TaxTMI 
TaxTMI 
2010 (7) TMI 769
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....account of disallowance of payments by invoking the provisions of section 40A(3) of the Act ?" Tax Appeal No. 662 of 2009 "(A) Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the Commissioner of Income-tax (Appeals) and thereby deleting the addition of Rs. 30,17,029 made by the Assessing Officer in respect of income from adat commission ? (B) Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the Commissioner of Income-tax (Appeals) and thereby deleting the addition of Rs. 15,93,600 as income from bill discounting ? (C) Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the Commissioner of Income-tax (Appeals) and thereby deleting the addition of Rs. 11,85,000 made in respect of unexplained expenditure incurred on renovation of house property ?" 2. Subsequently, learned advocate for the appellant-Revenue has reframed the questions as follows : Tax Appeal No. 661 of 2009 "(A) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 3,46,668 made on account of undisclo....
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....ssed at Rs. 1,68,79,830. 6. The assessee carried the matter in appeal before the Commissioner (Appeals), who partly allowed the appeal. Being aggrieved by the order of the Commissioner (Appeals), both the assessee as well as the Revenue preferred appeals before the Tribunal. Both the appeals came to be partly allowed. 7. In relation to proposed question (A) in both the appeals, during the course of search, jewellery to the extent of 1632.8 grams came to be seized from the residence of the assessee. The Assessing Officer treated 567 grams gold ornaments in the hands of Anjudevi, Badlidevi and Godavaridevi as explained and also accepted 227.1 grams belonging to the family members, consisting of his son and two daughters, as having been explained. The Assessing Officer accepted the lump sum gold ornaments weighing 800 grams as explained and the balance 655 grams valued at Rs. 3,46,668 were treated as unexplained and taxed as undisclosed investment and added to the income of the assessee. In the assessee's appeal, the Commissioner (Appeals) restricted the addition to Rs. 1,01,145, holding that the claim for 40 grams of the jewellery belonging to the assessee's w....
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....jewellery during the course of search, the basis for the same recognizes customs prevailing in the Hindu society. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the said circular to be a reasonable quantity, cannot be faulted with. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to give rise to a question of law. 11. In relation to proposed question (B) in Tax Appeal No. 661 of 2009, on the basis of the seized paper page No. 31, the Assessing Officer noted that there was an account without name for two periods. In the first account, the total amount credited was Rs. 84,34,000 and for the second account, it was Rs. 53,23,939. The Assessing Officer also noted that in these accounts, interest of Rs. 1,68,680 and Rs. 1,06,489 was debited. The Assessing Officer, ignoring the submission of the assessee that the interest represented the debit interest and the assessee has not claimed any inte....
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....10 per cent., i.e. Rs. 31,75,820 against which unaccounted expenditure was estimated at Rs. 15,87,910 (50 per cent.) and the net income was Rs. 15,87,910. The Assessing Officer, in respect of the trading turnover of Rs. 3,17,58,200, worked out as above, estimated the cash purchases of Rs. 3 crores and disallowed 20 per cent. thereof under section 40A(3) of the Act and, accordingly, worked out the disallowance at Rs. 63,51,540. In the assessee's appeal, the Commissioner (Appeals) deleted the addition which came to be confirmed by the Tribunal in the Revenue's appeal. 16. As can be seen from the impugned order of the Tribunal, the Tribunal has noted that it was an admitted fact that the undisclosed income had been estimated in the case of the assessee after rejecting the books of account maintained by the assessee. The Assessing Officer had merely estimated the cash payment over the specified amount. No specific case had been brought on record whether the assessee had made any payment in this case in excess of Rs. 20,000. According to the Tribunal, the onus is on the Revenue to prove that the assessee had incurred the expenditure in excess of the specified limit as pr....
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.... 5 per cent. 19. Thus, on the same set of facts, the Commissioner (Appeals) has worked out the gross profit at the rate of 6 per cent. whereas the Tribunal has adopted the rate of 5 per cent. Thus, the two authorities have on the same set of facts made different estimates. Thus, on these facts, the order impugned does not give rise to a question of law so as to warrant interference because that would only be a case of replacing one estimate by another estimate. 20. In relation to the proposed questions (B) and (C) in Tax Appeal No. 662 of 2009, the Assessing Officer had noted that the assessee was engaged not only in cheque discounting, but also in bill discounting business. He noted that the assessee had shown Rs. 9,52,746 on turnover of Rs. 95,27,462 as cheque discounting income. According to the Assessing Officer, the period of discounting was two days. He, therefore, estimated the income from cheque discounting at Rs. 11,43,295. The average of two figures was worked out at Rs. 10,48,020 which was taken as the cheque discounting income. In respect of the bill discounting, the total turnover of Kamal Trading, Jai Ambe Trading Co. and Arihant Sales Corporation was ....
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....otal addition in respect of the bill discounting/cheque discounting are sustained only to the extent of Rs. 9,52,746." 22. Thus, it is apparent that the conclusions arrived at by the Tribunal are based upon the findings of fact recorded after appreciation of evidence on record. Nothing is pointed out on behalf of the Revenue to indicate that the findings arrived at by the Tribunal are based upon irrelevant material or that relevant material has been ignored. In the circumstances, the controversy involved being based purely upon findings of fact, does not give rise to any question of law. 23. Proposed question (D) in Tax Appeal No. 662 of 2009 relates to addition of Rs. 11,85,000 in respect of expenditure incurred on renovation of the house property. The Assessing Officer noted that during the search proceedings, the assessee had stated that the premises belonged to Smt.Anjudevi, wife of the assessee and Rs. 5 to Rs. 6 lakhs were spent on repairs of the same premises for which the assessee had advanced Rs. 2.5 lakhs out of his bank accounts. Smt. Anjudevi stated that the assessee had made a disclosure of Rs. 30 lakhs covering the unexplained investment in this regard....