COMMISSIONER OF INCOME TAX Vs. NARESH KUMAR AGGARWALA

JUDGEMENT

(1.) This is an appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as -the Act) against the order of the Income Tax Appellate Tribunal (hereinafter referred to as -the Tribunal) dated 25th July, 2002. By the impugned order, the Tribunal set aside the order of the Commissioner of Income Tax (Appellate) [hereinafter, referred to as -CIT (A)] to the extent of addition of Rs. 8,84,750/- made by the Assessing Officer (hereinafter, referred to as -"the AO").

(2.) The Respondent-Assessee is a Stock Broker and also involved in carrying on the broking business in his individual capacity. Apart from this, the Assessee is also having other sources of income. A survey action was taken on 16th October, 1992 and search operation was conducted on 23rd October, 1992 resulting into recovery and seizure of some documents. One of such documents was a fax messaged dated 24th February, 1992. The Assessee filed return of the assessment year 1992-93 on 6th February, 1993. During the assessment proceedings, it was found from the books maintained by the Assessee that he had made payment of Rs. 13,40,630/- during the period 1990-91 and 1991-92 for the purchase of property at -Spencer Plaza? at Madras. However, since as per the details mentioned in the aforesaid fax message, the total area of the property, that was purchased by the Assessee, was 1327 square feet at the rate of Rs. 1,700/- per square feet, the AO calculated the cost of this property at this rate to be Rs. 22,55,900/- as against the declared payment of Rs. 13,40,630/-. Consequently, he took the difference of Rs. 8,84,750/- as unaccounted investment made by the Assessee in this property. The Assessee was given opportunity to explain, but the AO being not satisfied made an addition of this amount on account of "undisclosed investment in the property". For arriving at this conclusion, the AO in his order recorded as under:

(3.) The Assessee preferred an appeal against the order before the CIT (A). The CIT (A) confirmed the order of the AO in this regard and while doing so examined the letter dated 25th February, 1992 purportedly written by the same person, who had admittedly sent the fax message to the Assessee on 24th February, 1992. While disbelieving the aforesaid letter dated 25th February, 1992 and confirming the findings of the AO, the CIT (A) recorded as under: