TaxTMI 
TaxTMI 
2012 (9) TMI 477
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....come from different sources on the basis of search & seizure proceedings. 6. & 7. The Ld. CIT (A) has further erred in confirming addition of Rs. 3,00,000/- made by AO on a/c of value of gold ornaments & jewellery as undisclosed income. 8. The Ld. CIT (A) has denied granting of benefit of Instruction #916 dated 11/05/1994 issued by Central Board of Direct Taxes. 9. The Ld. CIT(A) has erred in confirming the action of AO in considering investments of Rs. 28,845/- is shares & securities to be from undisclosed income. 10. The Ld. CIT (A) has erred in confirming addition made by AO of Rs. 1,00,000/- on account of undisclosed expenditure on furniture. 11. The Ld. CIT (A) has erred in confirming addition made by AO of Rs. 30,000/- on account of undisclosed expenditure of religious donations. 12. & 13. The Ld. CIT (A) has erred in confirming additions made by AO of Rs. 11,000/- & Rs. 6,000/- made on a/c of undisclosed expenditure on tour to Singapore & Goa respectively. 14. & 15. The Ld. CIT (A) has erred in confirming addition made by AO of undisclosed household expenditure of Rs. 30,00/- & of Rs. 15,000/- on renovation expenditure. 16. The Ld. CIT (A) has erred i....
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....eding on 30.12.1993, except, written reply submitted vide letter dated 27.10.1993. No family member was assessed to wealth tax along with the assessee. The assessee has disclosed u/s132(4) of the IT Act an additional income of Rs. 3,00,000/- on account of undisclosed jewellery. The A.O. made addition of Rs. 3,55,509/- on account of undisclosed jewellery in year under consideration in the income of the assessee. 7. Being aggrieved by the order of the A.O., the assessee filed first appeal before ld. CIT (A), who has adjudicated this issue on page 5 in paragraph no.8 and allowed marginal relief of Rs. 55,509/- and confirmed the addition of Rs. 3,00,000/-. The ld. CIT(A) had given this relief by considering the Instruction No.1916 dated 11.05.1994 and statement recorded u/s 132(4) of the IT Act. 8. Now, the assessee is in appeal before us. The ld. Counsel for the assessee filed paper book and contended that this jewellery was belonged to them. The appellant's daughter purchased gold bonds weighing 500 gr. which was on conversion gold bond to gold ornaments were 545 gr. These facts are on record and disclosed by his daughter in her return of income (page reference 180 to 196). The....
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....referred page no.168 for which return had filed on 13.08.1982) in A.Y. 81-82 at Rs. 8000/-, Rs. 18,712/- & Rs. 19,224/- for which page was referred 174 of paper book and return was filed on 13.03.1985. Jewellery worth Rs. 14,400/- and Rs. 300/- was purchased and had shown in A.Y.85-86 for which he referred page no.179 and return of Smt. Sharmistha H. Patel was filed on 13.03.1986. The assessee's daughter as per page no.182 purchased another diamond jewellery valued Rs. 4,400/- which had been reflected in return for A.Y. 81-82. The another gold bond certificate evidence from page nos. 185 & 196 of paper book dated 23.07.1980 in the name of Nina Harish Patel which has been disclosed in the regular return of the assessee's daughter. The A.R. further has given re-conciliation of the jewellery as under:- 13. (A) Gold jewellery - Total jewellery found 1634.2gms (a) Sharmistha 1072.7 gms (b) Neena 561.5 gms Benefit of instruction No. 916 950 gms Balance jewellery 684.2 gms (B) Diamond jewellery - Sharmistha Rs. 1,99,380/- Neena Rs. 30,290/- Total Rs.2,30,....
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....on no.6 and also explained the source of jewellery with evidence submitted in paper book. The total jewellery was found in weight of 1634 gms. As per Board Circular No.1916 dated 11.05.1994, credit of 500gms jewellery is to be given on the basis of Hon'ble Gujarat High Decision in the case of CIT vs. Ratanlal Vyaparilal Jain Tax Appeal Nos. 661 & 662 of 2009, decided on July 19, 2010 in which the Hon'ble Gujarat High Court has held that Board's Instruction No. 1916 dated 11.05.1994 is the guideline not only procedure but explanation of source as in Hindu family jewellery is gifted at the time of social function viz. marriage, birth day, marriage anniversary and other festivals. We are of the considered view that to the extent of 600 gms gold jewellery value Rs. 1,54,200/- (600 gms. value Rs. 1,54,200/- @ 2570 per 10 grams as on 31.03.1987) held unexplained and CIT (A) is justified to the extent of Rs. 1,54,200/- in confirming the addition and remaining addition of Rs. 1,45,800/- is deleted. Accordingly these grounds of appeal are partly allowed. 10. Ground no.-9 is against the addition of Rs. 28,845/-. The A.O. observed that during the course of search and seizure proceeding, sh....
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.... Religious donations Rs.30,000/- 12 & 13. Expenditure on tour to Singapore & Goa Rs.11,000/- & Rs. 6,000/- 14 & 15. Household Expenses Rs. 30,000/- & Rs. 15,000/- 15. The A.O. observed in assessment order that during the course of search expensive expenditure on furniture & fitting at the office and at the residence was found. It was not recorded in the regular books of account. Similarly, evidences were found on having incurred expenditure on religious donation, expenses on tour to Singapore & Goa by the assessee's children, low household expenditure and renovation expenditure of residence of the assessee. The assessee was interrogated during the course of statement u/s 132(4) of IT Act and he admitted household expenses per month Rs. 1500/- to 2000/- which are not matching with withdrawal and same were incurred from his undisclosed professional receipts. The assessee had disclosed Rs. 30,000/- on account of household expenses. In reply to question no.42 of statement dated 27.10.86, he further admitted undisclosed income of Rs. 1,00,000/- on account of furniture at residence and office, Rs. 30,000/- on religious donation in last five years, Rs. 11....
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....lated to previous year not the year under consideration and disclosure was made by the assessee to buy the peace of mind if anything was found out during the search operation. The appellant had disclosed Rs. 11,000/- on account of Singapore trip of daughter who was group leader of school tour and all the particulars mentioned in diary related to school trip and also related the previous year not the year under consideration. Likewise expenditure on Goa tour of Rs. 6000/- was disclosed by him but same were related to the previous year. The appellant disclosed amounting Rs. 30,000/- on account of household expenditure but household during the assessment year was Rs. 38,572/-. As per Section 69C of IT Act any expense incurred unaccounted it can be added in which it has been incurred. Therefore, learned counsel argued that all the disclosure was made to buy the peace. Another side, ld. D.R. vehemently relied on the order of the A.O. and CIT(A) and statement u/s 132(4) of the IT Act. 18. We have perused the orders of the authorities below and paper book and heard the arguments of both sides. The ld. A.O. had not brought on record any incriminating material to show that the assessee h....
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....onfirmed the addition on page 18 of the CIT(A) order in paragraph no.11 because the stamps were found in the possession of the assessee and no material was brought on record by the appellant that stamp papers were purchased by other. 21. Now the assessee is before us. Ld. Counsel for the assessee contended that all the stamps were not pertained to assessee himself. The appellant filed the bifurcation of stamp purchased before the CIT(A) and claimed that stamp valued Rs. 6098/- purchased in the name of assessee and remaining stamp valued Rs. 7552/- in the name of different parties. He further claimed that during the year under consideration only stamp Rs. 710/- were purchased. Thus, no addition is called for. Whereas, ld. CITD.R. vehemently argued that ld. CIT(A) had considered all the evidence. Therefore, the order of the CIT(A) may be confirmed. 22. We have perused the statement u/s 132(4) of the IT Act and order of the authorities below and arguments and reply filed before the CIT(A). The assessee had hardly purchased stamps valued Rs. 710/- during the year under consideration and remaining stamps were either purchased by other parties or purchased by the assessee in....
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....ized papers showing the transactions of shares does not pertain to him. It pertains to its clients of the appellant who belong to popular group. But the appellant has not produced any evidence to show that the transactions does not pertain to him. A mere claim that it pertains to someone else is not enough. If the documents have been found in his possession, it is for him to lead the evidence to show that it does not relate to him. Further, the A.O. has mentioned that the attention of the appellant was drawn to the pages 27 to 92 of Annexure Y-4, which are slips issued by various share brokers in the names of family members of the appellant and also towards other loose papers. The appellant could not explain it properly, hence the A.O. considered that the transactions were conducted by the appellant himself. A.O. has further mentioned that during the search, dividend vouchers in the names of various family members of the appellant was found. Further considering the fact that the purchase and sale of shares is a continuous process, the A.O. estimated the income arising out of such investment at Rs. 15,00,000/-. Considering the above discussion and the material found during the searc....
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....vise in a year? Ans. Very few. Q.17. When very few clients come for seeking such advice then you must be able to specify whether the persons connected with page 60 of Annexure Y-1 had come for such an advice or not? Ans. Yes, they had come. Q.18. What fees did you charge from them for this particular advice? Ans. No specific fees is charged for such an advice from regular clients and in this case no fees for this advice was charged. Q.19. So one thing is clear - that page 60 of Annexure Y-1 came to you for seeking advice for sale of share. Is that correct? Ans. It was in relation to share. I am not sure whether it was for sale of share, calculation of capital gains or preparing of return of Income. Q.20. In response to Q. No.17 you had stated that the person connected with the said document had come to you for seeking advice regarding sale of share. In response to Q.19 you have changed your stand. What is the reason for this? Ans. The reality is that I do not know about this paper. Q.21. I am showing to you page 61 of Annexure Y-1. What are the calculation on this page? Can you link up the cal....
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....nd his family members. Further, the profit on purchase and sale of the share has calculated by the assessee on those seized papers. The appellant had not brought on record any evidence that these papers were pertained to Popular Groups or either assessee's client. The appellant had not substantiated his claim before the A.O., CIT(A) and also before us with evidence that these papers were pertained to different persons. However, the estimate made by the A.O. appears to higher side further the assessee had disclosed shares and securities in the name of the family members in their return. Therefore, we confirm the CIT(A) order to the Rs. 7,00,000/- instead of Rs. 15,00,000/-. Thus, the assessee gets relief of Rs. 8,00,000/-. The assessee's appeal is partly allowed on the ground. 27. Ground no.18 is against the addition of Rs. 1,50,000/- on account of payment made to Modern Engineering and Moulding Company by Ms. N.H. Patel. As per page 93 and page 94 she paid Rs. 1 lac and Rs. 50,000/- to above party. The assessee was given reasonable opportunity to explain the source of Rs. 1.5 lacs. He submitted reply vide his letter dated 27.10.1993 and admitted that she had paid Rs. 1.5 lacs....
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....ble opportunity before estimating the professional receipts. The appellant replied vide his letter dated October,27, 1993 and total receipts had been disclosed from professional business at Rs. 4,41,507/-. He further admitted during the course of recording the statement u/s 132(4) that "Amounts received by me from various persons which come to me for professional advice other than my clients are not recorded by me in my regular Books of accounts." The A.O. estimated the income @ Rs. 200/- per client at Rs. 9,75,000/- and after reducing the disclosed receipts of Rs. 4,41,507/-. The remaining amount of Rs. 5,33,500/- was added in the income of the assessee. 32. CIT(A) had confirmed the addition on page nos.24 and 25 of the CIT(A). The observation made by the CIT(A), which is reproduced as under:- "The argument of the appellant and the facts of the case have been considered. It has been found that during the course of search, the appellant himself admitted in response to question No.44 "Amounts received by me from various persons which come to me for professional advice other than my clients are not recorded by me in my regular books of accounts." Further it has been me....