Delhi High Court
Pioneer Publicity Copn. & Ors. vs Deputy Commissioner Of Income Tax on 29 January, 1999
Equivalent citations: (2000)67TTJ(DEL)471
ORDER
Nathu Ram, A.M. These are the appeals preferred by the Pioneer Publicity Corporation Group (hereinafter referred to as "PAC") against the block assessment orders made under s- 158BC of the Income Tax Act, 1961, separately in each case.
2. Since all the assessees involved are of the same group and certain issues involved are inter-related, we have heard these appeals together and these are being decided by this consolidated order.
2.1. Search and seizure operations in the cases of the this group were carried out by the department relating to their business as well as the residential premises on 27-10-1995, and during the course of search the department seized valuable assets as well as the books of account documents, etc. The position of cash and jewellery found and seized in this group on search is as under :
Premises Found Seized Cash (Rs.) (Rs.) 226, Cycle Market, Jhandewalan (business Premises of PPC) New Delhi 3,26,580 3,20,000 First floor, 64, Kalyanvihan (residence of Sunil Vasudev, partner of PPC) 2,18,460 2,00,000 (!round floor, 64, Kalyanvihan (residence of Deshraj) Vasudev, father of Sunil Vasudev and partner of Mls Syndicate Advertisers) 1,31,700 1,00,000 Locker No. 157 of Deshraj Vasudev 3,81,400 3,81,400
50. Ishwar Colony, Delhi (residence of Naresh Vasudev, partner of PPC) 5,38,160 4,87,700 B-206, Derawalan Nagai, Delhi (residence of Rajesh Vasudev & Mukesh Vasudev, partners of PPC) 11,97,967 11,66,000 27,94,267 26,54,100 Jewellery Ground floor, 64, Kalyan Vihar (residence of Deshraj) 95,866 Nil First floor, 64 Kalyan Vihar (residence of Sunil Vasudev, partner of PPC) 1,60,044 Nil Punjab National Bank, locker of Sunil Vasudev, partner of PPC 23,793 Nil 50, Ishwar Colony, Delhi (residence of Naresh Vasudev, partner of PPC)' 7,37,950 4,07,952 B-206, Derawalan Nagar, (residence of Rakesh Vasudev & Mukesh Vasudev, partners of PPQ 9,79,834 5,22,778 The group consists of following firms/companies :
(1) Pioneer Publicity Corporation-Firm Naresh Vasudev 35% Sunil Vasudev 27.5% Rakesh Vasudev 18.75% Mukesh Vasudev 18.75% (2) Delhi Advertising Semces-Firm Rajesh Vasudev 20% Mukesh Vasudev 20% PankajVasudev 20% Avinash Vasudev 20% Smt. Kiran Vasudev 20% (3) P.K. Advertising services Rajesh Vasudev Mukesh Vasudev Avinash Vasudev Smt. Kiran Vasudev (4) M/s P.K. Advertising Service (P) Ltd. (Directors) Rakesh Vasudev Deshra Vasudev Naresh Vasudev Sunil Vasudev Dinesh Vasudev Deepak Vasudev (5) M/s Syndicate Advertisers (Firm) Partners Rakesh Vasudev Deshraj Vasudev Mukesh Vasudev Avinash Vasudev Kiran Vasudev Satish Vasudev Surinder Vasudev Smt. Ramwati Vasudev 2.2 M/s Pioneer Publicity Corporation was constituted as back as October 1966 and other concerns as well as companies came to be formed by the members of the family of Deshraj Vasudev in 1985, 1987, 1992 and 1996, respectively. It would be seen that various firms and the companies are constituted or formed by the members of the family of Deshraj Vasudev. The business carried on by the group was that of advertising through the display of hoardings, etc. The various firms/companies maintain regular books of account in the shape of cash book, ledger, etc. as supported by bills and vouchers and the same were got audited wherever required. The firm/company and partners have filed returns and have been assessed in the past.
3. We now take up the various cases for consideration hereunder Pioneer Publicity Corporation (ITA No. 6177/Del/1996).
3.1. The assessing officer initiated proceedings by issue of notice under section 158BC on 10t-5-1996. Consequently the assessing officer issued a detailed questionnaire to the assessee-firm on 12-8-1996, covering various issues involved. The assessee-firm filed a return for the block period assessment years 1986-87 to 1996-97 (upto 27-10-1995) on 19-8-1996, and therein the assessee-firm had shown undisclosed income for the block period at Rs. 26.,71,850. The assessee firm during the course of assessment proceedings was required to give bifurcation of the undisclosed income shown in the return for the block period but the assessee-firm in its reply dated 24-10-1996, made a submission that in view of the further declaration of undisclosed income of the firm no cognizance of the amount declared at Rs. 26,71,850 be taken. As the assessee-firm had not given any details or bifurcation the assessing officer proceeded to complete the block assessment on the basis of the incriminating material found and seized during the course of search and seizure operations and computed the undisclosed income at Rs. 86,97,447 in the order passed under section 158BC of the Income Tax Act, on 30-10-1996.
3.2. The first effective ground taken is against an addition of Rs. 4,12,038 made on account of inflation of painting charges. The assessing officer noted that during search operations a trial balance of assessee-firm as on 31-3-1995, was found and seized. The profit as per the trial balances came to Rs. 37,18,656 whereas as per the return filed for the assessment year 1995-96 the net profit was disclosed at Rs. 8,31,533. The assessee-firm. was, therefore, through a questionnaire dated 12-8-1995, was required to reconcile and in response the assessee reconciled the difference. The assessing officer noted that in the trial balance payments relating to hoarding publicity expenses, painting charges were shown and the same were accepted by the assessing officer. However, in reconciliation account an entry of cash painting charges made of Rs. 4,12, 038 was found. These cash painting charges as claimed were not found in the trial balance and the assessee-firm in the absence of any vouchers surrendered the amount of Rs. 4,12,038 vide its letter dated 17-10- 1996. The assessing officer, therefore, treated the said amount of Rs. 4,12,038 as undisclosed income of the assessee for the block period on account of inflation of expenses under the head "Painting charges". The learned counsel of the assessee has not contested the addition made on account of surrender of the painting amount of Rs. 4,12,038 and in this view of the matter and especially when the said expenses incurred were not found vouched or accounted for in the books of account, the addition made of Rs. 4,12,038 is held to be justified and the same is confirmed.
4. The next ground relates to the addition of Rs. 1,81,000. The assessing officer noted from p. 139 of Annexure "A" to the Panchnama relating to the premises in Cycle Market, Jhandewalan Extn. New Delhi, that there was an agreement dated 1-3-1995, between the assessee-firm and Shri Krishna Kumar to pay the site rent at Rs. 65,000 in cash besides Rs. 65,000 in cheque for the third floor roof of house No. 3173, Sector "C", Vasant Kunj, New Delhi. According to the assessee the payment made through cheque is verifiable from the books of account but the payment made by cash was not found recorded in the books of account and was thus not verifiable. The assessee-firm under these circumstances surrendered the cash payment amount of Rs. 65,000 as undisclosed income vide letter dated 9-9-1996. Likewise on p. 25 of Annexure A.21 there was found an agreement for payment of cash of Rs. 1,16,000 per annum over and above the payment required to be made by cheque of Rs. 1,00,000 p.a. When confronted the assessee surrendered the amount of Rs. 1,16,000 also vide letters, dated 9-9-1996, and 17-10-1996. The assessing officer, therefore, treated the said unexplained payment of Rs. 1,81,000 (Rs. 65,000 + Rs. 1,16,000) as undisclosed income for the block period.
4.1. The learned counsel of the assessee has contested this addition though surrendered at the time of assessment on the ground that the payment in question was of revenue nature. He, therefore, claimed that though on one hand the addition of Rs. 1,81,000 may be justified as income from undisclosed source, a corresponding deduction should have been allowed on account of revenue expenditure which the assessing officer failed to do. In support he has placed reliance on the decisions in the cases of Nishant Housing Development (P) Ltd. v. Assistant Commissioner (1995) 52 lTD 103 (Pat) and Sharma Associates v. Assistant Commissioner (1996) 54 TTJ (Pune)(TM) 207 : (1996) 217 ITR 1 (AT). According to the learned counsel since the nature of expenditure incurred in cash as well as through cheque is similar and there was no dispute that it was of revenue nature and it was actually incurred the amount was allowable as revenue expenditure in view of the ratio of the decisions cited. The addition made would, therefore, stand neutralised by the allowance of the said amount as revenue expenses, He, therefore, pleaded that the addition made be deleted.
4.2. The learned departmental Representative, on the other hand, strongly objected to the claim so made. He made a submission that as per the agreement discovered during the course of search the assessee-firm provided for payment in cash also apart from part-payment by cheque and the cash payment was obviously neither to be accounted for by the assessee-firm nor the recipient. Admittedly the assessee-firm has not accounted for the cash paid. The assessee-firm has not furnished any information or details while making such claim about the party for whom the premises were taken for the purpose of display of hoardings and how much amount was charged from the said party and whether the amount charged from the said party has been fully disclosed in the books of account or the receipt has also been suppressed as the assessee has suppressed the payment of rent for display of hoarding. According to the learned departmental Representative it has been established from the incriminating documents seized that the assessee-firm had also indulged in suppressing of receipts. Unless it is established that all the receipts have been fully disclosed the claim made for such cash payment as revenue expenses cannot be allowed. He also pointed out that the facts of the case cited are distinguishable from that of the assessee-firm inasmuch as in those cases the receipt was not found suppressed whereas in the case of the assessee there has been found suppression of receipts. The learned departmental Representative has, therefore, pleaded that the claim made on the facts and circumstances should not be allowed especially when the assessee has surrendered the amount during the course of assessment proceedings as payment out of undisclosed income and the revenue expenses as legitimately claimed stand allowed in the regular assessment made for the relevant assessment year.
4.3. We have carefully considered the facts and rival submissions. We find, on consideration of the facts and incriminating material seized, that the assessee-firm has been indulging in suppressing receipts as well as expenses. Though the said rent amount was paid in cash and the same has not been accounted for in the books of account and has also been surrendered by the assessee-firm, there being no explanation about the source of payment, but there are no details or material brought on records to show that the advertisement payment received from the clients relating to such payment made by the assessee in cash on account of the rent of the premises for display of hoarding has been fully disclosed and the same have been accounted for in the regular books of account. There is, however, probability that such unaccounted cash payments were adjusted by the assessee-firm against, the unaccounted receipts of advertisement charges. Moreover, the payments made through cheques has been duly debited in the books of account and also allowed while completing the regular assessments against the accounted receipts.
4.4. We have gone through the decisions cited on behalf of the assessee and we find that the facts in the present case are distinguishable in as much as in those cases the addition made on account of unexplained expenditure was held to be neutralised by allowance of the said amount as revenue expenditure but the receipt/income shown was not found suppressed whereas in the present case receipt/income has also been found suppressed in the various years involved in the block period. In this view to the matter we see no merit in the claim made and the addition made on account of unexplained expenditure under section 69C is confirmed.
5. The next ground raised is against the addition made of Rs. 55,000 on account of undisclosed receipts. The assessing officer noted from the seized document.- as per p. 24 of Annexure A-23 to the Panchnama that there was copy of account of one Shri Meghraj as on 4-10-1995, according to which the assessee received Rs. 20,000 in cash and Rs, 35,000 was shown as due. When required it was explained that the cash receipt is recorded in the regular books on 25-9-1995. It was claimed that total amount due was of Rs. 35,000 and against it Rs. 20,000 were received in cash on full and final settlement. The assessing officer further noted there was no such entry in the books of account seized but the same was found in the books of account produced during the course of assessment proceedings and the assessee was required to explain. The assessee gave no explanation to such query made. The assessing officer has further noted that no confirmation has been filed from Meghraj. The assessing officer, therefore, treated Rs. 20,000 as income on cash basis and Rs. 35,000 on due basis and thus he treated the total amount of Rs. 55,000 as income from undisclosed sources.
5.1. It has been submitted by the learned counsel of the assessee that the cash book had not been written up to date as on the date of search but the fact remains that the amount of Rs. 20,000 was duly entered in the cash book as on 25-9-1995, and, therefore, the amount was duly taken into consideration ,in the computation of income for the assessment year 1996-97 and the addition on account of same amount would tantamount to double addition. It is also claimed that confirmation from the concerned party was obtained and the same is placed in the paper-book No. 3. There is otherwise no evidence to prove that the sum of Rs. 35,000 was received by the assessee before the end of the block period and that there was no justification for making an addition of Rs. 35,000. Shri Meghraj in his confirmation has stated that he has paid only Rs. 20,000 so far as the rest of the amount is stated to be outstanding being in dispute. The learned counsel has, therefore, contended that there being no evidence to support that the amount of Rs. 35,000 was received before the data of search the addition made of Rs. 35,000 for the block period is not justified and the sum of Rs. 20,000 having already been recorded in the regular cash book the amount cannot be added once again. He, therefore, prayed that the entire addition of Rs. 65,000 deserves to be deleted.
5.2. The learned departmental Representative on the other hand, has relied upon the order of the assessing officer and he further advanced arguments in support thereof.
5.3. We have carefully considered the facts and material available on records. The assessing officer has admitted that the said Rs. 20,000 has been accounted for in the books of account produced during the course of assessment proceedings and the amount of Rs. 20,000 thus stand reflected in the accounts rendered for the accounting year relevant to the assessment year 1996-97 (till date of search) and accordingly no addition of the said amount of Rs. 20,000 is justified as that would amount to double addition.
5.4. As regards the addition of Rs. 35,000 it is admitted that the said amount was shown as due from Meghraj but the same being in dispute was outstanding as confirmed by Shri Meghra), there is, however, nothing on record to show that the said amount of Rs. 36,000 was received by the assessee-firm before the date of search. We also note that the revenue has not made any enquiry from Meghraj to ascertain whether the amount of Rs. 35,000 shown as due war, over and above the amount of Rs. 20,000 paid in cash or the only amount due was of Rs. 55,000 and against that the assessee received Rs. 20,000 and as claimed that was in full and final settlement of the amount due of Rs 35,000. We find from p. 2 of the paper-book that the loan balance due as on 4-10-1995, from Shri Meghraj was at Rs. 35,000 and there against the assessee received amount of Rs. 20,000 showing the balance due at Rs. 16,000. This document contains further entries as per details below :
Rs.
Rs.
Last balance 35,000 Received Amt.
20,000 15,000 defense Colony 20'x 10' (One month) 9,000 Sewa Nagar 20' x 10' "
6,000 Bhogal 20' x 10' "
5,000 R.K. Puram 20' x 10' "
6,000 Add painting =800 sq. ft.
3,200 4/p. @3500 10,500 One shelter Lajpat Nagar (Three months) Add painting charges 600 By Balance due to us 55,300 5.5. It would be seen from the statement of account of Meghraj as on 4-10-1995, extracted above, that after adjustment of cash payment of Rs. 20,000 there remained an amount due from Meghraj as on 4-10-1995, at Rs. 55,300, Shri Meghraj in the confirmation given and placed at p. 3 of the paper book has not disputed the amount due Rs. 55,300. - The assessee-firm is maintaining account on mercantile system and the amount due on accrual basis has, therefore, to be considered. The income on this account has not been shown as admittedly the assessee has accounted for only the cash receipt of Rs. 20,000 in the books of account. In this view of the matter the addition of Rs. 55,000 made by the assessing officer deserves to be sustained though on different ground and we do so.
6. The next ground taken by the assessee is against an addition of Rs. 1,69,000 on account of unaccounted payments made to M/s Paramount Publicity. The assessing officer noted from document at p. 16 of Annexure A-8 of the Panchnama seized that there existed an account showing payment of Rs. 5,19,000. When required to explain the payment it was submitted on behalf of the assessee that these payments are to M/s Paramount Publicity and it includes payment by cheque of Rs. 3,50,000 and the same are duly entered in the regular books of account. The balance amount of Rs. 1,6,000 was surrendered as an unaccounted payment on account of undisclosed income. The assessing officer, therefore, accepted the payment made by cheque of Rs. 3,50,000 which have been accounted in the books of account but there being no explanation about the source he made an addition of Rs. 1,69,000 on account of undisclosed income for the block period.
6.1. The learned counsel for the assessee has not disputed the addition made on account of payment made to Paramount Publicity being unexplained but he has contested that it should have been allowed as revenue expenditure and in support he has placed reliance on (1995) 52 TTD 103 (Pat) and (1996) 52 TTJ (Pune) (TM) 207 .- 217 TTR 1 (AT) (supra). It is further contended that the entire amount of Rs. 5, 19,000 appear in the same document and nature of payment of Rs. 3,60,000 made by cheque and Rs. 1,69,000 made by cash are identical and the assessing officer having allowed the deduction of Rs. 3,50,000 as revenue expenditure, there is no justification for not allowing Rs. 1,69,000 as deduction being revenue expenditure. The addition made of Rs. 1,69,000 as income from undisclosed source would thus get neutralised by the deduction on account of revenue expenditure. The addition made of Rs. 1,69,000, therefore, deserves to be deleted. The learned departmental Representative relied on the order of the assessing officer.
6.2 We have considered the facts and material on record. Admittedly, the payment made by cash of Rs. 1,69,000 to Paramount Publicity is not out of disclosed source and it is for this reason that the amount was surrendered by the assessee-firm at the time of assessment. As regards the claim of the assessee that the amount be allowed as a revenue expenditure thereby neutralising the additions made, we would mention that the facts relating to this addition are identical to that relating to the addition of Rs. 1,81,000 discussed above and for the detailed reasons given while disposing of the ground relating to the addition of Rs. 1,81,000 the prayer so made is not found justified and the same is rejected.
7. The next ground taken up is against an addition of Rs. 2,58,000 on account of unaccounted receipts. The assessing officer noted from the document at p. No, 8 of Annexure 8 to Panchnama that the assessee received a cash of Rs. 2 lakh against bills raised. When confronted the assessee admitted the receipt as unaccounted. Likewise there was found on account of M/s Top Class Sales showing cash receipts of Rs. 87,000 and when confronted it was claimed that out of Rs. 87,000 receipt of Rs, 29,000 is accounted for in the books of account and the balance amount of Rs. 58,000 was surrendered as undisclosed. The AG on these facts made an addition of Rs. 2,58,000 (2,00,000 + 58,000).
7.1. The learned counsel for the assessee did not contest the addition so made before us in view of the surrender made before the assessing officer and the same is accordingly confirmed.
8. The next ground raised by the assessee is against an addition of Rs. 9,84,863. The assessing officer from the document at p. 63 to 85 of Annexure A-23 found that it was an account of receipt and payments for the period 27-9-1995, to 23-10-1995. This document contained entries relating to receipt of Rs. 36,02,878 including opening balance of Rs. 7,84,633 as on 27-9-1995, and the payments of Rs. 33,39,716 including opening balance of Rs. 6,33,500. When required it was submitted that these receipts/expenses are not accounted for in the books of account. The assessee was thereon required to work out and give the profit and investment involved in such unexplained payments and receipts. In response it was contended that difference of receipts and payments being of Rs. 2,64,288 only be taken as undisclosed income of the assessee-firm. The assessing officer, however, noted that extent of investment in the transactions of Rs. 36,02,878 has to be separately taxed since every transaction involved investment and income. The assessing officer further noted that in the regular return for the assessment year 1995-96 the assessee has shown total receipt of Rs. 5,16,10,522 and capital employed is of Rs. 1,07,57,836. The capital employed was thus found to be at 20 per cent of the turnover. The assessing officer, therefore, worked out the unexplained investment in these transactions @20 per cent of the turnover which came to Rs. 7,20,575. The assessing officer, therefore, apart from assessing the undisclosed income of Rs. 2,64,288 also made an addition of Rs. 7,20,575 on account of unexplained investment. The total addition made, therefore, comes to Rs. 9,84,863.
8.1. The learned counsel has made a submission that the addition of Rs. 2,64,288 is not contested in view of the fact that the same was surrendered before the assessing officer by the assessee-firm.
8.2. As regards the addition of Rs. 7,50,575 it has been submitted that this addition is wholly uncalled for as according to him a sum of Rs. 1,51,133 was available as per the diary produced at the very beginning of the period being the difference between the opening balance of receipt and opening balance of payments amounting to Rs. 7,84,633 and Rs. 6,33,500, respectively. Further, during the period the assessee earned an income of Rs. 2,64,288 which again flowed back in the said transactions. He has also contended that it is not a case of outright investment but a case in which there has been a regular rotation -of receipts and payments. There was, therefore, no justification for making an estimate of unexplained investment @20 per cent of the total turnover. Reliance is placed on the Tribunal's decision in the case of Sunder Agencies v. Dy. CIT (1997) 59 TTJ (Mumbai) 610 : (1997) 63 ITD 245 (Mumbai) to support the contention that neither section 68 nor section 69 was invoked. The onus is on the department to prove the alleged unexplained investment. He has further argued that there was no room for any presumptive addition under the scheme of Chapter XIV-B where no evidence of undisclosed income is found. The learned counsel, therefore, pleaded that under the circumstances the addition made of Rs. 7,20,575 is not justified on estimate basis and the same deserve to be deleted.
8.3. The learned departmental Representative on the other hand, strongly relied upon the order of the assessing officer and submitted that for carrying out the business of more than Rs. 36 lakh the assessee-firm is required capital investment and such investment having not been shown or found recorded in the seized documents the assessing officer was fully justified in estimating the same at 20 per cent of the turnover looking to the ratio of disclosed turnover to the capital investment in the business of the assessee-firm.
8.4. We have carefully considered the facts, material on records and rival submissions. As mentioned above the assessee-firm is engaged in the business of advertisement. The assessee in its accounts showed receipts on account of publicity, sales and there against claimed expenses on account of site rent paid for display of hoarding, publicity expenses and painting charges in the trading accounts There is no direct investment basically required in carrying on of such business as is evident from the copies of trading and P&L a/c for various years placed in the paper book. Further, we find from the balance sheet as on 31-3-1996, placed at p. 459 of the paper-book that the assessee-firm has fixed assets in the shape' of office premises and certain godowns where hoardings, etc, are prepared and kept before and after the display at the selected site and as on 31-3-1996, such fixed assets are of Rs. 36,20,835. Therefore, looking to the nature of business and the position obtained from accounts filed for various years we are of the considered view that there was involved no capital investment as such in the advertisement business done at Rs. 36,02,828. Moreover, an amount of Rs. 1,51,133 was available at the beginning of the period being the difference between the opening balance receipt and opening balance payments and the profit earned of Rs. 2,64,288 from such unaccounted business and this amount could be utilised for payment, if any required before the advertisement amount received from the clients. Moreover, the addition made on account of investment is only estimated and there is no material evidence as such found during the course of search to prove and establish that the assessee did make investment in such unaccounted business to the extent of Rs. 7,20,575 nor the assessing officer has invoked the provisions of section 69 which provides that where in the financial year immediately preceding the assessment year the assessee had made investment which are not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature and source of investment or the explanation offered by him is not in the opinion of the assessing officer is satisfactory the value of investment may be deemed to be the income of the assessee of such financial year. Since there is no evidence as such to prove nor there is any assets in which the alleged investment was made there would arise no question of rejecting the explanation, if any, offered in computing the undisclosed income under Chapter XIV-B. Provisions of section 69 among others do apply but the assessing officer having not made out a case for unexplained investment as per provisions of section 69 of the Income Tax Act, the addition made on account of unexplained investment to the extent of Rs. 7,20,575 is not justified and the same is directed to be deleted. The addition made of Rs. 2,64,288 on account of undisclosed income from the said business transaction is, however, upheld the same having been surrendered by the assessee-firm and the learned counsel having conceded the same..
9. The next ground relates to the addition of Rs. 1,62,800 on account of unexplained payment made. The assessing officer found from document seized at p. 97 front and back of Annexure A-23 that as per details given therein the payments were made to Sunil Kumar Vasudev, Naresh Kumar Vasudev and others which totalled to Rs. 1,62,800. When required the assessee-firm in its reply, dated 9-9-1996, explained that this is a rough paper but subsequently it changed its stand and stated that these are expenses for Diwali 1995 and the same are accounted for the books of account. The assessing officer noted that assessee has accounted for Diwali expenses in the books of account which were not seized during the course of search and further that Diwali expenses in each year were found to be of much lower amount. The assessee made no reply to the query raised in this behalf, The assessing officer, therefore, has held that the view that the assessee-firm merely entered these amounts in its computerised books of account and produced them for examination. On these facts the assessing officer rejected the explanation offered and made an addition of Rs. 1,62,800 on account of unexplained payment.
9.1. The learned counsel of the assessee has made a submission that the assessee-firm has placed on records copies of relevant pages of cash book and the same are available at pp. 27 to 31 of the paper-book. While making a reference to these papers the learned counsel of the assessee has shown that a sum of Rs. 1,62,800 was debited on 4-10-1995, to Diwali interest account and the said amount was credited to the interest Diwali account on 25-10-1995. Based on these entries it has been explained that the amount advanced to the partners and others was for expenses to be incurred on the occasion of Diwali at different business premises. According to the learned counsel a consolidated expenditure of Rs. 1,65,917 was incurred through cheque for payment of gift packs of dry fruits, etc. from M/s Roopak Pick & Pay, Ajmalkhan Road, New Delhi, as per the details given at pp. 584 to 587 of the paper-book. The expenses incurred relates to various transactions of the group and the details given are as under
Rs.
Pioneer Publicity Corporation (assessee) 16-10-1995 50,000 6-12-1995 1,768 P.K. Advertisement Services (P) Ltd.
16-10-1995 30,000 6-12-1995 562 Delhi Advertising Service 16-10-1995 40,000 9-12-1995 4,374 12-01-1996 2,068 P.K. Advertising Service 16-10-1995 20,000 5-12-1995 145 9.2. Amounts paid to 14 employees @ Rs. 500 on Diwali = Rs. 7,000. Total comes to Rs. 1,65,917. The ' learned counsel has, therefore, submitted, looking to the details given, the entire addition made is based on suspicion and the assessing officer failed to appreciate and consider the correct facts. All the relevant books were produced for examination and the same has also been admitted by him. It is apparent from the nature of the entries made that the amount was withdrawn from the regular cash books. On 4-10-1995, cash balance was available with the various concerns at Rs. 3,18,644.47 and it was out of this amount that the said amount was taken to the Diwali imprest a/c. The assessing officer has not doubted the entries recorded nor he has brought on record any material to disprove the correctness of the entries with regard to the availability of the cash balance. The learned counsel, therefore, pleaded that the addition being not justified deserves to be deleted.
9.3. The learned departmental Representative on the other hand, relied upon the order of the assessing officer and further submitted that as per the incriminating documents seized the said amount was given to the partners and others and there, was found no entry made in the regular books of account seized during the course of search. There is no valid explanation available about the source of such amount paid to the various persons and accordingly the addition made was fully justified being representing the unexplained expenditure.
9.4. We have considered the facts and rival submissions. Admittedly as per the seized documents an amount of Rs. 1,62,800 was given to the partners and others in cash. According to the learned counsel of the assessee this amount was placed in the Diwali interest a/c and finally the payment was made on account of four concerns of the group through cheque mainly on 15-10-1995, and small amounts on later dates on 5th Dec., 6th Dec., 9th Dec., 1995 and 12-1-1996, on their respective bank accounts. It shows that the payments for expenses incurred on Diwali and subsequent dates were not out of any such Diwali interest a/c in cash but the said payments were made directly by the various concerns of the group through cheque from their respective bank accounts. Moreover, if the said total amount of Rs. 1,62,800 was placed in the Diwali interest a/c that could have been done by the various concerns directly out of their cash balances and there was no need or necessity of showing the cash payment to the said partners and others in cash of amount totalling to Rs. 1,62,800. Further, though the assessee has shown that there was a cash balance as on 4-10-1995, with various concerns at Rs. 3,18,644.47 but there is no material brought on record to show how much amount was given by each concern for the purpose and how that was finally accounted for in their books of account. Having regard to these facts the explanation offered on behalf of the assessee does not repose much confidence to believe that the said amount was spent on purchase of gift packs for Diwali nor there is shown any co-relation between the total expenses shown as incurred on 1,65,917 by various concerns with the said cash payment of Rs. 1,62,800. We on these facts and circumstances see no merit in the explanation offered and the addition made of Rs. 1,62,800 of account of payment to that extent from undisclosed sources is upheld.
10. The next ground taken by the assessee-firm is against an addition of Rs. 80, 000. The assessing officer noted that seized document at p. No. 34 of Annexure A- 19 was a visiting card of one Mr. R. Haryal, director of M/s Trisat and on back of the visiting card there were instructions given to Rajesh Vasudev to pay Rs. 80,000 to the bearer of the card. The assessee-firm was required to explain the payment made from the books of account and in reply it was explained that the card indicates only a request for payment but no such payment was ever made and there being no acknowledgment of the amount by Shri Haryal no adverse view could possibly be taken. The assessing officer did not agree with such contention and noted that in unaccounted transactions normally no acknowledgment is given. The presence of visiting card with the assessee-firm is an evidence that the money was advanced by the assessee. With such observation the assessing officer treated the said amount of Rs. 80,000 as advance from undisclosed sources. The learned counsel of the assessee has admitted the recovery of the visiting card on the back side of which is written "Rajesh please give bearer Rs. 80,000". The learned counsel has pointed out that Rajesh Vasudev is one of the partners of the assessee-firm and in explanation before the assessing officer the assessee has denied to have made any payment to any person on the basis of the visiting card and also contested that at best the visiting card contained only a request for making the payment but there was no evidence as to the payment having been actually made. He has contended before us that visiting card did not have any date and there was also no evidence of making any payment. The assessee-firm also did not have any dealings with Haryal of Tnsat and there was also no account of any kind appearing in the books of assessee-firm relating to Haryal or Tnsat. The learned counsel has further contended that the department failed to examine Shri Haryal and also failed to bring on record any evidence in support of the contention that the actual payment was made. The conclusion of the assessing officer is based simply on presumption and is, therefore, wholly unsustainable. The learned counsel has also pointed out that the assessing officer has not indicated under which section 68 or 69 the addition is made. The onus was on the revenue as held in the case of Sunder Agencies v. Dy. CIT (supra). He further submitted that the presumption under s 132(4A) was not available in respect of sections 68 and 69 and for this purpose reliance has been placed on the decisions Pushkar Narain Sarraf v. CIT (1990) 86 CTR (All) 110 : (1990) 183 ITR 388 (All) and Raj Pal Singh Ram Autar v. Income Tax Officer (1991) 39 TTJ (Del) 544. The learned counsel has, therefore, pleaded that the addition made is wholly unjustified and the same deserves to be deleted.
10.1. The learned departmental Representative on the other hand, has relied upon the order of the assessing officer and advanced arguments in support thereof.
10.2. We have carefully considered the facts and rival submissions. Admittedly there was found a visiting card of Shri Haryal, Director of Trisat at the business premises of the assessee-firm during the course of search on the back side of which Rajesh Vasudev partner was asked to pay Rs. 80,000 to the bearer of the card. There is, however, no document found and seized at the time of search to show that the amount of Rs. 80,000 was paid to the bearer. The visiting card also does not give any date on which such request was made for payment of the amount to the bearer. The department has also not made any enquiry from Shri Haryal about the amount given. There is thus nothing to establish that the assessee-firm paid Rs. 80,000 to Shri Haryal during the block period out of it," undisclosed income and in the absence of any such material the addition made is not held justified and the same is directed to be deleted.
11. The next ground taken up by the assessee is against the addition of Rs. 35,000 on account of unaccounted cash receipts. The seized document at p. No. 8b of Annexure A-7 to the Panchnama indicated cash receipt of Rs. 35,000 from M/s Manu Oil. When. confronted the assessee-firm admitted the amount received as unaccounted and accordingly the assessing officer treated the amount as undisclosed income. The learned counsel of the assessee had made a submission that it was a trading receipt as the assessee had put up a hoarding for M/s Manu Oil and received the said amount for that work, there is, therefore, no justification for adding the entire amount and only the profit element thereon be assessed.
11.1. The learned departmental Representative, on the other hand, relied upon the order of the assessing officer.
11.2. We have considered the facts and rival submissions. It is evident from the facts given that assessee-firm did receive the said amount of Rs. 35,000 from M/s Manu Oil and the same is claimed to be on business account. It is claimed on behalf of the assessee that the whole amount be not taken as undisclosed income but there is no evidence or material produced either before the assessing officer or before his to show the details of advertisement contract with Manu Oil and total discount involved, how much amount received was recorded in books and how much was kept out of books, how much expenses relating to such works were incurred and whether the same was fully accounted for in books and, if not, how much was not accounted. There are also no details given of expenses incurred if any, relating to the job done for which the assessee received Rs. 35,000. In the absence of any such details of evidence about the expenses incurred, the claim of the assessee is not acceptable and action of the assessing officer in treating the receipt amount. of Rs. 35, 000 as undisclosed income is confirmed.
12. The next ground raised is against an addition of Rs. 1,10,500 on account of unexplained commission payment. The assessing officer noted that back side of seized document at p. 2 of Annexure A-2 of the diary shows payment of commission of Rs. 10,500 and when confronted it was admitted that such payment was made by P-K. Advertisement Services but since the diary pertained to the assessee- firm the payment of Rs. 1, 10, 500 as commission was held to be made by the assessee-firm. The assessing officer accordingly made an addition of Rs. 1, 10, 500 on account of commission payment from undisclosed income.
12.1. The learned counsel of the assessee has made a submission before us that there is no dispute that the amount was paid outside the books of account commission and the assessing officer was fully justified to add this amount as income non undisclosed source but having accepted this fact that it was on account of the payment on commission, the expenditure incurred was of revenue nature and the same should have been allowed from the total income and in support he placed reliance on the decision reported in (1995) 52 ITD 103 (Pat) and (1996) 52 TTJ (Pune) (TM) 207., (1996) 217 ITR 1 (AT) (supra).
12.2. The learned departmental Representative justified the addition made and strongly contested the claim made for allowing the amount as revenue expenditure.
12.3. We have considered the facts and the rival contentions. It is an admitted fact that the payment of commission of Rs. 1,10,500 was made outside the books of account by the assessee-firm. However, there is no material on record to show that commission paid is with regard to the accounted transactions of advertising receipts and in the absence of any such material and in view of the finding given by us earlier on identical facts the payment made is not allowable as revenue expenses against the income disclosed/assessed. The addition made of Rs. 1,10,500 is, therefore, upheld.
13. The next ground taken up by the assessee-firm. is against an addition of Rs 1,23,000 on account of accounted payments. The assessing officer noted that seized document at page No. 9 of Annexure A-2 gives details of unaccounted payments of Rs. 82,000 on front side and Rs. 1,23,000 on back side. When confronted it was explained that the payment of Rs. 82,000 relates to M/s. P.K Advertising Services a separate concern of the group and the payment being unaccounted an addition of this amount has been made in the hands of that firm, As regards the payment of Rs. 1,23,000 there being no explanation offered about its source the amount was taken unexplained expenditure out of undisclosed income.
13.1 The learned counsel of the assessee has made a submission that it was admitted before the assessing officer that both these payments were unaccounted. He has, however, contested before us on the ground that the assessee-firm was entitled for allowance of the said amount as revenue expenditure. He pointed out that the nature of the document would show that expenditure relates to the various advertising sites such as
(a) Greenpark site ;
(h) Patel Nagar site ;
(c) Azadpur site ;
(d) Punjabi Bagh site ;
(e) NOIDA site ;
(f) Dhaula Kuan site ;
(g) Africa Avenue site ;
(h) Kutub Hotel site ;
13.2. The expenditure being related to various sites is of revenue nature and the same deserves to be allowed thereby neutralising the addition.
13.3. The learned departmental Representative on the other hand, relied upon the order of the assessing officer and contested such claim of neutralising the addition by treating the said payment as of revenue nature.
13.4. We have considered the facts and rival submissions. Though the assessee has claimed that such payment made relates to various sites obtained for display of hoardings but he has not brought on record any material to show that the advertising charges received for such hoardings have been fully accounted for in the regular books of account and in the absence of any such material and for the detailed reasons given for similar claim in respect of other grounds the addition made being from undisclosed income is held fully justified and the same is upheld.
13.4.1. The next ground taken by the assessee is against an addition of Rs. 1,52,000 on account of unexplained expenditure. The assessing officer has mentioned that small diary was seized from the business premises of the assessee-firm. The diary contained entries relating to payments of Rs. 1,92,000 during the period 3-3-1992. to 21st Dec., 1992. When confronted it was explained that this diary belonged to a Government Officer and it contained details of payments made by the assessee-firm. Page 20 of the diary contained the name of the assessee-firm written as "PPC" and payments of Rs. 1,92,000 were shown for the aforesaid period. When confronted it was explained on behalf of the assessee-firm that the figure is not 1,92,000 but is actually 19,200 and the same was surrendered treating as undisclosed income for the block period. The assessing officer on examination of the diary noted that the figures in the diary are in coded form indicating payments in the code of thousand as is evident from p. No. 18 of the diary where figures are shown in full. He, therefore, treated the figures given on p. 20 of the diary as in thousand. The total payment shown on different dates during, the relevant period totalling to "192" was, therefore, read as 1,92,000 and the amount was held as unexplained expenditure out of undisclosed income for the block period.
13.4.2. The learned counsel of the assessee has contended that no addition could be made on the basis of the entries found and recorded in the diary of a third person. He also contested that jottings and notings in the diary could not be treated as a document and in support placed reliance on the following judgments.
(i) Assistant Commissioner v. Karodilal Agarwal (1994) 50 7TJ (Jab) 393;
(ii) Kantilal & Bros. v. Assistant Commissioner (1995) 51 TTJ (Pune) 513 : (1995) 42 ITD 412 (Pune),
(iii) Addl. Income Tax Officer v. T Mudduvirappa & Sons (1993) 45 ITD 12 (Bang);
(iv) Income Tax Officer v. W.D. Estate (P) Ltd. (1993) 46 TTJ (Bom) 143 : (1993) 45 ITD 473 (Bom), and
(v) M. V Mathews v. Income Tax Officer (1996) 46 TTJ (Coch) 353.
13.5 The learned counsel invited particular reference to the decision in the case of Income Tax Officer v. Pitamber Industries (P) Ltd. (1992) 42 ITD 373 (Del) wherein it was held that no addition could be made on the basis of a table diary belonging to a disgruntled employee. A reference was also made to the judgment of the Hon'ble Delhi High Court fn the case of L.K Advani in Cr. R.P. No. 265/1996 and as approved by the Hon'ble Supreme Court in the case of VC. Shukla. In the Bombay High Court judgment reported in JT 1998 (Dal) SC 172 the provisions of section 34 of the Evidence Act were interpreted and it was held that on the basis of entries in the diary of a third person no case can be made out. The learned counsel contested that in light of the above judgments cited, no addition could be made in the hands of the assessee-firm on the basis of the entries in the diary of a third person. It was also contested that there is no justification for presuming that the figure of "192" represented a sum of Rs. 1,92,000. However, in view of the confession made before the assessing officer that a sum of Rs 19,200 be added to the undisclosed income the learned counsel has not contested the addition to that extent, without prejudice to the main contention that no such payments were even made and there is no evidence brought on record by the assessing officer to prove that any such payments were made. According to the learned counsel owner of the diary was not examined and handwriting of the author of the diary was also not proved. No corroborative evidence was brought on record to support the entries in the diary.
13.6. The learned departmental Representative has relied upon the order of the assessing officer and had further submitted that the said diary was found and seized from the business premises of the assessee-firm. Though the assessee claimed that the diary belonged to a government officer but neither the officer was identified nor any officer came forward to own the said diary. There is, therefore, nothing on record to establish and prove that the said diary belonged to a third person and not to the assessee-firm. The assessee has also surrendered an amount of Rs. 19,200 and impliedly the assessee-firm has owned the diary. Since the diary belonged to the assessee and not to any other party the ratio of the various decisions, cited does not apply. The learned departmental Representative further submitted that the amount of Rs. 1,92,000 has been taken on deciphering the figure "192" given in codes on examination of other entries recorded in the diary. The learned departmental Representative, therefore, pleaded that there being no valid explanation about the source of payment the assessing officer has rightly made the addition of Rs. 1,92,000 on account of unexplained expenditure and the same deserves to be confirmed.
13.7. We have carefully considered the facts and rival submissions, We find that the said diary was admittedly recovered and seized from the office premises of the assessee-firm during the course of search and the same has to be presumed to be belonging to the assessee-firm as per provisions of section 132(4A) of the Income Tax Act unless it is proved otherwise. The presumption available under section j32(4A) is subject to rebuttal. The onus was on the assessee to rebut such presumption. The assessee-firm though claimed that the diary belonged to a government officer but there is no valid explanation or any evidence produced to Show the identity of such government officer, how the diary happened to be found at the business premises of the assessee-firm and why the concerned officer has not come forward to own the diary and explain the nature of the entries recorded therein, There is thus nothing to prove that the diary belonged to a third person and not to the assessee-firm. The onus thus cast upon the assessee-firm to rebut the presumption has not been discharged. Under the circumstances we entirely agree with the assessing officer that diary found and seized from its premises belonged to the assessee-firm and none else. As regards the nature of the entries we note that there is a figure of "192" recorded against the name of the assessee-firm and the assessee-firm during the course of assessment proceedings read the figure as "19200" and surrendered such amount as undisclosed income. The department has, however, decoded the figure of "192" as 1,92,000 taking the given figure in thousand but there does not exist sufficient material to decode the figure "192" in thousand to read as "1,92,000" and, therefore, we do not see much merit in adopting the undisclosed income at PAs. 1,92,000. However, looking to the facts and amount confessed and surrendered by the assessee-firm. we restrict the addition to Rs. 19,200.
14. The next ground raised relates to addition of Rs. 6,95,907 on account of unexplained investment in property. During the course of search the department found documents relating to the purchases of the following properties at the apparent consideration shown against each.
Rs.
225, Cycle Market, Jhandewalan Extn., New Delhi.
3,78,000 F-107 Javvahar Park 75,000 R-64, G.T. Kainal Road 9,50,000 14,03,000 14.1. The assessing officer made a reference to the Valuation Cell for estimating the extent in these properties. The DVO as per his report estimated the properties at Rs. 20,98,907 as per following details:
Rs.
225, Cycle Market, Jhandewalan Extn., 4,19,270 F-107, Jawahar Park 2,52,465 R-64, G.T. Karnal Road, Industrial Area 14,27,172 20,98,907 14.2. The assessing officer based on such report of the DVO required the assessee to explain the source of investment in the properties from the books of account. The assessing officer however, found that the -assessee-firm had accounted for in its books of account apparent consideration shown at Rs. 14,03,000. The assessee-firm strongly objected to treating the difference between the amount of valuation and the apparent consideration as unexplained investment.
The basis of valuation was also challenged and it was contended that since no documentary evidence was found during the course of search showing such value except that recorded in the regular books of account no adverse view could be taken,. The assessing officer was not satisfied with the explanation so offered. He noted that the main reason was that the difference in market rate as by the Valuation Cell and that shown as purchase consideration itself speak of the payment "on money" which is usual in such transactions. He, therefore, rejected the arguments advanced about the unexplained investment and treated the amount of difference of Rs. 6,95,907 as unexplained Investment by the assessee-firm and the same was added to the undisclosed income for the block period. The learned counsel of the assessee has given necessarily particulars in respect of the purchases of these properties and the consideration paid and disclosed in the return of income. According to the learned counsel, property at 225, Cycle Market, Jhandewalan Extn. was purchased on 5-4-1994, for consideration of Rs. 1,75,000 and is was duly disclosed in the balance sheet of the assessee-firm as on 31-3-1995, placed at pp. 438 to 474 of the paper-book. A copy of account of property is also given at page 435 of the paper-book. He submitted that copy of account of the property shows further investment on the renovation as per details placed at pp. 436 and 437 of the paper-book. The property was thus originally purchased for Rs. 1,75,000 and further investment thereon was made on its innovation at Rs. 2,06,000. Thus, the total investment made in the property comes to Rs. 3,81,000. The learned counsel has pointed out that no incrimininating document was found during the course of search which could justify the allegation for any undisclosed income being attributable to these properties and accordingly the present addition is outside the scope of Chapter XIV-B of the Income Tax Act. Without prejudice to the main contention that the addition was without jurisdiction it was further contended by the learned counsel that no addition could be made simply on the basis of the valuer's report and in fact there was no justification for making any reference to the Valuation Cell and in !,airport lie placed reliance on the following decisions :
(a) Income Tax Officer & Ors. v. Santosh Kumar Dalmia (1994) 121 CTR (Cal) 17 (1994) 208 ITR 337 (Cal);
(b) Bholanath Majumdar v. CTT & Ors. (1997) 137 CTR (Gau) 198 (1996) 221 ITR 608 (Gau),
(c) HEH Nizam Jewellery Trust v. Assistant Commissioner (1997) 142 CTR (AP) 226 . (1997) 11 (3 ITR 111 (AP), and
(d) CIT v. Jawahar Mills Ltd. No. 2) (1997) 142 CTR (All) 306 : (1997) 226 ITR 330 (All) 14.3. As regards F- 107, Jawahar Park property, it has been explained that this property was purchased on 27-6-1994, for a consideration of Rs. 76,000, The purchase consideration of the property was duly disclosed in the balance Sheet of the assessee-firm as on 31-3-1995, placed at pp. 449 to 458 of the paper book and a copy of account of this property has also been placed at p. 431 of the paper book. The purchase of the property has duly been disclosed in the return of income for the assessment year 1995-96 filed on 30-4-1996, i.e., before the date of search which took place on 27-10-1996. The learned counsel further submitted that with regard to this property also no incriminating document was found to show that the assessee paid any amount over and above that shown as apparent consideration in the sale-deed and uncounted in the books of account, and in the absence of any such material the action of the assessing officer is without any jurisdiction. He also contended that no addition could be made simply on the basis of the valuation report, 14.4. As regards B-64, G.T. Karnal Road, it is explained that this property was purchased in the name of the assessee-firm on 24-9-1991, for a consideration of Rs. 9,50,000. According to learned counsel it was duly disclosed in the balance sheet as on 31-3-1992, filed along with the return for the assessment year 1992-93 on 30-10-1993. A copy of a balance sheet is placed at p. 438 to 442 along with the copy of account of the property at pp. 428 to 429 of the paper-book. He also argued that as in cases of other properties the action of the assessing officer was without jurisdiction and no addition could be made on the basis of the valuer's report. The learned counsel, therefore, pleaded that the addition made by the revenue at Rs. 6,95,907 on account of unexplained investment is neither valid nor justified and the same deserves to be deleted, 14.5. The learned departmental Representative, on the other hand, relied upon the order of the assessing officer. He further submitted that as is evident from the report of the DVO the market value of the property at the time of purchase was substantially higher than that disclosed and the difference represented the "on money" paid by the assessee-firm. The learned departmental Representative, therefore, urged that the addition made being fully justified be upheld.
14.6. We have carefully considered the facts and rival submissions. There is no dispute that the assessee-firm purchased G.T. Karnal property in 1991 and other two properties in 1994 relevant to the assessment years 1992-93 and 1995-96 and the apparent consideration as recorded in the sale-deeds has been duly accounted for in its books of account. The assessee made further investment in renovation of Jhandewalan Extn. property and the same is also duly accounted for in the books of account. The assessing officer, however, made a reference to the Valuation Cell under section 131(l)(b) of the Income Tax Act and the DVO in the report submitted valued the properties at the amount given above. The report sent by the DVO is in an advisory capacity and the same had been given without giving an opportunity to the assessee of being heard or without seeking reaction of the assessee about the proposed valuation, the same being not a statutory reference as is provided in section 16A of the Wealth Tax Act. The valuation report given is therefore, one-sided without considering the objection of the assessee-firm The valuation made is only an estimate of the market value of the property on given facts and it does not represent or prove the actual amount paid by the assessee-firm to the vendors concerned.
14.7. As per the scheme of Chapter XIV-B2 closed income of the block period based on the evidence found as a of search and such other material or information as are available with the assessing officer is to be computed and assessed and in such computation of undisclosed income the provisions of section 69 among others apply. Sec. 69 provides that where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature of source of investments or the explanation offered by him is not in the opinion of the assessing officer, satisfactory, the value of the investment may be deemed to be income of the assessee of such financial year. The assessing officer has made the above addition on account of unexplained investment and though the assessing officer has not specifically invoked any section while making such addition but it could only be under section 69 under which addition could be made on account of unexplained investment. The plain reading of the section 69 would indicate that for invoking the section there should exist an investment made in any asset. The only investment in the above properties as per the sale-deed and books of account maintained made is at Rs. 14,03,000 and there is no material found or seized during the course of search to establish that the assessee-firm further made investments over and above that recorded in the books of account. We also find that the assessing officer has also not made any enquiry from the vendors about the actual consideration received by them so as to ascertain whether the consideration paid is the same as recorded in the books of account or the consideration paid is more than that recorded in the books of account. There being no such material evidence found or collected the fact of making investment of Rs. 6,95,907 over and above that disclosed at Rs. 14,03,000 has not been proved and established and accordingly no addition could be made on account of deemed income within the meaning of section 69 of the Income Tax Act.
14.8. Considering the facts and the ratio of various decisions cited we are of the considered view that the addition made of Rs. 6,96,907 is neither justified nor valid and the same is, therefore, directed to be deleted.
15. The next ground relates to the addition of Rs. 36,02,600 on account of peak credit for the block assessment years 1989-90 to 1992-93. During the course of search a diary was found and seized. The diary contained cash receipts and payments of substantial amounts. The assessee was required to explain the nature of the entries made in the diary and in response it was admitted that the transactions recorded in the diary are totally outside the regular books of account and peak amount of the transactions has been considered as undisclosed inc-me and offered in the return for the block period filed under section 168BC. As mentioned earlier, the assessee failed to give the bifurcation of the undisclosed income shown in the return. The assessing officer required the assessee to give working of the peal credit as claimed in the reply filed and in response the assessee in its reply, dated 24-10-1996, gave the working of the peak as per which total addition called for was of Rs. 9,09,004 as per detail given below :
Rs.
Financial year 1989-90 5,20,000 Financial year 1990-91 2,66,054 Financial year 991-92 1,22,950 Total 9,09,004 15.1 The assessing officer did not find the taking working as correct and accordingly he was not satisfied for the report that in the working given the assessee has not worked out the peak credit for financial year 1992-93 wherein the receipts and payments were of Rs. 40,25,450 as per assessee's own admission filed with reply, dated 24-10-1996. The source of receipts in this financial year could not be fully explained out of the payments made in earlier years as the quantum in those years is much smaller. The assessing officer further noted that as per the chart filed there are receipts of Rs. 37,02,500 between July, 1992 and October, 1992 and only one payment of Rs. 1 lakh has been made on 16-8-1992, during the period Thus, the peak for the financial year 1992-93 would work out to Rs. 36,02,500 (Rs. 37,02,500 - Rs. 1,00,000) for the period July 1992 to October 1992. Since the assessee on its own surrendered Rs. 9,09,004 for the financial year 1989-90 to 1991-92 the remaining peak credit in the financial year 1992-93 according to the assessing officer would come to Rs. 26,93,496. On these facts the assessing officer made an addition of Rs. 36,02,500 in the assessment years relevant to the financial years 1989-90 to 1992-93 on account of peak credits. The learned counsel of the assessee has disputed the additions so made on the ground that the calculation of the peak arrived at by the assessing officer was not correct and he filed a revised calculation placed at pp. 259 to 294 of the paper-book, according to which the peak, as per the learned counsel worked out at Rs. 21,34,918 as on 4-1-1993. During the course of hearing the Bench required the learned departmental Representative to verify the correctness of the peak as worked out by the learned counsel of the assessee and to submit a report. The learned departmental Representative in his report, dated 16-7-1998, made a submission that as per direction of the Bench the said peak statement was sent to the assessing officer for verification and he has reported that there are number of discrepancies in the assessee's peak statement. He has also pointed out certain discrepancies. He also submitted that it is not possible to prepare a peak list as the dates are not mentioned clearly against the amounts mentioned in the seized diary. According to the assessing officer such discrepancies were pointed out to the assessee but the assessee also expressed its inability to prepare an exhaustive list of all the. entries. The assessing officer has further made a submission that as per the assessee's statement the peak drawn at Rs. 20,40,496 is not correct as it takes care only of positive peak. The negative peak which comes to Rs. 12,81,904 as on 26-6-1992, has been ignored by the assessee in its calculation and the same has been requested to be considered.
15.2. The learned counsel of the assessee in the rejoinder filed has pointed out that there is no discrepancy as such in the statement given. He has then proceeded to meet the so-called discrepancies pointed out by the learned assessing officer in the peak statement. As regards the receipt of Rs. 3,68,000 claimed to be not known in the peak, he submitted that the said amount in fact represented the payments and not receipts and the same has duly been accounted in the peak statement prepared. The relevant entries are as under :
Date Amount Rs Page No. of paper-book where the peak statement is placed 29-1-1991 3,00,000 262 29-1-1991 16,000 262 12- 1991 12,000 265 10-1-1992 20,000 265 13-2-1992 20,000 265 3,68,000 15.3. The other objection is that the payment of Rs. 7,500 is not reflected in the peak statement. It is explained that this is not payment but is an income and is duly reflected at p. 262, dated 29-1-1991. Further, about the opening balance of Rs. 1,47,550 and payment of Rs. 1,09,750 it has been explained by the learned counsel that the opening balance is not to be added or subtracted because all the transactions have been taken datewise on running basis and any addition of opening or closing balance on any one place of the diary would disturb the whole calculation. The fact thereof is already there in the running details. The objection thus raised about the opening balance is misconceived. He has further explained that the said payments of Rs. 1,09,750 have duly been accounted for in the peak statement at pp. 264 and 265 of the paper-book as per details below :
S. No. Date Amount Rs Page No. of P.R.
1.
8-8-1991 10,000 264
2. 8-8-1991 5,000 264
3. 11-11-1991 25,000 264
4. 8-8-1991 15,000 265 5 22-10-1991 7,500 265
6. 8-8-1991 40,000 264
7. 31-3-1993 50,000 270 15.4. As regards the objection that the defect pointed out are not exhaustive and it would not be possible to prepare a complete list as the dates have not been mentioned clearly, the learned counsel has pointed out that this objection is again frivolous because the assessee has taken care and included all the entries in the year in which they appear and in the absence of any particular date the position has been taken into account at the end of the financial year. As regards the allegation that the assessee failed to file an exhaustive list of all the entries the learned counsel has submitted that it is not open to the department to raise such an objection at this stage. Though an exhaustive list has been filed as appearing at pp. 239 to 294 of the paper-book but in spite of sufficient opportunity given the department has not found any fault therein. Moreover, the list filed before the assessing officer was prepared as per his directions during the course of proceedings. Be as it may, when full an true facts were placed on record and the department had got sufficient opportunity to cross-verify the same it is not now open to them to take shelter behind such frivolous objections. He has further made a submission that the so-called negative peak of Rs. 12,81,904 is based on incorrect calculation adopted by the assessing officer and the same being not correct the resultant amount of peak both positive and negative is as a consequence incorrect. He has also submitted that the assessing officer ignored large number of entries as he took into account hardly 59 transactions as against 635 transactions included in the chart placed at pp. 259 to 294. The learned counsel of the assessee has further submitted that the negative as well as positive peak as per their calculation comes to Rs. 33,22,500 (Rs. 20,40,596 + 12,81,904). He has further made a mention that according to the peak chart filed and placed a, pp, 259 to 294 of the paper book negative peak worked out to Rs. 10,13,764.30 as on 3-7- 1992, and adding thereto the positive peak of Rs. 21,34,918.20 the total peak would come to Rs. 31,48,682.50 as against the peak adopted by the revenue at Rs. 36,02,500. The learned counsel of the assessee has, therefore, submitted that calculation of the peak as adopted by the assessing officer is not correct and the same cannot be relied upon. He, therefore, made a submission that the peak as per calculation given by the assessee-firm be adopted as against that adopted by the assessing officer.
15.5. The learned departmental Representative on the other hand, has relied upon the order of the assessing officer. He has further submitted that the peak as drawn by the assessing officer is as per the details furnished by the assessee-firm. The learned counsel of the assessee has given a lower figure both of negative and positive peaks drawn out of the same statement but the peak as given by the learned counsel of the assessee also suffers from wrong calculation. He, therefore, pleaded that the addition as made by the assessing officer based on the peak drawn is fully justified. Moreover, admittedly the various entries found recorded in the diary have not been found recorded in the regular books of account and the same obviously represented the undisclosed transactions and the addition made based on the peak drawn is fully justified and the same deserves to be upheld.
15.6. We have given our careful thoughts to the facts, material available on records and rival submissions made before us. Admittedly, a diary containing entries relating to receipts and payments of substantial amounts in cash was found and seized during the course of search and it is also not in dispute that the said diary belonged to the assessee-firm. The assessee-firm. has also admitted during the course of assessment proceedings that all the entries of receipts and payments as recorded in the diary are totally outside the regular books of account maintained. The position being so the assessing officer required the assessee to prepare a peak statement recording all the transactions of receipts and payments date-wise and such peak statement prepared by the assessee is placed at pp. 259 to 294 of the paper-book and it relates to the period 1-4-1985, to 27-10-1995. The assessee as per in the peak prepared surrendered an amount of Rs. 9,09,004 for the financial years 1989-90, 1990-91 and 1991-92 as per details below:
Rs.
Financial year 1989-90 5,20,000 Financial year 1990-91 2,66,054 Financial year 1991-92 1,22,950 Total 9,09,004 15.7. The peak relating to these years is not in dispute. According to the assessing officer the total receipts and payments for the financial year 1992-93 were of Rs. 40,25,450 and the total receipts for the period July, 1992 to October, 1992 were of Rs. 37,02,500 and according to him there was only one payment of Rs. 1 lakh on 16-8-1992. The peak for the period, according to the assessing officer, therefore worked out to Rs. 36,02,500.
15.8. We have gone through the peak statement prepared by the assessee and placed at pp. 259 to 294 and we find that on 3-7-1992, there was a negative peak of Rs. 10,13,764.30 and it thus represented the peak of the payments made. There is a positive peak as on 4-1-1993, at Rs. 21,34,918.20 on p. 269 of the paper-book. This peak represents the amount received. As mentioned above the peak drawn was of the entries recorded in the period from 1-4-1985, to 27-10-1995, and running into 36 pages from 259 to 294 of the paper-book. However, during the course of hearing before us the learned counsel of the assessee gave a peak statement for the period from 1-7-1989, to 1-3-1993, running into four pages and this statement shows a negative peak (net payment amount) at Rs. 12,81,904 as on 26-6-1992, and a positive peak of Rs. 20,40,596 (net amount received) as on 4-1-1993. There is thus wide difference between the peak statements as placed at pp, 259 to 294 and that filed before us during the course of hearing. It so appears the peak statement now filed during the course of hearing relates to the various entries recorded in a diary of Shri Rajesh Vasudeva, one of the partners. We also find from the paper book that at pp. 306 to 314 is given cash-flow statement. The diary of Rajesh Vasudeva for the period from 4-7-1989, to 27-10-1995, shows that there was a positive peak as on 4-1-1993, of Rs. 23,57,257.70 and there was a negative peak of Rs. 8,36,342.30 as on 3-7-1992. Both the peaks prepared on the basis of the diary of Rajesh Vasudeva, therefore, do not seem to tally both in respect of the negative peak and positive peak. The variation in peak based on the same diary has neither been explained nor verified by the learned counsel for the assessee nor by the learned departmental Representative.
15.9. On going through the peak statement placed on p. 259 to 294 of the paper -book it so appears that certain other diaries relating to other members of the group were also found and seized during the course of search and the peak statement placed at pp. 259 to 294 has been prepared by the assessee on account of such diaries found and seized and it is for this reason that this peak statement encompasses all the entries of receipts and payments found recorded in the said diaries. But since this peak statement relating to all the assessees of the group was not before the assessing officer and has been tiled in the first time before us, we ignore the same from consideration. Moreover, the assessing officer has also probably considered the other diaries in the hands of the concerned other assessee while completing their block assessments. We under the circumstances confine ourselves to the peak statement filed before the assessing officer.
15.10. The above addition on account of peak statements is based on tile diary relating to Rajesh Vasudeva and the same has been treated as belonging to the assessee-firm and the assessee has not disputed this aspect. The said ,statement gives a negative peak of Rs. 12,81,904, as on 26-6-1992, and the positive peak of Rs. 20,40,596 on 4-1-1993. The assessing officer while working out. his peak has taken only the receipts for the period from July, 1992 to October, 1992 whereas in the earlier period the assessee has also made payments out of the books to the peak amount of Rs. 12,81,904 and the amount so paid seems to have been recovered subsequently in the month of July to September, 1992 and after recovering the payment the peak of the amount received Subsequently would be around only Rs. 7,58,692. Having regard to the above position the peak adopted by the assessing officer for the period July, 1992 to October 1992 at Rs 36,02,500 is not held to be correct. It is not correct to claim that addition should be made both on account of positive peak and negative peak as the negative peak get merged into positive peak during the financial year 1992-93 itself and accordingly no separate addition on account of negative peak is justified. The only peak which in our considered view deserves to be adopted for assessing the undisclosed income for the financial year 1992-93 is of Rs. 20,40,596. Since the assessee has already offered a peak amount of Rs. 9,09,004 in the financial year relevant to the asst, yr. 1990-91, 1991-92 and 1992-93, the balance amount of peak of Rs. 11,31,592 (Rs. 20,40,596-Rs. 9,09,004) deserves to he adopted as undisclosed income for the financial year relevant to the asst. yr, 1993-94. We order accordingly.
16. The next ground taken by the assessee-firm is against addition of Rs. 1,92,000 on account of unexplained payment made for the chit funds during the block period. The assessing officer noted from p. 146 of Annexure A-23 to the Panchnama that, the assessee-firm made a payment of Rs. 1,92,000 in chit fund during the block period. The assessee-firm admitted the payment made as unexplained and unaccounted. The assessing officer, therefore, made an addition of Rs. 1,92,000 to the undisclosed income computed for the block period. The learned counsel of the assessee has not contested the addition made on this count. However, it has been claimed that the benefit of set off should be allowed on the ground that on matunry of chit funds these amounts were received by the assessee-firm and the same was available for meeting unexplained investment and expenditure.
16.1. The learned departmental Representative on the other hand, has relied upon the order of the assessing officer and he has submitted that there being no evidence for the availability of the said funds for meeting out the unexplained expenditure no such set off could be given.
16.2. We have considered the facts the rival submissions. Admittedly the assessee firm made payments towards chit funds at Rs. 1,92,000. There is, however, no details given about such payments towards chit funds and the amounts received on maturity of the chit funds and its availability for investment/expenditure neither by the assessing officer nor by the assessee-firm and in the absence of any such details we are unable to consider the question of granting of granting set off as claimed. In this view of the matter the addition made of Rs. 1,92,000 is confirmed.
17. The next ground taken is against addition of Rs. 6,71,226. During the course of search certain documents and papers relating to a concern M/s Orient Advertisement Agency were found and seized from the business premises of the assessee-firm. Page 129 of Annexure A-23 of Panchnama was a bank statement for the period 25th January to 16th December. The assessee-firm was required to explain the contents of these documents and also to give details of the investments made over the period involved. Total deposits in the bank as per the statement were of Rs. 11,79,731. One more document showing a deposit of Rs. 50,000 as on 8-9-1994, was also found and seized. Thus, the total deposit as per the bank statement was at Rs. 12,29,731. The assessees reply, dated 24-10-1996, admitted that income earned in the name of Oriental Advertising Agency belonged to the assessee-firm and the deposit represented the total turnover. The assessee-firm offered that the profit thereof be estimated at 5 per cent of the turnover for assessment. According to the assessing officer it was also admitted in the case of M/s. P.K. Advertising Services (a sister concern) that Oriental Advertising Agency is a unit of the assessee-firm and the transactions made in its name are unaccounted. According to the assessing officer the assessee-firm has not given the quantum of investment in such transactions. The assessing officer noted that the maximum balance as per the bank statement is at Rs. 6,09,739 as on 24th October. He, therefore, treated and adopted the said amount as undisclosed investment in the said unit and therein he added the income at Rs. 61,487, worked out @5 per cent of the total turnover as offered by the assessee-firm. The assessing officer thus made an addition of Rs. 6,71,226 in the total undisclosed income computed for the block period.
17.1 The learned counsel of the assessee made a submission that the assessee firm has no grievance against the income adopted at Rs. 61,487 as business done in the name of Oriental Advertising Agency was accepted to be the business profit of the assessee-firm and it was not disclosed in the books of account. The estimate of profit at 5 per cent was also not contested. The learned counsel, however, contested the addition made of Rs. 6,09,739 on account of unexplained investment in the business. The learned counsel contended that the theory of peak is never applied to the trading transactions. He also pointed out with reference to the relevant document that there was regular rotation of the amount of deposit and withdrawals and that clearly demonstrates that the amounts were available from time to time for incurring expenses and the balance of Rs. 6,09,739 does not represent any income but only a trading receipt at a particular point of time. He also contested that having applied the profit rate to the entire turnover it was not open to the assessing officer to pick up a particular figure of the turnover at a particular date and treat the same again as income. He also pointed out that the bank statements stand squared up at Rs. 11,79,731 and again all the amounts have been withdrawn by self cheques. It was thus contended that having considered the deposits as being of trading nature there would be no escape from the fact that the withdrawals were also of revenue nature which were made from time to time. He, therefore, contested that taking the receipts and withdrawals being equal apparently there is no income as there is no excess of receipt over expenditure. He also pointed out that apart from the initial deposit and regular rotation the profit of Rs. 61,487 would also be available for being deployed into the business. He further argued that it is fantastic to hold that the assessee required a sum of Rs. 6,09,739 as investment for acquiring a turnover of Rs. 11,79,731. He, therefore, pleaded that the addition made on account of the investment is totally unjustified.
17.2. The learned departmental Representative on the other hand, has relied upon the order of the assessing officer and further submitted that looking to the documents found the addition made on account of investment is fully justified, 17.3. We have carefully considered the facts and material available on records It is noted from the facts given that as per the seized material, business to the extent of turnover of Rs. 12,29,731 was carried out in the name of M/s Orient Advertising Agency and the assessee has owned the said business and declared the income therefrom @ 5 per cent of the total turnover and at this rate the income comes to Rs. 61,487. The assessee-firm has not contested the income adopted from the said business at Rs. 61,487. The addition thus made to the extent of Rs. 61,487 in the undisclosed income computed is therefore, confirmed.
17.4. As regards the addition of Rs. 6,09,739 we note that the assessing officer has taken the same as unexplained investment in its business. There is, however, no material evidence to support that the assessee-firm made unexplained investment to the extent of Rs. 6,09,739 in the name of Orient Advertising Agency. In the absence of any such material the undisclosed income computed on account of such unexplained investment is held to be outside the purview of Chapter XXIV-B. Undisclosed income computed on identical facts as considered in earlier grounds have been directed to be deleted and for similar reasons the addition made of Rs. 6,09,739 computed as undisclosed income is directed to be deleted.
18. The next ground relates to the undisclosed income computed at Rs. 6,72,613 on account of undisclosed income on account of investment in the account of M/s SPC. During the search certain documents relating to M/s SPC were found. When the assessee was required to explain the nature of the entries recorded therein, the assessee in its reply admitted that the entire receipts in the name of this party for the period 6-1-1987, to 2-2-1988, totalling to Rs. 26,90,463 were unaccounted and admitted to be its own. It was prayed that profit thereon be adopted by applying a profit rate of 5 per cent thereon. The assessing officer, however, proposed to work out the peak investment and to make the addition on that account separately. It was explained on behalf of the assessee that since the turnover was spread over a period of twelve months and the monthly billing was about Rs. 2,24,200 the same could be covered from the existing infrastructure and no separate investment was required to be ,ade. "'lie assessing officer, however, was not satisfied with such explanation offered. He adopted, the peak investment at 20 per cent of the total turnover which worked out to Rs 5,38,093 and the same was also added along with the undisclosed income conceded at 5 per cent of the total turnover which worked out to Rs. 1,34,520. The total undisclosed income was thus adopted by the assessing officer at Rs. 6,72,613.
18.1. The learned counsel of the assessee has not contested the undisclosed income taken at Rs. 1,34,520 estimated @6 per cent of the total turnover of Ps 26,90,463 as admitted by the assessee-firm. The undisclosed income adopted by the assessing officer to that extent is, therefore, confirmed.
18.2. The learned counsel has, however, contested the addition made of Rs. 5,38,093 being 20% of the total turnover as unexplained investment. The learned counsel submitted that there is no justification for such an addition because the total turnover was spread over a period of twelve months and the monthly billing was about Rs. 2,24,200 and that, therefore, there was a regular rotation of receipts and payments, It was also contended that considerable amount of cash was available to the assessee-firm outside the books of account as is reflected in the various documents on the basis of which addition has been made. The learned counsel, therefore, submitted that there is no justification for computing the undisclosed income at 20 per cent of the total turnover. He also pointed out that there being no material in support of the action of the assessing officer the same fall outside the scope of Chapter XIV-B and accordingly the addition made on this count deserves to be deleted.
18.3. The learned departmental Representative on the other hand, advanced requirements in support of the order of the assessing officer on the issue.
18.4. We have considered the facts and rival submissions. Admittedly there is no material found and seized during the course of search proving investment in such business at Rs. 5,38,093 and in the absence of such material there arises no question of explaining any such investment. Moreover, for the detailed reasons given by us on similar ground discussed earlier the undisclosed income computed on account of unexplained investment of Rs. 5,38,093 is directed to be deleted, M/s. P-K Advertising Services (P) Ltd. (ITA No. 6169/Del/1996)
19. The present appeal preferred by the assessee- company is directed against the block assessment made under section 158BC and the only ground raised relates to undisclosed income computed and assessed at Rs, 1, 55, 000.
19.1 During the course of search, business premises of M/s. P.K. Advertising Services, a sister concern, was searched and certain loose papers relating to the assessee- company were found and seized therefrom. There was found a trial balance of the assessee- company as on 31-3-1995, and therefrom the assessing officer noted that there was a difference of receipt and expenses at Rs. 19,04,258 whereas, as per the P&L a/c filed by the assessee- company along with its return for the assessment year 1995-96 profit was shown at Rs. 4,41,852. The assessee was required to explain such discrepancy and in reply it was explained that difference is mainly on account of the licence fee, site rent, display charges and canteen charges and in view of this the assessing officer accepted the explanation in respect of payments to DTC of Rs. 3,39,104 and to MCD of Rs. 8,61,760. lie also accepted the claim of primary expenses written off and depreciation at Rs. 1,437 and Rs. 1,20,355, respectively. It was also explained on behalf of the assessee that there were expenses of Rs. 95,000 under the head "display charges" which related to cash vouchers and were not fed in the computer and accordingly the same remained unposted. Likewise cash vouchers of Rs. 60,000 claimed to be relating to the payment made against painting charges and the same were also not claimed to be fed in the computer. The assessing officer treating these expenses of Rs. 1,55,000 as inflated and there being no cash vouchers produced in support thereof treated such expenses of Rs. 1,55,000 as not genuine arid accordingly undisclosed income to that extent was computed within the meaning of section 158BC of the Income Tax Act.
19.2. The learned counsel of the assessee has not contested the undisclosed income so computed, the same having already been surrendered before the assessing officer. The learned counsel, however, claimed that the cash generated as a result of such bogus expenses be treated as available for undisclosed investment/expenses in the hands of various assessees of the group. The learned departmental Representative objected to such claim.
19.3. We have considered the facts and submissions made. The undisclosed income of Rs. 1,55,000 as surrendered and not contested is confirmed the claim made for set off of the cash generated as a result of such bogus expenses against undisclosed investment/expenses of the group will be considered separately, Delhi Advertising Service (ITA No. 6170/Del/1996) :
20. This appeal preferred is against the block assessment made under section 158BC on the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 3,02,499. The undisclosed income computed comprises of the following :
Rs.(1)
Unexplained receipt from M/s Sanjay Publicity as discussed in para 3(a) 5,000 (2) Credit note of M/s Neelam Advertising & Marketing as discussed in para 3(b) 98,775 (3) Inflated expenses under the head site rent as discussed in para 3(c) 9,600 (4) Unexplained painting charges as discussed in para 3(d) 1,89,124 Total :
3,02,499 20.1. The learned counsel of the assessee has not contested the additions at S1. Plos. 2 and 4 above as the same were surrendered during the proceedings before the assessing officer. As regards addition of Rs. 5,000 at item No. I above, the assessing officer noted from pp. 80 to 86 of a note book seized that there were certain receipts shown to have been received by the assessee-firm. On scrutiny the assessing officer found 'that all the receipts are verifiable from the regular books of account except the receipt of Rs. 5,000 from M/s Sanjay Publicity on 5-3-1988. When confronted it was explained that cheque received from this party was bounced hack and a confirmation to that effect will be submitted shortly but no such confirmation as promised was filed. The assessing officer, therefore, treated the said amount of Rs. 5,000 as undisclosed income of the assessee-firm for the block period.
20.2. The learned counsel has made a submission that despite the fact that no could be filed it is not open to the assessing officer to add the amount on receipt basis. Actually no amount was received. He, therefore, contended that addition made on this count be deleted. The learned departmental representative, however, relied upon the order of the assessing officer on the issue.
20.3. We have considered the facts and the material available. It is evident from the facts given that the said receipt of Rs. 5,000 was found recorded in the note books seized during the course of search. The amount was received from Sanjay Publicity. It is claimed by the assessee that the amount VI as received through cheque and the cheque bounced back but the explanation so offered is not supported either by a confirmation from Sanjay Publicity or from the bank account. Before us also no grievance has been led in support of the explanation given. We, therefore, see no merit in the claim of the assessee and the receipt 1-amount'. of Rs. 5,000 taken by the assessing officer as undisclosed income for the. block period is confirmed.
21. The other point in dispute is with regard to the undisclosed income taken at Rs. 9,600. The assessing officer noted from pp. 29-30 of Annexure A-17 seized that it was a computerised trial balance of the assessee-firm as on 31-3-1995. As per this trial balance the site rent and licence fee paid was at Rs. 1,02,12,992 whereas as per the P&L a/c filed the total debit amount under this head was at Rs. 1.29,16,679. The assessee was required to explain the difference of Ps. 27,03,687 and in reply it was explained that in the trial balance there were heads like "Northern Railway", MCD, Caution Money, MCD Security, which were relatable to site rent. These amounts are shown as advances as per the term,, of the contract and are adjustable against the site rent at the close of the financial year. The explanation so given by the assessee was found to he correct by the assessing officer. However, the assessee could explain the expenses of only 26.94,087 under the head thereby leaving unexplained difference amount of P:; 9,600. The assessing officer treated the amount as bogus expenses and accordingly addition to the extent of Rs. 9,600 was made in the undisclosed income computed. The learned counsel of the assessee has not seriously contested the amount so debited as undisclosed income. The learned counsel, however, claimed that this generated availability of cash with the assessee-firm at Rs. 9,600 and the same be set off against the undisclosed income/expenditure. Similarly, though the other two items of additions of Rs. 98,77 5 and Rs. 1, 89,124 were surrendered before the assessing officer and the same were not contested but the learned counsel of the assessee contended that the sum of Rs. 98,775 was an amount on a credit note received from M/s Neelam Advertising and Marketing and this amount was not credited in the regular books of account. However, the amount might have been received subsequently outside the books of account on the basis of the said note, therefore, to that extent cash was generated for which the assessee is entitled to set off. Similarly, with regard to the sum of Rs. 1,89,124 it has been claimed that this being an inflation in expenses the cash was generated to the extent of Rs. 1,89,124 outside the books of account for which a set off may be allowed against the unexplained expenditure.
21.1. The learned departmental Representative has objected to the claim for set off.
21.2. We have considered this aspect. Since such claim has been made in several cases of the group the issue would be considered separately at the appropriate stage.
M/s P.K. Advertising Services (ITA No. 6168/DeI/1996):
22. The present appeal is directed against the block assessment made under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs 5,53,824. The undisclosed income so computed comprises of the following items Rs.
(1) On account of diary seized C-4/A-1 25,000 (2) On account of diary C-4/A-2 (Rs. 50,000 + Rs. 30,000 + Rs. 82,000) 1,62,000 (3) On account of exercise book C-4/A-10 pp. 80-87 1,50,000 (4) On account of bogus expenses determined on the basis of C-4/A-17 pp. 37 & 38 2,16,824 Total 5,53,824 22.1. The learned counsel of the assessee has not contested the amount of Rs 1,62,000 surrendered before the assessing officer. He has, however, contested the other additions made. Taking the addition of Rs. 25,000 to the undisclosed income on account of diary seized, first the assessing officer found that several amounts were found written in four pages of the diary. When confronted it was explained that in order to carry on business effectively certain advances were given to the workers/employees for the routine expenses at the site and the amount advanced was out of the cash balances available with the assessee-firm and the amount formed part of the cash in hand of the firm. In support, a chart showing the availability of cash in hand was filed to co-relate the amounts advanced as interest to the workers. It was also explained that, this is recorded in the normal course of business for memoranda purpose and this does not, indicate any unaccounted expenses on any unaccounted receipts. The assessing officer was not satisfied with the explanation so given as he did not find any interest account in the regular books and the cash balance shown in the chart showed the combined cash position of two firms and one company of the group namely, M/s. Delhi Advertising Service, M/s. P-K. Advertising Services (P) Ltd. and the assessee-firm. The assessing officer further noted that perusal of the diary would show that the amount relates to only one concern and although the name of the concern was mentioned, the same has to be treated as belonging to the assessee-firm as it was found and seized from its business premises. The assessing officer mentioning the entries recorded in the diary noted that the total amount involved is of Rs. 84,000 I-however, he only adopted the peak of Rs. 25,000 as undisclosed income.
22.2. The learned counsel has made a submission that the amount was advanced, to the employees of the following concerns of the group : M/s Pioneer Publicity Corporation ; M/s P.K. Advertising Service; M/s Delhi Advertising Service and M/s P.K Advertising Services (P) Ltd. He further argued that on the date of advance there was sufficient cash balance as per the books and this fact has not been disputed by the assessing officer, The cash books were duly produce before the assessing officer and he found no fault therein. Apparently there no justification for making addition of Rs, 25,000. He, therefore, contended that the addition made be deleted.
22.3. The learned departmental Representative, on the other hand, relied upon the order of the assessing officer and further contended that the diary in fact was found and seized from the premises of the assessee-firm and there is nothing to show in the diary that the card amount was paid as advance out of the cash balance of the said four firms on the relevant dates to their employees. The explanation by the learned counsel is not supported by any material. He, therefore, submitted that the amount was otherwise not found recorded in the regular book,, of the assessee nor there. was any details of the accounts rendered by the said employees for the amount advanced as interest money as claimed. The learned departmental Representative, therefore, pleaded that on given facts and seized material the assessing officer was fully justified in treating the peak amounts of Rs. 25,000 as undisclosed income of the assessee-firm, 22.4. We have considered the facts, rival submissions and material on records. Admittedly, the said diary was recovered and seized from the business premises of the assessee-firm and the entries recorded are of Rs. 84,000 and these are spread over a period 27-5-1995, to 17-10-1995. Peak of these amounts is at Rs. 25,000 as on 13-6-1995. Against the two entries of Rs. 11,000 2-9-1995, and Rs. 11,000 on 2-9-1995, name of Mishra is mentioned whereas there is no such name mentioned against other entries. There is no information available as to whether Mishra is an employee of the assessee firm or he is a third party, There is otherwise no indication or suggestion that the amount was given as advance to the employees of the aforementioned four concerns of the group and the amount came out of the cash balance of the said four concerns and in the absence of any such material evidence it could be said with certainty that the amount belonged to the four concerns and it came out of their cash balances standing in their cash book on .he relevant dates and given to their employees as interest money for incurring day-to-day expenses at site and in the absence of any such material the explanation so offered stands without any support and the same cannot be accepted, Moreover, the said diary was recovered and seized from the business premises of the assessee-firm and the same is presumed to be belonging to the assessee-firm unless proved otherwise and to do so the onus is on the assessee-frrm. No such onus has been discharged either before the assessing officer or before us by leading any evidence. We under the circumstances treat the peak amount of Rs. 25,000 as undisclosed income of the assessee-firm and addition made to that extent is confirmed.
23. Regarding the addition of Rs. 1,50,000 the assessing officer noted that an exercise book was found and seized from the business premises of the assessee-firm and when confronted about the nature of the entries it was explained that this exercise book contained payments received from the customers. As regards the cash transactions contained at pp. 80 to 87 of the exercise book it was explained that this is memoranda record for amounts paid and received back from the employees and the same are not verifiable from the regular books of account. The said cash transactions as found recorded were of the nature of receipt and payment and since the same were not found verifiable from the regular books of account all the transactions were taken as outside the books of account. Summary of payments as given in the assessment order gives the total amount of Rs. 4,57,107 and these relate to the period from October, 1992 to April, 1993. According to the assessing officer the peak of the amounts was apparently on pp. 82 and 83 and looking to the nature of the transactions and after the benefit of peak the assessing officer computed on this count undisclosed income for the block period at Rs. 1,50,000, The learned counsel of the assessee has contended that the theory of peak is not applicable to the trading receipts. Moreover, how the amount of Rs. 1,50,000 is worked out by the assessing officer is not clear. The highest figure between 30th Nov., 1992, and 23rd Dec., 1992, works out to Rs. 1,07,700 against which the assessing officer estimated the peak at Rs. 1,50,000 without giving any therefor. The learned counsel has, therefore, pleaded that from these trading receipts it would be fair and proper if profit therefrom is estimated by applying a profit rate of 5 per cent on the total amount of Rs. 4,57,107 which works out to Rs. 22,855.
23.1. The learned departmental Representative on the other hand, relied upon the order of the assessing officer and submitted that looking to the nature of the transactions and the same having not been accounted for in the books of account the assessing officer justified in taking the peak at Rs. 1,50,000 to work out the undisclosed income on that count.
23.2. We have considered the facts and rival submissions. It is not in dispute that the said exercise book was found and seized from the business premises of the assessee-firm and the same contained payments received from the customers to the extent of Rs. 4,57,107 during the relevant period, The assessing officer has given the summary of these payments as found recorded on pp. 80 to 87 of the said exercise book and the details given only indicate the payment received and not payments made. It is also admitted that these transactions are not found recorded in the regular books of account. All these payments receipts are from customers and there is no outgoing on account of expenses incurred, if any. No peak as such could be drawn. Moreover, the assessee-firm being engaged in advertising service the payments received could only be termed as ills trading receipts. The assessee-firm. undoubtedly incurred expenses on the site hoarding, painting, etc. It would, therefore, be fair and proper if income site how therefrom is computed by applying a g.p. rate thereon and we do so.
23.3 As regards the profit rate to be applied we find that there is no material available on the records as well as the paper-book filed to indicate g.p. rate disclosed by the assessee-firm. However, in the case of Pioneer Publicity Corporation the g.p. rate declared for various years is as under :
Asst Yr.
G.P. rate 1993-94 12% 1994-95 12% 1995-96 11.5% 1996-97 14% 1997-98 15% 23.4. The learned counsel has suggested estimation of the income by applying a profit rate of 5 per cent but no basis therefor is given and accordingly in our opinion it would be reasonable if the profit rate is estimated by applying a profit rate of 12 per cent looking to the trading results declared by the sister concern Pioneer Publicity Corporation and on this rate the profit is worked out to Rs. 54,800. We therefore, sustain the undisclosed income on this account to the extent of Rs. 54,800. The assessee gets a relief of Rs. 95,200 (Rs. 1,50,00Rs. 54,800).
24. As regards the addition of Rs. 2,16,824 the facts are that there was found a trial balance of the assessee-firm as on 31-3-1995, during search and on comparison of the trial balance with the regular P&L a/c the assessing officer noted that as per the trial balance profit comes to Rs. 17,24,502 whereas profit as per the P&L a/c as shown in the return for assessment year 1995-96 was at Rs. 5,32,397. When confronted it was explained that the difference in profit is mainly on account of the figure" of the amount adopted as licence fee and site rent. It was pointed out that as per the seized documents an amount of Rs. 8,60,795 is shown as advance to Northern Railway. This amount was in fact paid to the Northern Railway towards licence fee. Looking to the explanation offered about the outgoings no addition was made by the assessing officer on account of the difference found. However, according to the assessing officer examination of the trial balance revealed that 'lie cash balance was at Rs. 2,99,551 whereas as per the balance sheet filed with the return the cash balance was only Rs. 2,727. This gave a difference in the cash balance at Rs. 2,96,824. It was explained on behalf of the assessee that the cash difference was on account of amount paid to Mukesh Vasudeva from time to time and on account of payment to provident fund which could riot be entered into the trial balance and in support capital account of Pioneer Publicity Corporation in which the cash was transferred was filed. The assessing officer noted therefrom that such payment to Mukesh Vasudeva was only Rs. 80,000. As regards the remaining difference, it was explained that certain figures were not feeded in the computer earlier and the same were entered in the books and no adverse inference be drawn since the trial balance was prepared only for the purpose of ascertaining the arithmetical accuracy of the books and adjustments are always made at the time of finalisation of accounts. The assessing officer did not accept the explanation so given. He noted that the said trial balance was prepared after 31-3-1995, and the assessee could not produce any vouchers to prove its claim. The cash vouchers shown at Rs. 2,16,824 were introduced only to reduce the profit. The assessing officer, therefore, treated the amount of Rs. 2,16,824 as undisclosed income of the block period.
24.1. The learned counsel of the assessee admitted that the amount represented inflated expenses and claimed that while the addition may be sustained the benefit of set off be allowed to that extent.
24.2. The learned departmental Representative, on the other hand, objected to claim for set off.
24.3. We have considered the facts and submissions made. Admittedly the assessee reduced the profit shown by way of inflating the expenses to the of Rs, 2,16,824 and the same has been admitted by the learned counsel of the assessee. In this view of the matter we sustain the addition made of Rs. 2,16,824 and the same has been admitted by the learned counsel of the assessee. In this view of the matter we sustain the addition made of Rs. 2,16,824. The question of set off in light of the objections raised will be considered separately at the appropriate stage.
24.4. As regards the addition of Rs. 1,62,000 surrendered during the course of assessment, the learned counsel of the assessee has submitted that it was done wrongly, It was claimed that the amounts in question were on account of payment of commission outside the books of account. Therefore, while on one hand the addition should be made as income from undisclosed source, on the other hand deduction should be allowed on account of revenue expenditure nullifying the addition. The learned departmental Representative however strongly objected to the suggestions so made.
24.5. We have considered the facts in this behalf. The facts relating to the ad of Rs. 1,62,000 have been discussed by the assessing officer on p. 4 of the block assessment order. The diary seized contained entries relating to the payments received by the assessee group from Directorate of Health Services and Directorate of Advertising & Visual Publicity and certain amounts received were not found recorded in the regular books of account. While there were also found entries relating to certain payments amounting to Rs. 1,62,000 but nowhere it is mentioned that such payments represented the commission paid. Moreovet, there are no details furnished of the advertising receipts against which such commission was paid. We have noted that the assessee as well as other concerns of the group have been found indulging in carrying on advertising business outside the books on substantial scale which account for unaccounted receipts as well as unaccounted payments. There is nothing to show that the advertising receipts on which such commission was paid have either been accounted for in the regular books of account or the same have been, fully ascertained from the inter-relating material found during search and undisclosed income on this account has duly been computed in the block assessment. There being no such material and there being no details about such commission paid, if any, the relief claimed is not held justified and not accepted.
M/s Syndicate Advertisor (ITA No. 6171/Del/1996)
25. The present appeal is directed against the block assessment made under s, 15813C of the Income Tax Act on 30-10-1996, determining the undisclosed income at 12,56,457. The only dispute is relating to the addition of Rs. 11,31,450 and this is based on a document found during the course of search containing the account of M/s Baran International Ltd. The account is reproduced hereunder :
"4.8 South Ext.
7-8-1995 Balance b/d 39,607 site rent 4,500 31-8-1995 11,91,000 11,31,450 31.8 Cash to 1,94,850 Baron VPS 30,000 PPC 30,000 11,59,360 11,707 11,71,057 11,71,057 12-9-1995 b/d 11,707"
25.1. When confronted it was explained that the assessee-firm earned a profit of Rs. 71,707 on the said transaction and the same is offered by the assessee-firm in the return of the block period filed as undisclosed income. When asked to explain the nature of the said entries and other details it was explained that the billing was an accommodation entry provided to M/s Baran International Ltd. Against the receipt of Rs. 12,61,500 from M/s Baran International Ltd., cheques of Rs. 11,91,000 were issued against which the assessee-firm received cash of Rs. 11,31,450 and out of this cash amounting to Rs. 10,94,000 was paid to M/s Baran International Ltd. and the remaining amount along with other credit entries aggregates to Rs. 71,707 which has been declared as undisclosed income in the return, The assessing officer noted that names and addresses of the parties who have given cash to the assessee against cheques issued have not been given even though it was specifically asked to do so. Moreover, the claim of the assessee about the receipt, of cash of Rs. 10,94,000 against cheques issued of Ps 11,94,000 was not found supported by any evidence. On these facts the assessing officer treated the explained cash as on 31-8-1995, of Rs. 11,31,450 as undisclosed income for the block period.
25.2. The learned counsel of the assessee had made a submission that the assessee-firm issued bogus bills on account of site rent to M/s Baron International Ltd. and received payment through cheques worth Rs. 12,16,500 as per the following details :
Cheque No. Date Amount Bank on which drawn 114054 3-8-1995 4,41,000 OBC, Vasant Lok 114397 3-8-1995 2,49,000 OBC, Vasant Lok 114398 3-8-1995 2,08,500 OBC, Vasant Lok 114053 8-8-1995 3,18,000 OBC, Vasant Lok Total :
12,16,500 In order to balance such accounts the appellant obtained bogus bills from four parties as follows -
Name of party Amount (1) M/s Outdoor Publicity Corporation 3,13,500 (2) M/s Dec Publicity Corporation 3,18,000 (3) M/s Sara Publicity Corporation 2,92,500 (4) M/s Balaji Publicity Service 2,67,000 Total :
11,91,000 The assessee issued cheques worth Rs. 11,91,000 to these parties.
Cheque No. Date Amount 074731 8-8-1995 3,13,500 074729 8-8-1995 3,18,000 074730 8-8-1995 2,92,500 074732 8-8-1995 2,67,000 Total :
11,91,000 25.3. Against the cheques of Rs. 12,16,500 received from M/s Baroji International Ltd. cash of Rs. 10,94,850 was refunded to them. Similarly, against the cheques of Rs. 11,91,000 received from the four parties, cash amounting to Rs. 11,31,460 was received from them. These transactions led to the profit of Rs. 71,707 out of which Rs, 30,000 had gone to Vasudeva Publicity Services and equal amount of Rs. 30,000 had gone to the sister concern M/s Pioneer Publicity Corporation leaving a balance amount of Rs. 11,707 with the assessee-firm. According to him the assessing officer did not accept the explanation given for the reason that it was not corroborated by any evidence nor the assessee produced the parties who had given cash against the cheques nor their names and addresses were given. The learned counsel has submitted that names a116 addresses of the four parties from whom the cash was received was duly supplied and the same appears at page 114 of the paper-book which contained bank account of Vijay bank showing particulars of the parties and the amount of cheques. He has further contended that it was not open to the assessing officer to rely upon the same document for receipt of Rs. 11,31,450 but ignore the fact of payment of Rs. 10,94,850 to M/s Baron International Ltd There existed sufficient corroboration to the explanation given in the documents seized from where it is self-evident that on the one hand cash of Rs. 11,31,450 was received and credited and cash of Rs. 10,94,850 was debited. According to the learned counsel it is but natural that when the cash is received against the cheques no corroboration would be coming either oral or otherwise. The documents in question itself constitute sufficient evidence for the transactions involved and entries made in the seized documents cannot be disbelieved in view of the Tribunal's decision in the case of T.S. Kumaraswami v. Assistant Commissioner (1998) 65 ITD 188 (Mad). The learned counsel further argued that in any case it is not open to believe one set of document and ignore the other set. The learned counsel, therefore, pleaded that the addition made on the given document is not justified on given facts and the same deserves to be deleted.
25.4. The learned departmental Representative on the other hand, has placed heavy reliance on the order of the assessing officer and has further submitted that the assessee has shown receipt of cash but the assessee neither produced any evidence about the source of such cash including the names and addresses of the, parties from whom the amount is claimed to have been received and therein no sufficient evidence the assessing officer was justified in rejecting the explanation offered and adopting the cash received as undisclosed income of the assessee-firm.
25.5. We have carefully considered the facts and rival submission. On going through the documents seized and the explanation offered it appears to be a case of accommodation given and accommodation received and in the process the assessee has earned an income of Rs, 71,707. We also find that the transactions stand corroborated by the bank account in Vijay bank which contained necessary details of the amounts of cheques and the particulars of the. parties involved. Moreover, the assessing officer has made the addition involved believing part of the document but the payment of cash shown has not been taken note of. If the transaction as a whole is considered, the explanation offered will be found as reasonable taking the practical view of the transactions involved, The assessee-firm has in fact earned a profit of Rs. 71,707 and it would be fair and reasonable if undisclosed income to the extent of Rs. 71,707 is sustained and we order accordingly. The assessee-firm would get a relief to the extent of Rs. 10,59,751 on this count.
26. The appeal preferred by the assessee is directed against the block assessment order passed under s, 158BC of the Income Tax Act on 30-10-1986, determining the undisclosed income at Rs. 27,24,458. The undisclosed income assessed in comprised of the following Rs.
(1) Unexplained investment in B-206, Derawala Nagar, as discussed in para 3.1 12,50,000 (2) Unexplained cash as discussed in para 3.2 5,49,000 (3) Unexplained investment in FDR in the name of minor son as discussed in para 3.3 61,860 (4) Unexplained investment as discussed in para 3.4 1,22,940 (5) Loan to Shri K.I. Malik as discussed in para 3.5 50,000 (6) Unexplained investment in household articles as discussed in para 3.6 74,665 (7) Cash expenses for ceremony as discussed in para 3.7 29,738 (8) Unexplained investment in UTI Rajlakshmi as discussed in para 3.9 15,000 (9) Unexplained payment to housing socieity as discused in para 3.9 20,000 (10) Payment to committee as discussed in para 3.10 16,255 (11) Unexplained investment in property at 182, Gujarwala town as discussed in para 3.11 5,65,000 Total :
27,54,458
26.1. The learned counsel of the assessee has contested only the undisclosed income mentioned at Sl. Nos. 1, 5, 10 and 11 above and the remaining items of undisclosed income was surrendered before the assessing officer and accordingly the same has not been contested, The learned counsel has, however, made a claim with regard to the set off to be made of the said items against the undisclosed income committed in the case of M/s Pioneer Publicity Corporation. This aspect will be considered separately. However, the undisclosed income commuted as surrendered is confirmed.
26.2. We now deal with the undisclosed income relating to item Nos. 1. and above. The facts in brief are that property at B02-6, Derawala Nagar, is jointly owned by the assessee and his wife Sweaty Vasudeva and his brother Mukesh Vasudeva and his wife Anju Vasudeva. The property was purchased on 22-10-1992, for a consideration of Rs. 11,60,000. The assessing officer referred the property to the Valuation Cell who valued the cost of the property at Rs, 36,64,369. A copy of the valuation report was supplied to the assessee and he was required to explain as to why 50 per cent of the unexplained investment being difference between the consideration shown and the value taken by the DVO should not be adopted. The assessee in reply submitted that he had duly shown the, investment in the property in the return for assessment years 1993-94 and 1994-915 and no notice under section 143(2) has been issued. The assessment proceedings, therefore, stand concluded as provided in the Act, It was also contended that investment in the said property was disclosed and there was no paper or incriminating document or any evidence whatsoever found during the course of search on the basis of which inference could be drawn that the assessee suppressed the purchase consideration. It was also claimed that proceedings under section 158BC are different from proceedings under section 143(3) and the undisclosed income could be computed under section 158BC only on the basis of evidence found during the course of search and since no incrementing paper was found during search and seizure indicating suppression of purchase consideration no adverse inference could be drawn in the block assessment proceedings. It was also claimed that the words used in section 132(l)(c) are "which have not been or would not be disclosed" and since the assessee has disclosed the investment in the property no inference under section 158BC could be drawn on the basis of the report of the Valuation Cell.
26.3. The explanation so offered was not found satisfactory. The assessing officer noted that renovation in the property, if any, after purchase was denied. However, during the course of search it was found that investment in the property is much higher than that disclosed and accordingly it was got valued from the DVO. The assessing officer has further noted that during the course of search a paper as placed at SI. No. 10 of Annexure A- 10 was found and this contained details of investment and construction totalling to Rs. 17,40,000. Apart from this working some other works were also written but no figure there against were mentioned, According to the assessing officer the investment in the property was more than Rs. 17,40,000. Looking to these facts the reference to the DVO was made and as per the report of the DVO the actual investment is found to be much higher. Though the assessee had denied that the said papers belonged to him or the construction/renovation expenses mentioned therein related to this house but this is supported by the valuation report. According to the assessing officer the assessee surrendered a sum of Rs, 50,000 on account of unexplained expenditure in the property and this makes clear that renovation work was carried out after its purchase and before the date of search.
26.4. The assessee also objected to the valuation made at Rs. 36,64,369. The assessing officer also noted that certain work in the property such as plaster of paris work. flooring, granite work claimed to have been made after March, 1996 but such work was found falling in the period prior to the date of search- Enquiries made from the neighborhood also confirmed this. The assessing officer further noted that though his wife was co-owner along with the assessee but his wife had no source of income of her own except some rental income. The unexplained investment. therefore, cannot be attributed to her, The assessing officer, therefore, held the view that ,,)W of the unexplained investment, in the property would, therefore, be considered in the hands of the assessee and the balance in the hands of his brother Mukesh Vasudeva. The assessing officer worked out the difference at Rs. 26,04,369 (Rs 36,64,369 - 11,60,000) and this amount was rounded to Rs. 25 lakh. Fifty per cent thereof at Rs. 12,50,000 was, therefore, treated as unexplained investment in the hands of the assessee representing his undisclosed income.
26.5. The assessee was also found to have purchased another property No. 182, Gujiawala, for a consideration of Rs. 4,25,000 on 18-2-1988, from Smt. Manju Agarwal and as per the document found Manju Agarwal purchased the said property on 17-6-1983, for a consideration of Rs. 6,70,000. It was explained before the assessing officer that no document or paper indicating payment over and above Rs. 4,25,000 was found during search and accordingly no adverse inference could be drawn. The explanation so given was not accepted by the assessing officer lie worked out its market value as on the date of search at Rs. 9,90,000 based on the cost inflation index over Rs. 6,70,000 for the period 1983-84 to 1989-90. The difference of Rs. 5,65,000 (Rs. 9,90,000 - 4,25,000) was treated by the assessing officer as unexplained investment representing the undisclosed income, 26.6. The learned counsel of the assessee has submitted that reference made to one piece of paper at p. 10 of Annexure A- 10 has nothing to do with this property and it does not also show as to which property it related and when was such expenditure incurred. He, therefore, contended that this is a dumb document and no adverse inference could be drawn to the investment made in property at B-206, Derawala Nagar. As regards the other property at Gujrawala town, the learned counsel explained that this property changed hands very frequently as is evident from the seized documents itself because this property is located at a place which is unfit for human habitation. There is cluster of jhugi jhopri around this property generating all kinds of filth, pollution and stinking all around. The property was sold by the landlady as a distress sale owing to such adverse factors and it was for this reason that though the lady purchased the property five years back for Rs. 6,70,000 it was sold for Rs. 4,25,000.
26.7. The learned counsel has further submitted that there is otherwise no material evidence found and seized during the course of search to indicate and prove that the assessee invested any amount in both the properties over and above than that disclosed in the sale-deed and accounts. Moreover, both the properties are claimed to have been shown in the returns already filed much before the search and assessments thereon have also been completed. It is, therefore, contended that on such facts and circumstances no undisclosed income could be computed on account of unexplained investment in the property within the meaning of Chapter XIV-B and accordingly the same deserves to be deleted.
26.8. The learned departmental Representative, on the other hand, had relied upon the order of the assessing officer and has further submitted that looking to the facts discussed the undisclosed income computed relating to both the properties 1.,; fully justified.
26.9. We have carefully considered the facts and submissions made We find that the property at 206-Derawala Nagar was purchased for a consideration of Rs 11,60,000 and consideration so paid has been duly disclosed in the saledeed as well as accounts of the co-owners. Similarly, the property at 182, Guyawala town, was purchased by the assessee for a consideration of Rs. 4,25,000 as is apparent from the sale-deed and the same has also been accounted for in his accounts. There is no material evidence found during the course of search to prove and establish that both the properties were purchased for a consideration more than the consideration shown or unexplained investments made therein over and above the apparent consideration shown. A paper indicating certain details of construction at Rs. 17,40,000 is claimed to have been found during search but there is no detail given therein that the said figure related to the property at B-206 Derawala Nagar and the date oil which such expenditure was incurred. It is thus a dumb paper without giving necessary narration and particulars of the transactions and in our considered view no adverse inference could be taken based on such paper, Moreover, as mentioned above, no other incriminating document was found and seized during search establishing investment in the properties at an amount over and above that shown in the sale-deeds and account books. Moreover, the assessee has disclosed the investment made in both the properties in the returns filed. Copies of his assessment records for the assessment years 1989-90 and 1993-94 and 1994-95 are placed at pp. 590 to 606 of the paper-book. Further, we have also considered the question of unexplained investment in respect of the three properties in the case of M/s Pioneer Publicity Corporation above and for the detailed reasons and case laws discussed therein and there being no evidence found on search about suppression of consideration in both the properties the additions made in respect of both the properties on account of undisclosed income are not held justified and the same are directed to be deleted.
27. The undisclosed income as given at item No. 5 above of Rs. 50,000 the facts in brief are that there was found a letter from one Shri K.L. Malik asking for a loan of cash of Rs. 10,000 which the total loan amount would become Rs. 50,000. When confronted it was explained that this advance was made by the assessee out of the cash held by him as interest money on behalf of various firms. It was also claimed that the amount was received back after a month. The assessing officer did not find such explanation as acceptable as no evidence could be furnished in support of such claim nor by way of verification from the books of the firms. According to the assessing officer there was no confirmation filed from Shri K.L. Malik about the back payment of the amount after a month. The learned counsel has made a submission that the amount was advanced from cash balance of various firms which was kept with him. The various firms of the group had the cash balance available as on 4-6-1994, as per details below:
Rs.
P.K. Advertising Services 43,334 Delhi Advertising Service 77,734 Pioneer Publicity Corporation 8,640 P.K. Advertising Service (P) Ltd.
38,606 27.1. According to the learned counsel, the cash balance available with the, .our concerns was sufficient enough to advance Rs. 60,000 to Shri Malik. According to the learned counsel cash books were produced before the assessing officer during the course of assessment proceedings but no attempt was made to verify the explanation offered. The learned counsel, therefore, pleaded that on these facts the addition made was not justified.
27.2. The learned departmental Representative, on the other hand, relied upon (lie order of the assessing officer.
27.3. We have carefully considered the facts and rival contentions. A copy of the said letter written by Shri K.L. Malik to the assessee is placed at p. 30 of the paper-book wherein Shri Malik asked for Rs. 20,000 per bearer of the letter and with that the total amount due to the assessee would be Rs. 50,000. He, promised to send back the amount through draft. The assessee has admitted the contents of the letter as correct and advance made of Rs. 50,000. It is, however, claimed that this amount was given out of the cash balance belonging to the four concerns of the group but there is no entry made in the books of account of the firms about the amount so advanced to Mr. Malik nor them is any details given about the back receipt of the amount from Mr. Malik Them is also no material to show that the assessee was keeping interest money out of the cash balance of the various concerns in which he was a partner. There being no such evidence found the explanation offered is not considered Lo be tenable and accordingly we sustain the addition of Rs. 50,000 on account of such advance made from undisclosed income of the assessee.
28. As regards the item at 10 above, the assessing officer noted from p. 32 of Annexure A-32 that the assessee made payment of Rs. 16,266 to committee. When confronted it was explained that such investment was made by the wife of the assessee out of her savings. The assessing officer noted that his wife Smt. Sweaty has no source of inc)me and is also not a regular assessee and the assessee could not link any withdrawal to such payment. The assessing officer, therefore, treated the amount paid to the committee of Rs. 16,255 as unexplained income of the assessee. The learned counsel has made a submission that the said document was found from the business premises of the firm in which the assessee was a partner and it was reiterated that this was out of the pin money of his wife. In the alternative it was contended that it may be explained out of the surplus income/cash generated as a result of addition in the case of Pioneer Publicity Corporation and other firms.
28.1. The learned departmental Representative, on the other hand, relied upon the order of the assessing officer.
28.2. We have considered the facts and submissions made. It so appears that committee payments were made in small amounts each month and on the date of search total payment made was at Rs. 16,255. The explanation offered was that this came out of the savings or pin money of his wife. There may be truth ,n -such claim. Ladies normally make savings out of the monthly amount received for household expenses and they also receive gifts either personally or in the names of their children on auspicious occasions. The monthly payments may be petty and the total amount is also not very substantial. In this view of the matter we accept the explanation offered that the amount came out of the savings of wife of the assessee and the addition made on this count is directed to be deleted.
29. This appeal, preferred by the assessee, is against the block assessment order passed under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. '19,52,400. The undisclosed income so computed is comprised of the following:
Rs.
(1) Unexplained investment in B-206, Derawala Nagar property 12,50,000 (2) Unexplained cash 5,89,000 (3) Unexplained investments in shares & UTI 24,940 (4) Unexplained investment in purchase of goods 11,710 (5) Unexplained investment in household expenses 25,000 (6) Other investment in Units 18,750 (7) Unexplained investment in Master Gain 18,000 (8) Unexplained cash deposit in S.B. a/c 16,000
30. Out of the above eight items the learned counsel has contested only two items at S1. Nos. I and 8 above, The undisclosed income computed relating to other items has not been contested, the same having been surrendered before the assessing officer. As regards the addition of Rs. 12,50,000 on account of unexplained investment in B-206, Derawala Nagar property, the facts are identical to that of Shri Rajesh Vasudeva and the learned representatives of the assessee as well as the revenue also advanced arguments similar to that in the case of Rajesh Vasudeva. For the detailed reasons given in our order in the case of Rajesh Vasudeva above, the addition made of Rs. 12,50,000 is directed to be deleted.
31. As regards the undisclosed income computed at Rs. 15,000 on account of unexplained cash deposit in bank account the facts are that there was a cash deposit of Rs. 15,000 on 5-8-1991, in the S.B. a/c of the assessee. When confronted it was unexplained that the deposit was out of the savings of his wife which was held by her since marriage and she had no bank account. The assessing officer noted that the assessee got married in January, 1989 and the cash was deposited two and half years after the marriage and, therefore, it could not be attributed to the marriage gifts. The assessing officer, therefore, treated the deposit amount as unexplained out of undisclosed income.
31.1. The learned counsel has submitted that the amount be treated as explained out of the surplus income/cash out of the additions made in the various concerns in which the assessee is a partner. He however, did not seriously contest the addition made of Rs. 15,000. The learned departmental Representative has been heard. We have considered the facts and find that there exists no valid explanation about the source of deposit of Rs. 15,000. There is no evidence produced to show that the amount came out of the Savings of his wife. The amount also cannot be out of the marriage gifts as the assessee got married two and half years before the date of deposits. However, had the amount been out of savings of his wife the deposit would have been in her name and not in the name of the assessee. Admittedly, the amount has not come out of any explained source of income. Under the circumstances, the addition made of Rs. 16,000 is confirmed. The question of set off against the surplus income/cash available from various concerns would, however, b(,, considered separately.
32. The appeal preferred by the assessee is directed against the order of the assessing officer passed under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 4,59,190. The undisclosed income so computed ill comprised of the following:
Rs.
(1) Unexplained investment in shares 2,07,000 (2) Unexplained investment in two air- conditioners 30,000 (3) Unexplained expenditure for stamp duty 32.190 (4) Unexplained cash 90,000 (5) Unexplained cash payment in purchase of property 1,00,000
33. Out of the five items of unexplained income, the income at item Nos. I to 4 have not been contested by the learned counsel of the assessee and the same is, therefore, confirmed. The claim of the learned counsel that necessary adjustment/set off be given for these items against the undisclosed income computed for the firms M/s Pioneer Publicity Corporation will be considered separately.
34. As regards the undisclosed income of Rs. 1 lakh at item No. 5 above, the assessing officer noted that the assessee purchased a property at 11, Hanuman Road, Delhi, in the joint name of himself, Dinesh Vasudeva and Mukesh Vasudeva and the total consideration paid as per the sale-deed found was at Rs. 6 lakh. The assessing officer noted from P. 29 of Annexure A-5 seized that the assessee got as receipt payment of Rs. 6 lakh and on the receipt there was a mention of Rs. 1 lakh paid in cash whereas as per the assessee's version payments were made by pay orders of Rs. 2 lakhs each by three co-owners. When confronted it was explained that the amount of Rs. 1 lakh shown as cash is wrongly mentioned in the receipt and in fact there were two amounts of Rs, 1 lakh each mentioned in the receipt whereas the assessee had paid the amount of Rs. 2 lakh by a pay order. The receipt was prepared by the vendor in advance in contemplation of receipt of Rs. 1 lakh in cash but no such cash payment was made. The assessing officer was not satisfied with the explanation so offered. He rioted that in case the assessee had made the payment by pay order, the assessee would have got the receipt revised. The receipt is duly attested by the notary and its genuineness is beyond doubt. He, therefore, treated the said amount of Rs. 1 lakh as undisclosed income of the assessee for the block period. The learned counsel has made a submission that the purchase consideration of Rs 6 lakh for the was paid by the co-owners as under :
Cheque/Pay order No. Date Amount 817451 15-4-1995 2,00,000 817452 15-4-1995 2,00,000 090570 16-4-1995 2,00,000 34.1. These payments have been debited and accounted for in their accounts. According to the learned counsel, Mukesh Vasudeva made a payment of Rs. 2 lakh out of his saving bank account with State bank of India, Jhandewala, and Dinesh Vasudeva made the payment of Rs. 2 lakh out of the savings bank account with Oriental bank of Commerce, Paharganj. Necessary details of the payment made are placed at pp. 198 to 204 of the paper book. The assessee also made the payment out of his bank account with State bank of India. The learned counsel further submitted that the said document is a receipt prepared in advance but the payment was ultimately made by the co-owners through cheques/pay orders from the amounts lying in the bank account and there was, therefore, no need of payment of any cash of Rs. 1 lakh. It is also not the revenue 's case that the assessee paid any amount over and above the apparent consideration of Rs. 6 lakh shown in the sale documents, The learned counsel has, therefore, pleaded that the addition made of Rs. 1 lakh is, therefore, not justified and the same deserves to be deleted.
34.2. The learned departmental Representative on the other hand, placed reliance on the order of the assessing officer and advanced arguments in support thereof.
34.3. We have carefully considered the facts and submissions made. It is evident from the facts given that the said property was purchased for a consideration of Rs. 6 lakh by the assessee and two others and each paid Rs. 2 lakh out of their bank accounts, This has been disputed by the revenue . There is also no material evidence recovered and seized during the course of search to suggest that the co-owners paid any amount over and above that shown in the sale documents. The assessing officer has not made any enquiry from the vendor to ascertain the actual position of payment of said cash if any. Moreover, as per the said receipt placed at p. 198 the source of Rs. 2 lakh each paid by the other two co-owners has been given whereas no source is given of the amount paid by the assessee of Rs. 2 lakh. In the said receipt the only mention made is about Rs. 1 lakh payment in cash in advance but we have seen from the bank account of the assessee that he had in fact paid the said amount of Rs. 2 lakh from his bank account through cheque/pay order. Further, as per the receipt the three co-owners have paid Rs. 6 lakh in full and final settlement for purchase of the property whereas details of the payment shown therein is only of Rs. 5 lakh i.e., Rs. 2 lakh each by other two co-owners through banker's cheques and Rs. 1 lakh is shown in cash in advance, that gives the total at Rs. 5 lakh only. In this view of the matter there seems to be sufficient logic in the explanation given that the said receipt was prepared earlier and ultimately the assessee made the payment out of his bank account of Rs. 2 lakh. Having regard to all the facts and circumstances discussed we see no justification for the addition made of Rs. 1 lakh in the hands of the assessee and the same is directed to be deleted.
35. The appeal preferred by the assessee is directed against the order of the assessing officer passed under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 8,59,240. The undisclosed income so computed is comprised of the following Rs.
(1) Undisclosed cash 3,40,000 (2) Unexplained expenditure in renovation of house 50,000 (3) Unexplained investment in FDRs and shares 2,63,040 (4) Unexplained expenditure in connection with the marriage of son 60,000 (5 ) Unexplained donations and payments 21,200 (6) Unexplained investment in household articles 1,45,000 Total:
8,59,240
36. Out of the six items of undisclosed income item at Sl. Nos. I to 5 were not contested by the learned counsel of the assessee and accordingly the same are confirmed. The learned counsel, however, raised a plea for necessary adjustment thereof against the surplus income shown in the case of M/s Pioneer Publicity Corporation. This aspect will be dealt with separately.
37. As regards the sixth item about the addition of Rs. 1,45,000 on account of unexplained investment in household articles, the facts in brief are that during the course of search a list of valuable household articles was prepared from his residence and these articles included three air-conditioners; colour TV, refrigerators-, microoven, etc. When confronted it was explained that out of three air- conditioners found two were purchased in the financial year 1980-81 but no evidence in support of such claim was produced. Regarding colour TV BPL, three-door refrigerator and micro-oven it was claimed that the same are cry old. As regards one air- conditioner, one colour TV, one BPL refrigerator and micro-oven it was submitted that the same were received by the assessee on Sagar ceremony of his son Pankaj Vasudeva. According to the assessing officer no evidence in support of such claim was adduced. The assessing officer further noted that the assessee's son got married on 17th Nov., 1995, and it is customary to give gifts to couple at the time of marriage but gifts of such heavy items are never given at the time of Sagai. The assessing officer further noted that the assessee had shown withdrawals in the family of five persons to the extent of only Rs. 24,000 p.a. upto the assessment year 1991-92 and accordingly no asset especially costly items could be purchased out of savings from such withdrawals. There were also no purchase bills of the said items produced. The assessing officer, therefore, valued the household articles at Rs. 1,45,000 and treated the same as representing unexplained investment in purchase thereof for the block period as per details below:
Rs.
Three air- conditioners 45,000 Three colour TV 45,000 One VCR 15,000 One BPL 3 door refrigerator 16,000 One Micro-oven 15,000 One chandelier 10,000 37.1. The learned counsel of the assessee has made a submission that according to the assessee all these items are old household articles whereas the department has estimated their value at current rates, He further contended that the assessee is a regular taxpayer for the last several years and lie acquired these items over the years prior to the block period. In the alternative it was claimed that the amounts may be treated as acquired out of surplus income/cash available out of the additions made in the case of M/s Pioneer Publicity Corporation and other concerns in which the assessee is a partner.
37.2. The learned departmental Representative on the other hand, has relied upon the order of the assessing officer and advanced arguments in support thereof.
37.3. We have considered the facts and rival submissions. It is evident from the facts given that the aforementioned household articles were found at the residence of the assessee during the course of search. The assessee has claimed that all these articles were acquired prior to the block period but there is no evidence produced in support of such claim. The withdrawal shown by the assessee for a family of five members below Rs. 25,000 before the asst. yr 1991-92 is not considered sufficient enough to acquire these items out of savings therefrom. Admittedly, purchase of these items have not been accounted for nor there is separate withdrawals shown for their purchase. In the absence of any evidence about the period of their purchase the same are deemed to have been acquired as on the date of search out of undisclosed income under the provisions of section 69A of the Income Tax Act. The valuation adopted by the assessing officer is also considered to be reasonable for each item. We on these facts see no infirmity in the order of the assessing officer and the undisclosed income computed at Rs. 1,45,000 on this count is sustained. The question of its adjustment against the surplus cash/income from Pioneer Publicity Corporation shall be dealt with separately.
38. The appeal preferred by the assessee is directed against the order of the assessing officer passed under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 7,64,112. The undisclosed income so computed is comprised of the following Rs.
(1) Undisclosed cash 1,98,160 (2) Unexplained investment in jewellery 4,07,952 (3) Unexplained investment in shares 14,000 (4) Unexplained investment in farm land 1,44,000 Total :
7,64,112
39. Out of the four items of undisclosed income, items at Nos. 1, 3 and 4 have not been contested by the learned counsel, having been surrendered at the time of assessment and the same are accordingly confirmed. The learned counsel has, however, sought necessary adjustment against the surplus income/cash available in the case of the firm M/s Pioneer Publicity Corporation. This aspect shall be considered separately.
40. As regards item of unexplained investment at S1. No. 2 above of Rs. 4,07,952, the assessing officer noted that during the course of search at the residential premises of the assessee jewellery worth Rs. 7,37,930 was found out of which jeweller, of the value of Rs. 4,07,952 was seized. The jewellery found weighed 1444.6 gms. Besides 3.5 kg. of silver items. The revenue seized gold items of 849 gins. When required to- explain the source of the jewellery it was explained that the entire jewellery found except jewellery of Rs. 1,15,000 was held and the same was received on the occasion of marriage. As regards the jewellery worth Rs. 1,15,000 it was claimed that investment in this jewellery is unexplained. The amount was received by her from Delhi Advertising Service where she is a partner and the same should be considered in the block income of the said firm. The assessing officer also noted that she is not a wealth-tax assessee and how then her claim of the jewellery being received at the time of marriage could be accepted as for earlier years the value of the jewellery along with her other assets would exceed the taxable limit under the Wealth Tax Act. It was further contended before the assessing officer that in view of the Board's circular the possession of 500 gms. of gold jewellery is reasonable for persons not assessed to wealth-tax and in the circular the Board has also clarified that the question to include larger quantity of jewellery and ornaments can be considered having regard to the status of the family and custom and practice to which the family belongs and facts and circumstances of the case. It was, therefore, argued that the assessee got married in October, 1972 when the market rate of gold jewellery was very low. The assessing officer further noted that in view of Board's circular the authorised officer on his own allowed the gold jewellery of 595.6 gms. at the time of search and it would be fair to allow the benefit of jewellery released. He, however, treated the jewellery seized of Rs. 4,07,952 as unexplained and undisclosed income to that extent was computed and assessed for the block period.
40.1. The learned counsel of the assessee has reiterated that the jewellery found was received by the lady at the time of her marriage and other ceremonial occasions like birthday of children and festivals and looking to the status of the family the jewellery found should be accepted in full. Further, in the alternative, the learned counsel pleaded that the same be treated as expenditure out of the income of cash available to the spouse portion out of the additions sustained in the cases of the firms in which their spouse are partners. It is also contended that during the course of search the lady was not found to be having any other source of income and she being only a housewife the only source of undisclosed income, if any, could be from what she got from her husband.
40.2. The learned departmental Representative, on the other hand, relied upon the order of the assessing officer. He further submitted that total gold ornaments found weighed 1,444.6 gms. and the department was reasonable enough in accepting her claim at the time of search to the extent of 595.6 gms. and that was done in light of the Board's circular and status of the family. Moreover, the assessee has not produced any evidence either from the side of her parents or from the side of her in-laws about the receipt of the said gold ornaments at the time of her marriage nor there is any evidence about its acquisition out of the known source of income. The learned departmental Representative has, therefore, submitted that on these facts the assessing officer was justified in computing the undisclosed income on account of unexplained investment in the said gold ornaments, 40.3. We have considered the facts and rival submissions. It is evident from the facts given that the gold ornaments as found during the course of search are not fully explained and the department was fair enough in accepting her claim to the extent of ornaments being 595.6 gms. looking to her status and Board's circular. There is otherwise no evidence about the receipt of such excess jewellery by the lady at the time of marriage either from her parents or from in laws and in the absence of any such evidence, we would sustain the undisclosed income computed on this count at Rs. 4,07,952.
40.4. As regards its set off against the surplus cash/income of the firm in which her husband in partner that will be dealt with separately.
41. The appeal preferred by the assessee is directed against the block assessment made under section 158BC of the Income Tax Act on 30-10-1996, computing undisclosed income at Rs. 31,019 and this comprised of the following Rs.
Unexplained investment in shares 7,000 Unexplained credit 24,019
42. The learned counsel of the assessee has not contested the undisclosed income adopted at Rs. 7,000 the same being surrendered at the time of block assessment, As regards the unexplained credit of Rs. 24,019 the facts are that the assessing officer on examination of the saving bank account of the assessee observed that there was a credit entry of Rs. 24,019 on 16-9-1989, and when required to explain its source it was explained that the credit amount is the proceed of the lottery ticket after deduction of tax at source but the assessee failed to produce any certificate about the lottery amount awarded and the TDS from the concerned authority. The assessing officer, therefore, treated the credit amount of Rs. 24,019 as undisclosed income. The learned counsel of the assessee reiterated before us that the amount involved was the proceed of lottery and TDS was deducted at source. But no evidence in support thereof has been filed before us also. Alternatively it has been submitted that the amount may be adjusted against the. surplus income/cash available on account of undisclosed income computed in the case of M/s Pioneer Publicity Corporation.
42.1. The learned departmental Representative on the other hand, supported the order of the assessing officer_ 42.2. We have considered the facts and submissions made. Admittedly there is no evidence in support of the claim that the amount represented the proceeds of lottery ticket and in the absence thereof we confirm the undisclosed income computed on this count at Rs. 24,019. As regards the alternative plea taken the same shall be considered separately along with the plea made in other cases of the group.
43. The appeal, preferred by the assessee, is directed against the order of block assessment made under section 168BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 43,246 comprising of the following Rs.
Unexplained investment in shares 19,340 Unexplained credit 23,906 43.1. The facts involved here are identical to that of Deepak Vasudeva. The learned counsel has not contested the undisclosed income computed at Rs. 19,340 on account of investment in shares and he failed to produce any evidence in support of the credit of Rs. 23,906 claimed as proceeds of lottery. The additions, therefore, made on both counts are confirmed. The learned counsel has also taken the alternative plea here that the necessary set off be given for the credit amount of Rs. 23,906 against the surplus income/cash available from undisclosed. income of M/s Pioneer Publicity Corporation. This Shall be considered separately together with orders.
44. The appeal preferred is directed against the block assessment made under section 15SBC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 77,621 comprising of the following Rs.
Unexplained investment in shares 7,000 Unexplained expenses 47,500 Credit entry on 16th Sept., 1988 23,121 44.1. The learned counsel has -not contested the undisclosed income of Rs. 7,000 computed, the same having been surrendered before the assessing officer and the same s accordingly confirmed. As regards the amount of Rs. 23,121 the same has been claimed as proceeds of lottery but no proof in support has been furnished either before the assessing officer or before us. The undisclosed income, therefore, on this count also is confirmed.
45. Regarding the amount of Rs. 47,500, it has been submitted by the learned counsel that a sum of Rs. 50,000 has been surrendered by the assessee's father Shri Naresh Vasudeva on account of marriage expenses of the assessee and, therefore, the addition made amounts to double addition. Alternatively, he has claimed that the amount be treated as out of the surplus income/cash available with the firm.
45.1. We have considered the facts relating to the addition made on account of marriage expenses. The assessing officer noted that certain documents were seized during the course of search showing expenses on ceremony prior to the marriage of the assessee as per the following details Rs.
Band 3,500 Tailor 6,950 Floor furnishing 11,056 Tent 15,090 Payment to Mohan & Sons 11,900 Total 47,446 Rounded up Rs.
47,500 45.2 The assessing officer further noted that the vouchers found relating to these expenses were in the name of the assessee. When contented it was explained that these are covered by the undisclosed income of his father Naresh Vasudeva. It was also contended that the expenses incurred cannot be considered in his hands as in Hindu society it is the responsibility of the father to make the expenses in the marriage of his children. Such explanation offered was not accepted by the assessing officer. We also find that afore-mentioned expenses are only on certain items and these do not wholly cover the total marriage expenses and these in fact have been incurred prior to the marriage. The assessee's father claimed to have surrendered an amount of Rs, 50,000 on account of expenses incurred on marriage of the assessee and the same in our view does not cover the afore-mentioned expenses incurred by the assessee individual. The addition made on this count in the hands of the assessee is fully, justified and the same is confirmed. However, the alternate plea of the assessee with regard to both the additions of Rs. 47,500 and Rs. 23,121 for set off against the surplus income/cash available with the firms will be considered separately along with others.
46. The appeal, preferred by the assessee, is against the block assessment made under section 158BC of the Income Tax Act, dated 30-10-1986, determining the undisclosed income at Rs. 1, 17,986 comprised of the following items Rs.
(1) Unexplained investment in jewellery 62,736 (2) Investment in units of 2,000 units of Master Gain @ Rs. 10 each 20,000 (3) Investment in units of US-64 27,750 (4) Unexplained investment 25 convertible debentures of Videocon 5,000 (5) Unexplained investment in FDRs with Oriental bank of Commerce 1,500 (6) Unexplained investment in the M/s Kuber Finance India 1,000 Total 1,17,986 46.1. The learned counsel of the assessee has not contested the undisclosed income computed relating to the items at SI. Nos. 2 to 6 above, the same having been surrendered before the assessing officer and accordingly the same are confirmed.
47. As regards the undisclosed income of Rs. 62,736 at SI. No. I above, the facts in brief, are that during the course of search gold jewellery weighing 648.1 gins. and silver weighing 23 kgs. was found at the premises of the assessee. The total value of the gold jewellery as determined by the approved valuer was at Rs. 3,26,708, Out of this jewellery weighting 130.7 gms. valued at Rs. 62,736 was seized. When required to explain the source of acquisition of the jewellery it was explained that the jewellery belonged to the assessee as her Istridhan and the same were received as presents on her marriage. The assessee was not found to be a wealth-tax assessee, her wealth being below the taxable limit. When further asked to give evidence about its acquisition, it was contended that the total weight of the jewellery does not exceed the permissible limit as prescribed by the Board in its circular issued in 1994. The assessing officer noted that as per the Board's circular jewellery upto 500 gms. got accepted and the jewellery seized weighing 130.7 gms. was in excess of 500 grns. The assessing officer treated the said jewellery as unexplained representing the undisclosed income of Rs. 62,736.
47.1. The learned counsel of the assessee reiterated before us that the said jewellery represented her Istridhan as it was received by her at the time of her marriage and other ceremonial occasions like birthdays of children and festivals and looking to the status of the family no addition was called for. In the alternative it has been submitted that the amount be treated as expenditure out of surplus income/cash available to the spouse partner out of the additions sustained in the case of the firms in which the spouse is partner. It was also claimed that during the course of search the assessee was not found to be having any other source of income and that she being only a housewife the only source of undisclosed income, if any, could be from what she got from her husband. The learned counsel also submitted that other additions sustained on account of assets acquired be also set off against the surplus funds generated out of the additions made in the cases of the firms.
47.2. The learned departmental Representative on the other hand, relied upon the order of the assessing officer and also objected to the set off claimed.
47.3. We have considered the facts and the submissions made. Admittedly, gold ornaments weighing 648.1 gms. were found in the possession of the assessee during the course of search and though claim was made that the same was received on marriage from relatives but no evidence has been produced in support of such claim in the shape of confirmation from her parents or in-laws giving source of the gold ornaments presented on marriage. However, looking to the status of the family and Board's instructions the department has accepted the jewellery in her hand of about 500 gms. There is no valid explanation or evidence offered before us also to explain the total jewellery found. We, therefore, sustain the addition made on this count of Rs. 62,736.
47.4. As regards the alternative plea the same will be considered along with others separately. Snit. Sweety Vasudeva (ITA No. 6167/Del/1996):
48. The appeal preferred by the assessee is directed against the order of the assessing officer made under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 3,19,958 comprising of the following Rs.
Unexplained investment in jewellery 1,37,270 Unexplained investment in shares 1,82,668 Total 3,19,938 48.1. The learned counsel has not contested the undisclosed income computed at Rs. 1,82,668 on account of investment in shares, the same having been surrendered before the assessing officer. We accordingly confirm the addition made on this count.
48.2. As regards the undisclosed income computed relating to investment in jewellery the facts in brief are that during the course of search gold jewellery weighing 791.5 gms. valued at Rs. 3,88,838 was found in possession of the assessee and out of that 268 gms. valued at Rs. 1,37,370 was seized. When required to explain the source of acquisition of the jewellery found it was submitted that she got married on 10th Dec., 1982, and the jewellery was received in presents from her parents, in-laws, other relatives and friends on marriage and also on birthdays of her to children. It was also claimed that the jewellery found is within the permissible limit as per Board's circular of 1994. The assessing officer noted that the assessee is not a wealth-tax assessee and as per the circular for non-wealth-tax assessee the jewellery of 500 gms. could be treated as explained in the case of married ladies. Since the authorised officer on his own accepted and released the jewellery of 527 gms. at the time of search and the assessee failed to give any evidence about the source of acquisition of the total jewellery the seized jewellery worth Rs. 1,37,270 was treated as unexplained in the hands of the assessee and undisclosed income on that account was computed. The learned counsel of the assessee reiterated before us that the jewellery found represented her Istridhan as it was received at the time of her marriage and other ceremonial occasions like birthdays of children and festivals and looking to the status of the family such addition was not calied for. However, in the alternative he submitted that the amount be treated as expenditure out of the surplus income/cash available to the spouse of the assessee for the additions sustained in the cases of firms in which he is partner. He also contended that the assessee was not found to be having any other source of income and she being a housewife the only source of undisclosed income, if any, could be from what she got from her husband. He also claimed set off against the amount invested in shares against the surplus income of various firms.
48.3. The learned departmental Representative on the other hand, relied upon the order of the assessing officer and advanced arguments in support thereof.
48.4. We have considered the facts and the submissions made in this behalf. For the detailed reasons given in our order in the case of Smt. Anju Vasudeva above, the addition made of Rs. 1,37,270 is confirmed.
48.5. As regards the claim made for set off, the same would be considered separately along with others.
Desh Raj Vasudeva (ITA No. 6162/Del/1996) & Rajesh Vasudeva L/H of Late Ved Prakash Vasudeva (ITA No. 6155/Del/1996)
49. The appeals preferred in these cases are directed against the orders of the assessing officer passed under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income of Rs. 6,30,389 in the cases of Desh Raj Vasudeva and Rs. 26,900 in the case of Ved Prakash Vasudeva. The learned counsel has not contested these appeals on account of amount having been surrendered before the assessing officer. Both the appeals are, therefore, dismissed.
50. The appeal preferred is against the block assessment made under section 158BC of the Income Tax Act on 30-10-1996, determining the undisclosed income at Rs. 93,400 comprising of the following:
Rs.
1 . Unexplained investment in Master Gain 20,000
2. Unexplained investment in Units Scheme of US-64 44,520 3 Unexplained contribution to the policies of Peerless General Finance Company 28,880 Total :
93,400
51. The undisclosed income relating to first two items were surrendered before the assessing officer and accordingly the same have not been contested by the learned counsel of the assessee. The action of the assessing officer in this respect is, therefore, confirmed.
52. As regards the addition of Rs. 28,880 the facts are that during the course of search policies of Peerless General Finance Company of Rs. 20,000, Rs. 20,000 and Rs. 10,000 were found. The annual premium in respect of these policies was at Rs. 2,818. The assessee was required to explain the source of the premium paid and in reply it was explained that the payments were made by the assessee from withdrawals made from Pioneer Publicity Corporation. The assessing officer noted that there was no link established of the premium paid with the withdrawal shown from the firm. The assessing officer further noted that all the policies are of March, 1984 and the unexplained premium paid in ten years was worked out at Rs. 28,880 and the same was treated as investment out of undisclosed income.
52.1. The learned counsel of the assessee has submitted that assessing officer has only assumed the payment of ten instalments of Rs. 2,818 but there is no evidence for payment of such instalments and there is no basis for estimating the payment of Rs. 28,880. The learned counsel, therefore, pleaded that the addition should be restricted to Rs. 2,818.
52.2. The learned departmental Representative, on the other hand, supported the order of the assessing officer.
52.3. We have considered the facts and submissions made. It is not disputed that the policies were taken in March, 1984 and to keep the policies alive the assessee was required to pay the annual premium of Rs. 2,818. There is no material produced either before the assessing officer or before us to show that only one premium was paid at the time of obtaining the policy in 1984 and thereafter the same were allowed to be lapsed and no payment thereafter was made and in the absence of any such material the assessing officer was justified in taking the payment of annual premium for each year till the date of search for consideration of its source. On these facts we see nothing wrong in the order of the assessing officer on this count and the undisclosed income computed for the block period at Rs. 28,880 is accordingly sustained.
52.4. M/s Pioneer Publicity Corporation has raised ground No. 3 as under:
"3. That on the facts and circumstances of the case the learned assessing officer failed to give the benefit of telescoping the investments made by its partners out of the alleged undisclosed income of the assessee-firm, particularly when no evidence was found during the course of search and seizure operations to the effect that the partners had no source of income other than the share profit.
3.1 That on the facts and circumstances of the case, the learned assessing officer grievously erred is not setting off of the alleged undisclosed expenditure against the alleged undisclosed receipts and also failed to give the benefit of rotation on account of turnover and profits relating to such transactions while making an addition on the ground of alleged undisclosed investment"
52.4.1 During the course of assessment proceedings in the case of Pioneer Publicity Corporation the assessee-firm filed a cash flow statement and claimed that since the firm has disclosed the peak credits in the diaries, etc. which covered the cash found from residence and lockers of partners and also their investment, accordingly no addition be made in the hands of partners. The assessing officer, however, rejected the claim so made observing as under :
"I have examined the submissions of the assessee and fail to agree with them. Firstly, because the amounts for which the assessee has made surrenders do not relate to the case of assessee only, secondly, because the date of investments by the partners do not match with these cash flow chart and thirdly regarding the cash found at the time of search and seizure action the statements of the partners were recorded but none of the partners stated that the cash relates to the assessee or other firms of the group. The assessee has also not been able to establish that the cash outside the books available has been utilised in the investments by the partners. The diaries and other papers found do not have any indication that moneys shown to have been advanced have fully been recovered and was available on the date of search with the partners as cash-in-hand or their investment. No benefit in this regard can therefore, be given to the assessee or its partners as claimed. The disclosure made by other concerns like M/s P.K. Advertising Service, M/s Delhi Advertising Service or M/s P.K Advertising Service (P) Ltd. were made by them during the course of examination on account of cash vouchers. not available. In those cases also no evidence could be adduced that the transactions have resulted in cash generation and such cash was available with the partners on the date of search. Further, how movement of cash from one concern has been taken place to another when the partners/directors are not common also could not be explained. In view of these reasons the assessee's submission in this regard are not tenable and are rejected."
52.5. The learned counsel of the assessee has made a submission that this is the case of business run and controlled by close family group. The family's pedigree as given at p. 401 of the paper-book is reproduced below:
Family Tree Late Shri Arjan Dass Vasudeva Deshraj Vasudeva (Wife Smt. Ranjit Rani Sh. Ved Prakash (Wife Smt. Pushpa Vasudeva Sh. Naresh Vasudeva (Wife Smt. Avinash Vasudeva) Sh. Sunil Vasudeva (wife Smt. Kiran Vasudeva) Sh. Rajesh Vasudeva (Wife Smt. Sweety Vasudeva) Sh. Mukesh Vasudeva (Wife Smt. Anju Vasudeva) Pankaj Dinesh Dipak Gaurav Sonal Nakul (Son) Meenal (Daughter) 52.5.1 The constitution bf various firms of the family is given at pp. 399 and 400 of the paper-book. This would show that all the partners in the firm are only family members and director of the private limited company M/s P.K. Advertising Service (P) Ltd. are also members of the family and the entire share capital of the company is held by the family members only. The learned counsel further contended that in the eyes of general law a firm is not a person. A partnership which is collectively known as a firm has no legal existence apart from its partners and it is merely a compendium name to describe its partners and for such proposition the learned counsel has referred to the following decisions :
(1) Narayanappa v. Bhaskaia Krishnappa AIR 1966 SC 1300;
(2) R. M Chidambaram Pillai v. CIT (1970) 77 ITR 494 (Mad);
(3) P.M. Bharucha & Co. v. Income Tax Officer (1969) 74 ITR 513 (Guj), (4) CIT v. A. W. Figgies & Co. (1953) 24 ITR 405 (SC);
(5) CIT v. R. M. Chidambaram Piilai 1977 CTR (SC) 71 : (1977) 106 ITR 292 (SC);
(6) CIT v. Sant Lal Arvind Kumar (1981) 25 CTR (Del) 207 : (1982) 136 ITR 379 (Del);
(7) Malabar Fisheries Co. v. CIT (1979) 12 CTR (SC) 415: (1979) 120 ITR 49 (SC);
(8) Bist & Sons v. CTT (1979) 8 CTR (SC) 152 : (1979) 116 ITR 131 (SC); and (9) Addl. CIT v. Vinayak Cinema 1977 CTR (AP) 212 (FB); (1977) 110 ITR 468 (AP) (FB);
52.6 The learned counsel has further pointed out that various documents on the basis of which the addition is made in the hands of the firm were those found in the possession of the partners including the diaries prepared by them in their own handwriting for the transactions of the firms kept outside the books of account. Further, Annexure A-14 on the basis of which peak chart was prepared and the addition was made is the diary of one of the partners of the firm viz., Shri Rajesh Vasudeva Annexure A-23 is another diary of another partner Mukesh Vasudeva. Additions are being made in the hands of firm on the basis of these diaries as well. The entries in this diary show that the transactions appear in the names of several other partners namely, Sunil Vasudeva, Naresh Vasudeva and Deshraj Vasudeva. These entries show a complete interconnection and interchange of the amounts between the partners- The learned counsel has further contended that during the course of search proceedings no evidence was found to show that the partners were engaged in another business except that of the firms/companies. It has also been contended that the ladies of the family were merely housewives and they did not have any independent source of their own.
52.7. The learned counsel has, therefore, contended that the partners should get the benefit of cash generated as a result of undisclosed income earned and assessed in the hands of the firms and such income added in the hands of the firms should be treated as available to the partners to explain the unexplained investment/expenditure in their individual hands of their wives and children. The learned counsel in this connection has made a reference to the judgments in the cases of Anantha Ram Veer Singhania & Co. v. CIT (1980) 16 CTR (SC) 189 ' (1980) 123 ITR 457 (SC) and Kandla & Bros. v. Asstt. CTT (1995) 51 77J (Pune) 513 : (1995) 52 ITD 412 (Pune). The learned counsel has further pointed out that the interconnection and interlacing between the various firms is also established as is apparent from the assessment orders itself that the same documents contained the transactions pertaining to more than one firm and a particular reference in this connection was made to the additions of Rs 6,95,907 and of Rs. 36,02,500 made by the assessing officer in the case of Pioneer Publicity Corporation demonstrating the fact that transactions pertaining to more than one concern are noted in the seized documents. Attention has also been invited to the block assessment orders in the case of PK Advertising Services wherein the document No. C-4/A-1 shows that the advance made to the employees of the firms of this group appeared in the same document i.e., M/s. Delhi Advertising Service-, P.K. Advertising Service-, P.K. Advertising Service (P) Ltd. and Pioneer Publicity Corporation. The learned counsel has, therefore, pleaded that on given facts and case laws the assessing officer was not justified in rejecting the claim made in this behalf.
52.7.1. The learned counsel has also pointed out as per pp. 407 and 408 of the paper-book that the overall position for consideration and set off would emerge as follows :
Rs.
Rs.
Income surrendered 62,43,640 PB TT/5
(a) Deduct:
Investments and expenses 34,55,589 PB TT/12 Balance 27,88,041 PB TT/9
(b) Adjust:
Cash dispute Cash found 27,94,257 PB TT/51 Less:
Cash explained 8,19,117 PB TT/20 19,75,140 Less:
Cash surrendered 9,19,560 PB TT/10 Balance in dispute 10,55,580 Balance 17,32,461 Adjust: amount of jewellery in dispute (1) Mrs. Avinash 4,07,952 PB TT/50 (2) Mrs. Sweety 1,37,270 PB TT/50 (3) Mrs. Anju 62,736 6,07,958 Less: Surrendered 1,15,000 4,92,958 Balance in surplus 12,39,503 NOTE Without prejudice, it is further submitted that if any amount of addition is sustained over and above the surrendered amount of Rs. 62,43,640, that may be further available to the assessee. "
52.8. The learned departmental Representative on the other hand, relied upon the order of the assessing officer and he has further made a submission that though the various firms have been constituted by members of the family and the common fund has also been floated by the family members but each firm and the company are separate entities. They have carried on independent advertisement business and books of account have been maintained separately for each firm and the company. The partners of the firm have contributed their individual capital to each firm and they have also taken the shareholding of the company from their individual resources. Books of account have been audited and based on the accounts maintained they have filed their returns separately and they were also assessed as such. The income earned each year has been divided among the partners and credited to their individual accounts and they have been utilising their share income according to their individual needs. Though the firms have been functioning for the last several years but no material evidence was ever brought on record to show that management and control was common for all the firms and the company and there was interconnection, interlacing in management and funds and had there been such a situation the income of all the firms and the company would have been assessed by the revenue as assessing officer comprising of the various members of the family.
52.9. As regards the diaries and documents found, the learned departmental Representative submitted that the said diaries and documents were written by the partners of the firm Pioneer Publicity Corporation and business transactions recorded therein related to the said firm and it was for this reason that undisclosed income on that account has been computed based on such diaries and documents in the case of Pioneer Publicity Corporation and there is no objection raised in this behalf in the grounds of appeal of the said firm. The learned departmental Representative, therefore, submitted that no such benefit as claimed could be given in the hands of the various members with respect to the various assessee's assets as acquired by them from undisclosed income. He, therefore, contended that the claim made in this behalf has rightly been rejected by the assessing officer and the finding given by him deserves to be upheld.
51.10. We have carefully considered the facts, material available on records and the rival submissions made before us. We have also gone through the various case laws cited on the issue. We find that the firm M/s Pioneer Publicity Corporation was constituted in October 1966 and the first assessment year involved was 1968-69. The firm has carried on business all through and the same has been progressive year after year. The other concerns were, however, constituted much later by the family members, i.e. :
Delhi Advertising Services March, 1985 Syndicate Advertisers September, 1986 P K. Advertising Services April, 1987 P.K. Advertising Service (P) Ltd.
October, 1992
52.11. The constitution of various firms and the shareholders of the company have been given elsewhere. The firms as well as the company undisputedly learned out independent business; maintained their accounts separately. They also filed returns and assessed also separately. Therefore, for all practical purposes the various firms and the companies are separate entities. There has been nothing brought on record to show that all the firms and the companies had common management and control and there was interconnection, interlacing, intermingling, interlocking, inter-management, control and funds and business dealings and it is for this reason that the revenue has all along treated them separate entities and no effort was ever made to club their income and assess the same as one unit in the status of assessing officer formed of various family members. The learned counsel of the assessee has made a reference to the diary found written and in possession of Rajesh Vasudeva and Mukesh Vasudeva and certain transactions seem to appear in the names of Naresh Vasudeva and Sunil Vasudeva but we find that all the four are partners in the main firm Pioneer Publicity Corporation in whose hands the undisclosed income on such diaries and documents have been assessed in the block assessment and they have also not made claim at any stage that the said transactions as found recorded in the said diaries and documents related to any concern other than Pioneer Publicity Corporation. The learned counsel has placed reliance on various decisions for the preposition that a partnership collectively known as firm has no legal existence apart from its partners and it is a compendium name to describe its partners. There is no dispute so far as such proposition is concerned but since all the firms are constituted by the members of the same family it does not mean that existence of all the firms has merged for the reason that their partners come from the same family, The claim of the assessee in fact challenges the very existence and genuineness of the firms while there is no material evidence in existence to support such claim. We on facts and circumstances discussed do not find favour with the reasoning and claim made by the learned counsel of the assessee and are not inclined to disturb the status of the firms even for limited purpose of assessing the undisclosed income computed.
52.12. We find that the main firm M/s Pioneer Publicity Corporation and its associate concerns and the company do business of advertisement. They charge fees and incur expenses on taking the site on rent commission, preparation and painting of hoardings and their display at the site taken. The material seized shows that the firms particularly Pioneer Publicity Corporation indulged in suppressing the amount charged from the customers and also suppressing the expenses incurred on site rent, commission, preparation of hoardings, etc. It would be seen from the assessments made that the undisclosed income have been computed for various years falling in the block period on account of undisclosed receipts and also on account of undisclosed expenses incurred. In our considered view the unaccounted receipts were available for incurring unaccounted expenses and, therefore, necessary adjustment or set off is required to be given for that unaccounted expenses against the unaccounted receipts in each case of the firm if the facts so warrant.
52.13. We have given our findings in respect of the disputed receipts, income and expenses incurred outside the books in the cases of various concerns and it would not be fair and proper to compute undisclosed income both on account of unaccounted receipts/income and unaccounted expenses as unaccounted expenses could only be incurred out of the funds available from unaccounted receipts/income and we are fortified in taking such view by the decision of the Hon'ble Supreme Court in the case of Anantha Ram Veera Singhania & Co. (supra) wherein it was observed that secret profits or undisclosed income of an assessee earned in an earlier assessment may constitute a fund even though concealed from which the assessee may throw subsequently for meeting expenditure or introducing amounts in his account books depending upon the overall considerations of all relevant facts and circumstances.
52.14. In the case of Kantilal & Bros. (supra) the assessee was found having certain borrowings and also acquisition of assets and the department made additions both on account of unaccounted borrowings and unexplained investments in assets. The Tribunal held the view that it was contrary to canons of law to tax the same amount twice i.e., as borrowings and as cost of assets, 52.15. Looking to the ratio of these decisions the undisclosed income computed by the assessing officer both on account of unaccounted receipts/income and unaccounted expenses is not proper and valid and the unaccounted expenses incurred deserve to be given set off against the unaccounted receipts/income in each case of the firm, of course, having due regard to the facts and circumstances in each case. This aspect has not been properly examined by the assessing officer.
52.16. Further, when the firms have been found in receipt of unaccounted payments from clients, the same was undoubtedly available to the partners of the respective firms for acquisition of assets or incurring expenditure outside the books to the extent of their shares therein. It is, therefore, to be examined and considered how much unaccounted share income of the firm was available to its partners and how far the assets acquired by them from undisclosed income are covered by their share from such undisclosed income of the firm.
53. It is evident from the facts discussed that the assessing officer has not adverted to this ground and examined the same on facts and circumstances and in light of the ratio of the decisions cited supra. We therefore, restore this issue with limited purpose to the file of the assessing officer, with a direction to calculate the amount of relief allowable to the assessee in view of observations made in preceding paragraphs, having regard to all facts and circumstances involved and give a fresh finding therein after affording due opportunity of being heard to the assessee.
54. In the result ITA 6164/Del/1996, 6162/Del/1996 and 6155/Del/1996 stand dismissed, ITA Nos. 6154, 6156, 6157, 6157, 6168, 6171 & 6172/Del/1996 stand partly allowed. ITA Nos. 6158, 6159, 6160, 6161, 6163, 6165, 6167, 6169 & 6170/Del/ 1996 stand partly allowed for statistical purposes.