S.K. Jain, v. DCIT CC-8,

ITA 2004/DEL/2008 | 2005-2006
Pronouncement Date: 22-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 200420114 RSA 2008
Bench Delhi
Appeal Number ITA 2004/DEL/2008
Duration Of Justice 1 year(s) 8 month(s)
Appellant S.K. Jain,
Respondent DCIT CC-8,
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 22-01-2010
Date Of Final Hearing 18-01-2010
Next Hearing Date 18-01-2010
Assessment Year 2005-2006
Appeal Filed On 22-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H DELHI BEFORE SHRI VIMAL GANDHI : HONBLE PRESIDENT AND SHRI K.G. BANSAL : HONBLE ACCOUNTANT MEMBER ITA NO. 2004(DEL)/2008 ASSESSMENT YEAR: 2005-06 SHRI S.K. JAIN DEPUTY COMMISSIONER OF INCOME 11/2A PUSA ROAD NEW DELHI. VS. TAX CENTR AL CIRCLE 8 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MUKESH GUPTA ADVOCATE RESPONDENT BY: SHRI N.K. CHAN D SR. DR ORDER PER K.G. BANSAL ; AM THIS APPEAL OF THE ASSESSEE EMANATES FROM THE ORDER OF CIT(APPEALS)-II NEW DELHI PASSED ON 14.4.2008 IN APPEAL NO. 06- 07/405 AND IT PERTAINS TO ASSESSMENT YEAR 20 05-06. THE CORRESPONDING ORDER OF ASSESSMENT WAS FRAMED BY THE DEPUTY C OMMISSIONER OF INCOME- TAX CENTRAL CIRCLE-8 NEW DELHI (AO FOR SHORT) ON 26.12.2006 UNDER THE PROVISION OF SECTION 143(3) OF THE INCOME-TA X ACT 1961. THE ASSESSEE HAD TAKEN THREE GROUNDS IN THE APPEAL. THE THIRD GROUND REGARDING CASH FOUND IN THE POSSESSION OF SHRI G .L. JAIN A CONNECTED PERSON WAS NOT PRESSED BY THE LD. COUNSEL FOR T HE ASSESSEE FOR THE REASON THAT THE ORDER OF THE LD. CIT(A) IN THIS BEHALF DO ES NOT LEAD TO ANY GRIEVANCE ITA NO. 2004(DEL)/2008 2 IN THE CASE OF THE ASSESSEE. GROUND NOS. 1 AN D 2 ARE TO THE EFFECT THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION OF - (I) RS. 8 83 800/- ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEAR CH; AND (II) RS. 7 51 300/- ON ACCOUNT OF INVESTMENT MADE IN VARIOUS ARTICL ES FOUND IN THE COURSE OF SEARCH. 2. IN REGARD TO GROUND NO. 1 IT IS MENTIONED IN THE ASSESSMENT ORDER THAT DURING THE SEARCH AT THE RESIDENCE OF THE ASSESSEE CASH AMOUNTING TO RS. 1 04 98 500/- WAS FOUND IN POSSESSION OF VAR IOUS FAMILY MEMBERS OUT OF WHICH A SUM OF RS. 8 83 800/- WAS FOUN D IN THE POSSESSION OF THE ASSESSEE. HIS STATEMENT WAS RECORDED UNDER TH E PROVISION OF SECTION 132(4). THE RELEVANT PORTION OF THE STATEMENT WAS REPRODUCED BY THE AO ON PAGE 2 OF THE ORDER WHICH IS AS UNDER:- Q. HOW MUCH CASH IS PRESENT IN THIS PREMISE? PL EASE FURNISH SEPARATE DETAIL OF ANY UNACCOUNTED C ASH KEPT THIS PREMISES. A. AFTER ASKING MY FAMILY MEMBERS I CAN TELL YOU THAT THERE IS A CASH OF AROUND 80 00 000/- TO RS. 1. 00 CRORE IN THE HOUSE. THIS CONTAINS BOTH ACCOUNTED AND UNACCOUNT ED CASH. Q. I AM SHOWING YOU.THE TOTAL AMOUNT OF CASH F OUND IS RS. 1 04 98 500/-. KINDLY EXPLAIN THE SOURCE OF THIS CASH. ITA NO. 2004(DEL)/2008 3 A. OUT OF THE ABOVE CASH NEARLY 40 TO 50 LACS IS CASH IN HAND IN THE BOOKS OF ACCOUNTS OF DIFFERENT COMPANIES/CONCERNS. REST OF THE AMOUNT IS UNACCOU NTED EXCEPT FOR AMOUNT OF RS. 2 LACS WHICH PERTAIN T O MY DAUGHTER WHO IS NO MORE. ALSO THE CASH FOUND F ROM THE MIDDLE BOX IN THE LIVING ROOM IS PUJA MONEY WHIC H IS USED FOR DONATION PURPOSES AND RS. 50 000/- IS MY WIFES KITTY MONEY. Q. IN THE ABOVE QUESTION YOU HAVE STATED THAT NEARLY RS. 40 TO 50 LACS IS CASH IN HAND IN THE BOOKS OF AC COUNTS OF VARIOUS ENTITIES. PLEASE STATE THE DATE TILL WH ICH THE BOOKS ARE COMPLETE THE NAMES OF VARIOUS ENTITIES AS WELL AS THE APPROXIMATELY BALANCE IN EACH ENTITY? A. I DO NOT REMEMBER AT PRESENT AND I WILL TELL THE SAME ON SEEING MY BOOKS. 2.1 THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF CASH-ON- HAND OF ABOUT RS. 40.00 TO 50.00 LAKH AVAILABL E WITH VARIOUS FAMILY CONCERNS AS MENTIONED IN THE STATEMENT RECO RDED AT THE TIME OF SEARCH. HOWEVER IT WAS MENTIONED THAT INSTEAD OF DOING SO IT WAS SUBMITTED THAT CASH OF RS. 8 83 800/- WAS FOUND IN THE PO SSESSION OF THE ASSESSEE OUT OF WHICH CASH OF RS. 6 33 800/- WAS SEIZED. IT WAS FURTHER MENTIONED THAT THE ASSESSEE HAD NOT RECONCILED THE CASH FOUND IN THE POSSESSION OF SHRI G.L. JAIN. IN VIEW THEREOF A SUM OF RS .96 95 000/- WAS BROUGHT TO TAX AS UNEXPLAINED CASH. ITA NO. 2004(DEL)/2008 4 2.2 AGGRIEVED BY THIS ORDER THE ASSESSEE MOV ED AN APPEAL BEFORE THE CIT(APPEALS). IT WAS INTER-ALIA SUBMITTED THAT T HE AO FAILED TO APPRECIATE THAT A SUM OF RS. 8 83 500/- ONLY WAS FOUND IN THE POSSESSION OF THE ASSESSEE AND THE BALANCE AMOUNT WAS FOUND IN THE POSSESSION OF OTHER FAMILY MEMBERS. IT WAS EXPLAINED TO THE AO TH AT THE OTHER FAMILY MEMBERS HAD THEIR OWN SOURCES OF INCOME AND A S SUCH THE ASSESSEE CAN BE DIRECTED TO EXPLAIN ONLY THE CASH FOUND I N HIS POSSESSION. IN SO FAR AS THE CASH IN POSSESSION OF THE ASSESSEE IS CON CERNED IT RELATED TO TWO CONCERNS M/S S.K. INDUSTRIES LTD. AND M/S S.K. JAIN AMOUNTING TO RS. 7 91 237/- AND RS. 1 03 871/- RESPECTIVELY. THE LD. CIT(APPEALS) CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSI ONS MADE BEFORE HIM. IT WAS MENTIONED THAT IF THE CASH FOUND IN POSSESSIO N OF THE ASSESSEE BELONGED TO THE AFORESAID TWO CONCERNS THE SAM E OUGHT TO HAVE BEEN EXPLAINED ON THE DATE OF SEARCH ITSELF. THE E XPLANATION IS QUITE PRECISE AND THEREFORE IT IS PURELY AN AFTERTHOUGHT. IT WAS FURTHER MENTIONED THAT IT WAS FOR THE ASSESSEE TO ESTABLISH WIT H CREDIBLE EVIDENCE THAT THE CASH BELONGED TO THE TWO AFORESAID CONCERNS. FIN ALLY IT WAS HELD THAT THE ASSESSEE DID NOT FURNISH ANY COGENT REASON TO KEEP THE CASH OF BUSINESS AT HIS RESIDENCE ESPECIALLY WHEN THESE CONCERN S HAD THEIR OWN BANK ACCOUNTS. THUS THE ADDITION TO THE EXTENT OF RS. 8 83 800/- WAS ITA NO. 2004(DEL)/2008 5 UPHELD. IN REGARD TO THE BALANCE AMOUNT THE LD . CIT(APPEALS) FURNISHED THE REASONS FOR HOLDING IT TO BE BELONGING TO SHRI G.L. JAIN. WE ARE NOT CONCERNED WITH THIS ISSUE AS THE LD. COUNSEL HAS NOT PRESSED GROUND NO. 3 IN THIS REGARD. SUFFICE IT TO SAY THAT THE OT HER AMOUNT WAS DELETED FROM THE ASSESSMENT OF THE ASSESSEE. 2.3 BEFORE US THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT IN THE COURSE OF SEARCH ON 16.2.2005 CASH AMOUNTING TO RS. 8 83 800/- WAS FOUND IN HIS POSSESSION. THE AUTHORIZED OFFICER DID NOT ASK ANY QUESTION REGARDING THE SOURCE OF THIS MONEY. THE ASSESS EE WAS QUESTIONED IN A GENERAL MANNER ABOUT THE AVAILABILITY OF CASH I N POSSESSION OF ALL THE MEMBERS. THE ANSWERS WERE GIVEN TO THE QUESTIONS RAISED IN THIS BEHALF. IT MAY BE MENTIONED HERE THAT THESE QUESTIONS AND ANSWERS HAVE ALREADY BEEN REPRODUCED BY US WHILE SUMMARIZING THE ASSESSMENT ORDER. IT WAS FURTHER SUBMITTED THAT AFTER CONCLUSION OF THE SEARCH A LETTER DATED 21.3.2005 WAS ADDRESSED TO THE AO EXPLAI NING THE SOURCE OF CASH AS BELONGING TO M/S S.K. INDUSTRIES (P) LTD.- RS. 7 91 231/- AND M/S S.K. JAIN RS. 1 03 871/-. AS THE CASH STOOD EXPLA INED THE AO WAS REQUESTED TO RELEASE THE SEIZED AMOUNT OF RS. 6 33 800/-. THE EXPLANATION AS MENTIONED IN THIS LETTER WAS AL SO SUBMITTED IN THE COURSE ITA NO. 2004(DEL)/2008 6 OF ASSESSMENT PROCEEDINGS. HOWEVER THE AO D ID NOT ACCEPT THE EXPLANATION BY MENTIONING THAT THE ASSESSEE FAIL ED TO PROVE THAT IT WAS ACCOUNTED FOR IN THE BOOKS. THERE WAS NO BASIS TO COME TO THIS CONCLUSION. THE LD. CIT(APPEALS) ALSO UPHELD THE FINDINGS OF THE AO BY MENTIONING THAT THE EXPLANATION THEREOF WAS NOT FURNISHED IN THE STATEMENT RECORDED IN THE SOURCE OF SEARCH AND THEREFORE THE EXPLANATION FURNISHED BEFORE THE AO WAS AN AFTERTHOUGHT. THE CASE OF THE LD. COUNSEL WAS THAT NO QUESTION WAS PUT TO THE ASSESSEE TO EXP LAIN THE CASH FOUND IN HIS POSSESSION. THE EXPLANATION FURNISHED ON 21.3.2 005 WAS NOT PROVED TO BE WRONG. IT WAS ALSO NOT IN CONTRADICTION WITH T HE STATEMENT GIVEN AT THE TIME OF SEARCH. THE EXPLANATION STOOD ESTABLISHED AS THE ACCOUNTS OF S.K. INDUSTRIES PVT. LTD. FOR THE PERI OD 1.4.2004 TO 31.3.2005 WERE SUBMITTED BEFORE THE AO. THEREFORE IT WAS ARGUED THAT THE LOWER AUTHORITIES ERRED IN UPHOLDING THAT THE AMOUNT REPRESENTED INCOME FROM UNDISCLOSED SOURCES LIABLE TO BE INCLUDED IN THE TOTAL INCOME. 2.4 IN REPLY THE LD. DR SUBMITTED THAT THE ASSESSEE WAS REQUIRED TO FURNISH EXPLANATION REGARDING CASH AMOUNTING TO RS. 1 04 98 500/- FOUND IN THE PREMISES ON THE DATE OF SEARCH. IT WA S DEPOSED INTER-ALIA THAT CASH BETWEEN RS. 40.00 TO 50.00 LAKH WAS THE CAS H-ON-HAND IN THE BOOKS ITA NO. 2004(DEL)/2008 7 OF ACCOUNT OF DIFFERENT CONCERNS AND THE REST OF THE AMOUNT WAS UNACCOUNTED EXCEPT MINOR SUMS OF RS. 2.00 LAKH A ND RS. 50 000/- BELONGING TO THE DAUGHTER AND THE WIFE RESPECT IVELY. THIS SHOWS THAT THE CASH FOUND FROM THE ASSESSEE WAS ALSO NO T ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. HOWEVER SUBSEQUENTLY THE ASSESSEE FILED AN EXPLANATION THAT THE CASH FOUND FROM HIM BELONG ED TO TWO CONCERNS. NO EVIDENCE WAS FILED TO SHOW THAT THE CASH BELON GED TO THESE FIRMS AND THUS IT CANNOT BE SAID THAT THE EXPLANATION TENDERED BY THE ASSESSEE WAS SUBSTANTIATED IN THE COURSE OF ASSESSMENT PR OCEEDINGS. IT WAS FURTHER SUBMITTED THAT NO PAPER WAS FOUND IN THE PREMISES REGARDING THE DETAILS OF CASH-ON-HAND OF VARIOUS CONCER NS. IN ABSENCE OF SUCH DETAILS IT WOULD BE DIFFICULT TO COME TO A CONC LUSION THAT THE AMOUNT CLAIMED AS BELONGING TO THE AFORESAID TWO CONCE RNS BELONGED TO THEM AS A MATTER OF FACT. THEREFORE IT WAS ARGUED THA T LOWER AUTHORITIES WERE RIGHT IN BRINGING THIS AMOUNT TO TAX AS INCOME FROM UNDISCLOSED SOURCES. 2.5 WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT IN THE COURSE OF SEARCH A SUM OF RS. 8 83 800/- WAS FOUND IN THE POSSESSION OF THE A SSESSEE. AT THE SAME TIME TOTAL CASH FOUND IN THE PREMISES IN THE P OSSESSION OF VARIOUS ITA NO. 2004(DEL)/2008 8 MEMBERS OF THE FAMILY AMOUNTED TO RS. 1 04 98 500/ -. THE ASSESSEE WAS QUESTIONED ABOUT THE TOTAL CASH BUT NOT ABOUT TH E CASH FOUND IN HIS POSSESSION. AS MENTIONED EARLIER IT WAS INTER -ALIA DEPOSED THAT CASH OF ABOUT RS. 40.00 TO 50.00 LAKH WAS ACCOUNTED FOR IN THE BOOKS RS. 2.00 LAKH BELONGED TO THE DAUGHTER AND RS. 50 000/- BELONGED TO THE WIFE. THIS PART OF THE DEPOSITION DID NOT COME OUT TO BE WHOLLY TRUE AS FAR GREATER AMOUNT WAS CLAIMED TO BE CASH-ON-HAND O F VARIOUS FIRMS. HOWEVER WE ARE NOT CONCERNED WITH THE TOTAL C ASH OF RS. 1 04 98 500/- BUT WITH CASH OF RS. 8 83 800/- FOUND IN THE PO SSESSION OF THE ASSESSEE. THE EXPLANATION IN RESPECT OF THIS CASH WAS FURNISHED BY THE ASSESSEE ON 21.3.2005 AS BELONGING TO M/S S.K. INDUSTRIE S (P) LTD. AND M/S S.K. JAIN. IT WAS SUBMITTED THAT BOTH THE AFORE SAID PERSONS WERE ASSESSED TO TAX AND THEIR ACCOUNTS WERE MAINTAINED ON COMPUTERS. THE COMPUTER DATA WAS ALSO SEIZED IN THE COURSE O F SEARCH. THIS EXPLANATION WAS NOT REBUTTED BY THE AO. SINCE T HE COMPUTER DATA WAS ALSO SEIZED IN THE COURSE OF SEARCH THERE COUL D HAVE BEEN NO POSSIBILITY OF MANIPULATING CASH-ON-HAND OF THESE TWO FIRMS . THEREFORE IT CANNOT BE SAID THAT EXPLANATION TENDERED BY THE ASSESSEE WAS IN THE NATURE OF AN AFTERTHOUGHT AND THAT IT DID NOT REPRESENT THE REAL STATE OF AFFAIRS. THE ACCOUNTS OF S.K. INDUSTRIES PVT. LTD. PLACED IN T HE PAPER BOOK ON PAGES 22 ITA NO. 2004(DEL)/2008 9 AND 23 SHOW THAT A SUM OF RS. 8 03 273/- WAS STATED TO BE THE CASH SEIZED BY THE I.T. DEPARTMENT. THE ASSESSMENT F OR THIS YEAR WAS COMPLETED BY THE SAME A.O UNDER SECTION 143(3) WITHOUT MAKING ANY ADVERSE COMMENT IN THE MATTER. IN THIS BACKGROUN D WE ARE UNABLE TO PERSUADE OURSELVES TO AGREE WITH THE FINDING OF THE LD. CIT(APPEALS) THAT THE EXPLANATION WAS AN AFTERTHOUGHT. THERE FORE THE ADDITION SUSTAINED BY THE LD. CIT(APPEALS) IS DELETED. ACCORDINGLY GROUND NO. 1 IS ALLOWED. 3. IN REGARD TO GROUND NO. 2 IT IS MENTIONE D IN THE ASSESSMENT ORDER THAT IN THE COURSE OF SEARCH INVENTORY OF VARIOUS ITEMS SUCH AS FURNITURE PAINTINGS ELECTRONIC ITEMS ETC. WA S PREPARED AS ANNEXURE-2 OF THE PANCHNAMA. THESE ITEMS WERE VALUED ON THE BASIS OF INFORMATION GIVEN BY THE ASSESSEE. THE TOTAL VALUE OF THE IN VESTMENT WAS ARRIVED AT RS. 14 51 300/-. THE ASSESSEE WAS REQUESTED TO F URNISH THE BILLS SO AS TO QUANTIFY YEAR-WISE INVESTMENTS. IT WAS SUBMI TTED THAT THESE ITEMS WERE PURCHASED FROM CLASSIC ESTATES (P) LTD. CL ASSIC OVERSEAS (P) LTD. DYNAMIC CONSTRUCTION (P) LTD. AND NORTHERN INDIA MACHINERY STORE (P) LTD. HOWEVER BILLS WERE NOT FILED AND YEAR -WISE DETAILS OF PURCHASE WERE ALSO NOT FURNISHED. IN THESE CIRCUMSTANC ES THE VALUE OF THE ITEMS ITA NO. 2004(DEL)/2008 10 BEING RS. 14 51 300/- WAS ADDED TO THE TOTAL IN COME AS UNEXPLAINED INVESTMENT. 3.1 IT WAS SUBMITTED BEFORE THE LD. CIT(APPEALS ) THAT THESE ITEMS WERE PURCHASED OVER A NUMBER OF YEARS AND THERE WAS NO EVIDENCE ON RECORD THAT ALL THE ITEMS WERE PURCHASED IN THIS Y EAR. THE DETAILS OF WITHDRAWALS MADE BY THE ASSESSEE AND OTHER FAM ILY MEMBERS WERE ALSO FURNISHED. THE INVESTMENT IN THE ITEMS WAS STA TED TO BE OUT OF SUCH WITHDRAWALS. THE AO DID NOT DISPUTE THE AMOUN T OF WITHDRAWALS. THEREFORE IT WAS ARGUED THAT THE ADDITION WA S MADE PURELY ON ESTIMATE BASIS WITHOUT CONSIDERING ALL THE FACTS ON RECOR D. THE LD. CIT((APPEALS) CONSIDERED THE FACTS OF THE CASE AND THE SUBM ISSIONS MADE BEFORE HIM. IT WAS MENTIONED THAT THERE IS NO DISPUTE ABOU T THE EXISTENCE OF THE ITEMS. THE DISPUTE IS ABOUT THEIR VALUATION AN D SOURCE OF ACQUISITION. LOOKING TO OVERALL FACTS IT WAS HELD THAT SO ME CREDIT WILL HAVE TO BE GRANTED FROM THE WITHDRAWALS TOWARDS PURCHASE O F THESE ITEMS. IT WAS FURTHER HELD THAT SINCE THE ASSESSEE WAS LIVI NG IN THE HOUSE FOR QUITE SOME TIME IT CAN BE SAID THAT ALL THE ITEMS WERE NOT ACQUIRED IN THIS YEAR. THEREFORE A SUM OF RS. 6.00 LAKH WAS REDUCED ON THIS ACCOUNT. IT WAS ALSO HELD THAT RS. 1.00 LAKH COULD REPRESE NT EXCESS OF VALUATION AS ITA NO. 2004(DEL)/2008 11 ALL THE ITEMS WOULD NOT HAVE BEEN ACQUIRED FO R ROUND SUMS MENTIONED IN THE INVENTORY. THUS A FURTHER REDUCTION O F RS. 1.00 LAKH WAS ALLOWED IN RESPECT OF VALUATION. THE BALANCE AMO UNT OF RS. 7 51 300/- WAS HELD TO BE UNEXPLAINED INVESTMENT ON THE GROU ND THAT THERE WAS NO SATISFACTORY EXPLANATION AS TO THE SOURCE OF THE INVESTMENT AS NOTHING WAS DEBITED IN THE ACCOUNTS FOR PURCHASE OF THESE I TEMS. 3.2 BEFORE US THE LD. COUNSEL REFERRED TO PA GE 45 OF THE PAPER BOOK WHICH IS THE INVENTORY OF THESE ITEMS. IT WAS SUBMITTED THAT THE INVENTORY CONSISTED OF THE ITEMS NOT ONLY FOUN D IN THE PREMISES OCCUPIED BY THE ASSESSEE BUT OCCUPIED BY OTHER MEMBERS OF THE FAMILY ALSO. IT WAS ARGUED THAT THE ASSESSEE COULD BE ASKED T O EXPLAIN THE SOURCE OF ACQUISITION OF ONLY THOSE ITEMS WHICH WERE FOUND IN HIS POSSESSION AND CONTROL. FURTHER IT WAS SUBMITTED THAT ALL TH E ITEMS COULD NOT HAVE BEEN CONSIDERED IN ONE YEAR AS THE ASSESSEE HAD B EEN LIVING IN THIS HOUSE FOR QUITE SOME TIME. IN THIS CONNECTION OUR ATT ENTION WAS DRAWN TO PAGES 67 AND 69 OF THE PAPER BOOK WHICH FURNISH THE DETAILS OF WITHDRAWALS IN THE CASE OF THE ASSESSEE AND HIS SON SHRI SAJ AL JAIN FOR ASSESSMENT YEARS 1999-00 TO 2005-06. THE AGGREGATE WITHDRAWALS IN THE CASE OF THE ASSESSEE IN THESE SEVEN YEARS AMOUNTED TO R S. 31 07 727/- AND RS. ITA NO. 2004(DEL)/2008 12 6 87 710/- IN THE CASE OF HIS SON. INVESTMENTS IN INSURANCE PREMIA HAVE BEEN SHOWN SEPARATELY AT RS. 2 37 077/- AND RS. 2 00 273/- RESPECTIVELY IN THESE CASES. THE CASE OF THE LD. COUNSEL WAS THAT THE FATHER AND THE SON HAD SHOWN SUFFICIENT WITHDRAWALS SO AS TO COVER INVESTMENT IN THE ITEMS FOUND IN THEIR POSSESSION. THEREFORE IT WAS ARGUED THAT THE WHOLE OF THE ADDITION SHOULD HAVE BEEN DELETED. 3.3 IN REPLY THE LD. DR SUBMITTED THAT THE RE WAS NO DIRECT EVIDENCE IN THE FORM OF BILLS DEBIT TO ACCOUNTS ETC. TO SHOW THAT THE WITHDRAWALS WERE ALSO MADE FOR PURCHASE OF SUCH ITEMS. THE ASSESSEE HAD SHOWN WITHDRAWALS ONLY IN TWO CASES. THE LD. CIT(A PPEALS) HAD CONSIDERED ALL ASPECTS OF THE MATTER SUCH AS ACQUISITION OVER A PERIOD OF TIME VALUATION ETC. IT WAS ARGUED THAT ADDITION OF THIS NATURE WILL INVOLVE SOME GUESS WORK IN ABSENCE OF COMPLETE DETAIL S. THE LD. CIT(APPEALS) HAD ESTIMATED THE UNACCOUNTED EXPENDITURE AFTER CONSIDERING ALL THE FACTS. THEREFORE IT WAS AGITATED THAT HIS ORD ER SHOULD BE UPHELD IN THIS MATTER. 3.4 IN THE REJOINDER THE LD. AR SUBMITTED THA T WITHDRAWALS IN RESPECT OF OTHER PERSONS HAD ALSO BEEN GIVEN WHICH HA VE BEEN PLACED IN THE ITA NO. 2004(DEL)/2008 13 PAPER BOOK ON PAGES 67 AND 68 WHICH SHOW THA T WITHDRAWALS IN THE CASE OF SHRI G.L. JAIN AMOUNTED TO RS. 9 21 250/- AND IN THE CASE OF SHRI YOGESH JAIN AT RS. 4 74 579/-. WITHDRAWALS FOR PA YMENT OF LIC PREMIA HAVE BEEN SHOWN SEPARATELY AT RS. 63 590/- AND R S. 4 80 298/- RESPECTIVELY. 3.5 WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FACTS OF THE CASE ARE THAT INVENTORY OF VARIOUS ITEMS FOUND IN THE PREMISES WAS DRAWN AND A ROUGH E STIMATE OF THE VALUATION WAS ARRIVED AT WITH THE HELP OF THE ASSESSEE . THE ASSESSEE WAS REQUIRED TO EXPLAIN INVESTMENT IN THE ITEMS. HOW EVER THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT ONLY IN RESPECT OF ITEMS FOUND IN HIS POSSESSION AS THE PRESUMPTION OF OW NERSHIP U/S 132(4A) EXTENDS ONLY TO SUCH ITEMS. THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY BILL IN RESPECT OF ACQUISITION OF ITEMS FOUND IN HIS POSSESSION. THE ASSESSEE WAS ALSO NOT ABLE TO SHOW ANY SEPARATE DEBIT IN THE ACCOUNTS FOR PURCHASE OF SUCH ITEMS. HOWEVER THE ASSESSE E HAS SHOWN SUBSTANTIAL WITHDRAWALS OF RS. 31 07 727/- FOR HOUSE-HOLD EX PENDITURE OVER A PERIOD OF ABOUT SEVEN YEARS. HIS SON HAS ALSO SHO WN WITHDRAWALS OF RS. 6 87 710/- IN THIS PERIOD. ON THE FACTS IT CANNOT BE SAID AS TO WHICH OF ITA NO. 2004(DEL)/2008 14 THE ITEMS WERE PURCHASED IN THIS YEAR AND WHAT WAS THE EXPENDITURE INCURRED ON ACQUISITION OF SUCH ITEMS. THUS TH E EXPENDITURE INCURRED ON INVESTMENT IN THESE ITEMS CANNOT ALSO BE WORKED OUT ON AN EXACT BASIS. IN OTHER WORDS THE EVIDENCE COLLECTED IN THE COUR SE OF SEARCH IS INCOMPLETE WITH RESPECT TO THE YEAR AS ALSO WITH RESPECT TO THE AMOUNT. ON THE OTHER HAND THE ASSESSEE AND HIS SON HAVE SHOWN SUFFICIENT WITHDRAWALS IN SEVEN YEARS LEADING TO THE REASON TO BELIEVE THAT HE COULD BE IN POSSESSION OF MONEY FOR INVESTMENT IN THE ITEMS PURCHASED FROM YEAR TO YEAR. THEREFORE WE ARE OF THE VIEW THAT ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NO ADDITION WAS C ALLED FOR IN RESPECT OF INVESTMENT IN THESE ITEMS. THUS GROUND NO. 2 I S ALSO ALLOWED. 4. GROUND NO. 3 IS DISMISSED AS NOT PRESSED A S MENTIONED EARLIER. 5. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. 6. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 JANUARY 2010. SD/- SD/- (VIMAL GANDHI) (K.G.BANSAL) PRESIDENT ACCOUNTANT MEMBER DATE OF ORDER: 22ND JANUARY 2010. SP SATIA ITA NO. 2004(DEL)/2008 15 COPY OF THE ORDER FORWARDED TO:- SHRI S.K. JAIN NEW DELHI. DY. CIT CENTRAL CIRCLE-8 NEW DELHI. THE CIT(A) THE CIT THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.