TaxTMI 
TaxTMI 
2008 (8) TMI 914
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....4-05). 2. The first appellate order has been questioned by the Revenue in ITA No. 372/Jp/2007 (asst. yr. 1998-99) on the ground that the learned CIT(A) has erred in : "1. allowing the relief of Rs. 5,20,820 by determining the commission income at Rs. 86,832 by applying the rate of 1/3 of only 10 paise per hundred rupees of the turnover where the AO had rightly applied rate of 100 paise per hundred rupees turnover and had already allowed 50 paise per hundred turnover as expenses. 2. (a) holding that the assessee was only an introducer/facilitator for bogus billing and the owners of the primary and secondary concerns were not benamidars of Svs. Rakesh R. Purohit, Ramesh Chand Manihar and Manmohan Krishna Bagla but were engaged in issuing bogus bills on their own and not (on) behalf of the assessee, Ramesh Chand Manihar and Manmohan Krishna Bagla by ignoring statements/affidavits of the owners of primary and secondary concerns, their financial status, and the overall circumstances of the case. (b) holding that the statements recorded of the benamidars under s. 131 of the IT Act, 1961 during the assessment proceedings have no evidentiary value and therefor....
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.... 1. holding that the return filed in Form No. 2D is not invalid and erred in not holding the assessment proceedings void ab initio. It is contended that the assessment order passed under s. 153A r/w ss. 153B and 143(3) of IT Act is bad in law, void ab initio and deserves to be annulled because the assessment is based on invalid and non est return. 2. confirming the addition of Rs. 51,649 on account of commission in bogus billings by holding that the assessee has acted as introducer/ broker in the bogus billings made by Shri Om Prakash Ghiya, Prop. M/s Anmol Ratan, Shri Mahesh Sharma Prop. M/s Tirupati Balaji Gems, Shri Gauri Shanker Pareek Prop. M/s Vinayak Overseas, M/s Naman Gems (P) Ltd. and Shri Umesh Saboo Prop. M/s Shruti Gems. 3. confirming the addition of Rs. 53,800 on account of disallowance out of petrol expenses, depreciation on car, and telephone expenses. 4. In the appeals filed by the Revenue and assessee for remaining assessment years ground Nos. 1 to 5 in Revenue's appeal and ground No. 2 in the assessee's appeal is common and the only difference is of the amount deleted by learned CIT(A)/sustained by learned CIT(A). Facts and issue be....
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....nover of these concerns. The AO estimated expenses in issue of bogus bills @ Rs. 0.50 per hundred and estimated the net income from issue of bogus purchase bills @ Rs. 0.50 per hundred. 6.2 On the basis of the reasons mentioned in paras A to R at pp. 9 to 10 of assessment order for asst. yr. 2000-01, the AO held that Shri Umesh Saboo, Shri O.P. Ghiya, Shri Mahesh Sharma, Shri Mahesh Khandelwal, Shri Mohan Prakash Sharma, Shri Gauri Shanker Pareek, and Shri Raghuvar Dayal Pareek were benamidar of the assessee, and his partners Shri Manmohan Krishna Bagla and Shri Ramesh Chand Manihar (Maheshwari) and the business concerns in the name of these persons and M/s Naman Gems (P) Ltd. were actually managed and controlled by the assessee and his partners, Shri Manmohan Krishna Bagla and Shri Ramesh Chand Maheshwari. The learned AO held that the above said business concerns in the name of the above said benami persons were benami concerns of the assessee and his partner Shri Manmohan Krishna Bagla and Ramesh Chand Maheshwari (Manihar). However, the AO has treated Shri Sanjay Pareek (Prop. M/s Mine O Gems) and Shri Ram Ratan Patwari as independent persons. 6.3 1/3rd income determined in....
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....ssessment years as under : Particulars/A.Y. 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 Commission on account of alleged bogus bills issued by alleged benami firms 51,649 86,832 1,98,377 2,40,710 2,75,081 5,41,152 2,15,807 7. The Revenue is in appeal against the additions deleted by the learned CIT(A) and the assessee is in appeal against the additions sustained by learned CIT(A). 8. The learned Departmental Representative vehemently argued the case and submitted that these business concerns were involved in the issue of bogus purchase bills. During the course of search and seizure operations over Mittal Gems and Sanjeev Prakashan Group, the Department found that M/s Anmol Ratna, M/s Shruti Gems, M/s Tirupati Balaji Gems, M/s Vinayak Overseas, M/s Naman Gems, M/s Ram Ratan Patwari and M/s Mine O Gems have issued purchase bills of gemstones in the name of M/s Mittal Gems. The statement of Anand Shanker Mittal recorded by search party revealed that these concerns have issued bogus purchase bills to M/s Mittal Gems. The proprietors/directors of these business concerns were men of little means and were not in p....
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....a have filed affidavit before the AO. These persons in statement under s. 131 of IT Act in sworn affidavits have categorically said that they were actually employee of Shri Rakesh R. Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishna Bagla and they were working under the instruction and control of these persons and business concerns in their names were benami concerns of Shri Rakesh R. Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishna Bagla. Further, the AO has given opportunity to the assessee and his partners for cross-examination, which was not availed by them. These statements are acceptable evidence under the Evidence Act and cannot be ignored specially when Shri Umesh Kumar Saboo, Shri Mahesh Sharma, Shri Raghuvar Dayal Pareek, Mohan Prakash Sharma, O.P. Ghiya who were different persons gave statements and affidavits disclosing the persons controlling the business activities of their concerns/company which indicates that they were telling truth and were simply benamidars and the circumstantial evidences were thus against the assessee and his associates as per the decision of Supreme Court in the case of Smt. Sumati Dayal vs. CIT (1995) 125 CTR (SC) ....
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.... Overseas was assessed in the hands of Shri Gauri Shanker Pareek, on substantive basis and protective basis in the hands of the assessee and his partners Shri Manmohan Krishna Bagla and Shri Ramesh Chand Maheshwari. The AO had been in two states of mind and was not sure as to whether the income had actually gone to the assessee or not. Such double state of mind is not permissible in judicial parlance. The AO was in the state of "to-be" or "not-to-be" and therefore proceeded to make such additions half-heartedly knowingly well that the assessee and his partners cannot be held as real owner of the business concerns owned by the alleged benami persons in absence of documentary evidence and the Department has no material to discharge its onus. In such fluid state of mind, the additions made in the hands of assessee are bad in law and deserve to be deleted. The learned Authorised Representative submitted further that the onus is on the Department to prove that owner of the primary and secondary concerns were benami of the assessee and his associates. To hold a person as benami of another, one ought to have concrete evidences in contrast to sheer presumptions and suspicion and in such ca....
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....sessee was brought by these alleged benami persons in support of the allegations made by them in their statement/affidavits before the AO. The learned Authorised Representative submitted that under the peculiar facts of this case, the cross-examination to these person would not serve any purpose specially when the AO has not provided the copy of the regular returns, copy of bank statements and copy of demat account of these persons. The learned Authorised Representative submitted that these persons were not independent persons but they themselves were charge of guilty and they made the statements in self-interest with a motive to shift the guilt. Further, these persons were not men of veracity. They have stated something before the Investigation Wing/Custom Department and something else before the AO. The credit of these persons was shaken and impeached and their statements before the AO are not admissible as evidence. The facts as stated by the alleged benami persons in their statements/affidavit before the AO during the course of assessment proceedings were factually incorrect. In the statement they deposed that they were benami of the assessee and his associates and bogus purcha....
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....urat, which appears to be loss in Shruti Gems. Returns under s. 153A filed after the search, and name of M/s Shruti Gems is appearing on the return (paper book pp. 496-501). (ii) In answer to question No. 1 of statement dt. 25th Nov., 2005 (paper book p. 432) he stated that his present income from brokerage business is about Rs. 80,000. In answer to question No. 9 of statement dt. 3rd March, 2006, he stated his income from brokerage is about Rs. 3,500 per month. (paper book p. 444). (iii) In answer to question No. 7, he said that the real owner of M/s Shruti Gems were Shri Rakesh R. Purohit, Shri Ramesh Manihar and Shri Manmohan Krishna Bagla (paper book p. 433); and in answer to question No. 8, he said that he knows nothing about the working of M/s Shruti Gems. Shri Umesh Saboo in his statement dt. 30th June, 2003, in answer to question No. 5 (paper book p. 192) said that he started the business concern M/s Shruti Gems; in answer to question No. 7 (paper book p. 193), he said he was owner of M/s Shruti Gems; in answer to question No. 13 (paper book p. 194) he said that the key of the office of M/s Shruti Gems remains with him and he used to open the office of M/s....
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....book p. 215), Shri Kamlesh Saboo stated that the car belongs to Shri Umesh Saboo. The said car was purchased by Shri Umesh Saboo in November, 2002. Thus, Shri Umesh Saboo has not made correct statement before the AO. Therefore, going by the principle of falsus in uno falsus in omnibus as propounded by the Hon'ble Calcutta High Court in the case of Amal Kumar Chakraborty (supra), such statements were irrelevant and immaterial and cannot be relied upon. Hon'ble Calcutta High Court has held that the dictum falsus in uno falsus in omnibus is sound principle to apply in taxation when the matter is finding of fact on the basis of the statement. 9.1 The learned Authorised Representative submitted further that investment in 5,90,000 shares of Gaytri Shakti Paper Board Ltd. of Rs. 59,00,000 by Shri Umesh Saboo out the funds of M/s Shruti Gems was considered as explained investment by the AO in the hands of Shri Umesh Saboo. The balance sheet of M/s Shruti Gems for asst. yr. 2002-03, (paper book p. 487) reveals the investment of Rs. 36,00,000 in the name of Agrashakti Paper Mills, Rs. 35,00,000 in the name of Kiren Ben Shah, Rs. 15,00,000 in the name of Ridhi S. Shah and Rs. 5,....
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....n Prakash Sharma is proprietor of M/s Ambika Impex, for which the AO has held as benami firm of assessee group. The AO relied on the affidavit of Shri Mohan Prakash dt. 9th March, 2006 in holding that M/s Ambika Impex is benami firm of the assessee group. The learned CIT(A) has discussed in length on this issue in para 5.03.13 at pp. 75-76 of his order. After the completion of the assessment under s. 153A, Shri Mohan Prakash Sharma has filed his return for asst. yr. 2005-06 on 7th June, 2006 (paper book pp. 502-519), and in this return he has shown himself as proprietor of Shri Ambika Impex. 9.4 As regard M/s Naman Gems (P) Ltd. learned Authorised Representative submitted that after the search, the annual accounts of M/s Naman Gems (P) Ltd. were signed by Shri Om Prakash Ghiya and Shri Mahesh Khandelwal in the capacity of director (paper book pp. 524-536). The learned CIT(A) after appraising the facts has rejected the statements/affidavits filed by its directors and has held that M/s Naman Gems (P) Ltd. is an independent company and was not benami company of the assessee group. The directors of this company have accepted the decision of the learned CIT(A) and have not filed appe....
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....ara No. 4 of the affidavit Shri Mahesh Sharma has sworn that this group has floated a firm in name of M/s Tirupati Balaji Gems at the premise owned by Shri Ramesh Chand Manihar. In fact, the assessee group has no role in incorporation of M/s Tirupati Balaji Gems. Further, the premises of M/s Tirupati Balaji Gems was situated at 101, Navjeevan Chambers, Vinoba Marg, C-Scheme, Jaipur, which was never occupied, owned and possessed by Shri Ramesh Chand Manihar. In para 4, he states about physical handling of goods whereas in previous statement he said bogus billing in the firm. Thus, the affidavit filed by Shri Mahesh Sharma cannot be relied upon. Therefore, going by the principle of falsus in uno falsus in omnibus as propounded by the Hon'ble Calcutta High Court in the case of Amal Kumar Chakraborty (supra), such statements in the affidavit were irrelevant and immaterial and cannot be relied upon. 9.8 As regard Shri Raghuvar Dayal Pareek proprietor of secondary concerns the learned Authorised Representative submitted that the learned CIT(A) after appraising the facts has rejected the statements/affidavits filed by Shri Raghuvar Dayal Pareek and has held that secondary concerns ....
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.... hands of the assessee. The only basis of distinction was self-serving statement of the interested parties at the time of assessment; not the evidence. Further the AO assessed these concerns as involved in the issue of bogus purchase bills and if it is so then the financial position is immaterial for this type of the business rather a person of good financial position would not involve in such type of business. 9.12 The learned Authorised Representative further submitted that Naman Gems (P) Ltd. is a company incorporated under the Companies Act. From the order of learned CIT(A) it appears that this company was incorporated by Shri Om Prakash Ghiya and Shri Mahesh Khandelwal in assr. yr. 2002-03. This company was not in existence in asst. yr. 1998-99. Therefore, on the basis of the address on the bank account at Mumbai, the owners of primary and secondary concerns cannot be held as benami of the assessee. The registered office of the above named company is situated at 74, Bhatto Ki Gali, opposite Hawa Mahal, Jaipur and the assessee and his associates are not concerned with this premise. Similarly, the assessee or his associates are not concerned with the address of other primary ....
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....ent of the assessee or in partnership firm or company belonging to the assessee. Therefore, out of the several alleged benami persons, only two persons were ex-employees of the assessee and they started their own business after leaving the service of the assessee. The learned Authorised Representative submitted that none of the alleged benami persons is relative of the assessee or his associates within the definition of relative given under IT Act and even within wider definition of relative given under the Companies Act. The learned Authorised Representative submitted that the circumstantial evidences are also in favour of the assessee. The Department has carried out intensive search operations over the assessee and no document belonging to the alleged benami concerns was found from the possession and control of the assessee. It has been alleged that the owner of the primary and secondary concerns signed blank cheque book which was used by the assessee but on search no such cheque books were found; even counter-folios of the used cheque books were not found. It was alleged that the assessee was issuing the bogus purchase bills but neither blank bill book nor used bill books of the....
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..... Purohit, Shri Manmohan Krishna Bagla and Shri Ramesh Chand Maheshwari might have introduced some entry taker persons who wanted bills of purchases and might have earned commission of Rs. 0.10 per hundred. The finding of learned CIT(A) is based on presumption, assumption and guess. No any document was found as the result of the search showing that the assessee or his partners introduced some entry taker persons who wanted bills of purchase and might have earned commission of Rs. 0.10 per hundred. The Department has completed the assessment of several persons who brought the gemstones from M/s Shruti Gems, M/s Anmol Ratan and others and none of them have said that the assessee or his partners have introduced them or acted as middle men. The learned Authorised Representative prayed that the addition confirmed by learned CIT(A) deserves to be deleted. The learned Authorised Representative relied upon the following decisions in support of his contentions : (i) Sri Krishna vs. CIT (1983) 36 CTR (All) 75 : (1983) 142 ITR 618 (All); (ii) Amal Kumar Chakraborty vs. CIT (supra); (iii) CIT vs. Daulatram Rawatmull 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC); ....
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....ociates. The statements of Shri Mahesh Sharma before the Investigation Wing cannot be used against the assessee because these statements are self-serving statements and contrary to the fact that he has owned up M/s Tirupati Balaji Gems in his regular returns and has not denied his ownership over Tirupati Balaji Gems even in the returns filed after search under s. 153A of IT Act. The customs authorities had recorded the statements of Shri Umesh Saboo after 9 months of search under s. 108 of Customs Act, wherein he has admitted that he is owner of M/s Shruti Gems. Of course the AO was right in his observation that the statements given before the customs authorities are not binding to him under the income-tax proceedings but it is also correct to say that those statements recorded by another authority of the Government of India cannot be totally ignored without having adverse material with the AO to disbelieve the same. The learned AO has completely disregarded the statements of Shri Umesh Saboo and his family members, Shri Om Prakash Ghiya, Shri Mohan Prakash Sharma, before the search party and statements of Shri Umesh Saboo and Shri Gauri Shanker Pareek before the customs authoritie....
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....count of Shri Umesh Saboo. Shri Umesh Saboo opened this demat account after the search and on sale these shares were transferred from the said demat account on 3rd March, 2005. This shows that dematerialisation request form (DRF) and transfer instruction for delivery form were signed by Shri Umesh Saboo after the search. The AO himself has treated this investment as explained in the hands of Shri Umesh Saboo and no addition was made by the AO in the hands of Shri Umesh Saboo or in the hands of any other person. We also noticed from this demat account that Shri Umesh Saboo has received shares of Reliance Petroleum Ltd. on 5th May, 2006 in allotment under public issue. Therefore, it cannot be held that this demat account was opened and operated by the assessee and his associates by any stretch of imagination. The AO has completely ignored the regular returns filed by these alleged benami persons, wherein they have declared themselves as owner of their concerns. These persons have signed the IT returns and audited annual accounts, which cannot be disregarded merely on the self-serving statement. After the search, these persons have submitted their returns under s. 153A of IT Act, wher....
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....sed shares worth of Rs. 2.51 crores of the same company from other independent persons. We find that the learned CIT(A) has made elaborate findings in his order for asst. yr. 1998-99, after discussing and considering all the facts of the case and statements of alleged benamidar recorded during the course of search and after the search, statements recorded by the customs authorities, returns filed by alleged benamidars, assets owned by the alleged benamidars, operations in bank account/demat account by the alleged benamidar before and after the search and filing of the returns before and after the search by alleged benamidar and various case laws and we fully agree with these and uphold the findings of learned CIT(A) that the contemporary evidence which are in the form of statement recorded by search party under s. 132(4)/131 and statements recorded under the customs authorities clearly speak that the alleged benamidars were acting for themselves. No corroborative evidence was brought on record to prove that the business concerns belonging to these alleged benamidars were funded, managed and controlled by the assessee or his associates and they are the beneficial owner of these conc....
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....id repetition, these grounds are decided simultaneously. 13. The assessee was proprietor of M/s Lalluji & Co. The AO rejected the books of account and applied the provisions of s. 145(3) and estimated the profit of the assessee in asst. yr. 1998-99 to asst. yr. 2001-02. The assessee had shown trading loss of Rs. 2,82,533 in asst. yr. 2002-03, which was disallowed by the AO. The learned CIT(A) deleted the addition. The learned Departmental Representative relied on the order of the AO. The learned Authorised Representative submitted that the books of account were audited by chartered accountant and audit report was filed along with the regular return under s. 139. The auditors examined the books of account much before the date of search. The audit report is evidence and should be accepted. The learned Authorised Representative placed reliance on the decision of Delhi High Court in the case of Addl. CIT vs. Jay Engineering Works Ltd. (1978) 113 ITR 389(Del), 391-2. The learned Authorised Representative further submitted that the Department has carried out search and no evidence was found that the assessee is suppressing the sales or GP of M/s Lalluji & Co. The estimation of the AO ....
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....akti Paper Board Ltd. was made by the assessee and his partners in the name of these benami persons. Further, these share transactions are sham share transaction therefore, the AO has rightly estimated the commission income of Rs. 16,10,000. The learned Departmental Representative relied upon the findings of the AO and submitted that the AO has rightly made the addition of Rs. 2,99,15,000 on account of unexplained investment and of Rs. 16,10,000 on account of commission in sham share transaction totalling to Rs. 3,15,25,000 which was divided equally in the hands of Shri Rakesh R. Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishna Bagla and the AO has rightly made the addition of Rs. 1,05,08,334 being 1/3rd of Rs. 3,15,25,000 in the hands of the assessee and therefore the order of the learned CIT(A) in this regard should be set aside and the addition made by the AO should be upheld. On the other hand the learned Authorised Representative submitted that the AO has wrongly held that the assessee has made unexplained investment in shares and earned commission in sham share transaction. Under s. 69, the first onus was on the AO to show that the assessee has made investment.....
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....n has been made in the hands of Shri Ram Ratan Patwari. Further, the assessee cannot be held responsible for the cash deposited in the bank account of Shri Umesh Saboo, Shri Raghuvar Dayal Pareek, and Shri Mahesh Khandelwal. If the source of investment is found unexplained, the addition can be made under s. 69 in the hands of Shri O.P. Ghiya. The learned Authorised Representative further submitted that he has made detailed submission as regard issue of benami under ground Nos. 1 to 5 of the appeal filed by the Revenue and the Department has no material to hold that these persons were benamidar of the assessee and his partners. Further the AO himself has considered the share transaction as sham share transaction then question of investment in the shares cannot arise. The learned Authorised Representative submitted that the addition is not based on evidence or material but on surmises and conjectures. Suspicion howsoever strong cannot take the place of proof. The learned Authorised Representative submitted that these shares were neither transferred in the name of the assessee or his partners nor credited in the demat account of the assessee or his partners. Further, the AO himself co....
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....i vs. ITO (supra); (xvii) Uttam Chand Nahar vs. ITO (supra); (xviii) Vijendra Kumar Mamodia vs. Dy. CIT (supra); (xix) Rajesh Jain vs. ITO (supra); (xx) Radhey Shyam Ojha vs. Asstt. CIT (supra). 17. After considering the arguments advanced by the parties, in view of orders of the lower authorities, material available on the record as well as the decisions relied upon by them, we find substance in the contention of learned Authorised Representative. We find that the learned CIT(A) deleted this addition on the basis of his elaborate findings in paras 5.03.18 to 5.03.19 at pp. 89 to 93 of his order for asst. yr. 1998-99 after considering the search statement of Shri O.P. Ghiya and seized documents marked Annexs. AA26 and AA28. Shri O.P. Ghiya in search statements has categorically said that the share transactions in the shares of Gaytri Shakti Papers Boards Ltd. is an accommodation entry. The Annex. AA26 which is share file of Anmol Ratan shows that M/s Anmol Ratan purchased shares of Rs. 3.35 crores, out of which transactions of Rs. 20 lakhs relates to asst. yr. 2002-03 and Rs. 3.05 crores relates to asst. yr. 2003-04. The seized documents AA28 ....
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....addition of Rs. 5,49,270 and Rs. 4,16,091 made by the AO on account of jewellery explained by the assessee as belonging to his daughters-in-law and mother of the assessee, respectively. The brief facts are that the search party found total gold jewellery of net weight 2734.756 gms. and silver articles of 17827.800 gms. from the possession of family members of the assessee and locker in the names of assessee and his family members. The learned AO did not find the explanation of the assessee satisfactory and he treated the following jewellery and silver articles as unexplained in the hands of assessee : Name of Person Claimed by assessee Treated as unexplained by the AO Gold jewellery grams Silver items grams Gold jewellery grams Silver items grams Smt. Mandakani 502.160 2000 502.160 0 Smt. Sweta Purohit 498.400 2000 498.400 0 Ancestral belonging to late mother of assessee 699.620 4000 699.620 4000 Total 1700.18 4000 The learned AO made addition of Rs. 5,49,270 on account of unexplained jewellery belonging to Smt. Mandakani Purohit and Smt. Sweta Purohit, daughters-in....
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....ni/Mohar in marriage and to keep these in Puja. The learned Authorised Representative submitted further that the learned AO rejected the claim of the assessee on probabilities and possibilities. He held that the late mother of the assessee might have given her jewellery to other relatives. The mother of the assessee expired on 8th June, 1998 and she was living with the assessee. The assessee was only surviving son at the time of death of Smt. Janki Devi. In Hindu Society, the ladies have affection with the jewellery, therefore, possibility of giving the jewellery in the lifetime of Smt. Janki Devi to someone else is against the human probabilities. The assessee has filed affidavit which is at paper book pp. 114-115 wherein the assessee has stated on oath that his mother expired on 8th June, 1998 and at the time of her death, he was only her living son and her entire jewellery was passed to him. The contents of affidavits, which are not vague should be accepted correct. As regard silver articles of 4000 gms., the learned Authorised Representative submitted that the father of the assessee late Shri Ram Prasad Ji was Jagirdar of Village Badhbaughpura Tehsil Chaksu. The father of the a....
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....s prescribed such limit at 500 gms. in the case of a married lady. In the case of the assessee the claim of daughters-in-law is for 502.10 and 498.400 gms. jewellery. Accordingly, as per the circular even in the normal course the credit for jewellery required to be given comes to 1000 gms. The learned AO, therefore, has erred grossly in giving no benefit. The high-handedness of the learned AO can be seen from the fact that he has not allowed credit for even 1 gms. jewellery on account of jewellery belonging to daughters-in-law. In Hindu families, every married lady possesses some gold jewellery and the learned AO overlooked this fact completely. There was no material before the AO to presume that the assessee has made investment in the jewellery belonging to daughters-in-law. The learned Authorised Representative relied upon the findings made by learned CIT(A) in his order at pp. 11-13 and prayed that the findings of learned CIT(A) should be upheld. The learned Authorised Representative placed reliance on the following decisions in support of his contention : (i) Mehta Parikh & Co vs. CIT (1956) 30 ITR 181 (SC); (ii) Dilip Kumar Rao vs. CIT (1974) 94 ITR 1 (Bom); ....
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....ght in view of non-availability of item-wise tally. Our view also finds support from the view expressed by Tribunal, Ahmedabad Bench "C" in the case of Bhaijibhai Alias Bhupendra Himatlal Shah vs. Dy. CIT (1999) 107 Taxman 83(Ahd)(AT), wherein it has been held that merely because item of jewellery indicated in deed executed in 1932 did not tally with jewellery seized could not be a basis for coming to conclusion that seized jewellery was unexplained. Similar view has been expressed by Tribunal Delhi Bench in the case of Smt. Krishna Wanti Batra vs. Asstt. CIT (2004) 85 TTJ (Del)550 wherein it has been held that the assessees were entitled to benefit of weight of jewellery disclosed in the returns as it is well-known fact that Indian ladies keep changing design of jewellery from time-to-time on the old jewellery. Further the claim of the assessee for 4,000 gms. silver items as ancestral is very reasonable. Therefore, in the circumstances and facts of the case, the AO was not justified in making addition of Rs. 4,16,091 on account of the jewellery and silver articles explained by the assessee as belonging to his late mother Smt. Ram Janki and learned CIT(A) has rightly deleted the ad....
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....thorities with the decisions cited before learned CIT(A). 23. After considering the above submissions, we find substance in the contention of learned Authorised Representative that the cash found by the search party cannot be treated as unexplained specially when the assessee had prepared the books of account on the basis of bank statement and seized documents and produced before the AO and the AO has not pointed out any defect in the cash book. The AO, however relied upon the statements recorded by the search party and he allowed the credit for the explained cash to the extent what has been stated in the preliminary statements. The contention of the assessee remained that the statements given by the family members were extempore and without seeing the books of account and bank statements. Later, the books of account were prepared on the basis of bank statements and seized records and correct position of the cash was computed on the basis of documents. It was contended that the oral statement cannot supersede the documents. Reliance was placed in this regard on several decisions referred by the first appellate authority in his order. The decision of Jaipur Bench of Tribunal in t....
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....s ground therefore dismissed as not pressed. Ground No. 3 (Assessee'ITA Nos. 209 to 212, 214 and 215/Jp/2007) and Ground No. 7 (Department'ITA No. 377) and Ground Nos. 6, 7 and 8 in ITA No. 378/Jp/2007. 26. The ground No. 3 of the appeals filed by the assessee in ITA No. 209/Jp/2007 (asst. yr. 1998-99), ITA No. 210/Jp/2007 (asst. yr. 1999-2000), ITA No. 211/Jp/2007 (asst. yr. 2000-01), ITA No. 212/Jp/2007 (asst. yr. 2001-02), ITA No. 214/Jp/2007 (asst. yr. 2003-04) and ITA No. 215/Jp/2007 (asst. yr. 2004-05) is common wherein the assessee has challenged the addition of Rs. 53,800 in asst. yr. 1998-99, Rs. 49,009 in asst. yr. 1999-2000, Rs. 22,019 in asst. yr. 2000-01, Rs. 30,863 in asst. yr. 2001-02, Rs. 1,23,768 in asst. yr. 2003-04 and Rs. 74,164 in asst. yr. 2004-05 sustained by learned CIT(A) on account of disallowance of the expenses. The Revenue has also questioned the deletion of disallowance of expenses under ground No. 7 in ITA No. 377/Jp/2007 (asst yr. 2003-04) and under ground Nos. 6, 7, and 8 in ITA No. 378/Jp/2007 (asst. yr. 2004-05). Beings facts and issue being more and less common, therefore for the sake of convenience and also to avoid repetition, the....
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....2. In asst. yr. 2003-04 and asst. yr. 2004-05, the learned CIT(A) allowed part relief. 28. The learned Authorised Representative submitted that the disallowance was made purely on guess. The Department has carried out search over the assessee and no evidence was found to justify the disallowance. The assessee was doing the business of purchase and sale of import license. The business requires heavy telephone calls. Straightjacket formula cannot be applied for all the persons and the quantum of telephone expenses should be examined by appreciating the business needs. The disallowance on account of vehicle expenses and depreciation on vehicle is very high and unjustifiable. The learned Departmental Representative submitted that the disallowance made by the AO is reasonable and deserves to be upheld. 29. Considering the above submission of the parties, we hold that the learned CIT(A) has rightly deleted the addition made by the AO in respect of advertisement expenses in asst. yr. 2003-04 as the assessee can better understand the business need. In asst. yr. 2004-05, we also find that the AO has wrongly disallowed Rs. 1,52,770 in respect of the interest on car loan without appr....