Per Shri Ch. G. Krishnamurthy, Senior Vice President - These cases have a chequered history. The assessee Khandani Shafakhana is a registered firm engaged in the manufacture of Unani medicines. On 20-11-1981 the business premises of the firm and residential premises of its partners were searched by the ITOs under section 132 of the Income-tax Act, 1961 ('the Act). During the course of the search certain documents and undisclosed assets were found, on the basis of which an order was passed by the ITO under section 132(5) making an addition of Rs. 11,86,394 made up of the following items:

1. Unexplained cash of Rs. 8,477 out of cash of Rs. 66,000 seized from the business premises of the firm.

2. Concealed income of Rs. 6,07,847 on account of notings made by Shri Hakim Hari Kishan Lal, managing partner in his handwriting in the loose papers seized from the business premises of the firm-pages 31 to 35 of Annexure D-1. This includes division of Rs. 3,60,424 between three persons, namely, Shri Hakim Hari Kishan Lal, Vijay Abbot and Rajinder Abbot.

3. Undisclosed income of Rs. 4,48,000 on account of notings made on pages 30 and 43 of Annexue D-1.

4. Undisclosed income of Rs. 1,22,070 on account of notings made at page 34 of Annexure D-1.

This order was passed on 17-2-1982. Subsequently, the assessee filed objections under section 132(11) before the notified authority, who happened to be in this case the Commissioner, against the order under section 132(5). Pursuant thereto various meetings were held at the instance of the Commissioner, when evidence against the additions was produced and considered. Eventually, the assessee filed a petition under section 273A of the Act before the Commissioner of stating that they would agree for an addition of Rs. 75,000 to be spread over three assessment years with a view to purchase peace and avoid multiplicity of proceedings, making it clear that the assessee was not agreeing that there was any concealment of income. Thereafter the Commissioner called for a report from the ITO and again various meetings were held between the assessee's representative and the Commissioner, the IAC and the ITO. On 29-4-1982 a settlement was reached between the assessees and the Income-tax Department, which was recorded by way of minutes which we consider it necessary for the purpose of decision of this case to reproduce in detail:

"MINUTES OF THE MEETING

To CONSIDER THE SETTLEMENT PETITIONS OF KHANDANI SHAFAKHANA, SHRI HAKIM HARI KISHAN LAL, SMT. RAJ DEVI, DR. RAJINDER ABBOT AND DR. HAR PARKASH ABBOT FOR THE ASSESSMENT YEARS 1980-81 TO 1982-83:

A detailed discussion was held in the room of Commissioner Delhi-VIII, New Delhi on 28-4-1982 and 29-4-1982. The following persons were present:

1. Shri Ranbir Chandra Commissioner of Delhi-VIII, New Delhi.

2. Shri J. Gill, IAC, Range II(i), New Delhi.

3. Shri S.S. Pushkarna, ITO Doctor Circle, New Delhi.

4. Shri S.L. Batra, Chartered Accountant.

5. Shri Hakim Hari Kishan Lal.

The issues involved were discussed with reference to the orders under section 132(5) of the Income-tax Act, 1961 and petitions moved by the assessee under section 132(1) and also the report of the ITO Doctor Circle dated 28-4-1982 forwarded by the IAC, Range II(i), New Delhi. The issues involved were discussed thread bare in which the assessee's authorised representative also participated. The concensus of the discussion was as under:

1. That the undisclosed income in the hands of Dr. Har Parkash Abbot, Dr. Rajinder Abbot, Shri Hakim Hari Kishan Lal, Smt. Raj Devi while making orders under section 132(5) were not called for as they stood explained satisfactorily in view of the evidence produced by the assessee.

2. That the assessee was not in a position to explain the notings in the case of the firm Khandani Shafakhana in respect of sales which are seized during the search operations under section 132 on 20-11-1981. Through the detailed scrutiny of these notings with reference to the regular books of account, it