1. This appeal is filed by the assessee against the order of the CIT (Appeals) dated 2.1.2003 whereby block assessment made by the AO Under Section 158BC has been upheld.2. The block period involved in the present assessment is 1.4.1989 to 15.1.2000. The grounds of appeal raised by the assessee are as under: "1. That under has facts and the circumstances of the case, CIT (Appeals) was wrong in confirming the order of the Assessing Officer.
2. That the Learned CIT (Appeal) has acted against the law by not considering all the Grounds of Appeal taken by the assessee.
Therefore the order is liable to be cancelled.
3. That the search & Seizure Under Section 132 is illegal, void ab initio and was without compliance of the various provisions stipulated Under Section 132 of the Income Tax Act, 1961.
4. That the principles of natural justice were violated while conducting the search, recording the statement Under Section 131 in post search investigation and while passing the order Under Section 158BC of the Income Tax Act, 1961.
5. That the post search statement recorded by the Deputy Director of Income Tax (Investigation) being illegal void ab initio, the addition made on the basis of such statement can't be sustained in the eyes of law without recording of statement by the Assessing Officer who is a Quasi-Judicial Authority.
6. That the CIT (Appeals) was not correct in law in not appreciating that the gifts received by the assessee amounting to Rs. 50 lacs and Rs. 10 lacs received by M.S. Gupta & Sons HUF were not the undisclosed income in view of the provisions of the Section 158B(b) of the Income Tax Act, 1961 as these gifts were duly disclosed by the assessee and assessee's HUF by advancing them to M/s. Haryana Acrylic Mfg. Co. Pvt. Ltd. Rs. 27 lacs as Share Application Money & Rs. 5 lacs as Loan and Advancing to M/s. Mono Acrylic Mfg. Co. Pvt.
Ltd. Rs. 28 lacs as Loan and all these were duly accepted in the regular assessment of these concerns.
7. That the gifts have been illegally taken as cash credit and added Under Section 68 merely on the basis of books of the family concerns of the assessee and no books of accounts were maintained by the assessee.
8. That the gifts received were genuine. The Assessing Officer merely treated it to be the income of the assessee on presumption and on the statement recorded before the DDIT, which was under undue influence and without independently examining the assessee as a Quasi Judicial Authority.
9. That the burden of proof as entrusted on the Assessing Authority was not discharged by cross examining the donor when he was a regular assessee and the gifts were duly accepted in the Income Tax & Wealth Tax assessment of the donor.
10. That the addition of Rs. 1.80 Lacs was illegally confirmed in the income of the assessee as commission paid for arranging the gift.
11. That the CIT (Appeal) illegally by implication confirmed the estimation of the profit made by the Assessing Officer from the business concerns at the rate 5% instead of 3% as claimed by the assessee to justify the addition made on account of gifts and when all the submissions made by the assessee were ignored by the Assessing Officer.
12. No credit as Tax paid was allowed to the assessee for cash seized when specific request for the same was made.
13. That the Learned CIT (Appeal) is wrong in confirming the addition as even on merits also the gifts were genuine. The assessee has discharged his onus of proof by providing the identity of Donor, nature of transaction and source of the amount of the Donor. That the addition has been made only on assumptions/presumptions and the statement of the assessee, which was duly retracted by him and does not have any evidentiary value.
14. That the learned CIT (Appeal) is wrong in confirming the action of the Assessing Officer who has not discharged his burden of proof by not calling either the Donor or by enquiring the person who was alleged to have arranged the gifts.
15. That the Assessing Officer was wrong in observing that the evidence of the gift was found at the time of search." 3. During the course of hearing before us ld. counsel filed written submissions as well as paper books. Ld. counsel submitted that the detailed paper book earlier filed with the stay petition containing documents and paper having a bearing on the points in issues involved in the present appeal may also be referred to. Two paper books filed by the ld. counsel dated 19.8.2003 contained, inter alia, copies of various Tribunal decisions relied upon as well as statement of audited accounts of the sister concern, namely, Monoacrylic Manufacturing Company Private Limited, New Delhi regarding the profit rate in the business of trading of acrylic sheets, etc.
4. On the other hand, Mr. Peeyush Jain, ld. Sr.DR on behalf of the revenue, filed a paper book running into 81 pages containing, inter alia, copies of the statements of the assessee recorded on 25.11.1999 as well as 29.11.1999 and thereafter on various dates as part of post search enquiry by the DDI (Investigation), New Delhi. We have also heard the ld. Representatives at great length.
5. At the outset, we may notice relevant facts having a bearing on the points in issue involved before us. Search and seizure operations were conducted by the Income-tax authorities Under Section 132 of the Income-tax Act, 1961 on 25.11.99 at the residence as well as business premises of the assessee resulting in seizure of documents and records.
The AO issued notice Under Section 158BC under Chapter XIV-B of the Income-tax Act on 20.11.2001 for the aforementioned block period. The assessee filed the block return on 4.1.2002 declaring undisclosed income of Rs. 86,82,110/-. AO, however, made the assessment vide order dated 27.3.2002 making a further addition of Rs. 61,80,000/- treating the gifts aggregating to Rs. 60 lacs received from Shri Rampati Singhania of J.K. Group of Kanpur to the assessee and his HUF as non-genuine plus commission allegedly paid @3% for arranging these gifts being Rs. 1,80,000/-. The aforesaid addition has been upheld by the ld. CIT (A) and the assessee is aggrieved against the same.
6. The main controversy in the present appeal centers around the legal and factual merits of the impugned addition of Rs. 61,80,000/- treating the gifts from Shri Rampati Singhania as non-genuine. During the search operations, the assessee admitted in his statement recorded by the authorised officer on 25.11.99 that he and his HUF received the aforesaid gifts from Shri Rampati Singhania arranged through a Chartered Accountant against payment of cash. The particulars of the gifts, as borne out from the assessment, are as under: Sh. M.S. Aggarwal received two account payee gift cheques of Rs. 25,00,000/- each from Sh. Rama Pati Singhania vide cheque No. 257760 dated 08.05.1999 and cheque No. 257759 dated 12.5.1999 both drawn on The Hong Kong & Sanghai Banking Corporation Ltd. Kasturba Gandhi Marg, New Delhi; M/s. Gupta (M.S.) & Sons HUF received one account payee gift cheque of Rs. 10,00,000/- from Sh. Rama Pati Singhania vide cheque No. 257762 dated 19.05.1999 drawn on The Hong Kong & Sanghai Banking Corporation Ltd., Kasturba Gandhi Marg, New Delhi-1.
Shri Rampati Singhania is a regular Income-tax assessee with PAN number 20-034-PZ-0028 at Central Circle, Kanpur (U.P.). Shri Rampati Singhania is the industrialist of J.K. Group of Industries based in Kanpur and he is Chairman of J.K. Synthetics and J.K. Cement.
7. Subsequently, the assessee retracted from the aforesaid confessional statement and sent a letter to the D.I. (Investigation), Jhandewalan Extension, New Delhi stating, inter alia, as under: "There was a Search & Seizure operation at my residence in the morning on 25.11.99 which ended on 26.11.99. Immediately thereafter I was admitted in the nursing home from where I have been discharged today only.
On the date of search & seizure operation i.e. 25.11.99, there was a 'PAROJAN CEREMONY' function in my family in respect of 4 children of my younger brothers. A large number of relatives and family friends (approx. 400 persons) were invited to grace this occasion. I, being the eldest member of the family, was the chief host of the function.
Many of our relations had come from outside Delhi to attend the ceremony. Some of our guest had come even from AMERICA to attend the ceremony. Some of the relatives were staying at my residence. All of a sudden when search party came to my house, I requested them to free me immediately to enable me to ensure the final arrangements of the function and also to attend the same. I was told that if I sign the statement I can be freed within 2 hours for attending the function. However, I was not freed by the search party to attend the function in my family due to which I became mentally upset and lost control of my senses. The lunch for the whole family was also arranged in the 'PAROJAN CEREMONY' function. I and my family members including relatives staying with us were not permitted to go to attend the function, even the clothes of some of my relatives were snatched which they were to wear for going to attend the function, although initially I was promised that I shall be free by 11.00 AM (time of ceremony). I was feeling totally upset, shattered, humiliated and senseless. I went on requesting the search party to take my signature wherever they felt necessary and free me immediately. However, the search party kept on getting my signature with the promise I will be freed very soon. Finally neither I nor my family members and relatives staying with us are allowed to move to attend the ceremony. Therefore, I and my family and relatives staying with me even could not have their lunch on 25.11.99.
On the more, I am a patent of LUMBER SPONDYLYSIS for the last ten years. My Lumber Spondylysis had also become aggravated and I started feeling acute intolerable pain in my back. I went on requesting the search party to make me free and get my signature wherever they want. But I was awaken till next day morning with promises everytime that I will be freed immediately if I sing on the statement written by them. I due to the mental torture and humiliation signed on the papers and statements wherever the search party asked me to do so without appreciating what has been written therein. Due to the aggravation in my illness, I took the advice of the Doctor as soon as the search party left my house. On the advice of Doctor, I was admitted in the nursing home and was advised strict medical supervision and bed rest. I finally got discharged from the nursing home on 3.12.99, but still I am advised complete bed rest.
Copy of the letter is placed in the first paper book filed by the ld.counsel at pages 71-72. The DDI (Investigation) again recorded the statements of the assessee on 6.1.2000 in his office wherein the said gifts were again admitted as bogus. Copy of the statement recorded by the DDI (Investigation) is placed in the paper book filed by the DR at pages 32 onwards. Relevant portions of the statement concerning the admission of the assessee have been extracted by the AO as well as the CIT (A) in their orders.
8. During the course of assessment proceedings, it was contended on behalf of the assessee that confessional statement recorded by the Income-tax authorities under coercion and pressure does not constitute admissible evidence in support of non-genuineness of the gifts in question. The assessee further pleaded that Shri Rampati Singhania is an existing assessee with the JCT, Central Circle, Kanpur. Copies of Income-tax and Wealth-tax assessment orders of Shri Rampati Singhania, the donor made by the JC, Central Circle Under Section 143(3) of the Income-tax Act and Section 16(3) of the Wealth-tax Act respectively for the assessment year 2000-2001 in which the gifts in question have been made to the assessee were filed before the AO and these are available in the first paper book at pages 102 to 105. These assessments have been made in the Central Circle, Kanpur in the month of July, 2001 much after the search carried out by the Income-tax authorities at the premises of the assessee on 25.11.99. Regarding the source of the gift, the assessee explained before the AO that the donor issued the account payees cheques to the assessee and his HUF drawn on the Hongkong and Shanghai Banking Corporation which are placed in the first paper book at pages 94 to 96. Shri Rampati Singhania sold his property being Flat No. 123 - 124 on the 12^th Floor in the Sarnath Building at Bhoorabhai Desai Road, Bombay for a sum of Rs. 2,75,00,000/-. Photocopies of Form No. 34-A as well as certificate Under Section 269UL (3) of the Income-tax Act obtained by the donor for the sale of the property have been placed in the paper book at pages 98 to 101. The assessee pleaded before the revenue authorities that the genuineness of the gift transaction has been amply established on the basis of mass of evidence filed by the assessee, and therefore, the confession obtained from the assessee under pressure stands conclusively rebutted and refuted. The contentions of the assessee have been rejected by the AO mainly on the following grounds: (i) The donor is not in any manner related to the assessee nor is he known to the assessee. In the statement recorded on 25.11.99, the assessee has given the name of the donor as Shri Kamlapati Singhania. Whereas in his statement recorded by the DDI on 6.1.2000, the assessee stated that the gifts were received from Shri Rampati Singhania. According to the AO, the confusion in the names clearly indicate that the donor was a stranger to the assessee.
(ii) The allegation made by the assessee that the confessional statement was given under coercion and pressure is not correct inasmuch as even after a period of 40 days from the date of the search, the assessee gave a similar statement before the DDI (Investigation) accepting the gifts as non-genuine.
(iii) The facts that the assessee was carrying on undisclosed business in the name of six non-genuine entities dealing in acrylic sheets etc. further proves that the gifts in question have been purchased by the assessee by payment of cash to the alleged donor.
9. The aforesaid conclusions of the AO have been endorsed and approved by the ld. CIT(A) while sustaining the impugned addition of Rs. 61,80,000/- as undisclosed income.
11. Shri Anil Jain, Chartered Accountant, assailing the impugned addition reiterated the contentions earlier raised before the revenue authorities below and argued that the gifts of Rs. 60 lacs received by the assessee and his HUF were duly disclosed and accounted for in the books of the assessee as well as the donor, Shri Rampati Singhania and such disclosed transactions were clearly beyond the purview of block assessment. Ld. counsel argued that substantial evidence has been filed before the revenue authorities to establish the genuineness of the gift transactions. The evidence relied upon by the ld. counsel may be briefly referred hereunder: (i) Shri Rampati Singhania is the key figure of well-known industrial group, namely, Juggi Lal Kamlapat of Kanpur known as J.K. Group. He is a regular Income-tax and Wealth-tax assessee with Joint Commissioner of Income-tax Central Circle - 1, Kanpur. His affidavit dated 30^th May, 1999 affirming the gift have been filed before the AO and the same is placed in the first paper book at page 86. In this affidavit, he has deposed that gifts have been made by him by account payees cheques drawn on his bank account No. 051194116CO6 with the Hongkong Shanghai Banking Corporation Limited, K.G. Marg, New Delhi. He further deposed that sale proceeds of his self acquired immovable property have been deposited in the aforesaid bank account on which cheques have been issued to the assessee as well as his HUF. (ii) Gift deeds have been executed on 30.5.99 and 20.6.1999 placed in the first paper book at pages 87 to 89. The genuineness of the gift deeds have not been questioned by the revenue authorities.
(iii) Photocopy of bank account of the donor with Hongkong Shanghai Banking Corporation Limited from where payment of gifts have been made has been filed at pages 94 to 96 of the first paper book.
(iv) In support of sale of immovable property by the donor for a sum of Rs. 2.25 crores, photocopies of Form No. 34A as well as certificate Under Section 269UL(3) of the Income-tax Act obtained by the donor has been filed at pages 98 to 101 of the first paper book.
(v) Income-tax assessment order as well as Wealth-tax assessment order made by Joint Commissioner of Income-tax Central Circle 1, Kanpur for assessment year 2000-2001 have been filed at pages 102 to 105. It is stated that gifts in question have been made in May, 1999 which fall in the said assessment year.
(vi) Photocopies of bank accounts of the assessee and his HUF in Indian Bank where the amounts of the aforesaid gifts have been credited have been filed in the first paper book at pages 108 to 115. Account payees cheques issued by the donors are credited in these bank accounts.
12. On the basis of the aforesaid evidence, ld. counsel argued that the genuineness of the gift transactions are conclusively established inasmuch as the identity and capacity of the donor as well as factum of the gift transactions stand established. Ld. counsel argued that the plethora of evidence furnished by the assessee in support of genuineness of the transaction has not been controverted by the revenue authorities while holding the gift transactions as sham. Ld. counsel further added that the Department has rested its case solely and exclusively on the two statements dated 25.11.99 and 6.1.2000. It is submitted that the first statement recorded on 25.11.1999 is the preliminary statement recorded before the commencement of search and cannot be considered as a statement recorded Under Section 132(4). Ld.
counsel pointed out that the fact that the statement is a preliminary statement recorded before the search is amply evidenced by the observation of the AO at page 5 of the assessment order to this effect.
He further referred to page 101 of the Departmental paper book wherein it is indicated that question No. 1 to 19 of the statement were put to the assessee at preliminary stage and thereafter question No. 20 onwards form part of the statement recorded during the search. Ld.
counsel referred to the letter sent by the assessee immediately after the search retracting the admission and stating that the admission has been procured under coercion and pressure. Shri Jain filed an extract from the Kelkar Committee's Report (printed in the 258 ITR Page 40 Statute) wherein the Committee has made a critical reference to the practice adopted by the Departmental Officers obtaining forced confession from the assessees during the course of search operations.
The Finance Minister in his Budget Speech for the Financial Year 2003-2004 observed that in view of the recommendations of the Kelkar Committee, it has been decided that no confession shall be obtained during search and seizure operations. Ld. counsel filed a copy of the letter issued by Central Board of Direct Taxes from the file F.No.286/2/2003-IT (Inv.) on 10^th March, 2003 pointing out that instances have come to the notice of the Board where assessees have been forced to confess undisclosed income during the course of search and seizure and such confessions, if not based upon credible evidence, are later retracted by the concerned assessee. The Board, therefore, advised the Field Officers that no attempt should be made to obtain confession as to the undisclosed income. The Board further advised that in respect of pending assessment proceedings, Assessing Officers should rely upon the evidences gathered during the course of search or thereafter while framing the relevant assessment orders. Heavily relying upon the aforesaid recommendations of the Kelkar committee as well as directions issued by the CBDT to the field officers, ld. counsel strongly urged that the admission regarding the gift transactions being non-genuine have been obtained by the search party under coercion and the same should not be relied upon.
13. Ld. counsel further submitted that even if the contention of the assessee regarding the admission having been obtained under coercion and pressure is not accepted yet it is a well-accepted proposition of law that an admission is not conclusive and the assessee is fully entitled to refute and controvert the admission by adducing documents and evidence on record. In support of his contention, ld. counsel placed reliance on the decision of the Supreme Court in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala 91 ITR 18.
Further, reliance is placed on the decision of Supreme Court is Sarwan Singh Ratan Singh v. State of Punjab 1957 SC 637 wherein it has been held that a confession of an accused would need corroboration to convict the accused. Ld. counsel further referred to the decision of Delhi High Court in S. Arjun Singh v. CWT 175 ITR 91 wherein it has been held that an admission is an important piece of evidence but it is not conclusive and it is open to the assessee to show that it is incorrect. Ld. counsel has further drawn support from the following decisions.
14. Ld. counsel next raised the legal issue that the addition of Rs. 61,80,000/- as undisclosed income under Chapter XIV-B is without jurisdiction and outside the purview of Section 158B(b) of the I.T.Act. Ld. counsel argued that definition of undisclosed income given under Section 158B(b) is inclusive and since these words have also been used in Section 132(1)(c) in similar context, the same meaning as assigned by the Delhi High Court in its judgment in the case of L.R.Gupta v. UOI 194 ITR 32 would be applicable. In the said decision, Delhi High Court observed that undisclosed income means the income which is hidden and not disclosed to the Department. Ld. counsel further cited the following decisions of the Tribunal in support of his contention that the same meaning as applicable for the purpose of Section 132 (1)(c) would be attached to these words under Chapter XIV-B: 15. Relying upon the aforesaid decisions, ld. Counsel argued that since the gifts transactions in question are disclosed and properly accounted for in the accounts of the donor as well as the donee, these transactions are not covered Under Section 158B(b). According to the ld. Counsel, these gifts were received in May, 1999, vide Gifts Deeds dated 30.5.1999 and 20.6.1999 and the search took place on 25.11.1999.
The gifts, therefore, fall in the assessment year 2000-2001 and the due date for filing the return was 30^th June, 2000. The amounts received by the assessee and his HUF as gifts were disclosed in the return which became due after the date of search. The amounts received were deposited in the regular bank accounts of the assessee and his HUF as appearing at pages 109 and 111 of the first paper book. Before search, the amounts received were advanced to the following two companies.
(i) Haryana Acrylic Manufacturing Co. Pvt. Ltd. - PAN : AACH01716K Assessed at Central Circle-18, New Delhi.
(ii) Mono Acrylic Manufacturing Co. Pvt. Ltd.-PAN : AAACM8044K Assessed at Ward 5 (4), New Delhi.
Both the companies are old assessees and the amounts were duly deposited in their regular bank accounts and duly entered in the normal course in the books of the companies. Genuineness of these amounts has also been accepted in the assessments of these two companies. On these facts, ld. Counsel argued that gift transactions are disclosed transactions and are properly reflected in the books of account including bank records of the donor as well as the assessee and his HUF. Such gift amounts would thus clearly falls outside the purview of undisclosed income as defined Under Section 158B (b), ld. counsel argued.
16. Ld. Counsel next referred to the provisions of Section 158B(B) lays down the mode of computation of undisclosed income of the block period.
Ld. Counsel argued that the section specifically and unequivocally provides that undisclosed income has to be computed on the basis of evidence found during search". He submitted that no documents or evidence or records have been found by the Income-tax authorities during the course of search which may impeach the genuineness of the gifts received from Shri Rampati Singhania. Regarding the statements of the assessee, relied upon by the Department, ld. Counsel argued that these statements have not been recorded during the course of search and cannot be treated as statements Under Section 132(4). He submitted that first statement record on 25.11.1999 has admittedly been recorded before the commencement of search as evidenced by the reference made in the assessment order to such statement as preliminary statement.
Further more, the statement itself indicates that upto question No. 9, the earlier part of the statement has been recorded prior to the commencement of the search. On these facts, ld. Counsel argued that admission made by the assessee does not represent evidence found during search and, therefore, the action of the revenue authorities in treating the gifts as non-genuine on the basis of the statement while making the block assessment is without jurisdiction and beyond the scope and ambit of Section 158BB. Another argument put forward by the ld. Counsel is that statement of the assessee recorded by the authorities officer cannot in any manner be treated as evidence found during search. The evidence found during search would obviously be some documents, papers, slips, books of account or other such tangible material which many confer jurisdiction on the Assessing Officer for the purposes of block assessment. In support of his contention, reliance has been placed on the following decisions of the Tribunal : 17. Ld. Counsel submitted that since the gift transactions in question are disclosed and accounted for and duly acknowledged by the donee who is a leading Industrialist belonging to well known J.K. Group of Kanpur, the addition of Rs. 61,80,000/- as undisclosed income is factually and legally unjustified and without jurisdiction.
18. Ld. counsel next referred to the alternative basis adopted by the Assessing Officer whereby income from the following six benami concerns has been estimated at Rs. 1,31,76,257/- : (f) M/s. Evergreen Corporation Vill., Sirsapur Gurudwara Rd., Delhi-42.
19. Facts are undisputed that assessee has been carrying on unaccounted business of trading of acrylic sheets, off-cuts and scrap. The said business was not disclosed to the department. Total turn over of the business has been estimated by the Assessing Officer at Rs. 26.35 crores as under: and A-46 Rs. 7.55 crores TOTAL Rs. 26.35 crores Assessing Officer has applied net profit rate of 5% and arrived at the undisclosed income of Rs. 1,31,76,257/-. Regarding the net profit rate of 5%, Assessing Officer has referred to seized page No. 15 of Annexure A-20, which is placed at page 1 of the paper book filed by the Department. This paper appears to have been addressed to Mr. Narayan Rao of ICICI Acrylic and gives the working of costing of the acron sheets.
20. Ld. Counsel invited our attention to the assessee's letters dated 7.3.2002 as well as 13.3.2002 filed during the block assessment proceedings before the Assessing Officer wherein the basis of computing business income adopted by the Assessing Officer from the aforesaid six benami concerns of the assessee has been assailed. Copies of both these letters have been filed by the ld. Counsel, as required by the Bench.
Regarding figure of total sales, the assessee pointed out that the assessee made detailed submissions in the letter dated 13.3.1983. With regard to the sales figure through bank account adopted by the Assessing Officer at Rs. 18,80,71,833/-, assessee stated that this figure stands for entire cheques/drafts/hundis deposited into banks and there were following mistakes in the said figure : (a) This include all type of cheques/drafts/hundies deposited. Such deposits include number of deposits which are not for turnover like advances received and later on returned, loans taken and returned, deposits of personal transactions not relating to business. However in the absence of detail it is not possible to compute such amount, hence we request you to reduce at least 10% of above amount i.e. Rs. 1,88,07,183/- from above figure on this account.
(b) As already submitted, the assessee has done many transactions of purchase/sales/discounting of hundi/cheque/draft etc. on a commission of as small as 0.25% to 0.50%. Such transactions can not be equated with normal trading transactions, hence need to be separated and small rate of profit has to be applied on them.
However, in the absence of detail it is not possible to compute such amount, hence we request you to consider at least 20% of above amount i.e. Rs. 3,38,52,930/- (20% of total - 10%) on account of such turnover and apply lower net profit rate.
According to the assessee, the figure of turn over based on banks should be Rs. 16,92,64,650/- and out of this Rs. 3,38,92,930/- would involve lower net profit rate.
21. With regard to cash sales, the assessee pointed out various discrepancies in the figures proposed to be adopted by the Assessing Officer and such discrepancies have apparently been reconciled and figure of cash sales as suggested by the assessee have been adopted in the block assessment order at Rs. 7,54,53,311/-. Thus, according to the assessee, the figure of total turn over would work out to Rs. 24,47,17,961/- as against Rs. 26,35,25,144/- adopted by the Assessing Officer.
22. With regard to net profit rate, the assessee submitted before the Assessing Officer vide its letter dated 7.3.2000 that since the business of trading of acrylic sheets, off-cuts and scrap carried out by the assessee in the six benami concerns is substantially similar with that of the sister concern, namely, M/s. Mono Acrylic Manufacturing Private Limited, the net profit rate shown by the said company and accepted by the Income-tax Department in the said concern should form the basis for applying the net profit rate in the instant case. The assessee gave analysis of trading results of the said company for assessment years 1997-98 to 2000-2001 which indicated net profit rate for the four assessment years as under: Assessee pleaded before he Assessing Officer that even if the higher net profit as shown being 2.67% is to be adopted, the undisclosed income would work out to a figure would be much lower than the amount of Rs. 86,82,110/- disclosed by the assessee itself in the block return. Assessee thus mainly relied upon the trading results of the sister concern, namely, Mono Acrylic and disputed the action of the Assessing Officer in applying the net profit rate of 5% on the basis of seized page No. 15 of Annexure A-20.
23. Regarding the seized document, the assessee made the following submissions vide its letter dated 13.3.2002 before the Assessing Officer: (a) This profit rate of 5% mentioned in the sheets referred are quotations only and not the actual one.
(b) This profit rate is probably the gross profit rate and not profit rate.
(c) This profit rate is for material to be supplied to ICI only on 'A' class material, while profit rate for substandard material is much lower and that is some time sold even on loss.
(d) As mentioned in our earlier submissions, the entire turnover of the assessee is not by way of normal trading but include some turnover of draft/cheques/hundies discounted on a commission of as small as 0.25% to 0.50%, accordingly uniform profit rate can not be applied.
(e) The Net Profit earned by the assessee has ultimately to be correlated with his unexplained investment/expenses. When the assessee has already declared his undisclosed income on the basis of undisclosed income on the basis of undisclosed investments/expenses, the question of estimation of profit rate does not apply.
24. Ld. Counsel reiterated the submissions as made before the Assessing Officer as above and separately furnished written submissions on the issue vide pages 1 to 4 of the paper book No. 4. In the said paper book, return of income, assessment order as well as audited statement of accounts of Mono Acrylic for assessment years 1998-99 to 2001-2002 have been enclosed at pages 5 to 130. Ld. Counsel argued that the sister concern of the assessee, namely, Mono Acrylic is in the same line of business as the assessee and the assessment of the company has been done by way of scrutiny assessment for two years out of the preceding four years and, therefore, the action of the Assessing Officer in applying net profit rate of 5% is wholly justified. Ld.
Counsel further pointed out that the Assessing Officer as well as the CIT (A) have ignored the comparable results of the sister concern while sustaining the net profit rate of 5% in ad hoc manner. Ld. Counsel concluded his arguments by saying that the undisclosed income of Rs. 86,82,110/- shown by the assessee on the basis of unaccounted assets and unaccounted expenses during the block period deserve to be accepted and there is absolutely no justification for making additions on account of gifts received from Shri Rampati Singhania or alternatively by estimating the business income of the assessee.
25. Ld. Counsel, therefore, concluded by saying that the undisclosed income of Rs. 86,82,110/- already shown by the assessee in the block return be sustained and the balance addition made by the Assessing Officer be deleted.
26. Shri Peeyush Jain, ld. Senior DR supported the impugned order of the ld. CIT (A) and observed that the admission has been made by the assessee that the gifts received from Shri Rampati Singhania were non-genuine in a statement dated 25.11.1999 before the authorized officer and even after he retracted his admission by writing letters to the Department authorities, the assessee again gave the same statement before the DDI (Inv.) on 6.1.2000 admitting that the gifts were bogus and cash has been paid back to the donor. Ld. DR further submitted that allegations of coercion and pressure, exerted by the Income-tax authorities for procuring admission regarding the gifts being non-genuine are unsubstantiated and deserve to be rejected. Ld. DR further submitted that the donor was not in any manner related with the assessee nor was he connected with the assessee in any manner and there was, therefore, no occasion whatsoever for the donor for making gifts of Rs. 60 lacs to the assessee and his HUF. In response to specific query from the Bench regarding any action taken in the tax assessments of Shri Rampati Singhania, the donor, ld. DR fairly conceded that Income-tax and Wealth-tax assessments for assessment year 2000-2001, as placed in the first paper book by the assessee, have been made by the Joint Commissioner, Central Circle, Kanpur subsequent to the search operations accepting the declared version. However, he strongly emphasized that since the admission made by the assessee that he has paid cash amount back to the donor in lieu of cheques received from Shri Singhania, the impugned addition sustained by the ld. CIT(A) is fully justified and deserves to be upheld.27. Regarding the alternative computation of business income made by the Assessing Officer and sustained by the CIT(A), ld. DR invited our attention to page 1 of the paper book filed by him wherein while sending a quotation for acron sheets, profit @ 5% has been adopted. Ld.
DR submitted that net profit rate of 5%, adopted on the basis of the seized document, is fair and reasonable and deserves to be sustained.
Regarding the comparable results of the sister concern, namely Mono Acrylic wherein much lower profits ranging from 1% to 2.67% have been shown, in similar line of business and accepted by the Assessing Officer. Ld. DR has not offered any comments and submitted that the seized paper containing quotation for acron sheets quoted to ICI justifies the net profit rate of 5%. Similarly, with regard to figure of total turn over adopted by the revenue authorities at Rs. 26,35,25,144/-, ld. DR submitted that the figure is based on the bank accounts as well as seized documents bearing No. A-40, A-42 and A-46.
Concluding his arguments, Ld. DR urged that the impugned order of the CIT (A) confirming the block assessment deserves to be sustained.
28. We have carefully considered the rival submissions and also gone through the facts and evidence on record as contained in the paper books filed by the ld. Counsel for the assessee as well as the ld.Sr.DR during he hearing before us. The judicial pronouncements of various courts relied upon by the ld. Representatives before us have also been considered by us. With a view to delineate contours of controversy arising from the present appeal, it would be necessary to consider the following three basic issues which emerge from the orders of the revenue authorities below: (i) Whether the impugned addition of Rs. 61,80,000/- treating the gifts as non-genuine falls within the ambit of undisclosed income as defined Under Section 158B(b) and is cover for the purposes of block assessment under Chapter XIV-B of the Income-tax Act, 1961? (ii) Whether the admissions made by the assessee that the gifts are arranged ones and equivalent amount of cash has been returned back to the donor, Shri Rampati Singhania constitute conclusive and final evidence against the assessee? and (iii) If answer to Question No. 2 is in the negative, whether the assessee has succeeded in disproving the admission and establishing genuineness of the gifts in question? 29. The first issue as indicated above concerns the scope and ambit of undisclosed income as contemplated under Chapter XIV-B of the Income-tax Act. Chapter XIV-B consisting of Sections 158B to Section 158BH was introduced by the Finance Act, 1995 with effect from 1.7.1995 to make procedure of assessment of search case more effective. The chapters is titled "Special procedure for assessment of search cases." The scheme of block assessment enacted under this chapter laying down procedure for block assessment proceedings is intended by the legislature to operate simultaneously with the normal and regular scheme of assessment indicated under Chapter XIV of the Income-tax Act.
Both the tax schemes are independent of each other and they are not mutually exclusive. Block assessment under Chapter XIV-B is not intended to be a substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to regular assessment already made or to be made. Clause (b) of Section 158B contains inclusive definition of undisclosed income and reads as under: "(b) "undisclosed income" includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act [or any expense, deduction or allowance claimed under this Act which is found to be false]." If we analyse the aforesaid definition, it provides that unlimited income includes - (i) Any money, bullion, jewellery or other valuable article or thing or; (ii) any income based on any entry in the books of account or other documents or transactions; (iii) such money, bullion, jewellery, valuable article, thing, entry in the books of account or other documents or transactions represents wholly or partly income or property; (iv) which has not been or would not have been disclosed for the purposes of this act.
From the aforesaid analysis of the definition, it clearly emerges that if any asset or any income as recorded in the books or documents has been disclosed or intended to be disclosed to the Income-tax authorities, this would be outside the pale of undisclosed income as defined under Clause (b) as above.
30. We may next refer to Section 158BB which provides for computation of undisclosed income of block period. The section expressly and unequivocally provides that the undisclosed income had to be computed "on the basis of evidence found as a result of search ..... and such other materials or information as are available with the AO and relatable to such evidence." The expression "relatable to such evidence" has been inserted by the Finance Act, 2002 retrospectively w.e.f. 1.7.1995. A bare reading of this provision would indicate that undisclosed income has to be computed on the basis of evidence and material found during search. Any material or evidence available to the Assessing Officer which is not related to the search would not form the basis for computation of undisclosed income.
31. The issue regarding the jurisdiction of the Assessing Officer to consider the genuineness of the gift transaction and treat such gifts as undisclosed income would be required to be considered in the backdrop of the aforesaid legal position. The facts are undisputed that no evidence has been found during the course of search which may impeach the genuineness of the gifts received by the assessee and his HUF from Shri Rampathi Singhania. No documents or papers have been found during search proving that the gifts are non-genuine. The main stay of the Department's case is the statement of the assessee recorded on 25.11.99 and 6.1.2000 admitting the gifts to be non-genuine. First statement dated 25.11.99 is placed in the paper book filed by the ld.Sr.DR at pages 4 to 21. A part of the statement from pages 1 to 10 upto Question No. 19 and Answer thereto has apparently been recorded prior to the commencement of search and is a preliminary statement.
Subsequent portion of the statement has apparently been recorded after the commencement of the search proceeding inasmuch as prior to recording Question No. 20, the authorized officer has recorded the title "statement taken during the course of search". In fact, the Assessing Officer has referred to the statement as preliminary statement as page 5 of the block assessee order. From these facts, it is amply evident that statement of the assessee admitting the gifts to be non-genuine has been recorded before the commencement of the search and cannot conceivably be construed as a statement Under Section 132(4) of the Income-tax Act. The decision of Allahabad High Court in R.R.Gavit v. Smt. Sher Banu Hasan Daya 161 ITR 793 support the view taken by us. The statement of admission dated 25.11.99, which is the sole basis adopted by the Assessing Officer for bringing the gifts within the purview of undisclosed income Under Section 158BB for the purposes of block assessment cannot thus be treated as evidence found as a result of search. We are, therefore, of the view that the genuineness of the gifts cannot possibly be treated as covered within the limited scope and purview of undisclosed income under the block assessment. On this legal ground alone, the impugned addition of undisclosed income treating the gifts as non-genuine is held to be outside the purview of block assessment and liable to be deleted.
32. We may next consider the facts concerning the gifts received by the assessee and his HUF in the context of definition clause, namely, Section 158B(b) which defines the undisclosed income as reproduced above. The important limb of the definition which constitute the basic essence is "income or property which has not been or would not have been disclosed for the purposes of the act." In the case of L.R. Gupta v. Union of India 194 ITR 32, the Delhi High Court while construing the expression undisclosed income as used Under Section 132(1) has held that the income which is hidden from the Department is undisclosed income. In the instant case before us, gifts have been received by the assessee and his HUF by account payees cheques which have been duly deposited into the bank accounts as reflected at pages 109 and 111 of the first paper book filed by the assessee. From these bank accounts, the assessee and his HUF have issued cheques for making advances to the sister concerns, namely, Haryana Acrylic Company Pvt. Ltd. and Mono Acrylic Manufacturing Co. Pvt. Ltd. Both these companies are existing assessees and amounts advanced by the assessee and his HUF have been duly credited in the books of account of the said companies. Copies of bank accounts of these two companies as well as copies of accounts of the assessee in the books of the said companies have been duly furnished during the course of assessment proceedings before the Assessing Officer and are placed in the assessee's first paper book at pages 112 to 125. Assessee and his family members are promoters, directors and shareholders in these companies and the amounts advanced by the assessee out of the gifts have been duly entered in their books of account and accepted in their tax assessments. Similarly with regard to source of the gift amount, we find that Shri Rampati Singhania is a leading industrialist belonging to Juggi Lal Kamalapath Singhania family of Kanpur. The donor has sold his property in Bombay for a sum of Rs. 2.75 crores and has received clearance from Income-tax Department in Form No. 34A and 37I for the sale of the property.
Further Income-tax as well as Wealth-tax assessment of the donor for the assessment year 2000-2001, during which the gifts in question have been made, have been completed after scrutiny in Cental Circle, Kanpur by the Officer of the rank of the Joint Commissioner of Income-tax. All such documents were provided to the Assessing Officer during the block assessment proceeding and also form part of the paper book filed before us. Ld. counsel has drawn our attention to gift deed dated 20^th June, 1999 as well as 30^th May, 1999 which were executed by the donor as well as the donee and produced during the assessment proceedings before the Assessing Officer. Shri Rampati Singhania has sworn affidavit dated 13.5.1999 and 20.6.1999 much before the search and these affidavits have been filed during the block assessment proceedings and are placed in the first paper book filed before us. From these facts, it is amply evident that the gift transactions are duly disclosed and accounted for in the books of account of the donor as well as the donees. These transactions cannot be considered as secret, hidden or concealed. The surrounding facts and circumstances like routing the transactions through regular banking channels by the donor and the donees and accounting for all the amounts in their respective books of account and further gifts being evidenced by gift deeds as well as the affidavits of the donor provided ample evidence that the transactions are disclosed and accounted for and lie outside the pale of the definition of undisclosed income as contained Under Section 158B(b). We feel that the gifts in question have been duly disclosed and reflected in the books of accounts as well as tax returns of the donor and the donees.
Such transactions would clearly fall outside the purview of block assessment. On this ground also, the impugned addition as undisclosed income, in the block assessment is liable to be deleted.
33. Thus, the first issue regarding the applicability of Section 158B(b) to the gifts in question is decided in favour of the assessee and we hold that the issue of genuineness of the gifts lies beyond the purview of the block assessment.
34. The second and third issue as formulated by us above, arising from the present appeal, are basically concerned with the genuineness of the gifts in question. Without prejudice to our finding that the issue of genuineness of gifts lies outside the purview of block assessment as envisaged under Chapter XIV-B, we proceed to consider this aspect of the controversy also. The sheet anchor of Department case is the admission made by the assessee that the gifts are non-genuine and have been arranged through a Chartered Accountant on payment of commission @ 3%. Ld. counsel was at pains in emphasising that the statement has been procured by the assessee under coercion and pressure and is contrary to CBDT's instruction issued in March, 2003 pursuant to Kelkar Committee Report wherein the Committee has acknowledged the prevalence of the practice amongst the search parties to obtain forced confessions of undisclosed income from the assessees. The proposition is well established that admission made by an assessee during search operations constitute substantive evidence in view of Sections 17 and 21 of the Evidence Act. However, such admission cannot be considered as conclusive evidence against the assessee. It has been held by the Apex Court in Pullangode Rubber Produce Co. v. State of Kerala 91 ITR 18, relied upon by the ld. counsel, "an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect." 35. Reference may further be made to the decision of Delhi High Court in S. Arjun Singh v. CWT 175 ITR 91, cited by the ld. counsel where a similar proposition has been laid down. The Punjab & Haryana High Court in Kishan Lal's case 88 ITR 293 have taken the same view and observed, "it is an established principle of law that a party is entitled to show and prove that admission made by him is in fact not correct and true.
Such admission raise a presumption against the persons making the admission but such presumption is rebuttable.
36. A very heavy onus lay upon the assessee to refute and controvert the admission made at the time of search operation. In the instant case before us, documents and evidence filed by the assessee during the course of assessment proceedings before the Assessing Officer to which reference has been made hereinbefore by us amply established that the gifts in question have been made by Shri Rampati Singhania, a leading industrialist of Kanpur belonging to J.K. Group and such gifts are evidenced by gift deeds duly executed before the date of the search.
Source of the gift, creditworthiness of the donor as well as genuineness of the transactions have been established by filing the copies of the bank account of the donor showing credit of sale proceeds of the property as duly reflected in the Income-tax and Wealth-tax assessment of the donor. With regard to the mass of evidence filed by the assessee before the Assessing Officer, the revenue authorities have not been able to assail or refute such evidence while treating the impugned gifts as non-genuine. Even before us, the ld. Sr.DR when called upon to comment upon such evidence fairly conceded that Income-tax and Wealth-tax assessment in the case of Shri Rampati Singhania, donor have been made by the Joint Commissioner of Income-tax, Central Circle after the search operations accepting the return version.
37. With regard to the addition of Rs. 1,80,000/- on account of alleged commission paid by the assessee for arranging the gifts, we have not been told as to whom the alleged commission has been paid. No documents have been found during search operations to the effect that any intermediatory was involved in these transactions. Neither any enquiry has been made by the revenue authorities regarding the identity of the alleged intermediatory who is reportedly a Chartered Accountant. The addition in the block assessment has apparently been made merely on the basis of preliminary statement dated 25.11.1999 and 6.1.2000 which have been disproved by the assessee by filing substantial documentary evidence including gift deeds, copies of bank accounts, Income-tax and Wealth-tax orders of the donor as well as sworn affidavit of the donor.
We feel that the assessee has discharged the onus to disprove the admission regarding genuineness of the gift transactions.
38. At this stage, we may refer to the contention of the ld. Sr.DR that there was no occasion or relationship between the donor and the donee for making the gifts in the instant case. In our considered view, genuineness of the gift transaction has to be considered on the basis of attendant facts and circumstance of the case like identity of the donor, financial capacity and factum of the transaction. Even though relationship between the donor and the donee as well as the occasion for the gift may be relevant circumstances for adjudication of the issue of genuineness of the transaction yet no inference can be drawn merely on the basis of surmises and conjectures. Relationship or occasion for the gift are not in any case essential elements as engrained in the definition of gift under the Gift Tax Act. The view taken by us is amply reinforced by the decision of Chandigarh Bench of the Tribunal in the case of R.K. Syal v. ACIT 66 TTJ 656 cited by the ld. Counsel. In this decision, the Chandigarh Bench held as under: "The gift made cannot be rejected merely on the ground that there was no occasion or relationship for making the same. The element close relationship or occasion for making gift do not flow from the definition of gift as given in Section 2(xii) of the Gift Tax Act.
The conditions laid down there are there should be transfer by one person to another of any existing movable or immovable property, the transfer should be voluntary and should be made without consideration of any money." 39. At this stage, we may also refer to the observations of the Delhi High Court in the case of CIT v. Sunita Vacchani 184 ITR 121 as referred by the ld. counsel. The Hon'ble High Court observed, "The Tribunal has examined the evidence which was available on the record and has arrived at the aforesaid findings. Even though it amy be surprising as to how large sums of money are received by a family in India by way of gifts from strangers from abroad, unless there is something more tangible than suspicion, it will be difficult to regard the money received in India from abroad as money representing the income of the assessee in India. On the facts as existing on the records, we are unable to come to the conclusion that any question of law arises. The petition is dismissed." 40. Having regard to the aforesaid discussion, we feel that the assessee has succeeded in disproving the admission regarding the genuineness of transaction and adequate evidence has been brought on record to establish the genuineness of the gifts.
41. We may note here that since we have considered the issue of genuineness of the gifts on the basis of facts and evidence on record, we do not consider it necessary to go into the question whether the statements admitting the gifts as non-genuine have been obtained by the revenue authorities under duress or coercion and whether such admission are contrary to CBDT's Instructions dated 10^th March 2003 as well as recommendations of the Kelkar Committee Report accepted by the Government as indicated by the Finance Minister in his budge speech for the Financial Year 2003-2004 to which reference has been made by the ld. counsel before us. Since we have decided the issue on merits, we do not consider it necessary to go into the issue of admissibility of the statement as canvassed by the ld. counsel before us.
42. For the aforesaid reasons, we are inclined to delete the addition of Rs. 61,80,000/- added by the Assessing Officer as undisclosed income treating the gifts as non-genuine.
43. That leaves us with the alternative basis adopted by the AO for supporting the computation of undisclosed income in the impugned block assessment order.
44. The assessee has carried out the business of trading of acrylic sheets, off-cuts and scraps which has not been disclosed to the Income-tax department. The total turn over of the aforesaid business as computed by the Assessing Officer is Rs. 26.35 crores. As we have mentioned earlier the Assessing Officer has applied net profit rate of 5% on the turn over of Rs. 26.35 crores and arrived at the undisclosed income of Rs. 1,31,76,257 whereas assessment has been made on the undisclosed income of Rs. 1,44,62,110/-. On this issue, submissions made before us by learned retrospective on both sides, as referred to hereinbefore, have been duly considered. The sister concern of the assessee, namely, Mono Acrylic Manufacturing Co. Pvt. Ltd. has carried out similar business of trading of acrylic sheets, etc., as carried out by the assessee before us. The working results of the said company for the four assessments years being, assessment year 1996-97 to 1999-2000 have been furnished by the assessee before the Assessing Officer vide his letter dated 7.3.2002, copy of which has been filed before us.
These results are briefly reproduced hereunder:----------------------------------------------------------------------------PARTICULARS FINANCIAL YEAR---------------------------------------------------------------------------- 1999-2000 1998-1999 1997-1998 1996-1997--------------------------------------------------------------------------------------------------------------------------------------------------------Cost of Goods Sold 2,31,43,215 1,93,77,122 87,69,376 6,89,46,023----------------------------------------------------------------------------Other Expenses 43,11,072 22,29,632 10,63,328 23,13,610----------------------------------------------------------------------------Total Cost of Sales 2,47,54,287 2,16,06,574 98,32,704 7,12,59,633----------------------------------------------------------------------------Net Profit Rate 2.19% 2.64% 0.06% 0.04%----------------------------------------------------------------------------Add. Misc. Income 69,700 5,254 5,039 ------------------------------------------------------------------------------Net Income 6,84,186 5,91,523 10,645 30,004----------------------------------------------------------------------------Net Profit Rate 2.44% 2.67% 0.11% 004%---------------------------------------------------------------------------- The contentions made by the assessee on the basis of trading results of the sister concern, namely, M/s. Mono Acrylic Manufacturing Co. Pvt.
Ltd. as above have not been rebutted or controverted in the block assessment order by the Assessing Officer. Shri Peeyush Jain, ld. DR who appeared on behalf of the revenue, when specifically asked by the Bench to offer his counter comment on these submissions could not explain as to why similar profit rate as disclosed by the sister concern of the assessee in similar line of business be not adopted in assessee's own case particularly when the results have been accepted after scrutiny of accounts in the case of the sister concern. Even if contentions raised by the ld. counsel against adopting the quantum of total turn over at Rs. 26.35 crores are to be ignored yet the fact remains that undisclosed income worked out by adopting the net profit rate of 2.6%, which is the maximum rate as reflected in the aforesaid chart, undisclosed income would work out to Rs. 70.35 lacs as against Rs. 86,182,110/- returned by the assessee in the block return.
Regarding the net profit rate of 5% adopted by the revenue on the basis of seized paper placed in page 1 of the revenue's paper book, we find that the said paper appears to be merely a quotation and not the actual sale transaction. No verification has been done by the revenue with the ICI Limited to ascertain whether any transaction took place at such a price. Moreover, the rate of 5% is not apparently net profit rate. Once the Assessing Officer has himself accepted trading results in the case of the sister concern showing net profit rate less than 3% as above, we see no reason for the Assessing Officer to adopt net profit rate of 5% for working out the undisclosed income. For these reasons, the alternative basis adopted by the Assessing Officer and sustained by the CIT(A) for working out the undisclosed income at Rs. 1,31,76,257/- is unsubstantiated and cannot be accepted as fair and reasonable. We would accordingly accept Ground No. 11 concerning the estimation of profit from the business concerns.
45. From the aforesaid discussion, we have come to the conclusion that the additions made by the Assessing Officer treating the gift transactions as non-genuine as well as the alternative basis adopted for supporting the aforesaid addition are mis-conceived and unsustainable. We hold accordingly.
46. Before parting with this appeal, we may point out that in block return filed by the assessee, undisclosed income has been shown at Rs. 86,82,110/- whereas while computing the total undisclosed income, the Assessing Officer has adopted the disclosed figure as Rs. 82,82,110/-.
There is, thus, a discrepancy of Rs. 4 lacs in the figures adopted by the Assessing Officer from the block return while computing the undisclosed income. While we have held above that the addition of Rs. 61,80,000/- on account of gift transactions is liable to be deleted yet we would hold that after deleting the addition as above, the Assessing Officer would adopt the total undisclosed income at Rs. 86,82,110/- as disclosed by the assessee in the block return. This would take care of the discrepancy in working out the undisclosed income by the Assessing Officer in the block assessment order.
47. In the result, we hold that total undisclosed income for the block period would be adopted at Rs. 86,82,100/- as declared in the block return by the assessee.
48. Ground Nos. 1, 2, 3 and 4 relating to the validity of the search Under Section 132 have not been pressed before us and are, therefore, dismissed. Similarly Ground No. 12 regarding credit for tax paid has also not been pressed and is dismissed. The remaining grounds involve the addition on account of gift transactions as well as alternative basis adopted by the Assessing Officer for estimation of business profit have already been adjudicated by us above.
49. With these observations, the appeal of the assessee is disposed off as above.