V.RAMAIAH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE appellant Ramaiah is carrying on real estate business as a property developer in the name of M/s.Barath Building Constructions. He is also the Managing Director of M/s.BBC Associates Limited. On 15.3.1996, a search action under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was conducted in the premises of M/s. Petro Plast Group of Companies controlled by three brothers, Anand Agarwal, Raju Agarwal and Om prakash Agarwal. According to the Revenue, during the course of the said search, certain incriminating documents were found relating to transactions of the above group with M/s.BBC Associates, the Managing Director of which is the appellant herein and hence, the business premises of M/s. BBC Associates Limited at No.23/1, Mylai Ranganathan Street, T.Nagar, Chennai and the residential premises of the assessee V. Ramaiah and his family at No.15, Neelakanta Mehta Street, T. Nagar, Chennai were also subjected to search under Section 132 on the same date viz. 15.3.1996. According to the Department, the Authorised Officer seized four receipts for a value of Rs.1.10 crores and 18 blank agreements signed by the assesssee, Proprietor of M/s. Barath Building Constructions (in short BBC) and Managing Director of M/s.BBC Associates Ltd. during the search. The assessee had filed his returns of income, in his individual status, for the assessment years 1987 -88 to 1996 -97 and also block returns for the period 1986 -87 to 1996 -97. According to the Department, there are four unaccounted cash receipts issued by the appellant V. Ramaiah to four persons, totalling to Rs.4,34,000/=; undisclosed payment made by him for one Prabhat Talkies to the extent of Rs.1,61,843/=; unaccounted investment in shares in benami names to the tune of Rs.4,13,000/=; unaccounted receipts to the tune of Rs.1,60,00,000/=; unexplained cash credit of Rs.4,50,00,000/= and other unexplained cash credits to the tune of Rs.87,84,107/=. The said amounts were arrived at as 'undisclosed income' for the block period 1986 -87 to 1996 -97 and tax on the said undisclosed income at 60 percent was calculated at Rs.4,24,75,770=. The total undisclosed income for the aforesaid assessment years was arrived at Rs.7,07,92,950/ - and the tax on the said sum was arrived at Rs.4,24,75,770/ -. Aggrieved, the assessee preferred an appeal before ITAT challenging the additions and also challenged the correctness of framing an order under Section 158BC, on various grounds. ITAT, by its order in IT (SS) A.No.157/MDS/1997, dated 9.5.2001, remanded the contested issues to the Assessing Officer for re - consideration with a direction to

(2.) CONSEQUENT upon the directions of the Tribunal, the matter was reheard by the Assessing Officer and passed an order on 31.3.2003, against which the assessee again preferred an appeal before the Income -tax Appellate Tribunal challenging the additions by raising the following objections: -

(3.) THIS Court has admitted this Tax Case Appeal on the following Substantial Questions of Law, for consideration : -