Pinaki Chandra Ghose, J. - (1.) THIS instant appeal under section 260A of the Income Tax Act, 1961 hereinafter referred to as the said Act involving the assessment year 1994 -95 was admitted for hearing on the following substantial questions of law: i) whether the Tribunal was justified in law in upholding the addition of Rs. 1,45,000/ - for the assessment year 1994 -95 on the basis of a seized paper without considering and/or deciding the appellant's contention that the said paper bearing the date January 31, 1992 did not pertain to and could not be considered in the assessment year 1994 -95 and no addition could be made on the basis thereof in the said assessment year? ii) whether and in any event, the Tribunal was justified in law in upholding the addition of Rs. 1,45,000/ - on the basis of a seized paper 1 by rejecting the written explanation and statement on oath under section 131 of the said Act of the author thereof and its purported; findings in that behalf are arbitrary, unreasonable and perverse? iii) whether and in any event, the Tribunal was justified in law in upholding the addition of Rs. 1,45,000/ - without considering and/or dealing with the appellant's alternative contention that in view of the acceptance by the Revenue of the amount of Rs.4,10,000/ - offered for assessment by the appellant as representing the entire undisclosed investment in the pawn broking business as on the date of search and the principles laid down by the Commissioner of Income Tax in his order dated March 31, 1994 under section 132(12) of the said Act, no separate or further addition could be made on the basis of the seized paper?
(2.) ALL the three questions are related to an addition of Rs. 1,45,000/ - made against the assessee by the Income Tax Department on October 13/ 14, 1993 in the assessment on the basis of papers seized in course of a search conducted by the department. It appear from the facts that the revenue pointed out that it would be evident from the papers signed by them that the jewellery, valued. Rs. 1,40,000/ - was pawned by one Ashoke Kumar Samanta with the assessee against which the assessee advanced Rs. 1,00,000/ -. The case of the revenue is that such advance was made out of an undisclosed income and, as such, the said sum of Rs. 1,00,000/ - was added to the assessee's income in the assessment year 1994 -95, for which the relevant previous year was the financial year ended on March 31, 1994.Further addition of Rs. 45,000/ - was made on account of interest said to have been received by the assessee on the said advance. The Assessing Officer had made an addition of Rs. 70,000/ - on account of interest which was reduced to Rs.45.000/ - by the Tribunal.
(3.) IT further appears that during the search, the jewellery belonging to customers pawned with the assessee was seized and the same was valued by the Departmental valuer at Rs.9,07,135/ -. The assessee accepted that the pawn broking business was undisclosed and offered to be assessed on the investment in the said business. The assessee took the stand that the income earned in the said business prior to the search stood reinvested in the said business and that assessment of the investment in the said business as on the date of search would result in complete taxation of the investment as well as income earned thereon till that date and on such basis the assessee quantified the undisclosed investment and income at Rs.4,10,000/ -, being roughly 45% of the value of Rs.9,07,135/ - attributed by the Departmental valuer to the pawned articles.;