COMMISSIONER OF INCOME-TAX-II Vs. RAJESH GUPTA

JUDGEMENT

(1.) Pursuant to search under Section 132 of the Income Tax Act, 1961 [for brevity "IT Act"] conducted on 28.07.2007 as also recoveries made, the assessment with respect to the assessee who is carrying on financial services was completed under Section 153A read with Section 143(3). The assessment years were 2003-04, 2004-05, 2005-06 and 2006-07. The reliance placed was mainly on the entries made in a note-book recovered at the time of search as also the sworn statement under Section 132(4) of the Act. Additions were made with respect to a Chit carried on by the assessee, the rental income, loans availed by the assessee, i.e., and those availed from individuals as also from financial institutions. The assessee contended that the figures as disclosed in the note-book has different multipliers. With respect to the Chit, it was claimed that the multiplier applied could only be '100' and for rental income the multiplier was '1000'. On loans, it was contended that those from individuals the multiplier to be applied is '10000', while that from financial institutions the multiplier is '100000'.

(2.) Number of additions were made in all the years, some of which were modified in first appeal. The assessee was before the Tribunal, who directed the Assessing Officer to adopt the multiplier as contended by the assessee for all the transactions. The Tribunal found that there was absolutely no corroborative material with the Assessing Officer to apply the multiplier contrary to what was conceded by the assessee. In the present appeals, first 3 years are concerned with interest income as assessed from the Chit carried on by the assessee in the name of 'Bhaghyalakshmi'; being interest on the amounts received from the subscribers. The last year, being the year in which the search was conducted, the loans received from the individuals as also the financial institutions were added on for applying the multiplier of '100000'.

(3.) The questions of law arising in the appeals are re-framed by us as follows: