Decided on January 25,2008



George Mathan, J.M. - (1.) THIS is an appeal filed by the revenue against the order of the Commissioner (Appeals)-II New Delhi in Appeal No. Del/Commissioner (Appeals)2/2005-06/116, dated 31-5-2005 for the Block Period 1-4-1996 to 5-2-2003. Mr. Gunjan Prasad, learned CIT-department Representative represented on behalf of the revenue and Mr. Rano Jain, chartered accountant represented on behalf of the assessee.
(2.) The facts that have given rise to this appeal are that the assessee's premises had been searched under the provisions of Section 132 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on 5-2-2003. During the search substantial documents had been found. The assessee had as a consequence of the .search filed his return in Form 2B on 14-1-2005 declaring undisclosed income of Rs. 26,75,000. The assessment came to be completed under Section 158BC of the Act on 29-3-2005 wherein the assessing authority had made an addition of Rs. 5,90,804 being the peak investment as on 15-1-2003 for carrying out the undisclosed business of sales of jewellery. Being aggrieved with the order of assessment the assessee had filed first appeal to the Commissioner (Appeals) who vide his order dated 31-5-2005 had deleted-the addition by holding that the assessee had declared an amount of Rs. 11,46,060 in his return for the block assessment as undisclosed investment in stocks as per the bills which were found in the course of search. Being aggrieved with the order of the Commissioner (Appeals), the revenue has filed this appeal before the Tribunal. At the time of hearing the learned CIT-departmental Representative submitted that the assessing authority had in the assessment order in para 6 held that the assessee had not been able to state as to what was his actual initial investment for carrying out the undisclosed business of sales of jewellery and therefore had made the addition of the peak sales as per the seized material in Annexure 1 as on 15-1-2003. The learned representative on behalf of the assessee submitted that the assessee had considered the peak investment and had offered the amount of Rs. 11,46,060 as undisclosed income in the block assessment return. He further submitted that the sales as on 15-1-2003 was Rs. 5,90,804 and it was not the investment. It was further submitted that the sum of Rs. 11,46,060 was offered to tax in the return on account of the initial investment.
(3.) WE have considered the rival submissions and perused the orders of the authorities below. It is an undisputed fact that the assessee has filed his return of income for the block period declaring an income of Rs. 26,75,000 and this amount included an amount of Rs. 11,46,060 on account of the unexplained investment in stock as per bills found at the time of search. It is also an undisputed fact that the assessee had declared an amount of Rs. 12,79,140 towards profits earned on the transaction as recorded in the seized materials and the same has also been accepted by the assessing authority in the assessment order. The figure of Rs. 5,90,804 as taken by the assessing authority is from the sales figure in Annexure 1 as on 15-1-2003 as seen from p. 4 of the assessment order. Thus, the assessee has offered the initial investment and the profits from the dealing in the stock outside the books of accounts. In these circumstances, we are of the opinion that the finding of the learned Commissioner (Appeals) is correct that the initial investment and profit on the unaccounted sales have been offered by the assessee.;

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