TaxTMI 
TaxTMI 
2016 (2) TMI 121
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the following grounds of appeal. "1. That the Ld. C.I.T.(A) erred in confirming addition u/s 69A Rs. 4,44,295/- representing realization of assets inherited from mother pursuant to her 'WILL". 2. That the Ld. C.I.T.(A) erred in sustaining disallowances Car Exp. Rs. 10,993/-, Depreciation on car Rs. 6,328/- + Telephone Expenses Rs. 7,523/- although the expenses related wholly and exclusively to business activities. Without prejudice the disallowances are excessive." 3. The assessee is the proprietor of M/s. Lohia Ispat Udyog. The return of income for the assessment year was filed on 12.10.2007 declaring a total income of Rs. 1,39,760/-. The case was taken up for scrutiny assessment under section 143(3) and notice....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e WILL has been executed on a plain white paper and all the requisite conditions which are said to be followed while executing the same are not complied. AO was further of the view that the WILL has not been certified by any Advocate and not been attested by an independent witness and found the signature of the assessee as a witness whereby, the AO disbelieved the said WILL and the amounts transferred to business account were added to the income of assessee. 3.3 The assessee claimed expenditure of motor car to an extent of Rs. 1,09,933/- but the AO disallowed the same to the extent of Rs. 21,987/- being 20% against Rs. 1,09,933/-. The assessee claimed depreciation on motor car for Rs. 63,280/-. The AO disallowed the same to the extent of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....paper book to para 4 of the WILL wherein he pointed that the mother of the assessee expressed her intention to grant all her current assets to a tune of Rs. 4,28,795/- to the assessee. Supporting the same, the ld. Counsel for the assessee also pointed to the balance-sheet of his mother at page no.16 of the paper book where all her investments in shares totaling to Rs. 4,28,795/- and the same were transferred to the assessee's business concern from his personal account and accordingly pleaded to allow ground no.1 in favour of the assessee. The ld. DR vehemently contended that the AO is right in observing that the contents of the WILL are nothing but a concocted story, which, by no means, can be acceptable and relied on the orders of the ld. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and one daughter. Amongst them is the assessee before us but none challenged the said WILL before the Court of law. In fact, no contrary evidence has been brought to our notice. Therefore, it can be safely concluded that the said WILL is a valid WILL and the same regulated the succession as declared by the testator, i.e. the mother of the assessee. In respect of page no.16, where the Profit & Loss account belonging to the mother of the assessee is produced, wherein it shows that she has invested in shares, particularly, in MKJ Development Ltd., Starlight Credit (I) Ltd. and Kherapati Vanijya Ltd. which altogether come to Rs. 4,28,795/-. Therefore, in our view, the amount to an extent of Rs. 4,28,795/- is validly proved to have been investe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... business purpose only. The ld. Counsel further submitted that though the assessee appeared from time to time and filed the required details but the AO, without any reason whatsoever, disallowed one-fifth of the car expenses and depreciation on car and telephone expenses on ad hoc basis. Therefore, the ld. Counsel prayed for deletion of the above disallowances. In reply, the ld. DR supported the orders of the lower authorities and argued that the ld. CIT(A) is justified in restricting the disallowance to 10% of the expenses. After hearing the submissions of both the representatives, we are of the view that on mere presumption the AO just made the additions on ad hoc basis without any basis. The AO himself opined that the expenses of persona....