1. These three departmental appeals are directed against the consolidated order of the Commissioner (Appeals) Jalandhar dated 5-3-1997 for the assessment years 1985-86, 1986-87 & 1989-90. Since the appeals concern the same assessee and were heard together, so these are being disposed of by this common order for the sake of convenience. - (1.)
(2.)First, we would take up appeal in ITA No. 358 (Asr)/1997. The assessee has raised following two effective grounds in this appeal: "1. That on the facts and in the circumstances of the case the learned Commissioner (Appeals) has erred in deleting the addition of Rs. 2 lakhs made on account of unexplained advance given to Sh. G.D. Sharma. 2. That on the facts and in the circumstances of the case the learned Commissioner (Appeals) has erred in deleting the addition of Rs. 1,48,713 being the unexplained investment in the purchase of land."
The first ground relates to the deletion of addition of Rs. 2 lakhs made by the assessing officer on account of advance given to Sh. G.D. Sharma. 3.1 Briefly stated, the facts of the case are that a search under section 132 of the income-tax Act was conducted at the residential premises of the assessee on 28-7-1988. Some unexplained jewellery and incriminating documents regarding investment and expenses were found. One of the documents found during the course of search was a receipt dated 28-4-1984 of Rs. 2 lakhs given to Shri G.D. Sharma, Managing Director of M/s. Barauni Carbons (P.) Ltd. The receipt states as under: "Received from Sh. Jatinder Sehgal S/o Sh. D.D. Sehgal of 99, Central Town, Street 3, Jalandhar City, a sum of Rs. 2 lakhs as advance against future allotment of shares of proposed company (Barauni Carbons Private Ltd.) to be registered in the State of Bihar." The assessing officer stated that the receipt was issued at Barauni and the amount was paid to Shri G.D. Sharma at that place. However, the assessee explained that Rs. 80,000 was received by draft on 28-4-1984 from M/s. Moti Lal & Co., Amritsar as a loan, Rs. 50,000 was withdrawn from Savings bank Account No. 2022 of his wife Smt. Kiran Sehgal and the draft was prepared in favour of Sh. G.D. Sharma. Further it was explained that Rs. 50,000 were withdrawn from assessee's own bank account No. 16742 and draft was prepared on 28-4-1984 in favour of Sh. G.D. Sharma, the balance was out of cash available. The assessing officer raised objection that the receipts for the advance of Rs. 2 lakhs to Sh. G.D. Sharma was assessed at Barauni on 28-4-1984 and the assessee could not reach Barauni with these drafts on 28-4-1984 itself. During the course of assessment proceedings the assessing officer recorded the statement of the assessee and the assessee furnished replies contending that the drafts were presented to Sh. G.D. Sharma at Jalandhar and he must have written Barauni just by mistake or for any other reasons. The assessing officer further disbelieved this transaction for the reason that the loan was given by the wife of the assessee but the draft was made directly in the name of Shri G.D. Sharma and there was a possibility that the said amount might be a different amount. The assessing officer also observed that there was no evidence of the cash amount of Rs. 20,000. In view of the above, the assessing officer made an addition of Rs. 2 lakhs. 3.2 Before the learned Commissioner (Appeals), the assessee filed written submissions, which read as under: "43 These grounds are directed against the addition of Rs. 2,00,000 made by the assessing officer as unexplained investment in payment of this amount to Sh. G.D. Sharma on 28-4-1984. During the course of search conducted in the residential premises of the assessee on 28-7-1984 a account No. 16742 in Bank of India, Jalandhar belonging to Sh. J.K. Sehgal (HUF) of which assessee is the karta. The assessee also gave details as regards to the availability of cash of Rs. 20,000 which was handed over to Sh. G.D. Sharma. In our view, the assessee explained the source of investment of Rs. 2,00,000 and also categorically stated that the drafts were handed over to Sh. G.D. Sharma at Jalandhar on 28-4-1984. Even a statement of the assessee on 15-3-1996 was recorded by the assessing officer, and in answer to the last but one question, the answered as under: "Mr. G.D. Sharma was in Jalandhar on 28-4-1984. The drafts were presented to him here. By mistake he must have written Barauni. The draft of Rs. 50,000 was made by me at Jalandhar. It was not possible for me to be present at Barauni on 28-4-1984." The aforesaid contention of the assessee had not been controverted by the assessing officer. If the assessing officer was having any doubt in his mind he could have summoned Sh. G.D. Sharma to verify the explanation given by the assessee, particularly when the assessee himself requested him to issue notice under section 133 to Sh. G.D. Sharma for verifying the statement given by him. It is true that the assessing officer has not recorded the statement of Sh. G.D. Sharma and also not verified this fact that the drafts were handed over to Sh. G.D. Sharma at Jalandhar and not at Barauni for the reasons best known to him. Furthermore he has also not verified the above facts from the banks located at Barauni where these drafts were deposited, In such a situation, the assessing officer had made the addition merely on the basis of surmises and conjecture. In our view, the learned Commissioner (Appeals) has rightly deleted the addition. Thus, we do not see any infirmity, in his finding on this issue. This ground of appeal is accordingly dismissed.

(3.)THE next issue vide ground No. 2 relates to the deletion of addition of Rs. 1,48,713 made by the assessing officer considering the same as unexplained investment in the purchase of land, by the assessee in the name of his minor son. THE assessing officer found that the assessee purchased the land in the name of his minor son Sh. Vivek Sehgal as per following detail: "(1) On 18-4-1984 for Rs. 72,225 (plus duty of Rs. 6,163) from Shri D.K. Sehgal. (2) On 18-4-1984 for Rs. 64,800 (plus stamp duty of Rs. 5,525) from Shri D.K. Sehgal." THE assessee explained the source of investment as under: "(i) Rs. 58,800 was received from Smt. Shakuntala Sehgal from her savings account No. 8672. Her affidavit and copy, of account has been furnished and placed on record. (ii) A cheque of Rs. 50,000 from M/s. Ravi Trading Co., Jalandhar was received and deposited in account of Shri Vivek Sehgal. (iii) A sum of Rs. 30,000 and Rs. 20,000 was withdrawn from savings account No. 16742 on 27-3-1984 and 9-4-1984 respectively. (iv) Rs. 66,225 favouring Shri D.K. Sehgal was issued from account No. 4237 of Vivek Sehgal with Canara Bank." THE assessing officer, however, did not find merit in the explanation of the assessee for the reasons stated at page 2 of the assessment order dated 22-3-1986 and made the impugned addition. 4.1 THE assessee carried the matter to the Commissioner (Appeals) and submitted that the land had been purchased by his son Sh. Vivek Sehgal from his real uncle Shri D.K. Sehgal on 18-4-1984 for Rs. 72,225 and Rs. 64,800. THE stamp duty was paid at Rs. 6,163 and Rs. 5,525 respectively. As regards to the source of aforesaid investment the assessee reiterated the submissions made before the assessing officer. He further stated that a sum of Rs. 58,800 was given by Smt. Shakuntala Sehgal, his mother as a loan to Sh. Vivek Sehgal, his son and the draft in favour of Sh. D.K. Sehgal had been prepared directly cut out the S.B. Account of Smt. Shakuntala Sehgal who had affirmed the same in her sworn affidavit. So there was no reason to disbelieve the explanation of the assessee. As regards to the draft of Rs. 66,225 made out of Saving Bank Account No. 4237 in Canara bank of Shri Vivek Sehgal, the assessee submitted that a sum of Rs. 50,000 had been received by Sh. Vivek Sehgal on 26-3-1984 from M/s. Ravi Trading Co., Jalandhar and Rs. 17,000 was deposited in cash on 27-3-1984 in the aforesaid account out of Rs. 20,000 withdrawn by Smt. Shakuntala Sehgal on 16-4-1984. In this manner the source of withdrawal of Rs. 66,225 from S.B. Account No. 4237 of Sh. Vivek Sehgal was explained. As regards to the balance amount of Rs. 23,688, the explanation of the assessee was that from the S.B. Account No. 16742 in the name of Sh. J.K. Sehgal (the assessee) a sum of Rs. 30,000 was withdrawn on 27-3-1984 and Rs. 20,000 was withdrawn on 9-4-1984 and if a sum of Rs. 17,000 was deposited in the account of Sh. Vivek Sehgal was to be considered out of the aforesaid withdrawals, there remained another sum of Rs. 33,000 which covered the balance investment of Rs. 23,688. 4.2 THE learned Commissioner (Appeals) after considering the submissions of the assessee observed that the draft of Rs. 58,800 issued by the assessee's mother in the name of his minor son Sh. Vivek Sehgal was endorsed to Sh. D.K. Sehgal, the real brother of the assessee and the seller of the land and this amount was credited to the saving bank account No. 4242 of Shri D.K. Sehgal (HUF) in Canara Bank on 21-4-1984 by clearing. He further found that the draft of Rs. 66,225 was prepared from the Savings Bank Account of Sh. Vivek Sehgal and was credited in the account of Sh. D.K. Sehgal on 19-4-1984. According to the learned Commissioner (Appeals), the aforesaid two drafts were fully explained. THErefore, a sum of Rs, 1,25,025 (Rs. 53,800 + Rs. 66,225) was fully explained as such there remained a difference of Rs. 23,668. For this amount, the learned Commissioner (Appeals) observed that the assessee had withdrawn Rs. 30,000 and Rs. 20,000 from his own Savings Bank Account and if the drawings of Rs. 30,000 on 27-3-1984 was treated to have been diverted on the same date against case deposit of Rs. 17,000 in the bank account of Sh. Vivek Sehgal, even then there remained a balance of Rs. 13,000. He also pointed out that there was no link between the withdrawal of Rs. 20,000 on 9-4-1984 and deposit of Rs. 20,000 in the account of' Smt. Shakuntala Sehgal on 16-4-1984. Accordingly, the learned Commissioner (Appeals) held that there was no valid reason to reject the assessee's explanation to explain the investment of Rs. 23,688 out of withdrawals of Rs. 50,000 from his own Savings bank account. THE learned Commissioner (Appeals), therefore deleted the addition made by the assessing officer. 4.3 Alter considering the rival submissions and going through the assessment record as well as impugned order, it appears that the explanation given by the assessee was supported by the evidence on record. THE learned Commissioner (Appeals) after verifying the record, came to the conclusion that the explanation given by the assessee was convincing. In our view, the learned Commissioner (Appeals) has correctly appreciated the facts as well as explanation of the assessee. In that view of the matter, we do not see any valid ground to interfere with his finding on this issue and accordingly we decline to interfere with the findings of the learned Commissioner (Appeals) arid, therefore, the same are upheld.