Income Tax Appellate Tribunal - Delhi
Nem Chand Gupta vs Dy. Cit on 28 September, 2004
Equivalent citations: [2005]2SOT37(DELHI)
ORDER
P.M. Jagtap, A.M. This appeal by the assessee is directed against the order of the assessing officer i.e. Dy, Commissioner of Income-tax Special Range-13, New Delhi dated 29-8-1997 passed under section 143(3)/I58BC for the block period from 1986-87 to 29-8-1996.
2. In this case, a search and seizure operation under section 132(1) was carried out at the residential and business premises of the assessee and his family members on 29-8-1996. During the course of search, some incriminating documents besides cash and jewellery were found and seized. Consequent to the search, a notice under section 158BC was issued by the assessing officer to the assessee on 6-3-1997 in response to which a return of income in Form No. 2B was filed by the assessee declaring his undisclosed income for the block period at Rs. 4,50,000. The assessment, however, was completed by the assessing officer under section 143(3)/158BC by his impugned order assessing the undisclosed income of the assessee for the block period at Rs. 22,02,591. Aggrieved by the same the assessee has preferred the present appeal before the Tribunal.
3. Ground Nos. 1 to 3 raised by the assessee in his appeal have not been pressed by the learned counsel for the assessee at the time of hearing before us. The same are, therefore, dismissed as not pressed.
4. Ground No. 4 in general seeking no specific decision from us.
5. Ground Nos. 5 to 9 relate to the issue of addition of Rs. 2,68,187 on account of unexplained investment made in jewellery found as a result of search.
6. During the course of search, jewellery valued at Rs. 4,86,587 (including silver wares/coins worth Rs. 14,400) was found. In his preliminary statement recorded during the course of search, the assessee had stated that jewellery owned by him is only to the extent of 35-40 tolas. As regards the excess jewellery found during the course of search, he explained that the same belonged to his married daughter Smt. Sharda Devi who had visited her parents' house on the eve of 'Rakshabandhan' on 28-8-1996 just one day before the date of search and had left behind her jewellery with her parents before leaving for her house at Bahadurgah Road, Sadar Bazar, Delhi. The assessing officer, however, did not find this explanation offered by the assessee to be satisfactory for the following reasons given in his impugned order:--
"(i) It is seldom the practice to take along so much jewellery on person on an occasion like Rakshabandban to parents' house and return home without any of it on person.
(ii) In her statement recorded by the DCIT Special Range-13, New Delhi on 12-6-1997 Smt. Sharda Devi failed to recollect even a few items of jewellery, or any item for that matter, which she has carried and left behind with her mother on 28-8-1996.
(iii) In her affidavit dated 12-6-1997 she attributed sources of acquisition of such jewellery to her relatives including her father (116 grams), Smt. Ram Murti (90 grams) and her father-in-law (116 grains) at the time of her marriage in 1985. The provisions of Gift Tax Act, 1958 dealing with the exemption of gifts on the occasion of' the marriage of a dependent relative provide for exemption of gifts only upto Rs. 10,000 in 1985. Even though that year falls outside the block period the donor should have filed their gift tax returns paying gift tax on the excess donated to Smt. Sharda Devi. This document then (gift-tax return) would have been a concrete evidence of her getting the aforesaid weights of jewellery, from her relatives, who have evidently not discharged their onus under the Gift Tax Act.
(iv) There is yet another evidence in the seized material in annexure A-4(a) from 4341, Pabari Dhiraj, Sadar Bazar, Delhi which is the balance sheet of Smt. Sharda Devi and which provides details of her liabilities and assets. No jewellery has figured in this balance sheet."
7. Keeping in view the aforesaid reasons as well as the preliminary statement of the assessee, the assessing officer treated the jewellery to the extent of 400 gms. valued at Rs. 2,04,000 alongwith silver wares valued at Rs. 14,000 as explained and the remaining jewellery valued at Rs. 2,68,187 (i.e., Rs. 4,86,587 - Rs. 2,18,400) was treated by him as unexplained in the hands of the assessee for the purpose of block assessment.
8. The learned counsel for the assessee submitted before us that the explanation offered by the assessee about the remaining jewellery being owned by his married daughter was a plausible explanation and since the same was also supported by an affidavit of the said lady filed before the assessing officer confirming the position stated by the assessee, there was no reason for the assessing officer to disbelieve the same without bringing anything contrary on record. The learned Departmental Representative, on the other hand, strongly relied on the impugned order of the assessing officer in support of the revenue's case on this issue.
9. We have considered the rival submissions and also perused relevant material on record. It is observed that in his preliminary statement recorded during the course of search, the assessee had stated of having owned jewellery only to the extent of 35-40 tolas and nothing was stated by him about the jewellery of her married daughter in the said statement. Although the affidavit of his daughter Smt. Sharda Devi was filed by the assessee, before the assessing officer, the same was found to be unreliable by the assessing officer for the specific reasons given in his impugned order. First of all, the said lady had failed to even recollect /recognize any item of the jewellery carried by her to the assessee's house and left behind on the day of 'Rakshabandhan' during the course of her examination by, DCIT, Special Range- 13, New Delhi on 12-6-1997. Secondly, her explanation about the source of acquisition of the said jewellery being gifts received from her father and her father-in-law at the time of her marriage in 1985 was not supported by any gift tax returns filed by the concerned donors as required at the relevant year. Thirdly, a balance sheet of Smt. Sharda Devi was also found and seized during the course of search conducted in the assessee's case and in the said balance sheet providing details of her liabilities and assets, the concerned jewellery was not found reflected. It is thus clear that neither the nexus of the said lady with the jewellery, found at the residence of the assessee was established nor the source of acquisition of the said jewellery was satisfactorily explained in her hands and consequently the explanation of the assessee about the excess jewellery stood successfully rebutted by the assessing officer. As such, considering all the facts of the case, we are of the view that no satisfactory explanation was offered by the assessee about the excess jewellery worth Rs. 2,68,187 found during the course of search and the assessing officer was fully justified in adding the same to the undisclosed income of the assessee for the block period. His impugned order on this issue is, therefore, upheld dismissing ground Nos. 5 to 9 of the assessee's appeal.
10. Ground Nos. 10 & 11 relate to the issue of addition on account of unexplained investment found to be made by the assessee in copper business as worked out by the assessing officer on the basis of peak credit.
11. During the course of search, three books of account namely cash book (Annexure A-2), ledger (Annexure A-3) and Lotus Spiral Diary (Annexure A-9) revealing undisclosed business of copper carried on by the assessee were found and seized. The assessee accepted the owners of the said books in his statement recorded during the course of search as well as later on during the assessment proceedings. He also declared Rs. 3,52,000 as his undisclosed income in the return for the block period on account of capital investment made in the unaccounted copper business. The assessing officer, however, worked out his capital investment in the unaccounted business at Rs. 3,01,000 and Rs. 5,95,000 for assessment years 1996-97 & 1997-98 on the basis of the following peak credit working made by him from the capital account of the assessee appearing at page Nos. 5 to 8 of the ledger identified as Annexure A-3 :
Date Particular CB Folio Dr. Cr.
Balance 6/2 By cash 1 2,000 2,000 7/2 By cash 2 2,50,000 21,52,000 18/2 To cash 4 1,50,000 1,02,000 19/2 By cash 5 1,50,000 2,52,000 9/3 To cash (Mandir) 12 100 15/3 By cash 14 10,000 2,62,000 19/3 To cash 15 20,000 2,82,000 19/3 By cash 15 1,000 2,81,000 26/3 To cash 19 20,000 3,01,000 1/4 By cash (To) 20 330 4/4 To cash (By) 21 10,000 10,000 4/4 By cash 23 5,41,500 5,51,500 300 Kg X 145 23 43,500 5,95,000
12. Since the assessee had already declared in his return income of Rs. 2,52,000 for the block period on account of his own capital investment in unaccounted copper business, he added the balance amount of' Rs. 49,000 (Rs. 3,01,000 - Rs. 2,52,000) to the undisclosed income of the assessee for assessment year 1996-97. For assessment year 1997-98, he added the entire amount of Rs. 5,95,000 to the undisclosed income of the assessee on account of his investment in unaccounted copper business worked out on the basis of peak credit.
13. The learned counsel for the assessee submitted before us that the assessee had declared a sum of Rs. 1 lakh as the capital investment of his son Shri Dinesh Gupta in addition to Rs. 2,52,000 as his undisclosed investment in his return of income filed for the block period, but the assessing officer did not take into consideration the sum of Rs. 1 lakh separately declared by the assessee while making the impugned addition on account of capital investment in unaccounted copper business. He further submitted that the assessing officer while making the addition of Rs. 5.95 lakhs for assessment year 1997-98 on -account of peak credit should have reduced the peak credit of Rs. 3.01 lakhs already added in assessment year 1996-97 and only the net different ought to have been added by him on this count to the undisclosed income of the assessee. The learned Departmental Representative, on the other hand, relied on the order. of the assessing officer in support of the revenue's case on this issue.
14. After considering the rival submissions and perusing relevant material on record, we find no force in the contentions raised by the learned counsel for the assessee. First of all, the capital investment of the assessee in the undisclosed copper business was worked out by the assessing officer on the basis of his capital account appearing at page Nos. 5 to 8 of Annexure A-3 (ledger) whereas the capital account of his son Shri Dinesh Gupta was appearing on page 19 of the said ledger. Therefore, there was no question of giving any credit on account of a sum of Rs. 1 lakh declared by the assessee on account of capital investment of his son in the undisclosed copper business. As a matter of fact, the total investment found to be made in the undisclosed business was Rs. 9,96,000 as mentioned by the assessing officer on page No. 9 of his impugned order out of which only Rs. 8,86,000 was considered in the hands of the assessee ignoring the balance investment of Rs. 1,00,000 pertaining to his son. Secondly, it is evident from the peak credit working given by the assessing officer at pages 8 & 9 of his impugned order as reproduced hereinabove that peak credit from assessment year 1997-98 was worked out by him at Rs. 5,95,000 separately without taking into consideration any opening balance for assessment year 1996-97 which clearly means that the peak credit of Rs. 5,95,000 represented entirely fresh investment made by the assessee in the unaccounted copper business and the same being in addition to the investment of Rs. 3.01 lakhs already made in assessment year 1996-97, there was no case to adjust the peak credit for assessment year 1996-97 or reduce the same from the peak credit of Rs. 5.95 lakhs worked but by the assessing officer for assessment year 1997-98. As such, considering all the facts of the case, we find no infirmity in the additions made by the assessing officer on this court on the basis of peak credit working and upholding his impugned order on this issue, we dismiss ground Nos. 10 & 11 of the assessee's appeal.
15. Ground Nos. 12 & 13 relate to the addition of Rs. 6,11,404 made by the assessing officer on account of unexplained expenditure found to be incurred by the assessee on marriage of his daughter.
16. During the course of search, large number of vouchers, cash memos, bills etc. were found and seized from the residence of the assessee evidencing expenditure incurred by him on solemnizing his daughter's marriage on 2-7-1995 in Centaur Hotel, New Delhi. The said expenditure was mainly, related to hotel payments, purchase of jewellery, gift items, reception and decoration expenses etc. On page 148 of Annexure A-1, a summary of the total expenditure was given which is reproduced below as given on page No. 10 of the assessing officer's order :-
65,350 500 4,25,551 57,000 10,000 3,73,398 15,000 1,55,116 55,000 10,000 1,300 1,50,000 8 11,500
-235
1,700 10,03,949 928 3,000 55,380 1,150 3,742 70,000 2,000
-
13,000 19,100 1,86,858 13,000 400 1,86,540
-
5,437
-
11,55,329 260 3,73,398 3,000 100
-
-410
11,58,329 9,120 1,86,540 Ghari Anguthi 43,380 Chain 2 suit Hotel Chatke 12,000 55,380
17. The assessee was asked by the assessing officer to explain the aforesaid expenditure totalling to Rs. 11,58,329. In reply, it was stated by the assessee that he represents summary of the following expenditure/investment made by his family:
(a) Marriage expenses-(Rs.3,73,398+Rs. 55,380 + Rs. 3,000) = 4,31,779
(b) Construction at 287, DSIDC by son Shri Rakesh Gupta- (Rs. 4,25,551 + Rs. 70,000 + Rs. 13,000 + Rs. 13,000) = 5,21,551
(c) Car Finance from MGF by M/s. Multi Metal Traders Down payment out of books :55,000 Loan from MGF: 1,50,000 = 2,05,000 11,58,330
18. As regards the marriage expenses of Rs. 4,31,779 incurred by him, the sources were explained by the assessee as follows:
Rs.
(a) Spent from the books of M/s. Metachem 80,000
(b) Spent from the books of M/s. Multimetal Traders 23,000
(c) Miss Mamta's own cash in hand (as per her statement of affairs as on 31-3-1995) 21,500
(d) Sale proceeds of jewellery utilized for the purchase of jewellery further expenses 73,964
(e) Cash gifts received on 25-6-1995 on the occasion of engagement of 'Godh Bharai' 21,400
(f) Cash gift received on 2-7-1995 on the occasion of marriage 1,27,020
(g) Withdrawals by Shri Nem Chand Gupta from books of Metachem India for marriage expenses 30,000
(h) Withdrawals made by Shri Dinesh Gupta from the books of M/s. Multi Metal Traders 30,000
(i) Cash expenses gifted by Shri Sushil Kumar son-in-law of Shri Nem Chand Gupta 1 1,000
(j) Amount spent by Mamta out of repayment of her loan 19,500 4,37,390
19. The aforesaid explanation of the assessee was verified by the assessing officer from the relevant record and out of the total expenditure of' Rs. 11,58,330 found to be relatable by him entirely to the marriage expenses, he accepted the explanation of the assessee to the extent of Rs. 5,46,926 on the basis of necessary papers/documents filed by the assessee and verified by him. The details of the source so accepted by the assessing officer as given on page 13 of his impugned order are as follows :
(i) Rs. 2,05,000 Purchase of car
(ii) Rs. 1,63,000 Withdrawal of Shri Nem Chand Gupta and Shri Dinesh Gupta
(iii) Rs. 1,59,426 Cash gifts received
(iv) Rs. 19,500 Withdrawal of Mamta's deposit with M/s. Metachem In Rs. 5,46,926
20. As regards the assessee's explanation about the sum of Rs. 5,21,551 being the expenditure incurred on construction by his son, the assessing officer did not find the same to be acceptable holding it to be highly unlikely that these two distinct activities of marriage and construction being blatantly dissimilar in nature could be written on one page even as the marriage had taken place on 2-7-1995 whereas the factory construction bills/vouchers were pertaining to 1993 & 1994. He also found (fiat the figures reflected in the relevant seized document were in no way identical to those found written on vouchers relating to construction expenditure. He, therefore, rejected the said explanation of the assessee and added the remaining unexplained amount of Rs. 6,11,404 (Rs. 11,58,330.. Rs. 5,46,926) to the undisclosed income of the assessee for the block period.
21. The learned counsel for the assessee submitted before us that expenditure incurred by the assessee on the marriage of her daughter as well as investment made in construction of factory building by his son Shri Rakesh Gupta were noted by the assessee on the same page and both these amounts being the expenditure/investment made by the assessee's family, there was no reason for the assessing officer to disbelieve the explanation of the assessee that the expenditure to the tune of Rs. 5,21,551 reflected therein was on account of construction of the factory building by assessee's son Shri Rakesh Gupta. He further submitted that nothing was found during the course of search to show that the expenditure to that extent was incurred by the assessee on marriage of her daughter and in the absence of the same, the addition of that amount made by the assessing officer to the undisclosed income of the assessee was totally unjustified in the block assessment. According to him, merely because the construction expenditure incurred by the assessee's son was noted on the same paper in which marriage expenditure was also noted does not go to prove that the same was also incurred in connection with the marriage and in the absence of any corroborative evidence found during the course of search, the assessing officer was not justified in drawing adverse inference against the assessee in the matter. He submitted that the investment made by the assessee's son in construction of factory building was duly declared by him in the declaration filed under the VDIS, 1997 and the department having accepted the said declaration, there was sufficient evidence to show that the said entries found noted in the relevant seized document were related to the undisclosed investment made in the construction of factory building.
22. The learned Departmental Representative, on the other hand, submitted that large number of vouchers, cash memos, and bills evidencing expenditure incurred by the assessee on the marriage of his daughter were found during the course of search and since the said expenditure was summarized by the assessee on page No. 148 of Annexure A-1, the only conclusion possible was that all the amounts found recorded therein represented the marriage expenditure incurred by the assessee. He, therefore, contended that the said summary by itself was sufficient evidence found during the course of search to establish the marriage expenditure incurred by the assessee and the assessing officer was fully justified in making the impugned addition on the basis of the same after duly accepting the sources explained by the assessee with the help of relevant documentary evidence.
23. We have considered the rival submissions and also perused relevant material on record. It is observed that the marriage expenses evidenced by relevant vouchers, cash memos and bills and found during the course of search were duly summarized by the assessee at page No. 148 of Annexure A-1 and even the purchase bill of jewellery found from another premises evidencing purchase of jewellery at the time of marriage was also included in the said summary. The manner and method in which all these entries were recorded by the assessee on page 148 of Annexure A-1 reasonably lead to a conclusion that the said summary made by the assessee was that of marriage expenditure incurred by him on the marriage of her daughter. The assessee, however, made an attempt to explain that some entries found recorded therein involving a total income of Rs. 5,21,551 represented investment made in the construction of factory building by his son Shri Rakesh Gupta. However, as pointed out by the assessing officer in his order, the said figures as reflected on page 148 were in no way identical to those found written on vouchers relating to construction expenditure. Further, the marriage of assessee's daughter was solemnized on 2-7-1995 whereas the construction expenses on factory building were incurred by the assessee in the years 1993 and 1994 and in these circumstances, the assessing officer was right in holding it highly unlikely that these two activities of marriage and construction which were blatantly dissimilar in nature and were also incurred at different points of time could have been written by the assessee on one page. It is worthwhile to note here that nothing was brought on record by the assessee either before the assessing officer during the course of' assessment proceedings or even before us during the course of appellate proceedings to show any nexus of the relevant entries appearing on page 148 of' Annexure A-1 with the construction expenses of factory building by his son Shri Rakesh Gupta. Even the declaration filed by the said son under VDIS, 1997 is hardly sufficient to support the assessee's case on this issue in the absence of any nexus of the construction expenditure reflected in the relevant bills and vouchers and the relevant amounts found recorded in page 148 of Annexure A- 1. We, therefore, hold that the assessing officer was fully justified in rejecting the explanation offered by the assessee in this regard and in treating the entire expenditure of Rs. 11,58,329 found recorded on page 148 of Annexure AA to be expenditure incurred by the assessee on marriage of her daughter. As regards the source of the said expenditure as explained by the assessee before the assessing officer, it is observed that the same was accepted by the assessing officer to the extent of Rs. 5,46,926 on the basis of relevant documentary evidence filed by the assessee before him and the source of the remaining amount explained by the assessee was not accepted by him in the absence of such supporting evidence after giving elaborate reasons in his impugned order. Before us, the learned counsel for the assessee has not pointed out any infirmity in the order of the assessing officer on this aspect and this being so as well as keeping in view the cogent and specific reasons given by the assessing officer in support of his order on this issue, we find no reason to interfere with the same. The addition of Rs. 6,11,404 made by the assessing officer on this issue is, therefore, upheld dismissing ground Nos. 12 and 13 of the assessee's appeal.
24. Ground Nos. 14 & 15 relate to the addition of Rs. 2,16,000 made by the assessing officer on account of unexplained expenditure incurred on payment of rent.
25. During the course of search, a rent agreement entered into b), the assessee that Shri Jagdish Lal Obheroi was found and seized evidencing that second floor of E-49, Naraina Vihar was taken by the assessee on rental basis during the period from 1-9-1990 to 31-8-1993 on a monthly rent of Rs. 6,000. The total rent thus paid by the assessee as per the said agreement at Rs. 2,16,000 was found to be pertaining to the following years A.Y. 1991-92 7 months Rs. 42,000 A.Y. 1992-93 12 months Rs. 72,000 A.Y. 1993-94 12 months Rs. 72,000 A.Y. 1994-95 5 months Rs. 30,000 Rs. 2,16,000 Before the assessing officer, it was pleaded on behalf of the assessee that the aforesaid rent expenses had been met partly from the drawings of the family members. However, considering that the total drawings shown by all the family members of the assessee taken together for the year. ending 31-3-1992 i.e., assessment year. 1993-94 was only Rs. 85,894 as against payment of rent of Rs. 72,000, the assessing officer found the explanation of the assessee to be unacceptable and treating the entire rent of' Rs. 2,16,000 as having been paid by the assessee out of undisclosed income, he added the same to his undisclosed income for the block assessment.
26. The learned counsel for the assessee invited our attention to the year wise details of drawings of the assessee as well as his family members given at page 186 of his paper book and pointed out that drawing for assessment years 1993-94 & 1994-95 were sufficient enough to meet the payment of rent. He contended that the assessing officer, however, considered only the figures of drawings for assessment year 1992-93 to add the entire amount of rent in question to the undisclosed income of the assessee. The learned Departmental Representative, on the other hand, relied on the order of the assessing officer on this issue.
27. After considering the rival submissions and perusing the relevant material on record, we are inclined to agree with the contention of the learned counsel for the assessee. As is evident from the statement showing yearwise quantum of drawings by the assessee and his family members, although the withdrawals for assessment years 1991-92 and 1992-93 were not sufficient to cover the payment of rent amounting to Rs. 42,000 and Rs. 72,000 paid in the said years, the withdrawals shown in the subsequent two years i.e., assessment years 1993-94 and 1994-95 at the total figure of Rs. 1,34,472 and Rs. 1,41,337 were sufficient to support and substantiate the explanation of the assessee that the rent paid in the said two year's at Rs. 72,000 and Rs. 30,000 was met from the said withdrawals. We, therefore, find no justification in treating the amount of rent paid for assessment years 1993-94 and 1994-95 as undisclosed income of the assessee and, accordingly, restrict the addition on this count to Rs. 1,14,000 as against Rs. 2,16,000 made by the assessing officer. Ground Nos. 14 & 15 are, accordingly, partly allowed.
28. Ground No. 16 relates to the addition of Rs. 85,000 made by the assessing officer on account of cash found during the course of search to the extent it remained unexplained.
29. In his preliminary statement recorded during the course of search, the assessee had stated that cash only to the extent of Rs. 15,000 is available in his house whereas actual cash to the tune of Rs. 93,944 was found during the course of search. The excess cash was explained by the assessee later on during the course of search as representing his wife's savings. During the course of assessment proceedings, the stand taken during the course of search however was changed by the assessee and it was explained that cash to the extent of Rs. 80,000 belonging to M/s. Metachem India was carried home the previous evening i.e., on 28-8-1996 by Shri Dinesh Gupta for depositing the same in bank account on the next day. Cash book of the said firm was also produced by the assessee to show that sufficient cash was available with the said firm out of which Rs. 80,000 was meant for depositing in the bank account. This explanation of the assessee, however, was not found acceptable by the assessing officer for the reason that during the course of search conducted at the business premises of the said firm i.e., M/s. Metachem India, cash only to the extent of Rs. 39,000 was found and neither the assessee nor any other person present there did make any reference to this cash of Rs. 80,000 stated to be brought by Shri Dinesh Gupta to the residence of the assessee for depositing in the bank account. Since the assessee also had explained the cash found from his residence as representing his wife's savings, the assessing officer found it difficult to believe that the assessee being one of the partners of Ws. Metachem India was not aware of the cash of Rs. 80,000 stated to be brought by his son Shri Dinesh Gupta to his custody for depositing in the bank account. The assessing officer also found it beyond comprehension that the partner Shri Dinesh Gupta who had stated to have brought the cash of the firm for depositing in the bank account would leave the said money at the house of another partner when he himself was residing separately in an independent house. He, therefore, rejected the explanation offered by the assessee in this regard and treated the cash found during the course of search to the extent of Rs. 85,000 as unexplained allowing relief to the extent of Rs. 8,944 on account of cash attributable to savings of the assessee's household.
30. The learned counsel for the assessee submitted before us that cash found during the course of search was explained to the extent of Rs. 80,000 as belonging to M/s. Metachem India by the assessee and since cash to the extent of Rs. 2,78,509 was available with the said firm on the date of search out of which only an amount of Rs. 39,000 was found in the business premises of the said firm, there was no reason for the assessing officer to reject the explanation offered by the assessee on this count. He also invited out attention to the copy of cash book extract of the said firm placed at page 202 of his paper book to show that cash balance to the extent of Rs. 2,78,509 was available with the said firm on the date of search.
31. The learned Departmental Representative, on the other hand, submitted that the availability of sufficient cash balance as per the cash book of M/s. Metachem India alone was not sufficient to explain the cash found at the residence of the assessee during the course of search and it was also necessary for the assessee to establish that cash belonging to the said firm was brought to his residence and was lying there. He invited our attention to the preliminary statement of the assessee recorded during the course of search placed at pages 31 and 32 of the paper book wherein in reply to question No. 6 the assessee had clearly stated that no cash belonging to his firm was lying in his house. He also submitted that during the course of search conducted at the business premises of M/s. Metachem India, cash only to the extent of Rs. 39,000 was found as against the cash balance of Rs. 2,78,509 reflected in the cash book which clearly shows that the cash book of the said firm was not reliable. He submitted that even none of the family members of the assessee during the course of search had stated that cash belonging to the firm of M/s. Metachern India was available at the residence of the assessee. He contended that the explanation of the assessee thus was rightly rejected by the assessing officer and in the facts and circumstances of the case, his impugned order on this issue deserkles to be upheld.
32. We have considered the rival submissions and also perused the relevant material on record. As rightly contended by the learned Departmental Representative before us, in order to explain the cash found during the course of search conducted at his residence, it was not just sufficient for the assessee to show that sufficient cash balance was available with his firm M/s. Metachem India as per its cash book on the date of search, but it was also necessary for him to establish that the cash found at his residence was belonging to the said firm. In this regard, it is observed that in this preliminary statement recorded during the course of search, the assessee was required to state about the availability of cash at his residence and, in reply to question No. 6 put forth in this regard, the assessee categorically stated that no cash belonging to his firm was lying in his house. Moreover, as pointed out by the learned Departmental Representative before us, even none of the family members had stated about the availability of any cash belonging to the said firm in their house during the course of search. During the course of assessment proceedings before the assessing officer, the assessee however changed his stand and tried to explain that cash to the extent of Rs. 80,000 belonging to M/s. Metachem India in which he was a partner, had been brought to his house by Shri Dinesh Gupta for depositing in the bank account. This explanation, however, was not found to be acceptable by the assessing officer giving cogent reasons in his impugned order which have already been discussed hereinabove while narrating the facts of the case. Having regard to the said reasons given by the assessing officer as well as the categorical statement made by the assessee during the course of search, we are of the view that the assessing officer was fully justified in rejecting the explanation of the assessee offered on this issue and confirming the addition of Rs. 85,000 made by him under section 69A on account of unexplained cash found during the course of search, we dismiss ground No. 16 of the assessee's appeal.
33. In the result, the appeal of the assessee is partly allowed.