ORDER R.S. Syal, Accountant Member. - These two cross appeals one by assessee and other by revenue in addition to assessee s cross- objection emanate from order passed by CIT(A) on 10th April, 2001 in relation to block period ending on 15th July, 1998 comprising of assessment years 1989-90 to 1999-2000. 2. First ground of assessee s appeal is general containing summary of all additions made and sustained, which have been specifically spelt out in further grounds. 3. Ground No. 2 is against confirmation of addition of Rs. 40,000 on account of unexplained cash. Briefly stated, facts of case are that assessee was subjected to search action under section 132(1) on 15th July, 1998. In course of search, cash of Rs. 47,760 was found out of which sum of Rs. 40,000 was seized. On being called upon to explain source of cash, it was stated by assessee during course of assessment proceedings that he, in his preliminary statement recorded on date of search viz 15th July, 1998, had claimed to have Rs. 35,000 at his residence. sum of Rs. 1,47,500 was withdrawn by assessee from his bank account No. 4879 with SBBJ on 16th April, 1998 and out of that, gold worth Rs. 50,000 was purchased from Ghanshyam Soni, amount of Rs. 50,000 was given to his wife Smt. Santosh Soni in cash and balance amount of Rs. 47,500 was lying at his residence. Assessing Officer did not accept assessee s explanation because though sum of Rs. 1,47,500 was withdrawn from bank on 16-4-1998 but its application claimed for purchase of gold worth Rs. 50,000 and equal sum stated to have been given to his wife was not verifiable. Assessing Officer observed that assessee had not given complete address of said Shri Ghanshyam Soni nor produced voucher for purchase of gold worth Rs. 50,000. It was further noticed that cash was withdrawn on 16th April, 1998 and no record was maintained indicating day-to-day incoming and outgoing and hence cash balance of Rs. 47,760 was not subject to verification. He however, accepted genuineness of cash to extent of Rs. 7,760 and made addition for balance amount of Rs. 40,000 under section 69A of Act. No relief was allowed in first appeal. 4. We have heard both sides and perused relevant material on record undisputed fact is that assessee was doing work of goldsmith. Earlier he was doing job of Nagina setting but later on started doing jobs of manufacturing (including jobs of polishing and nagina setting). It is further not disputed that assessee had not maintained his books of account. Returns for assessment years 1989-90 to 1992-93 were not furnished as in his opinion income was below taxable limit and hence there was no requirement for filing of return. However, returns for assessment years 1993-94 and 1994-95 were filed on 20th Oct., 1994 and computation of income and capital account for assessment years 1989-90 to 1992-93 were furnished along with return for assessment year 1993-94. This fact is corroborated from p. 17 of assessment order. No return for assessment year 1995-96 was filed as income was below taxable limit. Again returns for assessment years 1996-97 and 1997-98 were filed on 31st March, 1998 and 31st Oct., 1998 respectively. Search action was taken on 15th July, 1998 and return for assessment year 1998-99 was filed on 30th Oct., 1998. Since no books of account were maintained by assessee for and up to year of search, assessee furnished copies of balance sheet capital account and year-wise cash flow statement before Assessing Officer on basis of returns earlier filed and considering transactions for years in which returns were not filed as income was below taxable limit. Such year-wise detail starting from assessment year 1989-90 up to assessment year 1998-99 are available on pp. 196 to 275 of paper book. Though such details were made available to Assessing Officer but he refused to take cognizance of same on ground that these were made after date of search incorporating transactions found recorded in notebooks, loose papers and bank transactions. Such finding is contained in para 26 of assessment order. As would be seen infra that Assessing Officer took into consideration these statements of earlier years including balance sheet etc. for making addition on account of household expenses. Hence on one hand he refused to consider these details enable assessee to explain source of transactions, on other, he considered those very details for making addition on account of household expenses. Such course of action blowing hot and cold in same breath cannot be upheld. Be that as it may, crucial question, which looms large over landscape of factual matrix of instant case is to decide as to whether or not assessee is entitled to furnish cash flow statement to explain transactions, when no books of account are maintained? In our view reply to this question has to be in affirmative for obvious reason that all transactions, assets or incomes of person, not maintaining books of account, cannot be said to be undisclosed income, more so when income earned is negligible not warranting maintenance of books of account as per provisions of Act and assessee is regularly assessed to tax having filed his returns of income in due course. If view of Assessing Officer is accepted, it would play havoc upon such small assessees and would bring both disclosed and undisclosed income within purview of undisclosed income . In such circumstances it becomes duty of Assessing Officer to verify balance sheet and cash flow statement, etc., with necessary material including details already available, filed along with returns in past. so-called incriminating material gathered during course of search is required to be tallied with cash flow statement and additions are to be made only for amounts which are not properly explainable. We are therefore, unable to endorse opinion of authorities below on this count. 5. Adverting to facts of case, it is noted that first balance sheet filed by assessee is for assessment year 1989-90 and no return was filed for this year because income was below taxable limit at Rs. 17,400. detailed chart incorporating assessment years from 1989-90 to 1998-99 with amount of income declared and dates of furnishing returns, wherever income is taxable, has been made available at p. S-1 of paper book. As per balance sheet and capital account furnished for assessment year 1989-90, we note that closing capital balance has been taken at Rs. 71,118. It is further observed that assessee had not filed his return of income for first time in 1994. Rather he is existing assessee since several years back. copy of income-tax assessment order of assessee for assessment year 1979-80 has been placed on record. This order was passed on 9th July, 1980 in which total income after deductions was assessed at Rs. 10,670. Considering totality of facts, age of assessee and other necessary material we find that there is no reason to doubt availability of this much capital. For all subsequent years assessee has made available capital accounts, balance sheets and cash flow statements, particulars of which tally with chart of incomes as per returns already filed contained in p. S-1 of paper book. 6. dispute in this ground is addition of Rs. 40,000 on account of availability of cash as on date of search. From deposition of assessee recorded on date of search we find that it was made clear that he had withdrawn sum of Rs. 1,47,500 from bank on 16th April, 1998 out of which gold was purchased for Rs. 50,000, equal amount was given to his wife and balance amount was available with him. withdrawal of sum from bank on this date is duly verifiable from copy of bank statement placed on record and that fact has also not been disputed by Assessing Officer. only reason for which Assessing Officer had not accepted claim of that assessee in this regard is that assessee had not adduced any evidence for purchase of gold worth Rs. 50,000. It is strange that Assessing Officer is not accepting utilization of cash on ground that purchase voucher was not available. There is every reason for Assessing Officer to doubt transaction in which bill is found during course of search and source of spending amount is not coming up. We are confronted with converse situation in which no bill for purchase of gold was found and assessee s explanation for having spent sum of Rs. 50,000 out of amount withdrawn from bank, on this transaction has been found unacceptable by Assessing Officer. It is further noticed that Assessing Officer doubted availability of cash from bank on ground that amount was withdrawn on 16-4-1998 whereas search took place on 15-7-1998. Here it is important to note that we are dealing with search case in which each and every aspect, nook and corner of assessee s premises is thrown open before search team and there is no possibility of anything escaping attention of officers. There is no reference in assessment order, even remotely suggesting utilization of sum of Rs. 1,47,500 elsewhere, withdrawn by assessee from bank. On perusal of cash flow statement for period 1st April, 1998 to 15th July, 1998, copy placed at p. 261 of paper book, it is palpable that withdrawal of Rs. 1,47,500 is duly reflected and closing cash balance on date of search is at Rs. 97,198.05, which is certainly more than Rs. 47,760 found at time of search. Under these circumstances we are of considered opinion that no addition on this count is warranted. We, therefore, order for deletion of addition of Rs. 40,000. 7. Ground No. 3 of assessee s appeal and ground No. 1 of revenue s appeal deal with addition on account of unexplained investment in gold ornaments. facts apropos of this ground are that gold ornaments weighing 939.8 grams (net) were found during course of search. On being show caused to explain source of this gold jewellery, it was stated by assessee that gold ornaments of 959.364 grams belonged to following persons : 1. Anand Soni, HUF as per WT 644.436 assessment order for assessment gms. year 1985-86 (net) 2. Anand Prakash Soni purchased 116.640 gms. (net) 3. Smt. Santosh Devi received 198.280 through Will gms. (net) 959.364 gms. (net) assessee enclosed copies of wealth-tax assessment orders for assessment year 1985-86 in case of Shri Anand Prakash Soni (HUF) and wealth-tax assessment order in case of Shri Suraj Prakash Soni assessee s brother for assessment year 1985-86. Assessing Officer did not accept explanation of assessee because of statement given by him and his wife at time of search. He extracted some portions of statements recorded under section 132(4) and thereafter discussed availability of gold jewellery vis-a-vis assessee s contention separately. He noted that Shri Anand Prakash Soni (HUF) had claimed gold jewellery of 644.436 grams (net) as belonging to it in light of wealth-tax assessment order passed for assessment year 1985-86 in which assessee s net wealth was determined inclusive of this much of gold jewellery. He did not accept possession of gold jewellery to this extent for reason that assessee had not furnished any wealth-tax return after assessment year 1985-86 and further no list of ornaments was ever filed. As regrards gold ornaments of 116.640 grams purchased by assessee Shri A.P. Soni were concerned, that was also not accepted because assessee had not furnished bill of Shri Ghanshyam Soni from whom gold was allegedly purchased and payment of Rs. 50,000 was stated to have been made out of cash withdrawal of Rs. 1,47,500. claim of Smt. Santosh Soni having received 198.280 grams (net) gold jewellery by way of Will of late Shri Ramchandra was also not accepted by Assessing Officer because she had not disclosed this fact at time of search. It was further observed by Assessing Officer that assessee s brother Shri Suraj Prakash had also claimed to have received jewellery from Shri Ramchandra Soni as per his Will. It was also noticed that sale bill of gold ornament issued by one Shri Ramchandra Swarankar was found during course of action under section 132(1) in which name of assessee was shown as seller for 139.75 grams and that of his wife Smt. Santosh Bala was shown as seller for 585.2 grams. Assessing Officer however accepted that Smt. Santosh Soni, wife of assessee received 62 tolas of gold ornaments at time of her marriage and assessee received gift of ornaments of 3.69 tolas. Accordingly it was held that 70 tolas of gold ornaments were received by assessee and his wife at time of their marriage. Resultantly, addition for 876 grams (939.8 minus 63.8 grams possession of 70 tolas accepted to have been received by assessee and his wife at time of marriage minus 63.79 tolas sold) was made which amounted to Rs. 3,74,052. In first appeal learned CIT(A) came to conclusion that total gold ornaments weighing 815.149 grams were acceptable. This included 644.436 grams possessed by HUF, 198.28 grams received by assessee s wife out of Will of Shri Ramchandra and 72.433 grams (equivalent of 6.21 tolas) accepted by Assessing Officer himself. Accordingly he restricted addition to Rs. 10,526 by allowing relief of Rs. 3,63,526. Both sides are in appeal against their respective stands. *** Anand Prakash Soni v. Deputy Commissioner of Income-tax