TaxTMI 
TaxTMI 
2014 (10) TMI 144
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....hat the arguments raised in ITA No. 2316/D/2011 would addressed the grounds in ITA No. 2317/D/2011. For ready reference we reproduce the grounds raised by the Revenue in ITA 2316/D/2011 by which order dated 22/05/2011 of CIT(A)-Meerut pertaining to 2004- 05 assessment year is under challenge: 1. "The CIT(A) erred in law in deleting the addition of Rs. 13,44,000/- on account of difference in capital account relying the reconciled figures of debit and credit entries on account of investment in house property even though the assessee failed to furnish the source of such investment in the house property to the satisfaction of AO as required in terms of section 69 of the Income Tax Act, 1961. 2. That the CIT(A) erred in law in deleting the addition of Rs. 1,50,000/- on account of unexplained household expenses solely relying on an unsubstantiated fact that the assessee's household expenses were met by her mother and by her ex-husband whereas no such evidence were furnished before the AO during the course of assessment proceedings. 3. That the CIT(A) erred in law in deleting the addition of Rs. 25,00,000/- on account of alleged unexplained gift without appreciating the fact that....
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....ined difference in opening capital and Rs. 25 lacs in view of services rendered to Shri Surendra Uppal & Rs. 1,50,000/- on account of expenses met out of the unexplained income. Aggrieved by these additions the assessee came in appeal before the CIT(A). In appeal before the First Appellate Authority these additions were deleted. Aggrieved by this the Revenue is in appeal. 5.1 The relevant facts relatable to these additions on which reliance is placed by the ld. Sr.DR are extracted hereunder from the assessment order: Facts relatable to ground no. 1: "With the return of income assessee filed balance sheet, which is assessee's capital account. The opening capital is shown at Rs. 21,01,936.00 against the closing balance of capital of Rs. 7,02,084.00. The assessee in her explanation filed on 12.12.2006 while explaining the expenditure showed education expenditure of daughter at Rs. 1,63,985.00, Payment in Foreign Currency at Rs. 2,00,000.00. Son purchase of Rs. 13,490.00, Cash deposited in HSBC at Rs. 3,900, 10 FDRs with HSBC of Rs. 49,000.00, 10 FDR's with HSBC more than of Rs. 4,00,000.00, Air Tickets through Ashwa Tours & Travels of Rs. 25,000.00, Deposited in Post Office o....
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....lacs from Sh. Surendra Uppal. The alleged gift is not without consideration as held in assessment year 2003-04 the assessee has been in receipt of payment from Uppal Group of concerns, hence infact the amount of gift to the assessee is in lieu of serviceds rendered by her. Hence the amount of Rs. 25.00 lacs is taken as receipt in her hands and added accordingly." 6. The ld. Sr. DR placed heavy reliance upon the assessment order so as to submit that on facts the additions should not have been deleted as the explanation offered by the assessee has been blindly accepted by the CIT(A) without making any effort to cross check the same. Considering the findings recorded the ld. Sr. DR was required to address the documents available in the paper book filed, however, it was his submission that the findings recorded in the assessment order are sufficient to sustain the addition made and it was his request that the impunged order be reversed and additions made may be upheld. 7. The ld. AR addressing the background of the case submitted that in the facts and circumstances of the present case the assessee is the last person who ought to have been searched looking at the nature of the inc....
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.... A perusal of the assessment order would show that right at the first instance the assessee has replied before the AO that the said flat was purchased in the A.Y. 1998-99 by Shri Surendra Uppal where she has been living since then and as per page 25 of the paper book it is seen that at the time of search Sh. Surendera Uppal and the assessee were found living at the same address. A perusal of the impugned order further shows that as per the statement recorded on 18/03/2005 during the search operation the assessee was asked the following question which also throws light on the issue. The same is extracted from the impugned order: "Q3 Please stated the details of investment made in purchase of Flat No.B-42A, Gangotri Apartment with source thereof." The answer to the Q3 "A General Power of Attorney dt. 23.12.1997 was executed by Mrs. Alpana Gupta in favour of my brother Sh. Pankaj Johri in respect of the above flat (Page No. 14 to 16 of Annexure A-5). It was agreed that the flat was on sale for Rs. 12 lacs. The agreement to sale was made on my name by Shri Alpana Gupta and entire payment of Rs. 12 lacs were made by December, 1997. The mode, manner and source of investment whic....
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.... was in 1997 working as a Manager in tea estate in West Bengal. In support of the alimony received confirmation from the ex-husband had been filed wherein Mr. Verma accepted that he would bear the expenditure on the upbringing of his two daughters Saloni & Mohini Verma and that he along with his family would financially help his wife to settle in Delhi. It was submitted that although during the assessment proceedings the details were not filed but statement to this effect was made by the said lady and the evidences available on record copy of which is placed at pages 11 to 15 were confronted to the AO. It was also pointed out that apart from this the mother of the assessee Dr. Urmila Joly who is a retired Doctor from Central Government Health Services residing in 307 Alkananda, New Delhi also accepted the fact that she has also extended full support to the assessee and her minor grand daughters who resided with her and the electricity, telephone etc. expenses and other household expenses were taken care of by her. Confirmation of the certificate of the mother it was stated is available in the paper book, which too has been confronted to the AO and not rebutted during the appellate ....
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....ced by way of a sale deed. The assessee it was submitted admittedly was subjected to search purely on account of the fact that search was conducted on the companies of Shri Surendra Uppal. The AO of the assesse and Shri Surendra Uppal who was alive at that point of time it was submitted was the same AO. The fact of gifting an amount of Rs. 25 lacs to the assessee by way of a gift deed is evidenced on record. The fact that the donor has disclosed this gift having been made to the assesse in the block assessment is a fact on record. Inviting attention to the impugned order it was further submitted by him that it is a matter of record that wherever and whenever the assessee has received professional receipts from Uppal Group of concerns she has disclosed the same in her returns filed in the normal course. In these circumstances the findings on facts that the amount is a gift to the assessee deserves to be upheld. 14. We have heard the rival submissions and perused the material available on record. It is seen that the assessee before the CIT(A) advanced the following arguments which have been reproduced para 8.2 of the impugned order, considering which the CIT(A) proceeded to grant ....
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....and ground no. 6 is a residual ground as such require no adjudication. These are accordingly dismissed. 17. In the result, the revenue's appeal is dismissed. ITA No. 2317/Del/2011 18. ITA No. 2317/D/2011 has been filed by the revenue against the order of the CIT(A)-Meerut dated 25/02/2011 pertaining to 2005-06 assessment year on the following grounds: 1. "That the CIT(A) erred in law in deleting the addition of Rs. 3,00,000/- on account of unexplained household expenses solely relying on an unsubstantiated fact that the assessee's household expenses were met by her mother and by her ex-husband whereas no such evidence were furnished before the AO during the course of assessment proceedings. 2. That the CIT(A) erred in law in deleting the addition of Rs. 6,20,000/- on account of alleged unexplained gift without appreciating the fact that the assessee failed to file any evidence with regard to the genuineness of such gift despite the specific opportunity given to the assessee. 3. In doing so, the CIT(A) ignored the decision in the case of Rajiv Tandon vs. CIT, 294 ITR 219 which clearly lays that the concept of genuineness of gift which also includes the occasion and....
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....ee admittedly provided her services as an interior decorator and also consultancy to the Senior Citizen Home Complex Welfare Society, Uppal Tower Pvt. Ltd. For ready reference we extract the para from the assessment order on which reliance has been placed upon by the ld. Sr. DR: "During the assessment year the assessee states to have received an amount of gift of Rs. 6,20,000.00 from Shri Surendra Uppal. The alleged gift is not without consideration as held in assessment year 2003-04 the assessee has been in receipt of payment from Uppal Group of concerns to also received Rs. 40,000.00 stated above from Senior Citizen Home Complex Welfare Society. Hence infact the amount of gift to the assessee is in lieu of services rendered by her. Hence the amount of Rs. 6,20,000.00 is taken as receipt in the hand and added accordingly." 22. The ld. AR has contended that the arguments on behalf of the assessee remain identical and whenever there has been professional receipt it has been disclosed the fact that Sh. Uppal did live with the assessee over the years is a fact and thus the gift made out of love and affection cannot be doubted. The averments made before the CIT(A) are found recor....
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.... the aforementioned peculiar facts and circumstances we find no good reason to interfere with the findings arrived at in the impugned order. The conclusion of the CIT(A) which finds favour with us reads as under: - 4. "The AO made certain additions in the assessment in respect of which he has imposed the penalty by observing that the assessee concealed her income and furnished inaccurate particulars of income. The appellant made submissions during the assessment as well as the penalty proceedings. Detailed submissions were made during appellate proceedings in quantum appeal on the basis of which I have deleted the addition in my order of date in Appeal No. 173/07-08. The addition having been deleted and explanations given during appellate proceedings, I, in my considered opinion, hold that it is not a case which is hit by the provisions of Explanation 1 of section 271(1)(c). Penalty is held as not imposable in view of the ratio of the case of CIT vs. Reliance Petro Products Pvt. Ltd., 322 ITR 158 (SC). Penalty order is cancelled." 27. In the aforementioned peculiar facts and circumstances the departmental appeal is dismissed. ITA No. 2319/Del/ & 2320/Del/2011 28. ITA No....