Lalit Mohan, CA for the Petitioner. Satpal Gulati, CIT(DR) for the Respondent.

The Cross Appeals have been filed by the Assessee and Revenue against the impugned order dated 29.10.20210 passed by the Ld. CIT(A)-I, New Delhi for the Block Period 01.04.1988 to 23.03.1999 and against the Revenue’s appeal no. 03/Del/2011, the assessee has also filed the Cross Objection No. 189/Del/2011.

2. The assessee has filed the following grounds in IT(SS)A No. 02/Del/2011 :-

1. “The Ld. CIT(A)-1, New Delhi did not provide proper opportunity of hearing to the appellant and order of the Ld. CIT(A) is a non-speaking order.

2. The ld. CIT(A) failed to consider and decide the grounds of appeal no. 35, i.e. all the receipts and payments have been considered as undisclosed income and peak amount should have been considered.

3. The ld. CIT(A) failed to consider and decide the grounds of appeal no. 36, i.e. the undisclosed income has been determined even on the basis of documents seized from Ms. Asmita Aggarwal and Easan India Ltd. without there being any evidence to show the satisfaction of their respective AOs, as required by section 158BD of the Income Tax Act, 1961 (hereinafter referred to as "the Act") and handing over of the documents to the Ld. DCIT, Central Circle-12, New Delhi.

4. The assessment being time barred is null and void ab initio and deserve to be quashed.

5. Any valid notice u/s. 143(2) of the Income Tax Income Tax Act, 1961 (hereinafter referred to as "the Act"), 1961 was neither issued not served upon the assessee.

6. The Ld. Assessing Officer, who purportedly issued the various notice under the provisions of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), and made the assessment was not authorized to exercise power and perform functions of the Assessing Officer and therefore the said notice as well as the assessment made are invalid, null and void ab initio.

The Ld. Assessing Officer has no jurisdiction over the case of the assessee.

The Ld. CIT(A) failed to appreciate that the onus to prove that the Assessing Officer was so authorized was on the Assessing Officer and thus erred in holding that the Assessee has not brought any material on record.

The CIT(A) erred in upholding the following additions: (Rs.)

1. Investments in M/s Esam India Ltd. 37,00,000

2. Commission Income 35,00,000

3. Foreign travel expenditure (Rs. 3,32,757/- + 69,800/-) 4,02,557

4. Deposits in bank accounts. 29,88,526

5. Expenditure on repair and renovation. 1,19,41,051

6. Expenditure on purchase of cell phones. 1,90,360

7. Investments in purchase of cars 1,95,44,196

8. Unexplained expenditure 38,74,444

9. Deposits 7,24,71,120

10. Income as per diary 1,42,10,625

11 Investment in house hold and personal items. 79,68,269

12. Investment for purchase of foreign exchange. 1,27,688

13. Payment made to Rita Luther 2,00,000

14. Payment to Sh. Sandeep Puri 1,00,000

15. Profit of M/s Delhi Exports 2,77,00,000

16. Profit of M/s Globetrotters 3,34,00,000

17. Cash expenditure 1,05,250

18. Income received through M/s Vino Veritas 7,67,30,400

19. Income received through M/s European Capital Ltd. 1,33,00,000

20. Cash payments received 8,06,800

21. Receipts from Sh. SC Bharjatia 75,00,000

22. Bogus purchases 17,39,40,857

23. Deposits made in General Credits Finance Ltd. 54,00,000

24. Income on account of payment made to Sh. Arjun Amla.3,20,40,000

25. Income as per documents seized from Ms. Asmita Aggarwal. 11,00,42,100

8. The submissions and evidences of the assessee have not been considered at all and without prejudice, the same has not been appreciated in true perspective.

9. The lower authorities erred on facts and in law in by relying upon the evidences, which are not admissible.

10. The observations and orders of the lower authorities are against the facts of the case as well as law.

11. The interest charged u/s. 158BFA(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") is against the facts of the case as well as law and without prejudice is excessive.

ASSESSEE’S IT(SS)A NO. 2/DEL/2011

3. The facts relating to the issues in dispute as narrated by the revenue authorities are that a search and seizure action as per provisions of Section 132 of the Income Tax Act, 1961 (in short “Act”) was carried out at the residential premises of the assessee on 23.3.1999. The search was completed on 17.7.1999. The search as per the provisions of Section 132 of the Act was also conducted at the business premises of the assessee M/s Esam India Ltd. on 23.3.1999 which was concluded on 14.3.2000. Notice u/s. 158BC of the Act was issued to the assessee on 30.11.2000 requiring assessee to file block period return within 15 days of receipt of notice. The notice was served upon the assessee on 01.12.2000 through registered post. The letter containing notice u/s. 158BC of the Act was received back undelivered. Thereafter a notice was served at the then residential address of the assessee i.e. 141, North Avenue, New Delhi on 21.12.2000 through Notice Server.

3.1 In response to the same the assessee filed the reply dated 21.12.2000 through his Authorised Representative stating that assessee was being tried in the Court of ACMM, Patiala House, New Delhi in the case titled Enforcement Directorate vs. Abhishek Verma, in which the question whether Sh. Abhishek Verma was NRI or not was pending consideration. It was claimed in this letter that since the residential status of Sh. Abhishek Verma was sub-judice, therefore, block return could not be filed by Sh. Abhishek Verma.

3.2 On 26.2.2001, assessee was requested to furnish proof in support of his claim that he was a Non- Resident Indian and not subject to tax laws of India and assessee was once again reminded to file block period return without delay. In response to the same, assessee filed his return on 01.03.2001 through his counsel, assessee took the same plea, but could not file any evidence supporting his version.

3.3 On 29.5.2001, the summons u/s. 131 of the Act were issued to the aassessee for compliance on 12.6.2001. In response to the same, the assessee did not respond and did not file any reply mentioning the reasons for his non-attendance.

3.4 In the absence of block period return filed by the assessee the proceedings were getting time barred. On 31.7.2001, the questionnaire alognwith notices u/s. 143(2) and 142(1) of the Act was issued to the assessee on 07.6.2001. On 7.6.2001 assessee was issued a letter stating that assessee was already allowed an opportunity by the Income Tax Investigation Wing to obtain the photocopies of the seized material. The assessee was again given opportunity to obtain the photocopies of the seized material referred in the questionnaire issued to the assessee which was allowed to the assessee.

3.5 On 2.7.2001, assessee filed a letter dated 21.6.2001 stating that books of accounts, documents etc. should be returned to the assesses since, no reasons were recorded nor approval of higher authorities was obtained for retention of the same. Assessee was asked to attend on 03.7.2001, to receive the copy of retention order and asked to inspect the seized records and obtained any photocopies of the seized records. On 2.7.2001, the assessee did not inspect any record on 2.7.2001. The copy of retention order dated 31.01.2001 and 16.2.2001 for seized documents was given to assessee on 3.7.2001. On 2.7.2001 another letter was field by the assessee mentioning that the photocopies of documents supplied to the assessee earlier were incomplete and specific request for certain annexures and pages were made which was given to the assessee. On 6.7.2001 summons were issued to Sh. Abhishek Verma for compliance on 13.7.2001 so as to explain the seized documents. These summons were served on the assessee on 09.7.2001. Assessee did not attend at the given date and time nor any reply has been filed by the assessee stating reasons for his non-attendance. On 9.7.2001 assesee made another request through his letter dated 6.7.2001 requesting for returning the original seized material and assessee was allowed the opportunity to inspect and photocopies of seized material. But assessee did not inspect any seized material and filed another letters dated 10.7.2001 and 13.7.2001 stating that seized documents should be returned to the assessee. On 16.7.2001 assessee filed the Petition u/s. 144A of the Act before the Additional CIT, Central Range-3, New Delhi requesting for directions to AO to return in original seized material and without prejudice to this supply the certified copies of the seized material. The case was heard by the Addl. CIT, Central Range-3, on 18.7.2001. As per the directions of the Addl. CIT, Central Range-3, New Delhi assessee through his counsel gave a list in respect of which photocopies was required by him and the photocopies of those documents were provided to the assessee on 20.7.2011. On 24.7.2001 assessee filed block return declaring undisclosed income NIL. Notice u/s. 143(2) and 142(1) of the Act was issued on 24.7.2001 requesting the assessee to reply the questionnaires issued and served earlier. Assessee through his counsel attended on 24.7.2001 filed a written reply to the questionnaires issued to the assessee. The block assessment return has been filed by the assessee ‘under protest’. Assessee has declared his status as Non Resident Indian. Assessee in his reply filed through his counsel on 24.07.2001 has stated that he was non- resident during the whole of the block period under consideration.

It has been further stated that assessee had no income in India and being non-resident, assessee is not liable under the Income Tax Act, 1961 regarding income earned out of India/Foreign Countries. In support of this version, assessee has not filed any evidence regarding non-resident during the whole of the block period. In the absence of the evidences supporting this claim of the assessee, the AO treated the assessee as Resident for the purpose of this block assessment year.

3.6 Keeping in view of the facts and circumstances and the evidences filed by the assessee, the AO elaborately assessed the undisclosed income of the assessee from page no. 4 to 35 of the assessment order and determined the income under 26 headings and completed the assessment vide order dated 25.7.2001 for the block period 01.04.1988 to 23.03.1999. The relevant page no. 34 & 35 of the assessment order is reproduced as under:-

“On the basis of the above discussions, the undisclosed income of the assessee is determined as follows:- (Rs.)

1. Undisclosed investments in M/s Esam India Ltd. 37,00,000

2. Undisclosed Commission income 35,00,000

3. Undisclosed foreign travel expenditure (Rs. 3,32,757/- + 69,800/-) 4,02,557

4. Undisclosed deposits in bank accounts. 29,88,526

5. Undisclosed expenditure on repair and renovation. 1,19,41,051

6. Undisclosed expenditure on purchase of cell phones. 1,90,360

7. Undisclosed investments in purchase of cars 1,95,44,196

8. Unexplained expenditure (as per 8 above) 38,74,444

9. Unexplained deposits 7,24,71,120

10. Undisclosed income as per diary 1,42,10,625

11. Undisclosed investment in house hold and personal items.79,68,269

12. Undisclosed investment for purchase of foreign exchange. 1,27,688

13. Undisclosed payment made to Rita Luther 2,00,000

14. Undisclosed payment to Sh. Sandeep Puri 1,00,000

15. Undisclosed profits of M/s Delhi Exports 2,77,00,000

16. Undisclosed profits of M/s Globetrotters 3,34,00,000

17. Undisclosed cash expenditure 1,05,250

18. Undisclosed income received through M/s Vino Veritas 7,67,30,400

19. Undisclosed income received through M/s European Capital Ltd. 1,33,00,000

20. Undisclosed cash payments received 8,06,800

21. Undisclosed receipts from Sh. SC Bharjatia 75,00,000

22. Bogus purchases 17,39,40,857

23. Undisclosed deposits made in General Credits Finance Ltd. 54,00,000

24. Undisclosed income as per 24 above. 1,19,03,000

25. Undisclosed income on account of payment made to Sh. Arjun Amla 3,20,40,000

26. Undisclosed income as per documents seized from Ms. Asmita Aggarwal. 11,00,42,100

Total undisclosed income 63,40,87,243

Tax @ 60% on the above 38,04,52,346

Interest u/s. 158BFA(1) [for 8 months @ 2%] 6,08,72,375

Total Demand 44,13,24,721

Penalty proceedings u/s. 158BFA(2) of the I.T. Act, 1961 has been initiated separately.

The order has been passed with the prior approval of the Addl. CIT, Central Range-III, New Delhi.”

3.7 Aggrieved with the aforesaid assessment order dated 25.7.2001 passed u/s. 158BC of the I.T. Act, 1961, assessee filed the appeal before the Ld. CIT(A), who vide his impugned order dated 29.10.2010 partly allowed the appeal of the assessee. Aggrieved with the impugned order dated 29.10.2010, Assessee as well as Revenue both are in appeals before the Tribunal on the grounds mentioned, as reproduced above.

4. The aforesaid appeals and cross objection came up for hearing before the Bench on 15.10.2020. Both the parties argued on legal issues and filed their written submission on legal issues and relied upon the same. After hearing the Ld. Counsel for the assessee completely on legal issues, the Ld. CIT(DR) argued the matter partly on 15.10.2020 and we adjourned the matter as Part-Heard for the arguments of the Ld. CIT(DR) on 19.10.2020. On 19.10.2020, we have heard both the parties on the legal issues. On 18.12.2020. we have fixed the case for arguments of both the parties on merit also. At the time of hearing both the parties argued at length and also relied upon their written submissions and completed the arguments on legal as well as merits also.

5. Ld. Counsel for the assessee argued that the assessee has filed the present appeal against the impugned order dated 29.10.2010 passed by the Ld. CIT(A) against the order of the Assessing Officer passed u/s. 158 BC of the Act for the block period 1.4.1988 to 23.3.1999. He stated that the assessee is challenging the order of the assessment framed u/s. 158 BC of the Act dated 25.07.2001 being barred by limitation and he draw our attention towards Section 158BE(1) and the assessment order passed u/s. 158 BC of the Act and stated that in terms of this provision, AO is required to complete the assessment u/s. 158 BC of the Act within 02 years from the end of the month for which the last authorization for search u/s. 132 of the Act was executed. The explanation contained in the said section clarifies that the authorization for the search initiated u/s. 132 of the Act is considered to be executed when the search is recorded to be concluded by the search team in the panchnama drawn after such search. The word panchnama is not defined in the Act or Rules, even the Code of Criminal Procedure, 1973, the provisions of which relating to search and seizure are applicable to searches and seizure u/s. 132 of the Act, do not define the said word, however it prescribes the format in which the panchnama is required to be drawn. Ld. Counsel for the assessee stated that in the case of the assesse authorization / warrant of search was given on 22.3.1999, but in consequence thereof 03 panchnamas were drawn on three different dated at the same residential premises of the assessee i.e. dated 23.03.1999; 21.5.1999 and 16.7.1999. He stated that according to the Department the search was concluded on 16.7.1999, the date of limitation for passing the assessment order u/s. 158 BC of the Act was treated as 31.7.2001 and accordingly the order u/s. 158 BC of the Act was passed on 25.7.2001 i.e. within limitation period. But according to the assessee search in the case of the assessee was initiated u/s. 132 of the Act after drawing 1st panchnama itself, and therefore the limitation to complete the assessment was to be counted from the 1st panchnama and as a result the limitation for framing assessment would be 31.3.2001 i.e. 2 years from the end of the month in which the last panchnama for search u/s. 132 of the Act was executed. But in the assessee’s case the impugned assessment order u/s. 158BC of the Act was passed on 25.7.2001, counted as per the 3rd panchnama which was barred by limitation provisions of section 158 BE of the Act.

5.1 Ld. Counsel for the assessee further draw our attention towards the 1st panchnama which was drawn on 23.3.1999 as search premises of the assessee. Copy of the same is at page no. 1- 4 of the Paper Book Volume –I. As per page no. 1-4 of the Paper Book Volume –I there are some documents and books of accounts were found and seized, which the Ld. Counsel for the assessee has reproduced in his written submissions i.e. Annexure ‘A’ (A-I to A- 11), Annexure (A-2 to A-14) (according to the assessee these items were found, but not seized). As regards the 1st panchnama, Ld. Counsel for the assessee mainly stated that the 1st panchnama dated 23.3.1999 and the revenue in order to extend the period of limitation artificially adopted a colorable mechanism of keeping few items inventorised in a seal under a separate room. Thus the period of limitation are to be counted from 31.3.1999 to end on 31.3.2001.

5.1.1 As regards the 2nd panchnama, Ld. Counsel for the assessee draw our attention towards the second panchnama which was drawn on 21.5.1999 which is at page no. 23-26 of the paper book volume-I. From this panchnama, no fresh document or any material was found / seized from the residential premises of the assessee. The period of visit on the said date was from 1.30 PM to 4.00 PM i.e. about 2.5 hours. He stated that that 2nd panchnama is only to extend the period of limitation.

5.1.2 As regards to 3rd panchanama which was drawn on 16.7.1999 at the same searched premises of the assessee which the assessee has attached at pages 29-32 in the Assessee’s Paper Book Volume- 1. According to the assessee no new document or any valuable material was found and seized from the searched premises of the assessee, nor any further restrained order u/s. 132(3) of the Act was passed. Lastly, on this legal issue of limitation, Ld. Counsel for the assessee stated that nothing further remained to be investigated at the search premises after 1st panchanama, the only reasons behind is not to conclude the search and keeping it pending for a long duration of approximately 4 months was, in only the gain time or, in other words, extend the period of limitation to complete the assessment upon the assessee, which is not permissible in law and therefore the assessment passed u/s. 158BC of the Act dated 25.7.2001 is time barred. In support of these arguments advanced by the Ld. Counsel for the assessee, he cited various judgments rendered by the Hon’ble High Courts which includes CIT vs. Sandhya P. Naik : 253 ITR 534 (Hon’ble Bombay High Court); CIT vs. Sarb Consultate Marine Products Pvt. Ltd. 294 ITR 444 (Hon’ble Delhi High Court); CIT vs. SK Katyal reported in 221 CTR 310 of the Hon’ble Delhi High Court; A Rakesh Kumar Jain vs. JCIT in ITA no. 1240/2016 of the Hon’ble Madras High Court; CIT vs. TS Chandrashekar : 221 CTR 385 of the Hon’ble Karnataka High Court; DCIT vs. Adolf Patric Pinto 284 ITR (AT) 207 of the ITAT, Mumbai Bench; Pr. CIT vs. PPC Business and Products (P) Ltd. 398 ITR 71 (Delhi); CIT vs. DD Axles P ltd. 323 ITR 558 (Delhi); C. Ramaiah Reddy vs. ACIT 339 ITR 210 (Karnataka); DR. C.Balakrishnan Nair vs. CIT 237 ITR 70 (Kerala); ACIT vs. Vijay Kumar Raichand ITA No. 6437 to 6442/Del/2012 and Capt. Vijay KumarRaichand vs. ACIT ITA No. 102 to 107/Del/2013 (ITAT, Delhi);’ SVIL Mines Ltd. vs ACIT (ITA No. 832 and 833/De/2014) (ITAT, Delhi) and Nandlal M. Gandhi vs. ACIT 115 ITD 1 (ITAT, Mumbai). He requested that keeping in view the aforesaid arguments supported by his written submissions alongwith the documentary evidences filed in the shape of paper books and case laws, the appeal filed by the Assessee may be accepting by quashing the assessment order dated 25.7.2001 passed by the AO u/s. 158BC of the Act.

6. On the contrary, Ld. CIT(DR) on the arguments advanced by the Ld. Counsel for the assessee on the legal issues, relied upon the orders passed by the revenue authorities and also filed his written submissions containing pages 1-8 in which he has controverted the arguments advanced by the ld. Counsel for the assessee on the basis of various documentary evidences filed by the department in the shape of various paper books. Ld. CIT(DR) stated that in compliance of the directions of the ITAT, the Department has filed the copies of the seized documents in the shape of various paper books which are available with the Bench.

The same was also supplied to the assessee. He argued that the search was effectively concluded after the 1st panchnama drawn on 23.3.1999 and the subsequent part of search carried out in May, 1999 and finally in the month of July, 1999. To reply the arguments advanced by the Ld. Counsel for the assessee, Ld. CIT(DR) stated that 1st panchnama was drawn on 23.3.1999 and various documents and books of accounts were found and seized from the premises of the assessee which the assessee has himself admitted by placing the evidences on record i.e. pages 1-4 of the paper book volume 1 that are Annexure A-1 to A-11, Annexure A-2 to A14; A-6 to A-21 of the Assessee’s Paper Book Volume No. 1. The contention raised by the assessee is not correct, because it can be seen from the copy of the 3rd and final panchnama dated 16.7.1999 placed by the assessee in his paper book volume no. 1 page 29-32 in where new valuable items were found and inventorized by the search team which had been found at the time of drawing the 1st and 2nd panchnama in the month of March, 1999 and May, 1999 respectively. According to the 3rd panchnama dated 16.7.1999 Column 5(b)(i) various items were found that are Ann-2, Inventory of Credit Cards; Ann-3, Inventory of Foreign Visits; Ann-4, Inventory of Mobile.

6.1 He submitted that assessee has not placed in the paper book these documents, the copies of the Annexures Ann-2 to Ann-4, prepared at the time of drawing the 3rd and final panchnama dated 16.7.1999. But the comparison of the names of these annexures with the annexures prepared at the time of drawing the 1st panchanama dated 23.3.1999 which has been placed by the AR at page 1-4, alongwith the annexure 1 to 14 in assessee’s paper book page 5 to 22 will reveal that above stated Annexures Ann-2 to Ann- 4, prepared at the time of drawing of third and final panchnama dated 16.7.1999 were entirely different than the Annexure Ann-1 to Ann-14, prepared at the time of drawing of first panchnama dated 23.3.1999. Ld. CIT(DR) stated that at the time of drawing of 1st panchanama dated 23.3.1999 no inventory was prepared in respect of mobiles and foreign visits, and such valuable were found only at the time of drawing of third and final panchama dated 16.7.1999. As regards the credit cards, while the credit cards found at the time of drawing of first panchanama dated 23.3.1999 were listed / inventorised at Annexure-7 which the assessee has attached as APB page 12, the credit card found at the time of drawing of third and final panchanama dated 16.7.1999 were listed / inventorised at Annexure-2. Ld. CIT(DR) finally submitted that as the statute does not place any limitation on the Authorised Officer that search must be temporarily suspended and restraint order must be passed, only and only in the situation when he / she is fully aware that in the subsequent future date(s), when the restraint order will be lifted, the valuable must be found and / or seized. In the end, Ld. CIT(DR) stated that the arguments advanced by the Ld. Counsel for the assessee is contrary to the record available with the Bench and it is a matter of record that various new valuable items were found and inventorised by the search team at the time of subsequent search carried out in July, 1999 and 3rd panchaname was drawn, which had not been found at the time of drawing of first or second panchanam drawn in the month of March and May, 1999 respectively meaning thereby that in the 3rd panchanma drawn in the month of July, 1999 various new valuable items were found by the search team, resulted in discovery of various new valuables items in the possession of the assessee merely because no seizure was effected on the new valuable found in the search carried out in July, 1999, it cannot lead to the conclusion that search was carried out just to extend the time limit to pass the assessment order. Accordingly, the search was validly concluded only in July, 1999, and therefore, the assessment was correctly framed within the time limit which expired only on 31.7.2001, being two years from the end of the month in which search was concluded, as the assessment order was passed on 25.7.2001. Lastly, Ld. CIT(DR) stated that the case laws relied upon by the Ld. Counsel for the assessee are not applicable to the facts and circumstances of the case of the assessee and requested that the legal issues raised by the Ld. Counsel for the assessee may be decided in favour of the Revenue and against the Assessee and on the other legal issues, he relied upon the impugned order of the Ld. CIT(A).

7. No other legal issues have been argued by both the parties.

8. We have heard both the parties on the legal issue raised by the assessee by stating that assessment order dated 25.7.2001 in the case of the assessee was passed u/s. 158BC of the Income Tax Act, 1961 is barred by limitation. We have gone through the orders passed by the revenue authorities alongwith the relevant provisions of law i.e. section 158BE of the Act as well as documentary evidences filed by the assessee and the Revenue especially three panchnamas as referred by both the parties in their written submissions. We are of the view that as pointed out by both the parties that 1st panchnama in pursuance of section 132 of the I.T. Act was drawn on 23.03.1999 at the searched premises of the assessee. Assessee has enclosed the same at pages 1-4 of the Paper Book Volume –I. As per the 1st panchnama various documents and books of accounts were found and seized by the Department that are Annexure A(A-1 to A-11); Annexure (A-2 to A- 14) which at page no. 6 to 21 of the Assessee’s paper book Volume- 1. According to the second panchnama dated 21.5.1999 which is at pages 23-26 of the assessee’s paper book volume no. 1 at the same searched premises of the assessee. According to the assessee no fresh document or material was found / seized from the residential premises of the assessee. But restrained order dated 21.5.1999 was passed u/s. 132(3) of the Act in respect of Rolls Royce car NO. DL1CE1233 parked in the garage and (ii) front door of the room of the assessee, were continued (placed at paper book vol. 1 at pages 27-28). The period of visit on the said date from 1.30 PM to 4.00 PM i.e. about 2.5 hours. According to the assessee search was concluded on 1st panchanma itself i.e. 23.3.1999, but as stated by the assessee in his written submissions and as per his paper book pages mentioned above restrained order dated 21.5.1999 was passed u/s. 132(3) of the Act meaning thereby that the search was not concluded on the 1st panchnama itself i.e. on 23.3.1999, it is continued vide panchnama dated 21.5.1999. Similarly, the 3rd panchnama was also drawn on 16.7.1999 at the same searched premises of the assessee which the assesse has placed in his paper book at pages 29-32 of the APB Vol.I. We have perused these three panchnams dated 23.3.1999; 21.5.1999 and 16.7.1999 and we are of the view that various new valuable items were found and inventorized by the search team which have been found at the time of drawing of 1st panchanama and 2nd panchnama drawn in the month of March, 1999 and May, 1999 respectively. Assessee has filed one paper book dated 4.3.2011 containing pages 1-54 in which he has attached the (1) panchnama dated 23.3.1999 (pages 1-4); (2) (Annexure A-1 to A-11) were found and seized (page 5); (3) Annexure A-2 to A-4 found but not seized (page 6- 21); (4) Order u/s. 132(3) dated 23.3.1999 dated 23.3.1999 issued in respect of : Garage in which Rolls Roys Car in is parked and one room of Abhishek Verma, in which clothes, electrical items and other valuables are kept (pages 11); (5) Panchnama dated Panchama dated 21.5.1999 (pages 23-26); (6) order u/s. 132(3) dated 21.5.1999 issued in respect of Rolls Roys Car parked in garage, and room of Abishek Verma in which clothes, electrical items and other valuables are kept (pages 27 & 28); (7) panchnama dated Panchama dated 16.7.1999 (29-32); (8) order sheet of proceedings before the CIT(A) (pages 33-41); (9) written submissions dated 14.7.2009 filed before the CIT(A); (10) letter dated 12.10.1999 of the CIT(A) seeking comments and report of the AO and (11) letter dated 11.10.2010 of the AO. Assessee has also certified that all the documents at serial no. 1 to 7 were available before the AO and the CIT(A) and rest are part of proceedings / hearing before the CIT(A).

8.1 Keeping in view the aforesaid documentary evidences which the assessee has himself filed, we are of the view that as per the 3rd panchnama dated 16.7.1999 which the assessee has attached in the paper book at page no. 29, but at column no. 5(b)(i) following issues were found:-

(i) Ann-2, Inventory of Credit Cards.

(ii) Ann-2, Inventory of Foreign Visits.

(iii) Ann-4, Inventory of Mobile.

8.2 At the time of drawing the 1st panchnama dated 23.3.1999 no inventory was prepared in respect of the mobile and foreign visits and such valuables were found only at the time of drawing of 3rd panchnama dated 16.7.1999. As the assessee himself admitted in the documentary evidences filed by the assessee that in three panchnamas the search team has taken in possession various valuables items which clearly establish the search carried out in the month of July, 1999 i.e. the last panchnama dated 16.7.1999 and various valuable items were taken into possession were not seized. Merely because no seizure was effected on the new valuables found in the search carried out just to extend the time limit to pass the assessment order. Keeping in view of the facts and circumstances explained above, after examining the three panchnamas dated 23.3.1999; 21.5.1999 and 16.7.1999, we are of the considered view that search was validly concluded only in July, 1999 and assessment was separately framed within the time limit which expires only on 31.7.2001 being 2 years from the end of the month in which the search was conducted as the assessment order was passed on 25.7.2001. Therefore, in our view the legal grounds raised by the assessee is not supported by any valid documentary evidences, but on the contrary, revenue’s case is well supported by the documentary evidences, as per the paper books filed by department also. The case laws cited by the Ld. Counsel for the assessee are having the different facts and are not relevant to the present case. Therefore, the legal issue involved in ground no. 4, as argued by both the parties is decided against the assessee and in favour of the Revenue by upholding the order of the Ld. CIT(A) on this issue. Since no other legal issues have been argued by the both the parties, hence, need not be adjudicated.

9. As regards the merits of the case, we have heard both the parties and perused the orders of the authorities below alongwith the documentary evidences filed by both the parties in the shape of paper books. We are of the considered view that the issue involved in ground no. 1 regarding non-opportunity of hearing to the assessee by the Ld. CIT(A), we have gone through the order passed by the Ld. CIT(A) and we are of the view that full opportunity was provided by the Ld. CIT(A) to the assessee. The assessee has argued his case by filing various documentary evidences before the Ld. CIT(A) and the Ld. First Appellate Authority has passed a very elaborate order by partly allowing the appeal filed by the assesse. Therefore, the issue raised in ground no. 1 is dismissed.

9.1 As regards ground no. 2, 3, 5 & 6 are concerned, we note that these issues were not argued, at the time of hearing by both the parties, hence, the same need not be adjudicated.

9.2 As regards the ground no. 7 raised by the assessee in which the assessee has challenged the additions on merits which were upheld by the Ld. CIT(A) i.e. total 25 additions which the assessee has mentioned in ground no. 7 at page 3-4 of the grounds of appeal. After hearing both the parties and perusing the orders of the revenue authorities, we are of the view that as regards to addition of Rs. 37 lacs on account of investment of M/s Esam India Ltd. as undisclosed income of the assessee, we have perused the seized material which at page 8, 11, & 12 to Annexure 4 seized from 4, Safdarjung Lane, New Delhi on 23.3.1999, mentioned by the AO. No doubt that assessee has denied these deposits, but as per the finding of the revenue authorities below supported by the seized material M/s Esam India Ltd. was incorporated on 10.1.1990.The assessee is No. 1 of the original subscriber to the Memorandum of Association of the company. The name of M/s Esam Trading Co. Ltd. was changed to M/s Esam India Ltd. and to M/s Alta Vista (India) Ltd. The assessee was the director of M/s Esam Trading India Ltd. till 21.11.1993, the balance sheet and profit and loss account for the year ending on 31.3.1993 signed by the assessee in the capacity of Director filed with the Registrar of Companies, New Delhi shows that M/s Esam Trading India Ltd. has outstanding loan of Rs. 37 lacs as on 31.3.1993 received from the Directors. During the search operation in the case of the assessee on 23.3.1999 are supported by the cash book of M/s Esan Trading India Ltd. wherein these deposits have been recorded in the name of Abhishek Verma (Assessee). The assessee was the Director at that time as the audited balance sheet of M/s Esam Trading Company Ltd. as on 31.3.1993 filed with the Registrar of Companies, New Delhi. Therefore, keeping in view of the facts and circumstances as explained above, with the support of documentary evidences, we are of the view that investment of Rs. 37 lacs made by the assessee as per the documents seized from his residence during the search, hence, the addition in dispute has been rightly made by the AO as undisclosed income of the assessee which was also rightly upheld by the Ld. CIT(A). Hence, we uphold the order of the Ld. CIT(A) on this issue of undisclosed income amounting to Rs. 37 lacs on account of investments in M/s Esam India Ltd.

9.3 As regards the commission income of Rs. 35 lacs. The AO has made the addition and discussed the issue in page 5-6 vide para no. 2 and the Ld. CIT(A) has upheld the same in para no. 6 to 6.2 at page no. 35 and 36 of the impugned order. We have gone through the findings given by the revenue authorities alongwith the arguments advanced by both the parties as well as the documentary evidences filed. We are of the view that vide questionnaire dated 17.6.2001 assessee was given opportunity by the AO to explain this amount. In response to the questionnaire dated 17.6.2001 the assessee recorded his statement dated 16.7.1999 by stating that the only investment in the share capital of M/s Esam India Ltd. has been made in 1991-92 which is a cash deposit in company account amounting to Rs. 35 lacs. This was made from his undisclosed and unaccounted income, which he was offering for taxation and he shall file the return of income declaring such amount and pay the necessary taxes on this income. We are of the view that in view of the statement made by the assesee and non-furnishing of any evidence showing that assessee has not received this commission income. The AO has rightly made this addition and Ld. CIT(A) has also rightly upheld the same, hence, we uphold the order of the Ld. CIT(A) on this issue.

9.4 As regards the addition of Rs. 4,02,557/- on account of foreign travels expenditure. After hearing both the parties and perusing the documentary evidences filed by the assessee which is at Annexure A2 & A-6. The assessee has not filed any evidence in support of his claim on this addition and by merely denying that assessee has not incurred any expenditure. Hence, this addition is liable to be made in the absence of any evidence filed by the assessee. We are of the view that amount of Rs. 16640 + 89465 + 226652 + 69800 totaling to Rs. 402557/- on account of foreign travel expense has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), because the assessee has not produced any documentary evidences supporting his claim. Hence, we uphold the impugned order on this issue.

9.5(i). As regards addition of Rs. 29,88,526/- on account of deposit in the bank. The Assessing Officer has provided opportunity to the assessee to explain this deposits, but the assessee has not availed the same and has not filed any evidence, even no explanation regarding this deposit has been given by the assessee. Therefore, the revenue authorities have rightly treated the same as undisclosed income of the assessee, hence, we uphold the order of the Ld. CIT(A) on this issue.

9.5(ii) As regards the addition of Rs. 1,19,41,051/- made on account of expenditure on repair and renovation on the accommodation owned by the Central Government of India. The AO has given opportunity to the assessee to explain the expenditure on repair and renovation on the accommodation. But after perusing the orders passed by the revenue authorities, we are of the view that revenue has made this addition on the basis of the documents which were found and seized at the residential premises of the assessee and from the office premises of the company Esam India Ltd. wherein 99.98% equity shares is held by the assessee. These documents were recorded in respect of repair and renovation. Assessee has not explained the source of such expenses and hence, we are of the view that in the absence of any explanation and documentary evidences, the AO has rightly made the addition in dispute and Ld. CIT(A) has rightly upheld the same, therefore, we uphold the order on this issue and upheld the impugned order of the Ld CIT(A) on this issue.

9.6 The AO has made the addition of Rs. 1,90,360/- on account of expenditure on purchase of cell phones and treated the same as undisclosed income of the assessee. On the basis of Annexure A-1 seized during the search operation in the case of the assessee on 23.3.1999 for the purchase of cell phones, after giving opportunity to the assessee. The assessee has not attended the AO and not filed any reply. Therefore, in our view this addition has rightly been made and upheld by the Ld. CIT(A). Hence, we uphold the order of the Ld. CIT(A) on this issue.

9.7 The AO has made the addition of Rs. 1,95,44,196/- on account of investments in purchase of cars and treated the same as undisclosed income of the assessee. After going through the orders passed by the revenue authorities, we are of the view that no doubt the assessee has denied the ownership of these vehicles, but has not substantiated his version with the support of any evidence. On the contrary, the Rolls Royce car no. DLIC1233 and Ferrari and Contessa were found and mentioned in the documents seized from the premises of the assessee owned by the assessee and the assessee has not able to explain the source of investments in these vehicles. Therefore, we uphold the impugned order on this issue.

9.8. As regards the unexplained expenditure of Rs. 38,74,444/-, the AO treated the same as undisclosed income of the assessee and the AO has made the addition on the basis of the seized documents and after giving the opportunity to the assessee to explain the same. Assessee neither attended the AO in response to the summons to explain the seized documents nor filed any reply stating the reasons for non-attendance in spite of the fact that photocopies of the documents were given to the assessee at the time of seized of these documents. After giving opportunity to the assessee and on the basis of the documentary evidence filed by the assessee alongwith the explanation, the Ld. CIT(A) in para no. 12.3 at page no. 53-54 of the impugned order held that opportunity given by the AO was not availed by the assessee and due to lack of evidences supporting the claim of the assessee, the Ld. CIT(A) has given the relief of Rs. 2,20,940/- and the balance of Rs. 36,53,504/- was rightly been upheld by the Ld. CIT(A) as undisclosed income of the assessee for this block period. In spite of the fact that the assessee remained non-cooperative before the revenue authorities, sufficient relief has been given to the assessee, hence, no interference is called for in the well reasoned order of the Ld. CIT(A) on this issue, therefore, we uphold the finding of the Ld. CIT(A) on this issue.

9.9. As regards the addition of Rs. 7,24,71,120/- on account of deposits in the Bank of Maharastara and treating the same as undisclosed income of the assessee. According to the assesssee, the AO has not considered the detailed reply filed by the assessee and wrongly made the addition in dispute and AO has not brought on record any evidence or evidence to establish the allegations of heavy cash deposit made by the assessee. But as per the order of the AO as well as Ld. CIT(A) the AO has given opportunity by issuing the questionnaire dated 7.6.2001 to the assessee requiring to explain the deposits made in Bank of Maharastara, but the assessee has denied the same. According to AO this bank account in the name of M/s Tangerine Informatique Systems was introduced by Sh. Abhishek Verma, Sh. Manish Bhatnagar was the authorized person to operate this account. Sh. Manish Bhatnagar was Director in company named M/s Kudos Exports Pvt. Ltd. which is a 100% subsidiary of M/s Esam India Ltd. The more than 90% of equity capital of M/s Esam India Ltd. is owned by Sh. Abhishek Verma. After going through the orders passed by the revenue authorities, we are of the view that addition of Rs. 7,24,71,120/- was made on account of undisclosed income deposited in the Bank of Maharastara, New Delhi in the bank account of M/s Tangerine Informatique Systems, Kudos Exports Private Ltd., AK Exports, Akansha Exports. The chain of ownership and authorized signatories of each of these concerns as brought out by the AO in the assessment order clearly prove that the main person to whom all these accounts belonged is the assessee only as this chain started with the bank account of Kudos Exports Pvt. Ltd. which is a 100% subsidiary of Esam India Ltd. wherein the assessee has ownership of 99.98% equity. Ld. CIT(A) has elaborately discussed the same at page no. 55-56 of the impugned order and held that all these firms were found to be non-existence at the given address and therefore, in our view the AO has rightly been made the addition which the Ld. CIT(A) has upheld. Hence, we uphold the impugned order on this issue.

9.10. The AO made the addition of Rs. 1,42,10,625/- on account of alleged transactions recorded in the diary alleged to be handed over by Ms. Asmita Aggarwal on 16.7.1999 and treated the same as undisclosed income of the assessee. Assessee has given the opportunity to the assessee to explain this amount and assessee has stated that Ms. Asmita Aggarwal having bitter relations with the assessee and finally resulted in legal divorce and there is no evidence or material to establish that the transactions recorded in the diary actually took place. After considering the reply filed by the assessee and detailed discussions, the AO has made the addition in dispute on the basis of documentary evidences as referred by the AO in the assessment order and the Ld. CIT(A) in the impugned order elaborately and finally upheld the addition on the ground that this addition has been made on the basis of the diary which was handed over to the Department by the wife of the assessee Mrs. Asmita Aggarwal. This addition has been made by the revenue authorities on the basis of documentary evidences and especially to the assessee who remained non-cooperative with the revenue authorities and for lack of evidence. Assessee has not discharged his burden of his onus laid upon him to prove that this diary did not belong to him, but he failed to prove the same and in the absence of any valid explanation and evidence, the AO has rightly made the addition of Rs. 1,42,10,625/- found recorded in the diary and which has been rightly been upheld by the Ld. CIT(A). We are of the view that no interference is called for in the well reasoned order passed by the Ld. CIT(A) on this issue, hence, we uphold the finding of the Ld. CIT(A) on this issue.

9.11 The assessee has challenged the addition of Rs. 79,68,269/- made by the AO on account of investments in house hold items and personal belongings as undisclosed income of the assessee. The AO has made this addition after giving opportunity to the assessee for substantiating his claim as well as on the basis of the evidences.

The Ld. CIT(A) has upheld the same by holding that during the search operation at the residence of the assessee on 23.3.1999 traveller cheque worth Rs. 1100 US$ were found. Assessee was requested to explain the source of acquisition of these traveler cheques failing which an amount of Rs. 38,500/- was proposed to be treated as undisclosed income. Vide his reply dated 24.7.2001 assessee has stated that the traveler cheques were purchased out of income earned out of India. During the block assessment proceedings, assessee has not brought on record any information showing that he in fact earned income out of India during the block period. The AO as well as Ld. CIT(A) has rightly made the addition of Rs. 79,68,269/- on account of undisclosed income of the assessee, hence we uphold the same on this issue.

9.12 As regards the addition of Rs. 1,27,688/- on account of foreign exchange as undisclosed income of the assessee. The AO has made the addition on the basis of seized material and after giving opportunity to the assessee, which the Assesse has not availed the same and the Ld. CIT(A) has rightly upheld this addition in dispute by dismissing the ground of the assessee, hence, we uphold the same on this issue.

9.13 The AO has made the addition of Rs. 2 lacs on account of payment made to Ms. Rita Luther and treated the same as undisclosed income of the assessee. The AO has made the addition on the basis of seized material mentioned in the assessment order and the impugned order. No contrary evidence has been filed by the assessee. Therefore, the AO has rightly made this addition and Ld. CIT(A) has rightly upheld the same, which does not require any interference on our part, hence, we uphold the same.

9.14. As regards the addition of Rs. 1 lac on account of payment to Sh. Sandip Puri and treating the same as undisclosed income of the assessee. The revenue authorities has made this addition on the basis of seized material mentioned in the impugned order and assessee has failed to explain the same therefore, this addition is upheld.

9.15. The AO has made the addition of Rs. 2,77,00,000/- on account of profit of M/s Delhi Exports and treated the same as undisclosed income of the assessee. According to the assessee, the AO has failed to appreciate the provisions of Income Tax Act, 1961 and particularly of Section 2(31) which defines person and further failed to appreciate that the income of partnership firm is separately assessable and without prejudice the assessee has submitted that AO has not in possession of any evidence or material to establish that M/s Delhi Exports earned a profit of Rs. 2,77,00,000/- and considered this profit for the block period upto 23.3.1999. The AO had made the addition in dispute on the basis of questionnaire dated 18.6.2001 asking the assessee to explain the page no. 76-77 of Annexure A-29 seized from M/s Esam India Ltd. during the search operation on 23.3.1999. As pr this papers M/s Delhi Exports earned this profit. In reply to the question raised by the AO the asessee has not furnished any proof of having filed the income tax return of his concern M/s Delhi Exports, hence, Assessing Officer has made the addition in dispute. Ld. CIT(A) has also upheld the impugned addition on the basis of the finding given by the AO. We have gone through the orders passed by the revenue authorities and we are of the view that assessee has not furnished any proof, which is contrary to the evidence collected by the revenue authorities therefore, in the absence of the same the addition in dispute is deserve to be upheld, hence, we uphold the same.

9.16. As regards the addition of Rs. 3,34,00,000/- on account of profit of M/s Globetrotters. The AO has made the addition by holding that M/s Globetrotters, 4, Vasant Vihar, New Delhi is a partnership firm formed in November, 1996 with partners M/s Esam India Ltd., a company promoted by Sh. Abhishek Verma and M/s AV Portfolio (P) Ltd. and in the absence of any evidence, addition in dispute was made by the AO. Ld. CIT(A) has upheld the addition in dispute. We have gone through the orders passed by the revenue authorities and we are of the view that vide question no. 4 of the Questionnaire dated 18.6.2001 assessee was requested to explain pages 89-90 of Annexure A-29 seized from M/s Esam India Ltd. during the search operation on 23.3.1999. After considering the explanation given by the assessee, the AO made the addition and Ld. CIT(A) has upheld the same on the ground that addition in dispute on account of profit of M/s Globetrotters is a partnership between the assessee and an employee of M/s Esam India Ltd. and on the basis of the seized materials which is owned by the assessee, the addition has been made on the basis of the profit and loss account or balance sheet of this firm found and seized during the course of search. To negative the version of the revenue authorities assessee has not given any explanation whatsoever the amount of Rs. 3.34 crores is verifiable from the seized documents is held to be correctly added by the AO to the undisclosed income of the assessee, which was upheld by the Ld. CIT(A). Hence, we uphold the action of the Ld. CIT(A) which has been made on the basis of the seized material. Hence, we uphold the findings of the Ld. CIT(A) on this issue.

9.17. As regards addition of Rs. 1,05,200/- on account of cash expenditure incurred by M/s Delhi Exports. The Assessing Officer has disallowed the same by holding that the assessee is a real owner of M/s Delhi Exports and liable to pay the tax on income earned by M/s Delhi Exports and on the basis of page no. 5 Annexure A-28 seized from M/s Esam India Ltd. during the search operation on 23.3.1999 showing that the cash expenditure of Rs. 1,05,250/- was not booked in the books of M/s Delhi Exports. Assessee denied the same but without any evidence. Ld. CIT(A) has also upheld the same. After perusing the orders passed by the Revenue Authorities, we are of the view that the addition of Rs. 1,05,200/- made to the taxable income on account of expenditure incurred by M/s Delhi Exports. Assessee has not given any evidence or plausible explanation to controvert the version of the Assessing Officer. Therefore, the Ld. CIT(A) has rightly upheld the same, hence, we uphold the order of the Ld. CIT(A) on this issue.

9.18. As regards to the undisclosed income of Rs. 7,67,30,400/- on account of receipt by M/s Vino Veritas. The Assessing Officer made the addition on account of seized documents. Assessing Officer has also asked the assessee vide questionnaire dated 18.6.2001 for the explanation from the assessee and requested that Annexure A-48 seized from D-4/2, Vasant Vihar, New Delhi, assessee has transferred funds totaling US$ 21,31,000/- from M/s Esam India ltd. to M/s Vino Veritas, a concern of assessee operated in the name of Mr. John Feritas. The amount of Rs. 7,67,30,400/- was received by the assessee in the name of M/s Vino Veritas. Assessee has denied the same without any documentary evidences and remained non-cooperative before the revenue authorities. The Assessing Officer is of the view that the assessee is a real beneficiary of the amount transferred to the order of Vino Veritas and added this amount as undisclosed income of the assessee. Ld. CIT(A) has also upheld the order of the Assessing Officer by holding that assessee has not able to explain the source of Rs. 7,67,30,400/- having been transferred from M/s Esam India Ltd. to Vino Veritas. After going through the orders passed by the Revenue authorities, we are of the view that revenue authorities have righty made the addition in dispute for lack of evidence and non-cooperation of the assesee, hence, there is no need to interference in the impugned order on this issue, therefore, we uphold the same.

9.19 The Assessing Officer made the addition of Rs. 1,33,00,000/- on account of transfer by M/s Infocom Digital Systems Ltd. to M/s European Capital Ltd., but has not brought any evidence on record establishing his version and Assessing Officer has made the addition in dispute and Ld. CIT(A) has upheld the same. After going through the orders passed by the revenue authorities, we are of the view that Assessing Officer and the ld. CIT(A) has made the addition for lack of evidence and due to non-cooperation of the assessee merely having the question of the Assessing Officer that does not mean that addition in dispute should be deleted without supporting the evidence. We are of the view that this money was transferred to M/s European Capital ltd., the assessee is holding the power of transfer of the bank account of European Capital ltd. and is a beneficiary of Rs. 1,33,00,000/- transferred during 1997 and 1998 by M/s Infocom Digital Systems Ltd. to M/s European Capital Ltd.

Therefore, the amount of Rs. 1,33,00,000/- has rightly been treated as the undisclosed income of the assessee by the revenue authorities, because this addition has been made on the basis of the seized documents in Annexure A-43 found from the premises of M/s Esam India ltd. and assessee could not furnish any evidence to support his contention, hence, we uphold the finding of the Ld. CIT(A) on this issue.

9.20 As regards the addition of Rs. 8,06,800/- on account of cash payment received from M/s Infocom Digital Systems Ltd.. After going through the orders of the revenue authorities, we are of the view that this addition has been made on the basis of the seized material Annexure A-48 from M/s Esam India Ltd. on 23.3.1999. No explanation has been given by the assessee to the revenue authorities. Therefore, this addition has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), hence, no interference is called for in the impugned order on this issue and we uphold the same.

9.21 The addition of Rs. 75,00,000/- on account of receipts from Sh. SC Bharjatia. According to the Assessing Officer M/s Infocom Digital Systems Ltd. to be a concern of the assessee and mode and manner in which the assessee was actually benefitted. The questionnaire dated 18.6.2001 issued by the assessee regarding this amount requested the assessee to explain this amount received from by him through M/s Infocom Digital Systems ltd. In the reply dated 24.7.2001 assessee has denied having received any payment of Rs. 75,00,000/- from Sh. SC Bharjatia. Two cheques worth Rs. 50,00,000/- and Rs. 25,00,000/- were deposited into the account of M/s Infocom Digital Systems Ltd. their ABN Amro Bank account on 22.12.1997 and 23.12.1997. These payments were made by Sh. SC Bharjatia from his firm M/s Precious Arts and Jewels at the behest of Sh. Abhishek Verma considering M/s Infocom Digital Systems Ltd. to be a concern belonging to Sh. Abhishek Verma and assessee is a real beneficiary of this sum received from Sh. SC Bharjatiya. After considering the assessee’s reply, the Assessing Officer has made the addition in dispute and Ld. CIT(A) has confirmed the same by holding that this amount in dispute received by M/s Infocom Digital Systems Ltd. from one Sh. SC Bharjatiya. According to the Assessing Officer, M/s Infocom Digital Systems Ltd. was raised by the assessee to transfer the funds to M/s Europena Capital Ltd. whose bank account was authroised to be opened by the assessee. Therefore, the assessee is a real beneficiary of this amount, hence, we are of the view that the findings given by the ld. CIT(A) is as per record and evidence and therefore, the same is upheld.

9.22 Assessing Officer has made the addition of Rs. 17,39,40,857/- on account of payment made by M/s Kudos Exports Ltd. as undisclosed income of the assessee. Assessing Officer issued the questionnaire dated 23.7.2001 asking the assessee to explain that as per page no. 3 to 22 of Annexure A-1 seized from the residence of Ms. Asmita Aggarwal during search proceedings on 23.3.1999, assessee was the real owner of M/s Ganton Ltd. M/s Kudos Exports Pvt. Ltd., a company owned by M/s Esam India Ltd., shares of which are owned by the assessee substantially, has made imports from M/s Ganton Ltd. In response to the questionnaire dated 23.7.2001 assessee had not given any reply to the concern. The Assessing Officer has made the addition in dispute and Ld. CIT(A) has upheld the finding of the Assessing Officer. In appeal before us, we have no other alternative, except to uphold the impugned order on this addition because for lack of evidence on the issue in dispute filed by the assessee, therefore, the addition of Rs. 17,39,40,857/- made by the Assessing Officer and confirmed by the ld. CIT(A) is as per law and record, hence, we uphold the same.

9.23 The Assessing Officer had made the addition of Rs. 54,00,000/- on account of deposits made with General Credits Finance Ltd. as undisclosed income of the assessee. During the assessment proceedings Assessing Officer issued the questionnaire dated 7.6.2001 to the assessee asking him to explain the undisclosed deposits. Assesee has denied the same and has not filed any evidence supporting his denial, hence, the Assessing Officer has made the addition in dispute and ld. CIT(A) has upheld the same by holding that the assessee had submitted in his statement recorded on 16.7.1999 that he has made the deposits of Rs. 54 lacs in the bank and that bank had gone into the liquidation and a claim had been lodged through the Bank of England and assessee has filed declaration under VDIS declaring such deposits, but has not made the payment of tax thereon. His application was not entertained and no certificate was issued. The Assessing Officer on the basis of documents no. 1-3 of Annexure A-3 seized from the residence of Mrs. Asmita Aggarwal, Ex-wife of the assessee also shows that such payments were made by the assessee for depositing in the bank beginning from October, 1991 till July, 1992.

Assessee has not explained the source of this amount by filing any documentary evidences, therefore, the Assessing Officer has rightly made the addition and Ld. CIT(A) has also rightly upheld this addition. We are fully agree with the findings of the revenue authorities and upheld the addition in dispute.

9.24 The Assessing Officer had made the addition of Rs. 3,20,40,000/- on account of payment to Sh. Arjun Amla as undisclosed income of the assessee. Assessing Officer vide question no. 7 of questionnaire dated 18.6.2001 asked the assessee to explain the amount received back from M/s Vino Veritas amounting to US dollar 8,90,000/- on 19.2.1996 which were arranged by payment of Rs. 3,20,40,000/- to Sh. Arjun Amla of M/s Camelot Trading Co. In the reply dated 24.7.2001 assessee has stated that the statement recorded before the Enforcement Directorate had been withdrawn in the Court on 17.12.1999. But in support of his contention, assessee has not filed any documentary evidences and Assessing Officer has made the addition in dispute and the ld. CIT(A) has upheld the same. After going through the orders passed by the revenue authorities and the reply filed by the assessee, which is for want of evidence, supporting the statement of the assesee, we are of the view that no interference is called for in the well reasoned order of the Ld. CIT(A) on this issue, hence, we uphold the impugned order on this issue.

9.25 The addition of Rs. 11,00,42,100/- made by the Assessing Officer on account of income as per the documents seized from Mrs. Asmita Aggarwal. The Assessing Officer vide question no. 39(b) of questionnaire dated 07.06.2001 who asked the assessee to explain these deposits made by him as per page no. 24 of the Annexure A-1 seized from the residence of Mrs. Asmita Aggarwal during the search operation on 23.3.1999. Assessee has explained that the pages relied upon are the photocopies of some typed matter and even this does not bear the name and signatures of the assessee.

He further submitted that the name of the bank into which the deposits has been made is not there and he denied these deposits. The Assessing Officer has supplied all the documentary evidences to the assesee and the statements recorded on 16.7.1999 of the assessee was also given to the assessee in which the assessee has admitted that he was having bank account in Liechtenstein.

During March, 1995, US dollar 2,67,500/- equivalent to Rs. 93,62,500/- have been deposited by assessee, the source of which assessee has not explained and Assessing Officer has made this addition as undisclosed income of the assessee. Similarly, as per the question no. 39(c) of Questionnaire dated 7.6.2001 Assessing Officer asked the assessee to explain the transfer of money from account no. 520062 made by him as per pages 30 to 46 of Annexure A-1 seized from the residence of Ms. Asmita Aggarwal during search operations on 23.3.1999. Assessee has not furnished any explanation of the amount in dispute and the Assessing Officer has made the addition of Rs. 3,58,60,300/- as undisclosed income of the assessee. Similarly, vide question no. 39(d) of questionnaire dated 7.6.2001 assessee was asked to explain the payment of totaling USD 5,00,000 to KD USA. Vide his reply dated 24.7.2001 assessee has stated that the pages relied upon are the photocopies of some typed matter and do not carry the name and signatures of the assessee, but assessee has not given any explanation to the same and Assessing Officer has made the addition in dispute. Exactly, on similar facts and circumstances of the case the total amount of Rs. 11,00,42,000/- was added as undisclosed income of the assessee has been made on the basis of documentary evidences by giving the opportunity to the assessee for explaining the same, but assessee raised the question on the questionnaire, but did not file any reply. Ld. CIT(A) has upheld the addition of Rs. 11,00,42,000/- as undisclosed income of the assessee which has been made on the basis of documentary evidences seized during the search operation in the case of the Ms. Asmit Agarwal. Ld. CIT(A) has upheld the addition of Rs. 11,00,42,000/- made to the undisclosed income of the assessee on account of entries recorded in the documents seized from the residential premises of Ms. Asmita Aggarwal Ex-wife of the assessee. We have gone through the orders passed by the revenue authorities and we are of the view that the Assessing Officer has made the addition in dispute on the basis of the seized material i.e. Annexure A-1 pages 60 to 70, but no explanation has been given by the assessee. Assesee has not given any explanation regarding the nature of these entries recorded in these documents and has raised the question on the questionnaire issued by the Assessing Officer.

We are of the view that the assessee remained non-cooperative before the revenue authorities and the revenue authorities has given full opportunity to the assessee before making the additions in dispute, therefore, we uphold the impugned order passed by the ld. CIT(A) on the additions of Rs. 11,00,42,100/-. The aforesaid additions made by the Assessing Officer and upheld by the ld. CIT(A) mentioned in ground no. 7 are dismissed by upholding the order of the ld. CIT(A) on these additions.

10. Keeping in view of the facts and circumstances of the present case and the issues involved in appeal filed by the assessee and after going through the arguments advanced by both the parties alongwith the documentary evidences filed by both the parties in the shape of papers books, we are of the considered view that Assessing Officer as well as Ld. CIT(A) has given full opportunity to the assessee for substantiating his claim on legal as well as on merits, but the assesee remained non-cooperative before the revenue authorities, hence, Assessing Officer has made the additions in dispute on the basis of the search material, after confronting the same to the assessee, but the assessee has not substantiated his claim by filing any evidence before the authorities below. Therefore, no interference is called for in the well reasoned orders of the revenue authorities, hence, we uphold the impugned order of the Ld. CIT(A) by dismissing the appeal filed by the Assessee. In the result, the IT(SS)A NO. 2/DEL/2011 filed by the assessee is dismissed.

11. The Revenue has raised the following grounds in IT(SS)A No. 03/Del/2011:-

1. The order of the Ld. CIT(A) is not correct in law and facts.

2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the addition of Rs. 1,19,03,000/- made by the AO on the basis of seized documents without appreciating facts on record.

3. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal.

11.1 At the time of hearing, Ld. Counsel for the assessee stated that the tax effect involved in the appeal filed by the Revenue is below the prescribed tax limit of Rs. 50 lacs, in view of the latest CBDT circulated vide Circular No.17/2019 Dated 08.08.2019, hence the appeal of the Revenue may be dismissed.

11.2 Ld. CIT(DR) has not raised any objection on the request of the assessee’s counsel.

11.3 Keeping in view the addition in dispute challenged by the Revenue in the present appeal and in view of the latest CBDT’s instructions, as aforesaid, the appeal of the Revenue is dismissed on account of low tax effect. In the result, the appeal of the Revenue is dismissed.

12. Assessee has also filed the Cross Objection No. 189/Del/2011 in Revenue’s Appeal IT(SS)A No. 03/Del/2011 on the following ground:-

“In view of Board’s Instruction No. 1894 dated 16.06.1992 and case of K.K. House vs. ITO (2007) 11 SOT 445 (Hyd) and ACIT vs. Justice Motilal B. Naik (2004) 270 ITR (AT 141 (Hyd.), the appeal of the AO is not maintainable.”

12.1 As regards the cross objection filed by the assessee against the Revenue’s appeal is concerned, since we have dismissed the Revenue’s appeal on account of low tax effect, hence, the cross objection filed by the assesee has become infructous and dismissed as such.

13. In the result, both the appeals filed by the Assessee as well as Revenue stand dismissed and also the Cross Objection filed by the Assessee stand dismissed.

Above decision was announced on 25th January, 2021 in the Open Court.

Sd/- Sd/-

(PRASHANT MAHARISHI) (H.S. SIDHU)

ACCOUNTANT MEMBER JUDICIAL MEMBER