Statement of the assessee was also recorded on that date.
Department sought to tax the said amount of Rs.5.99 crores as undisclosed income in the hands of the assessee.
However on the basis of the said diary and the cash flow chart, the A.O. companycluded that Rs.5.99 crores was paid by MKSEPL including SCPL and Rs.94 lakhs by MKTPL in the Accounting Year 1999 2000 to MKF and MKI respectively for the purchase of 9 RBI Relief Bonds by the assessee.
The said Bonds were purchased between 17.11.99 and 11.2.2000.
All three companypanies were private limited companypanies in which the assessee had companysiderable voting power.
Accordingly the Tribunal allowed the Departments appeal.
1873 OF 2007 Arising out of S.L.P. C No.13570 of 2006 KAPADIA, J. Leave granted.
The A.O. found that the said Bonds were purchased from the money received from MKF and MKI for short, two firms in which the assessee was the partner.
The assessee was asked to explain the sources of investment of Rs.26.35 crores in purchase of 9 RBI Relief Bonds during Financial Year 19992000.
It belonged to the assessee.
On 16.11.2000, during the search the statement of Kalpesh Shah, son of the assessee, was also recorded under Section 132 4 of the said Act.
A short question which arises for determination in this civil appeal filed by the Department whether payments made by M. K. Shah Exports Pvt.
This was for the block period 1.4.90 to 24.8.2000 for short, block period .
CIVIL APPEAL NO.
By the Assessment Order dated 29.11.2002, the said amount of Rs.5.99 crores was assessed as a deemed dividend under Section 2 22 e of the said Act.
In the books of account the said two firms were shown to have received back the loans and advances from three companypanies M.K. Tea P Ltd. for short, MKTPL , Safari Capital P Ltd. for short, SCPL and MKSEPL, which three companypanies were closely related companypanies, in which the assessee had companytrolling interest.
The diary indicated investment of Rs.26.35 crores by the assessee in 9 RBI Relief Bonds during the accounting year ending 31.3.2000.
The A.O. took into companysideration the income of the assessee for the block period, under Chapter XIV B at Rs.65.77 crores.
Ltd. for short, MKSEPL during the Accounting Year ending 31.3.2000 Assessment Year 2000 01 amounting to Rs.5.99 crores was made to the two firms M s. M.K. Foundation for short, MKF and M s. M.K. Industries for short, MKI for the benefit of respondent assessee herein, Mukundrai K. Shah.
During the search apart from cash and jewellery a diary titled ML 20 was seized.
The diary was seized from the premises of MKSEPL.
On 24.8.2000, the Department searched the premises of the assessee under Section 132 of Income Tax Act, 1961 for short, the Act .
Aggrieved by the decision dated 21.2.03, the matter was carried in appeal by the Department to the Tribunal.
