Commissioner (Appeals).

10. Next ground in the appeal of the assessed is against upholding an addition of Rs. 1 lakh out of addition made on account of investment in household appliances. The assessing officer has made addition of Rs. 2 lakhs on account of household appliances. The Commissioner (Appeals) has reduced the addition to Rs. one lakh. This is undisputed fact that inventory of household appliances were prepared during the course of search and assessed could not explain the items purchased during the block period properly. Therefore, we are not inclined to interfere in the findings of Commissioner (Appeals), who sustained an addition of Rs. one lakh as against Rs. 2 lakhs addition made by the assessing officer. Accordingly the order of the Commissioner (Appeals) is confirmed on this issue.

11. Next issue, i.e., ground No. 5 is against the sustenance of addition of Rs. 45,000 on account of expenses incurred by assessed on foreign tour. The total addition was made by the assessing officer at Rs. 99,000. In fact, the assessing officer made addition by observing that cost of stay at abroad for 18 days estimated at Rs. 72,000 and cost of air ticket estimated at Rs. 50,000 and after allowing the benefit of withdrawals shown from Patni Chemicals of Rs. 23,000, the remaining amount of Rs. 99,000 was added by the assessing officer as unexplained expenditure on foreign visit. The Commissioner (Appeals) after ascertaining the fact that the expenses on stay were borne by Shri Atul Gupta, who asked the assessed to visit South Africa for purpose of supply of computers. Therefore, the expenditure incurred on stay for 18 days was deleted by the Commissioner (Appeals). However, he sustained the addition of Rs. 18,000 on account of stay at Singapore and on account of tickets at Rs. 27,000 (Rs. 50,000 total cost of ticket minus Rs. 23,000 withdrawals shown from Patni Chemicals). In this way, an addition of Rs. 45,000 was sustained. No plausible explanation could be filed on behalf of the assessed during the course of hearing. Therefore, in view of the reasoning given by Commissioner (Appeals), we confirm this addition.

12. The alternate ground, i.e., ground Nos. 6 to 9 were not pressed. Therefore, they are dismissed as not pressed.

13. Now we will take up the appeal of the department in IT(SS)A No. 232/Del/2002.

14. First ground is against deleting the addition of Rs. 20 lakhs on account of NRI gifts. The assessing officer made the addition by holding that the gifts received by assessed were not genuine. The Commissioner (Appeals) deleted this addition by holding that proper books of accounts were maintained by assessed and the gifts received from NRI were duly disclosed by filing regular return of income. Therefore, no addition can be made in proceedings under Chapter XIV-B of the Act. The Commissioner (Appeals) has also placed reliance on Explanation B & C inserted by Finance (No. 2) Act, 1998, by which it was clarified as under:

"Explanation -B. The total undisclosed income relating to block period shall not include the income assessed in any regular assessment as income of such block period.

Explanation-C. The income assessed in this Chapter shall not be included in the regular assessment of any previous year included in the block period."

14.1 Undisputedly, the assessed has disclosed gifts received during assessment year 1996-97 while filing the regular return. Therefore, there was no point to add this addition while processing the return under Chapter XIV-B. Accordingly, we hold that the Commissioner (Appeals) was justified in deleting the addition of Rs. 20 lakhs.

15. In ground No. 2 the department has objected in deleting the addition of Rs. 10,11,885 made by the assessing officer on account of capital gain on sale of shares. Again this addition was made by the assessing officer on account of sale of shares during assessment year 1992-93. The Commissioner (Appeals) deleted this addition by holding that the capital gain arising out of sale of shares was duly shown during assessment year 1992-93 while filing the regular return. Therefore, on the reasoning given while deleting the addition of Rs. 20 lakhs, this addition was also deleted.

15.1 Here also we do not find any infirmity in the finding of Commissioner (Appeals), as the assessed has already disclosed all the facts relating to capital gain on account of sale of shares during assessment year 1992-93 while filing its regular return.

16. Ground No. 3, which relates to deleting the addition of Rs. 8,50,000 out of total addition of Rs. 23,75,000, this issue we have already dealt with while disposing the ground of appeal, where the Commissioner (Appeals) has sustained the addition of Rs. 15,25,000. We have already deleted the addition of Rs. 15,25,000 by holding that no addition can be made in the hands of the assessed, as nothing was brought on record which could have established that assessed has made deposit with Saharanpur Associates of Rs. 15,25,000. A sum of Rs. 8,50,000 was advanced by assessed out of his bank account and the same was disclosed by assessed while filing his regular return of income. Therefore, there was no point in making any addition while completing the assessment under section 158BC Therefore, this ground of the department also fails.

17. Ground No. 4 relates to deletion of addition of Rs. 4,37,569 made by the assessing officer on account of diversion of income in the name of his wife Smt. Parul Goyal. This addition was made by the assessing officer by observing that Smt. Parul Goyal was not aware of filing of any return on her behalf. Therefore, the conclusion was drawn by the assessing officer that income shown in the name of Smt. Parul Goyal was, in fact, the income of the assessed. Accordingly, the amount of Rs. 4,37,569 shown income of the block period of Smt. Parul Goyal was added in the hands of the assessed. The Commissioner (Appeals) has deleted the addition on the reasoning given in para 36 of his order.

17.1 The learned Departmental Representative could not controvert the findings of Commissioner (Appeals) that Smt. Parul Goyal had filed her regular return and the amount of addition has already been declared by her in her return. If by any reason during the course of search, proper explanation could not be given but on a later stage when the facts were found otherwise and the explanation of the assessed was reasonable, no addition can be made in the hands of the assessed. The assessment in the case of Smt. Parul Goyal has already been completed on the basis of regular return. Therefore, in view of the reasoning given by Commissioner (Appeals) and in view of these facts we confirm the order of Commissioner (Appeals) on this issue also.

18. Ground No. 5 is in regard to deleting the addition of Rs. 18,57,038 made by the assessing officer on account of bogus declaration in VDIS in the name of assessed's wife Smt. Parul Goyal. The wife of the assessed had availed the benefit of Voluntary Disclosure of Income Scheme, 1997 and disclosed jewellery of Rs. 18,57,384. The assessing officer held that the declaration in VDIS was not genuine. Accordingly he made addition in the hands of the assessed by holding that jewellery was purchased in the name of his wife by assessed. The Commissioner (Appeals) has given his findings in paras 41 and 42 of his order and deleted the addition. It was held by the Commissioner (Appeals) that the VDIS declared in the name of wife of the assessed was duly accepted by the department. Therefore, there was no point in making any addition in the hands of the assessed. The Commissioner (Appeals) has also observed in his order that Shri Y.P.B. Singh, who appeared on behalf of department also could not rebut the evidence in regard to VDIS.

18.1 The findings of the Commissioner (Appeals) given in paras 41 and 42 of his order are as under :

"41. The evidence of irrefutable nature as discussed herein force, cannot be ignored merely because the lady has applied ignorance with regard to the said material/information. Shri Y.P.B. Singh did not also rebut the said evidences. He merely relied on the statement of the lady, which has already been held by me, cannot go to substitute the documentary evidences available in seized material in support of the declaration under VDIS having been made by her and enjoyment of proceeds of jewellery (covered by VDIS 1997 in her own name).

42. On a consideration of the totality of facts and circumstances of the case, I have no option but to delete this addition of Rs. 18,57,038. The appellant gets a relief of Rs. 18,57,038."

18.2 After considering the above finding of Commissioner (Appeals) and the order of the assessing officer, we do not find any infirmity in the findings of the Commissioner (Appeals), as findings of the Commissioner (Appeals) neither could be controverter nor any material was brought on record as to how the jewellery disclosed under VDIS was bogus. Therefore, in view of the reasoning given by the Commissioner (Appeals), we confirm his order on this issue also.

19. Ground No. 6 is against deleting the addition of Rs. 1,47,000 on account of capital introduced in the name of minor children of the assessed. Various gifts were received by the minor son of the assessed and the gift-tax returns were filed during the relevant period of time and also regular returns of the minor son of the assessed were filed and they were accepted also. Therefore, we hold that the Commissioner (Appeals) was justified in holding that there was no reason to assess this amount of gift received by assessed's son while completing the assessment under section 158BC, as the gift-tax return and regular returns were duly filed at the relevant point of time. Therefore, we hold that the Commissioner (Appeals) was justified in deleting the addition on account of gifts aggregating to Rs. 1,47,000 received by Rishab Goyal, son of the assessed.

20. Ground No. 7 is against deleting the addition of Rs. 2,75,000 made by the assessing officer on account of income and investment in moneylending business based on loose papers pp. 22, 25 and 32 of Annexure 26. The assessing officer has made an addition of Rs. 10 lakhs and Rs. 2,75,000 on the basis of parchas found from the possession of assessed during the course of search. These parchas were numbered as 25 to 32 of Annexure 26. These parchas were containing some jottings which give an aggregate figure of Rs. 5.42 lakhs and Rs. 2,50,000. The assessing officer estimated the investment of these parchas at Rs. 10 lakh and Rs. 2,75,000. These investments were estimated by the assessing officer by observing that assessed is dealing in the business of moneylending. Before the Commissioner (Appeals) it was submitted that neither any description are given on these papers, nor any transactions are mentioned in these papers. Only few figures show

3-30

2.12

5-42

and likewise the figure of Rs. 2,50,000 was mentioned and thereafter the word "interest" is mentioned. Therefore, the assessing officer drew an inference that the assessed is dealing in moneylending business and accordingly he estimated the investment in moneylending at Rs. 10 lakhs and likewise the figure of Rs. 2,50,000 was altered by Rs. 2,75,000 by alleging that on this amount the assessed has received a sum of Rs. 2,50,000 as interest. Accordingly it was submitted that these two additions made by, the assessing officer were not justified. Reliance was placed on various case laws, i.e., 64 TTJ 247 (sic), Atul Kumar Jain v. Dy. CIT (1999) 64 TTJ (Del) 786, Bedi & Co. (P) Ltd. v. CIT (1983) 144 ITR 352 (Kar); CIT v. Bedi & Co. Ltd. (1998) 230 ITR 580 (SC); 66 TTJ 139 (sic), Asstt. CIT v. Shailesh S. Shah (1997) 59 TTJ (Mum) 574 : (1997) 63 ITD 153 (Mum). After considering the submissions and perusing the order of the assessing officer, the Commissioner (Appeals) held that this is a deaf and dumb document, therefore, no addition can be made on the basis of these parchas. Accordingly the additions of Rs. 10 lakhs and Rs. 2,75,000 were deleted. The findings of the Commissioner (Appeals) given in his order in paras 48 to 50, are as under :

"48. In reply, Shri Y.P.B. Singh, Assistant Commissioner stated as follows :

Page No. 25 of Annexure A-26 has been examined by me, total has been made like this

3-30

2-12

5-42 the period has been mentioned from 15.1 to 1.5 with regard to total of Rs. 2,12,800 different amount have been added to each other which total up to Rs. 2,12,800, reg. 3-30, there is no such detail.

I have carefully considered the material and information on record as also various case laws as have been referred to and relied upon by the learned counsel for the appellant. From the scrutiny of the paper no inference can be drawn about any investment in moneylending business by the assessed. Practically it does not give any sort of details as has also been admitted by the assessing officer. Further, initially, it was for the revenue to prove that the loose paper had some contents of income. Apparently, the assessing officer has failed to discharge this initial onus. Respectfully following the case laws as have been referred to and relied upon by the learned counsel for the appellant, the addition is deleted.

Addition on account of payment made to one Shri Gautam and interest thereon-Rs. 2,75,000

49. In relation to this loose paper marked No. 32, on the basis of which the aforesaid addition of Rs. 2,75,000 has been made, the learned counsel for the appellant relied on the arguments made by him in relation to the Purcha No. 25, as has been discussed by me in the preceding paragraphs. The assessing officer too referred to the similar argument as had been advanced by him in relation to the loose paper referred to above. Page No. 32 of Annexure A-26 has been examined by me and it is written like as follows :

Rs. 2,50,000 Gautam 5-9-1996

5-3-1997 intt.

On the basis of above inscription, inference reg. moneylending business by the assessed has been drawn by the assessing officer.

50. Following the case laws as has been referred to by me in relation to Purcha No. 25, this addition too is deleted."

20.1 After perusing the findings of the Commissioner (Appeals) and the submissions of both the parties, we do not find any infirmity in these findings. Firstly the finding of the Commissioner (Appeals) has not been controverter by the learned Departmental Representative by filing any positive evidence. The copies of the pages found from the possession of the assessed are placed in the paper book and after going through these papers, we find that these are simply deaf and dumb documents and they cannot be considered for making any addition. This is a settled principle of law that any document or entry recorded in those documents should be corroborated with a positive evidence. Here in the present case nothing has been corroborated or proved that assessed was dealing in moneylending business. Therefore, we hold that the Commissioner (Appeals) was justified in deleting the addition of Rs. 10 lakhs and Rs. 2,75,000.

20.2 For the sake of clarification no ground of appeal has been taken by the department in regard to deletion of addition of Rs. 10 lakhs.

21. Ground Nos. 8 and 9 are in regard to deleting the addition of Rs. 1 lakh out of addition of Rs. 2 lakhs on account of household expenses and deleting the addition of Rs. 54,000 out of total addition of Rs. 90,000 on account of expenditure on foreign tour by the assessed. For the remaining addition sustained by commissioner (Appeals), the assessed also came in appeal before the Tribunal and the ground of appeal of assessed has already been disposed of by us above, while disposing the appeal of the assessed, whereby we have held that the order of the Commissioner (Appeals) was correct. The grounds of the assessed were dismissed. On the same reasoning we dismiss these grounds of the department.

22. The remaining issue in appeal of department is against the deletion of addition of Rs. 67,50,000 made by the assessing officer on account of undisclosed investment in purchase of property Thrill Hotels (P) Ltd.

22.1 The learned Departmental Representative has simply placed reliance on the order of the assessing officer.

22.2 The findings of the Commissioner (Appeals) are given in his order in pp. 59 to 64, which are as under :

"59. During the course of search, a loose paper was found from the possession of Shri Nand Kishore Goel. The said letter gave an impression that the property had been purchased for Rs. 2 crores and the difference was paid outside the books of accounts. The amount of addition of Rs. 67,50,000 was worked out as under :

(a) Value of property                                                            2,00,00,000
 

Deduction : Amount covered by the agreement                       50,00,000
 

                                                                                            1,50,00,000
 

(b) 45 per cent of above being the share of the appellant and other members of his group 67,50,000

60. In short the assessing officer under some misconception held that the agreement for purchase of the 'Said property was entered into in the year 1997 only when the property was of the value of Rs. 2 crores. It is on the basis of this misconception that the aforesaid addition of Rs. 67,60,000 had been made. It has now been accepted by the assessing officer that the agreement had been entered into in the year 1989. In view of the fact that the said valuation has been upheld by the Board of revenue, Allahabad in terms of its order dated 20-11-2001, it is evident that the very basis of this addition has become non-existent. No agreement to sell whatsoever has taken place in the year 1997, May be in the year 1997 value of the property might have been Rs. 2 crores, but the same is not relevant for the purposes of computation of undisclosed income as the property in question had been subject-matter of agreement to sell as early as on 12-5-1989 and on that time, a sum of Rs. 9,75,000 had been paid also leaving a balance of Rs. 25,000 only. On the basis of estimated value of the property at Rs. 2 crores in the year 1997, no addition can be made as the agreement had been entered into on 12-5-1989. If the correct facts about the date of purchase of the property and payments made for the same are taken into account, there remains no basis for the said addition of Rs. 67, 50, 000 in the hands of the appellant.

2,00,00,000 50,00,000 1,50,00,000

61. The said addition does not even find support on the basis of letter dated 9-8-1994, found from the possession of Shri Nand Kishore Goel. The contents of the letter has been dealt with by the same assessing officer in the block assessment order dated 29-3-2001, passed in the case of Thrill Hotel (P) Ltd. It has been clearly stated in the said order, that the said letter is not in the handwriting of Shri Arvind Gupta, but somebody has signed as Arvind. This letter, therefore, cannot be said to be having any authenticity as stated by the assessing officer himself.

62. Further this letter contains lot of incongruities. In this letter there is some reference of sale and purchase of shares of Thrill Hotel (P) Ltd. for a sum of Rs. 2 crores. There is no material to support the same. The group of Shri Rakesh Goel, the appellant here, has been already having a shareholding to the extent of 62.5 per cent in the beginning. Thereafter they acquired some more shares from Shri Arvind Gupta (another shareholder) and on the date of search, the group as a whole having 90 per cent shares in the said company;

45 per cent belonging to Shri Rakesh Goel and remaining 45 per cent belonging to Shri Naresh Goel (brother of Shri Rakesh Goel). In this statement under section 132(4) Shri Arvind Gupta has admitted the subsequent sale of shares to Goels and in the said statement he has further stated that the transactions took place on various value of shares. From a combined reading of all the material referred to above, only conclusion that can be drawn, is that Shri Rakesh Goel instead of selling the shares of Thrill Hotel (P) Ltd. had purchased shares from Shri Arvind Gupta and such transactions had nothing to do with purchase of property for which agreement had been entered into on 12-5-1989. Thus, the said letter's authenticity has not been proved, as no bearing on the assessment of the appellant and the same cannot go to support that the appellant has made any such investment for which addition of Rs. 67,50,000 has been made here.

63. Thus, from whatever angle the matter is examined, there does not seem to be any basis for the said addition of Rs. 67,50,000. The same is, therefore, deleted.

64. For the same reasons as given above, the annexure of the said letter also does not have any evidentiary value, much less for making any addition in the case of the appellant as proposed by the Assistant Commissioner in his report submitted to me. Even after specific query raised by me, the Assistant Commissioner did not substantiate either the contents of the said annexure or bring to my notice any information which could indicate that the appellant had ever made any such investment. Therefore, the suggestion given by the assessing officer is rejected as being without merits."

22.3 After considering the order of the assessing officer, submissions of the learned authorised representative and the findings of the learned Commissioner (Appeals), we found that the findings of the Commissioner (Appeals) are self-explanatory which does not require any further interference. The findings given by the Commissioner (Appeals) were given after hearing the learned authorised representative, the comments of the assessing officer and the submissions of Shri Y.P.B. Singh, the Departmental Representative. These findings, as stated above neither could be controverter by the learned Departmental Representative nor any other material was brought on record from which it can be established otherwise. Therefore, we confirm these findings. of the Commissioner (Appeals), as we have already stated that the findings of the Commissioner (Appeals) are very clear, which does not require any interference.

23. In the result, the appeal of the assessed is allowed in part. The cross-objection of the assessed is dismissed and the appeal of the department is dismissed.