Decided on March 09,1994



Vimal Gandhi, Judicial Member - (1.) THESE two appeals, one by the assessee, and the other by the Revenue, for the assessment year 1961-62, are directed against the order of the CIT (Appeals). For the sake of convenience, both the appeals are being disposed of through this consolidated order.
(2.) The facts in brief are that the assessee-company in the relevant period was engaged in the business of printing and publishing an English weekly "Link". It also undertook such printing for others. The original assessment in this case was completed on 28-2-1966, under Section 143(3) of the Act on a total loss of Rs. 2,22,316, which was subsequently reduced to Rs. 2,12,658 under Section 154 of the Income-tax Act, 1961. Subsequently, on getting fresh information, the Assessing Officer concluded that income escaped assessment and, accordingly, reassessment proceedings were initiated. It was found that the assessee had received a loan of Rs. 1 lakh from M/s Globe Associates (P.) Ltd., New Delhi, a company under liquidation. In the books of account of the above company, the loan amount was debited on 13-12-1960 and credited on 29-12-1960. The corresponding entry of loan received was found in the assessee's books of account on 14-12-1960, but there was no entry of repayment to M/s Globe Associates (P.) Ltd. on or about 29-12-1960. The amount was carried forward from year to year and transferred to Suspense Account on 13-12-1965. It was admitted that entry relating to repayment on 29-12-1960 was correct. The assessee was asked to explain the source of repayment of loan to M/s. Globe Associates (P.) Ltd. It was claimed that Dr. A.V. Baliga had received donations from different persons and those donations were utilised for repayment of the loan. The amount was remitted through one Shri S.L. Kapoor. The details of the donations received were not furnished, as Dr. Baliga was dead by the time the proceedings were taken. However, Shri S.L. Kapoor denied the transaction in the statement recorded by the Assessing Officer. The assessee further could not give the Branch of the Bank through which the amount was remitted to M/s. Globe Associates (P.) Ltd. In the above background, the claim was rejected and Rs. 1 lakh was treated as the assessee's income from undisclosed sources.
(3.) IN the reassessment proceedings, the Assessing Officer added another sum of Rs. 1,92,000 representing unexplained cost of construction of building at Link House, Bahadur Shah Zaffar Marg, New Delhi. The total cost of construction carried on in three assessment years, 1961-62, 1962-63 and 1963-64 was disclosed at Rs. 12,68,428. It was, however, found that, for obtaining loan from bank, the assessee had furnished certificate from the Architect, M/s. Sathe & Kothari, New Delhi, dated 14-6-1968 estimating the value of the building at Rs. 23,36,680. Having regard to the above report, the value of the cost of construction of the building was taken at Rs. 23,36,680. The difference of cost of construction amounting to Rs. 6,87,771 was spread over in three years and a sum of Rs. 1,92,000 was added in the income of the assessee in the reassessment proceedings as unexplained investment.;

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