TaxTMI 
TaxTMI 
2012 (9) TMI 477
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.... & 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 in confirming addition of Rs. 13,650/- made by AO on a/c of stamp p....
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.... 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 assessee's daughter had categorically admitted during course of search and seizure pr....
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....9,224/- 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.2,30,670/- (c) Silver Utensils Rs. 61,000/- The assessee retracted whatever disclosure made during the course of u/s 132(4) of the IT Act vide his letter dated 16.02....
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.... 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, shares and debentures worth Rs. 28,845/- were found and seized. The A.O. had given reasonable opportunity of being heard. The assessee's replies were considered by the A.O. and held ....
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....sessment 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. 11,000/- expenditure on Singapore tour and about 5 to 6000/- rupees on Goa tour and Rs. 30,000/- disclosed on account of renovation of residence. Thus, total disclosure was Rs. 1,92,000/-. The source of the investment was exp....
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.... 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 had incurred expenditure on furniture and renovation. He considered only statement recorded u/s 132(4) of the IT Act. Thus, there is no basis of addition of Rs. 1,15,000/- and CIT(A) was not right in confirming the addition. During t....
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.... 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 different years. Thus, the CIT(A) was not justified in holding the addition of Rs. 13,650/-. We allow the appeal on this ground in favour of the assessee. 23. Ground no.17 is against the addition of Rs. 15,00,000/- on account of speculative....
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....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 search, it is quite clear that the appellant was dealing in purchase and sale of shares. Hence the addition made on this account is confirmed. 25. Now, the assessee is before us. The ld. Counsel for the assessee contended that during the search and sei....
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....r 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 calculations have with those on page 60 of this annexure? Ans. I am not in position to state the nature of the calculation. I can not link up the figures appearing on page no.60 and 61. Q.22. I am showing to you page 62 of Ann. Y-1. What are the figures on this page and can you link up this with page no.60? Ans. I am not in position to state the nature of the calculation. I can't link up page no.60 and 62 of Y-1. Q.23.....
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....ties 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 to that company from Haniush Trust account by debiting to her account. The necessary evidences were not filed by the assessee before the A.O. at the time of assessment proceeding. Therefore, he made the addition of Rs. 1.5 lacs in the income of the assessee. 28. The ld. CIT(A) had also confirmed the addition on account of payment made to above company because he did not produce any evidence before the Assessing Officer to explain the source of the investment and also even during appellate proceeding, the source of deposit was not expla....
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....closed 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 mentioned by assessing officer that during the search proceedings no systematic details about the receipt from the clients were found recorded. Considering the fact that there was no systematic record of the professional receipt found during the search and in the statement recorded u/s.132(4) at question No.44 the appellant had admitted that amount received from various persons are not recorded, the estimate made by the assessing officer on the basis of clients general index register is quite reasonable. Further, the assessing officer has taken an average ....