ACIT, Meerut v. Smt. Anita Gupta, Meerut

ITSSA 54/DEL/2009 | misc
Pronouncement Date: 06-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 5420116 RSA 2009
Assessee PAN TODSR1997W
Bench Delhi
Appeal Number ITSSA 54/DEL/2009
Duration Of Justice 10 month(s) 27 day(s)
Appellant ACIT, Meerut
Respondent Smt. Anita Gupta, Meerut
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 06-05-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 06-05-2010
Date Of Final Hearing 27-04-2010
Next Hearing Date 27-04-2010
Assessment Year misc
Appeal Filed On 09-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI K .G. BANSAL ACCOUNTANT MEMBER IT(SS)A. NO.50/D/09 BLOCK PERIOD 01.04.1989 TO 27.03.2000 SMT. ANITA GUPTA VS. ASSTT. C.I.T. 237 WEST END ROAD CENTRAL CIRCLE MEERUT CANTT. (UP) MEERUT (UP) PAN NO. IT(SS)A. NO.54/D/09 BLOCK PERIOD 01.04.1989 TO 27.03.2000 ASSTT. C.I.T. VS. SMT. ANITA GUPTA CENTRAL CIRCLE 237 WEST END ROAD MEERUT (UP) MEERUT CANTT (UP) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.D. MITTAL ADVOCATE RESPONDENT BY : SHRI ASHOK PANDEY CIT- DR ORDER PER K.G. BANSAL: AM: THESE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE EMANATE FROM THE ORDER OF CIT(A) MEERUT PASSED ON 18.03.2009 IN APPEAL NO.115/05-06 PERTAINING TO BL OCK PERIOD FROM 01.04.1999 TO 27.03.2000. THE CORRESPONDING O RDER OF ASSESSMENT WAS FRAMED BY THE ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE MEERUT ( HEREINAFTER CALLED TH E ASSESSING OFFICER ) UNDER THE PROVISIONS OF SECTION 158BC RE AD WITH 2 SECTION 263 OF THE INCOME TAX ACT 1961. FROM THE ASSESSMENT ORDER IT TRANSPIRES THAT THE ASSESSMENT WAS ORIGINALLY COMPLETED ON 27.03.2002 COMPUTING THE UN DISCLOSED INCOME AT RS.1 25 14 876/-. THIS ASSESSMENT WAS SE T ASIDE UNDER THE PROVISIONS OF SECTION 263 ON 26.05.2003 B Y THE CIT CENTRAL KANPUR. THE ASSESSMENT WAS FRAMED AFRESH ON 29.03.2005. THE ASSESSEE FILED APPEAL AGAINST THIS ORDER AND THE CIT(A) MEERUT PASSED THE IMPUGNED ORDER ON 18. 03.2009. BOTH THE PARTIES ARE AGGRIEVED BY THIS ORDER AND HE NCE THEY FILED APPEALS BEFORE US. IT(SS) A. NO.50/D/09 APPEAL OF THE ASSESSEE: 2. THE ASSESSEE HAS TAKEN UP THREE GROUNDS IN THE A PPEAL. GROUND NOS.1 & 2 ARE AGAINST THE ADDITION MADE TO T HE UNDISCLOSED INCOME ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION ESTIMATED BY THE VALUATION OFFICER AND THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE. GROUND NO.3 IS REGARDING ADDITION OF RS.15 000/- TO THE UNDISCLOSED INCOME I N RESPECT OF OTHER INVESTMENTS BEING SHARES. 3. IN REGARD TO THE COST OF CONSTRUCTION IT IS SEE N FROM THE ASSESSMENT ORDER THAT THE ASSESSEE CONSTRUCTED A HO USE PROPERTY ON PLOT NO.237 WEST END ROAD MEERUT IN FOUR FINANCIAL YEARS BEING 1994-95 TO 1997-98. THE YEA R WISE BREAK UP OF THE COST IS RS.11 08 537/- IN FINANCIAL YEAR 1994-95; RS.8 26 778/- IN FINANCIAL YEAR 1995-96 RS.11 74 0 43/- IN FINANCIAL YEAR 1996-97 AND RS.16 78 943/- IN FINAN CIAL YEAR 1998-99 AGGREGATING TO RS.47 88 301/-. THE MATTER WAS 3 REFERRED TO THE VALUATION OFFICER FOR ESTIMATING TH E COST OF CONSTRUCTION WHO ESTIMATED SUCH COST AT RS.49 85 0 00/-. THUS THE ESTIMATION MADE BY THE VALUATION OFFICER EXCEED ED THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE BY AN AMOUNT OF RS.1 96 698/-. THIS AMOUNT WAS ADDED TO THE UNDIS CLOSED INCOME OF THE BLOCK PERIOD. THE LEARNED CIT(A) CON FIRMED THIS ADDITION BY STATING THAT THE ESTIMATION MADE BY THE VALUATION OFFICER WAS BINDING ON THE ASSESSING OFFICER AND SU CH ESTIMATION HAD TO BE UPHELD BECAUSE CONSTRUCTION AC COUNT WAS NOT MAINTAINED BY THE ASSESSEE. 3.1 BEFORE US THE LEARNED COUNSEL SUBMITTED THAT T HE ASSESSEE HAD DECLARED THE COST OF CONSTRUCTION IN THE REGULAR RE TURNS FILED FOR ASSESSMENT YEARS 1995-96 TO 1998-999. THE DETAILS OF THE COST SHOWN IN THE RETURN HAVE ALREADY BEEN MENTIONED BY US WHILE DEALING THE ORDER OF THE ASSESSING OFFICER. FURTHE R IT WAS SUBMITTED THAT NO INCRIMINATING DOCUMENT WAS FOUND IN THE COURSE OF SEARCH REGARDING THE COST OF CONSTRUCTION OF THE HOUSE PROPERTY. THEREFORE THIS ISSUE COULD NOT HAVE BEE N THE SUBJECT MATTER OF COMPUTING THE UNDISCLOSED INCOME. IN THE ALTERNATIVE IT WAS SUBMITTED THAT THE REPORT OF THE VALUATION O FFICER IS ONLY IN THE NATURE OF AN ESTIMATE WHICH MAY NOT REPRESENT THE ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE. THE DIFFEREN CE BETWEEN THE ESTIMATE AND THE ACTUAL EXPENDITURE SHOWN BY TH E ASSESSEE WAS ONLY RS.1 96 698/- BEING LESS THAN 10% OF THE COST SHOWN BY THE ASSESSEE WHICH AMOUNTS TO ABOUT RS.47.9LAC. A NUMBER OF FACTORS WERE MENTIONED WHICH INFLATED THE ESTIMATION MADE BY THE VALUER NAMELY THAT-(I) THE VALUER APP LIED A 4 UNIFORM RATE PERTAINING TO DSR 1997 WHILE THE CONST RUCTION WAS SPREAD OVER FOR 4 YEARS; (II) THE MARGIN OF PROFIT ATTRIBUTABLE TO THE CONTRACTOR WAS TAKEN AT 5% WHILE IT SHOULD HAVE BEEN TAKEN AT 8% BEING THE STANDARD RATE OF PROFIT PRESCRIBED UNDER THE INCOME-TAX ACT AND (III) THE EXPENDITURE IN RESPEC T OF ARCHITECT FEES WAS TAKEN AT RS.1 02 790/- WHILE THE ACTUAL EX PENDITURE WAS RS.10 000/- ONLY. THUS IT WAS AGITATED THAT T HERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION EITHER IN LAW OR ON FACTS. 3.2 THE LEARNED DR RELIED ON THE ORDERS OF THE ASSE SSING OFFICER AND THE LEARNED CIT(A) IN THIS MATTER. 3.3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS MADE BEFORE US. IT IS AN ACCEPTED PROPOSION THAT T HE CONSTRUCTION WAS MADE OVER A PERIOD OF 4 YEARS. TH E AGGREGATE OF EXPENDITURE SHOWN BY THE ASSESSEE IN T HE RETURN OF INCOME AMOUNTED TO RS.47 88 301/-. THIS FACT HA S NOT BEEN CHALLENGED BY THE REVENUE. IN THE LIGHT OF THIS AD MITTED FACT THE FINDING OF THE LEARNED CIT(A) THAT THE COST OF CONS TRUCTION ESTIMATED BY THE VALUATION OFFICER HAS TO BE UPHELD AS NO CONSTRUCTION ACCOUNT WAS MAINTAINED BY THE ASSESSEE CEASES TO HAVE ANY BEARING IN DETERMINATION OF THE ISSUE. FURTHER THE LEARNED DR HAS NOT BEEN ABLE TO REFER TO ANY DOCUME NT FOUND IN THE COURSE OF SEARCH SHOWING THAT ANY EXPENDITURE O VER AND ABOVE SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME WAS INCURRED. THUS IT CAN BE HELD THAT THE SEARCH DID NOT YIELD ANY INCRIMINATING EVIDENCE IN RESPECT OF COST OF CONSTR UCTION. IN THIS CONNECTION WE MAY REFER TO THE PROVISION CONTAINED IN SECTION 158B(B) WHICH DEFINES UNDISCLOSED INCOME TO INCLU DE (ANY 5 MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT O R OTHER DOCUMENTS OR TRANSACTIONS WHERE SUCH MONEY BULLIO N JEWELLERY VALUABLE ARTICLE THING ENTRY IN THE BO OKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSACTION REPRESENTS WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSES OF THIS ACT OR ANY EXPE NSE DEDUCTION OR ALLOWANCE CLAIMED UNDER THIS ACT WHICH IS FOUND TO BE FALSE). THIS PROVISION REQUIRES UNEARTHING OF A NY ASSET OR ENTRY ETC. IN THE COURSE OF SEARCH WHICH REPRESENT S WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WHI CH WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSE OF THIS ACT . NO SUCH EVIDENCE WAS SHOWN TO HAVE BEEN FOUND IN THE COURSE OF SEARCH. THEREFORE IT CAN BE SAID THAT NO EVIDENCE WAS FOUND IN THE COURSE OF SEARCH WHICH FALSIFIES THE COST OF C ONSTRUCTION SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME. IT IS ALSO A MATTER OF FACT THAT THE DIFFERENCE BETWEEN ESTIMATI ON AND THE ACTUAL COST OF CONSTRUCTION SHOWN BY THE ASSESSEE I S LESS THAN 10% AND THERE ARE VALID REASONS SHOWN BY THE ASSESS EE FOR SUCH A DIFFERENCE. THEREFORE IT IS HELD THAT IN T HE FIRST PLACE THIS ISSUE COULD NOT HAVE BEEN TAKEN UP IN COMPUTIN G THE UNDISCLOSED INCOME. IN THE SECOND PLACE EVEN ON TH E BASIS OF VALUATION REPORT NO ADDITION COULD BE MADE AS THE DIFFERENCE WAS NOMINAL WHICH IS BOUND TO HAPPEN IN CASE OF EST IMATION OF COST OF CONSTRUCTION. THUS GROUND NOS.1 AND 2 ARE ALLOWED. 4. IN REGARD TO UNDISCLOSED INVESTMENT IN SHARES I T HAS BEEN MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESSEE INVESTED 6 A TOTAL SUM OF RS.1 89 000/- IN VARIOUS SHARES MENT IONED IN PARAGRAPH 5 ON PAGE 8. THE PAYMENT SHOWN IS RS.1 7 4 000/- ONLY. THERE WAS NO EXPLANATION FOR THE DIFFERENCE OF RS.15 000/-. THEREFORE THIS AMOUNT WAS ADDED TO T HE UNDISCLOSED INCOME. THE LEARNED CIT(A) UPHELD THIS FINDING BY MENTIONING THAT THE INVESTMENT AMOUNTED TO RS.1 89 000/- AND ONLY A SUM OF RS.1 74 000/- WAS SHOWN TO HAVE BEEN PAID. THERE WAS NO EXPLANATION FOR THE BALANCE AMOUNT OF RS.15 000/-. 5. NO SUBMISSION WAS MADE BY THE LEARNED COUNSEL BE FORE US IN REGARD TO THIS GROUND OF APPEAL. ON THE OTHER HAND THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. SINCE THE LEARNED COUNSEL HAS FAILED TO DISPLACE THE FACTS ME NTIONED IN THE IMPUGNED ORDER THERE IS NO REASON FOR US TO INT ERFERE WITH THE FINDING GIVEN THEREIN. THIS GROUND IS DISMISSED. IT(SS) NO.54/D/09- APPEAL OF THE REVENUE 6. GROUND NO.1 IS THAT THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.1 27 828/- MADE BY THE ASSESSING OFF ICER IN RESPECT OF UNDISCLOSED JEWELLERY. IT IS MENTIONED THAT INSTRUCTION NO.1916 DATED 11.05.1994 ISSUED BY THE CENTRAL BOARD ON DIRECT TAXES IS APPLICABLE IN THE CONTEXT OF SEIZURE OF JEWELLERY IN THE COURSE OF SEARCH AND IS NOT APPLIC ABLE IN THE COURSE OF ASSESSMENT PROCEEDINGS. 7. IN THIS CONNECTION THE FACTS MENTIONED IN THE O RDER ARE THAT JEWELLERY VALUED AT RS.7 44 658/- WAS FOUND AT THE RESIDENCE OF 7 THE ASSESSEE AND JEWELLERY VALUED AT RS.13 55 218/- WAS FOUND IN THE LOCKER OF THE ASSESSEE. THUS THE VALUE OF THE JEWELLERY FOUND IN THESE PLACES WAS RS.20 99 826/-. EVIDENCE S AND EXPLANATIONS WERE TENDERED BEFORE THE ASSESSING OFF ICER IN THE COURSE OF ASSESSMENT PROCEEDINGS AND AFTER CONSIDER ING THEM HE CAME TO THE CONCLUSION THAT JEWELLERY WEIGHING 3 49.60 GRAMS VALUED AT RS.1 27 828/- REPRESENTED UNEXPLAI NED JEWELLERY. THEREFORE THIS AMOUNT WAS ADDED TO THE UNDISCLOSED INCOME. IT WAS SUBMITTED THAT OUT OF THE AFORESAID JEWELLERY WEIGHING 101.60 GRAMS BELONGED TO SHRI MAYANK GUPTA THE SON AND 248 GRAMS BELONGED TO BHUMIJA GUPTA THE DA UGHTER. IN SUPPORT OF THE SUBMISSION REPORTS OF THE APPROV ED VALUER DATED 03.04.1994 WERE FILED. THE DATE OF THE REPOR T IS PRIOR TO THE DATE OF SEARCH. THEREFORE IT WAS PLEADED THAT THESE PERSONS OWNED THE JEWELLERY IN 1994 AND CONSEQUENTL Y IT WAS ARGUED THAT THE SAME CANNOT BE ADDED TO THE UNDISCL OSED INCOME OF THE ASSESSEE. IN THIS CONNECTION SUPPORT WAS ALSO DRAWN FROM THE AFORESAID BOARD CIRCULAR NO.1916. R ELYING ON THE BOARD CIRCULAR THE LEARNED CIT(A) DELETED THIS ADDITION. THE LEARNED DR BEFORE US RELIED ON THE ORDERS OF L OWER AUTHORITIES AND IN PARTICULAR ON THE DECISION OF HONBLE BOMBAY HIGH COURT MENTIONED IN THE GROUND OF THE REVENUE. THE CASE OF THE LEARNED COUNSEL WAS THAT THE VALUA TION REPORT OF 1994 SUBSTANTIATED THE CLAIM OF THE ASSESSEE THAT T HE JEWELLERY MENTIONED THEREIN DID NOT BELONG TO HIM. SINCE THE SE PERSONS WERE NOT LIABLE TO THE ASSESSED TO WEALTH-TAX NO RETURN OF WEALTH WAS FILED IN THEIR CASES. THAT HOWEVER DOES NOT MEAN THAT TH E JEWELLERY 8 BELONGED TO THE ASSESSEE. IN THE ALTERNATIVE RELI ANCE WAS PLACED ON THE BOARD CIRCULAR AND IT WAS ARGUED THAT THESE PER SONS WERE EXPECTED TO BE IN POSSESSION JEWELLERY OF 100 GRAMS AND 250 GRAMS. THE JEWELELRY FOUND WAS WITHIN THE VICINITY OF THES E LIMITS. THEREFORE THERE WAS NO CASE OF SUSTAINING THE ADDITION ON THI S GROUND. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMI SSIONS MADE BEFORE US. WE FIND THAT THE CASE OF THE ASSESSEE I S PRIMARILY BASED UPON THE VALUATION REPORT DATED 06.04.1994 IN THE C ASE OF SHRI MAYANK GUPTA AND MS. BHUMIJA GUPTA. IT IS NO DOUBT TRUE THAT THESE REPORTS HAVE NOT BEEN MENTIONED IN THE SEARCH PROCE EDINGS. IN THIS CONNECTION THE CASE OF THE LEARNED COUNSEL WAS THA T IT IS FOR THE AUTHORIZED OFFICER TO RECORD OR NOT AND SEIZE OR NO T ANY DOCUMENT FOUND IN THE COURSE OF SEARCH THEREFORE OMISSION OF THESE REPORTS IN PANCHNAMA DOES NOT LEAD TO AN INFERENCE THAT SUCH R EPORTS WERE NOT MADE ON 06.04.1994. WE ALSO FIND THAT THIS EVIDENC E HAS NOT BEEN CONSIDERED BY ANY OF THE LOWER AUTHORITIES. THE LE ARNED CIT(A) MENTIONED ABOUT THESE REPORTS BUT DID NOT HOLD THAT THESE REPORTS WERE ANTE DATED. THERE IS NO EVIDENCE PRODUCED BEF ORE US ALSO TO CONTEND THAT THESE REPORTS WERE FABRICATED LATER I. E. AFTER SEARCH. THE REPORTS HAVE BEEN MADE BY AN APPROVED VALUER. THER EFORE ON THE FACE OF IT IT WILL HAVE TO BE HELD THAT THE REPORT S WERE MADE ON 06.04.1994. IN SUCH A CIRCUMSTANCE THE JEWELLERY MENTIONED THEREIN CANNOT BE HELD TO BE BELONGING TO THE ASSESSEE. TH IS DE HORS THE CASE LAW KNOCKS OFF THE VERY BASIS OF ADDITION MAD E BY THE ASSESSING OFFICER. IN ANY CASE THE ADDITION WAS D ELETED BY THE LEARNED CIT(A) ON THE BASIS OF THE CIRCULAR. THE F ACTS OF THE CASE OF SMT. DHANVIDYA A DALAL VS. CIT (2007) 294 ITR 277 ( BOMBAY) ARE 9 DIFFERENT FROM THE FACTS OF OUR CASE. IN THAT CASE JEWELLERY VALUED AT RS.1 65 000/- WAS STATED TO HAVE BEEN RECEIVED BY W AY OF INHERITANCE HOWEVER THE WILL DID NOT CONTAIN THE NARRATION OF THE JEWELLERY. THE WILL WAS EXHAUSTIVE AND CONTAINED T HE LIST OF ALL ASSETS HELD BY THE DECEASED. THEREFORE IT WAS HELD THAT THE FINDING OF THE TRIBUNAL THAT THE JEWELLERY WAS NOT INHERITED COULD NOT BE FAULTED. THE CIRCULAR WAS HELD TO BE NON-APPLICABLE BECAUSE THE JEWELLERY POSSESSED BY THE LADY WAS MORE THAN THE JEWELLERY M ENTIONED IN THE CIRCULAR. IN THIS CASE THE ONLY EXPLANATION BY TH E ASSESSEE IS THAT THE JEWELLERY DID NOT BELONG TO HIM AS IT WAS OWNED BY OTHER TWO PERSONS. THIS WAS SUPPORTED BY VALUATION REPORTS OF 1994 WH ICH HAS NOT BEEN DISPROVED BY THE LOWER AUTHORITIES. IN THESE CIRCU MSTANCES WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS RIGHT IN DELET ING THE ADDITION MADE IN RESPECT OF THE JEWELLERY. THUS THIS GROUN D IS DISMISSED. 8. GROUND NO.2 IS AGAINST THE DELETING OF AN AD DITION OF RS.3 00 000/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNEXPLAINED INVESTMENT IN FURNITURE AND OTHER COSTL Y HOUSEHOLD ARTICLES. IT IS MENTIONED THAT THE LEARNED CIT(A) FAILED TO TAKE INTO ACCOUNT THE FACT THAT THE ASSESSING OFFICER HA D BEEN VERY REASONABLE IN ESTIMATING INVESTMENT IN THESE ARTICL ES. IT IS FURTHER MENTIONED THAT HE FAILED TO TAKE INTO ACCOU NT THE FACT THAT THE VALUE HAD TO BE ESTIMATED AS THE ASSESSEE FAILED TO PRODUCE ANY BILL OR VOUCHER IN RESPECT OF THESE ART ICLES. 8.1 IN THE ASSESSMENT ORDER IT IS MENTIONED THAT IN THE COURSE OF SEARCH AND SEIZURE OPERATION A LIST OF VALUABLE ART ICLES SUCH AS FURNITURE AIR CONDITIONERS COMPUTER GYMNASIUM AR TICLES ELECTRONIC ITEMS ETC. WAS PREPARED. THIS INVENTO RY HAS BEEN 10 APPENDED AS ANNEXURE-2 TO THE ASSESSMENT ORDER. IT WAS SUBMITTED THAT THESE ITEMS WERE ACQUIRED BY THE ASS ESSEE OVER A LONG PERIOD OF TIME. SUCH ITEMS GET ACCUMULATED WITH THE PASSAGE OF TIME. SOME OF THE ARTICLES ARE VERY OLD AND THOSE WERE ACQUIRED AT THE TIME OF MARRIAGE IN THE YEAR 1 973. OTHER FURNITURE ITEMS AND KITCHEN UTENSILS WERE ALSO ACQU IRED LONG BACK. THE EXPENDITURE IN ACQUISITION OF THESE ARTI CLES WAS MADE OUT OF HOUSEHOLD WITHDRAWALS THE DETAILS OF W HICH ARE FURNISHED AS UNDER:- S.NO. ASSTT. YEAR AMOUNT (RS.) I) 1991-92 24 417/- II) 1992-93 43 471/ - III) 1993-94 60 732/- IV) 1994-95 63 719/- V) 1995-96 8 3 112/- VI) 1996-97 9 5 950/- VII) 1997-98 1 1 1 588/- VIII) 1998-99 1 5 5 003/- IX) 1999-00 1 52 400/- X) 2000-01 2 01 136/- THE ASSESSEE ALSO FURNISHED VALUATION REPORTS IN RE SPECT OF THESE ITEMS ON THE DATE OF SEARCH. THE VALUE OF EL ECTRIC AND ELECTRONIC GOODS WAS ESTIMATED AT RS.40 000/- ON TH E BASIS OF RE-SALE PRICE. THE VALUE OF FURNITURE AND FIXTURES AND GYMNASIUM ARTICLES WAS ESTIMATED AT RS.54 850/-. T HE ASSESSING OFFICER CONSIDERED THE SUBMISSIONS. IT W AS 11 MENTIONED THAT THE WITHDRAWAL FOR HOUSEHOLD EXPENSE S SHOWN BY HER HER HUSBAND AND THREE GROWN UP CHILDREN WER E NOT SUFFICIENT TO MEET EVEN THE DAY TO DAY EXPENSES. T HESE WITHDRAWALS WERE ALSO USED TO MEET CLUB EXPENSES WH ICH WERE ABOUT RS.35 000/- IN ASSESSMENT YEAR 1998-99 AND RS .20 000/- IN ASSESSMENT YEAR 1999-00. IT WAS FURTHER MENTION ED THAT THE ITEMS HAVE BEEN VALUED AT A VERY LOW VALUE BY APPLY ING RE-SALE METHOD AND NOT THE COST OF PURCHASE. SOME EXAMPLES ARE GIVEN THAT THREE YEARS OLD AIR CONDITIONER WAS VALU ED AT RS.2 500/- AND 4 YEARS OLD WASHING MACHINE WAS VALU ED AT RS.1 000/-. AS PER PANCHNAMA THERE WERE 4 TVS. 5 AIR CONDITIONERS ONE COMPUTER WITH PRINTER AND UPS 10 BEDS AND DIWANS 14 SOFA SETS TWO DINING TABLES 13 ALMIRAH S ETC. THESE ITEMS WERE ACQUIRED AFTER SHIFTING TO THE NEW RESID ENCE AT WEST END ROAD MEERUT. THEREFORE THE COST OF ACQUISITI ON WAS ESTIMATED AT RS.5 00 000/-. CREDIT OF RS.2 00 000/ - WAS GIVEN IN RESPECT OF ITEMS BROUGHT FROM THE OLD HOUSE AND THEREFORE UNEXPLAINED INVESTMENT WAS WORKED OUT AT RS.3 00 00 0/-. 8.2 THIS MATTER WAS ALSO AGITATED BEFORE THE LEARN ED CIT(A). BEFORE HIM THE VALUATION MADE BY THE ASSESSING OFF ICER WAS CHALLENGED IT WAS ALSO SUBMITTED THAT THE ITEMS W ERE ACQUIRED OUT OF PERSONAL WITHDRAWALS. AFTER CONSIDERING THE ASSESSMENT ORDER AND THE EXPLANATION OF THE ASSESSEE HE CAME TO THE CONCLUSION THAT THE VALUATION AND THE ADDITION WERE MADE PURELY ON PRESUMPTIONS. THEREFORE THE ADDITION WAS DELET ED. 12 8.3 BEFORE US THE LEARNED DR RELIED ON THE ORDER O F THE ASSESSING OFFICER AND THE LEARNED COUNSEL RELIED ON THE ORDER OF THE LEARNED CIT(A). 8.4 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS MADE BEFORE US. THE FACTS ARE THAT IN THE COURSE O F SEARCH INVENTORY OF FURNITURE AND ELECTRICAL GOODS ELECTR ICAL GOODS AND GYMNASIUM GOODS ETC. WAS PREPARED. THESE GOODS HAV E BEEN VALUED ON AN ESTIMATE BASIS BY THE ASSESSING OFFICE R AT RS.5 00 000/- ON COST OF ACQUISITION BASIS. THE AS SESSEE ALSO GOT VALUED OF THESE ITEMS FROM THE VALUER WHO VALU ED THEM ON RE-SALE BASIS AT RS.94 850/-. THE ASSESSEES EXPLA NATION IS GENERAL IN NATURE THAT THESE ITEMS WERE ACQUIRED AT THE TIME OF MARRIAGE OR WITH THE EFFLUX OF TIME FROM PERSONAL W ITHDRAWALS. HOWEVER NEITHER ANY BILL OR VOUCHER WAS PRODUCED N OR ANY PART OF THE WITHDRAWAL WAS LINKED BY MEANS OF RELIABLE E VIDENCE TO THE ACQUISITION OF THESE ITEMS. THE ASSESSING OFFI CER GRANTED CREDIT OF RS.2 00 000/- IN RESPECT OF FURNITURE ETC . BROUGHT FROM THE OLD HOUSE. THIS IS ALSO NOT BASED ON ANY EVIDE NCE ON RECORD. THUS HE MADE AN ADDITION OF RS.3 00 000/- . THE LEARNED CIT(A) DELETED THE ADDITION BY STATING THAT THERE WAS NO BASIS FOR MAKING THE SAME AND IT IS BASED ON PRESUM PTIONS AND ESTIMATES. THE FACT OF THE MATTER IS THAT THE HOUS EHOLD GOODS WERE FOUND AND WERE GOT VALUED BY THE ASSESSEE FROM THE APPROVED VALUER. ALTHOUGH THE VALUATION MADE BY TH E APPROVED VALUER SEEMS TO BE ON THE LOWER SIDE YET THAT IS TH E ONLY EVIDENCE AVAILABLE WITH US ON WHICH RELIANCE CAN B E PLACED. FURTHER SECTION 69A OF THE ACT CONTAINS A PROVISIO N THAT WHERE 13 IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND TO BE T HE OWNER OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ART ICLE AND SUCH MONEY BULLION JEWELLERY OR VALUABLE ARTICLE IS NO T RECORDED IN THE BOOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION A BOUT THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY BULL ION JEWELLERY OR OTHER VALUABLE ARTICLE OR THE EXPLANATION OFFER ED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATIS FACTORY THE MONEY AND THE VALUE OF THE BULLION JEWELLERY OR OT HER VALUABLE ARTICLE MAY BE DEEMED TO BE THE INCOME OF THE ASSES SEE FOR SUCH FINANCIAL YEAR. THE SECTION PROCEEDS ON THE B ASIS OF VALUE IN THE FINANCIAL YEAR IN WHICH THE GOODS ARE FOUND. THE SAME IS THE YEAR OF SEARCH IN THIS CASE. THE EXPLANATION O F THE ASSESSEE REGARDING SOURCE OF ACQUISITION IS GENERAL AND IT HAS BEEN ADEQUATELY REBUTTED BY THE ASSESSING OFFICER W HEN IT IS HELD THAT WITHDRAWALS WERE NOT ENOUGH TO MEET EVEN HOUSEHOLD EXPENSES. THE LEARNED CIT(A) HAS NOT TAKEN INTO AC COUNT THE OBJECTIVE FACT OF FINDING OF THE ITEMS IN THE HOUSE OF THE ASSESSEE WHEN IT WAS HELD THAT THE ADDITION APPEARS TO HAVE BEEN MADE MERELY ON PRESUMPTION AND ON ESTIMATE BAS IS. THE FACTS ARE THAT THE ITEMS WERE FOUND AND WERE ALSO G OT VALUED BY THE ASSESSEE. THEREFORE NOW HE CANNOT HAVE ANY OB JECTION TO SUCH A VALUATION. THERE IS NO CREDIBLE EXPLANATION ABOUT THE SOURCE OF ACQUISITION. THEREFORE WE ARE OF THE VI EW THAT IT WILL BE FAIR AND JUST TO UPHOLD THE ADDITION OF RS.94 85 0/-. THUS THIS GROUND IS PARTLY ALLOWED. 14 9. THE RESULT OF AFORESAID DISCUSSION IS THAT BOTH THE APPEALS ARE PARTLY ALLOWED. 10. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 06.0 5.2010. SD/ SD/- ( R.P. TOLANI ) ( K.G. BANS AL ) JUDICIAL MEMBER ACCOUNTANT ME MBER DT.06.05.2010. NS COPY FORWARDED TO:- 1. SMT. ANITA GUPTA 237 WEST END ROAD MEERUT. 2. ASSTT. CIT CENTRAL CIRCLE MEERUT (UP). 3. THE CIT 4. THE CIT (A) NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY BY ORDER (ITAT NEW DELHI).