- (1.) By way of this appeal, the department has assailed the judgment and order of the Tribunal whereby tribunal has partly allowed the appeal of the assessee and modified the order passed by the CIT (A).
(2.) This court while admitting the appeal on 22.7.2003 had framed following substantial questions of law :- "1. Whether on the facts and circumstances of the case, the learned ITAT was right and justified in reducing the additions of Rs.15,81,000/- to Rs.3,12,932/- on renovation of Hotel Hawamahal without there being material on record and whether the finding in respect of above additions is perverse ? 2. Whether on the facts and circumstances of the case, the learned ITAT was right and justified in allowing the set off Rs. 16 lacs as lease payment which was disallowed by the A.O. and confirmed by CIT(A) and whether the finding in respect of the above additions is perverse ? 3. Whether on the facts and circumstances of the case, the learned ITAT was right and justified in holding that Rs. 16 Lac had flown back from unexplained lease payments and whether the finding in respect of the above additions is perverse ?" 4. Whether on the facts and circumstances of the case, the learned ITAT was right and justified in deleting the additions made of Rs. 1,73,600/- for investment in kullu land and whether the finding in respect of the above additions is perverse ?" 5. Whether on the facts and circumstances of the case, the learned ITAT was right and justified in deleting the additions of Rs. 4,82,065/- for Raisina land and whether the finding in respect of the above additions is perverse ?"
(3.) The brief facts of the case are that the assessee company is a closely held company of Mr. V.K. Bhatnagar and his family members and it is running the business of hotels and restaurants. A search under section 132 was conducted on 15.1.1999 at various places of assessee group. Among other places in the group, search under section 132(1) of I.T. Act was conducted at registered office of the company at A-1, South Extension Part-I, New Delhi on 15.1.1999. Besides, surveys under section 133A on 15.1.1999 were conducted at Hotel Hawa Mahal, Jaipur and at Hotel Manali Mahal, Manali during the course of search/surveys various documents relevant to the assessee company were found/seized from the above premises as well as some other premises searched. 3.1 A notice under section 158BC was issued and served on the assessee company on 22.11.2000. The return under section 158BC was due on 8.12.2000. The assessee company vide letter dated 4.12.2000 sought extension of time of 45 days to prepare the return stating that it did not have the Xerox of the seized documents. Assessee company vide this office letter dated 1.12.2000 was given due opportunity to take the Xerox of required documents and was asked to file the return by 18.12.2000. Thus, the extension was granted upto 18.12.2000. However, the assessee company sought further extension till 30.12.2000 as complete copies of documents/statements could not be taken by it. Further extension was granted upto 1.1.2001. The assessee company filed its return for the block period on 1.1.2001 declaring undisclosed income of Rs.65.50 lacs. ;