TaxTMI 
TaxTMI 
2016 (7) TMI 389
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.... said Pat Sanstha as under : 23-03-2002 Chintamani Nagari Sah. Pat Pedhi Maryadit, Dhule Rs.1,00,000/- 29-08-2001 -do- Rs.25,000/- 29-08-2001 -do- Rs.25,000/- 3. The source of investment was not satisfactorily explained by the assessee before the ADIT (Investigation), Nashik. Notice u/s.158BD dated 24-02-2003 was served on the assessee on 07-03-2003. The assessee filed return of income for the Block Period on 28-01-2005 disclosing total income of Rs. 3,17,700/-. The AO completed the assessment u/s.158BC(c) r.w.s. 158BD of the Act on 24- 03-2005 determining the undisclosed income at Rs. 3,72,267/-, the details of which are as under : Asst. Year Amount 1997-98 Rs.70,196/- 1998-99 Rs.79,358/- 1999-00 Rs.1,06,293/- 2001-02 Rs.59,321/- 2002-03 Rs.57,099/- 4. The assessee filed an appeal before the CIT(A) who had partly allowed the appeal of the assessee. Subsequently, the assessee approached the Tribunal. The Tribunal vide order dated 13-08-2010 while partly allowing the appeal of the assessee restored the issue to the file of the AO with the following observation : "4.5 We have heard both the parties and perused the relevant facts of the ....
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....ments to explain the source of these FDRs. The appellant was having business income of Rs. 15,000/- and Rs. 32,000/- for A.Ys. 1997-98 and 2000-01 respectively. I find from the records that the AO has not given any credit for the said business income towards FDRs. While it is true that the appellant has not been able to fully match the FDRs with the availability of funds, AO was also not justified in not giving any credit of the business income towards investments in FDRs. In the facts and the circumstances of the case and also keeping in view the smallness of the tax involved and the number of years these cases have been pending in appeal [ since 2002], I am of the considered opinion that 25% of the business income could be allowed towards source of the unexplained FDRs for A.Y. 1997-98. This will meet the ends of the justice. Similarly a credit of Rs. 3,240/- [i.e. the net addition retained on account of unexplained FDR after giving relief by the CIT(A)] is given to the appellant for A.Y. 1999-2000 out of his business income. Therefore, the appellant gets a benefit of Rs. 3,750/- for A.Y. 1997-98 (25% of Rs. 15,000/-), Rs. 3,240/- for A.Y. 1999-2000 and Rs. 8,000/- for 2000....
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....Vs. A.N. Dyaneswaran reported in 297 ITR 135 he submitted that the Hon'ble High Court in the said decision has held that items regarding which assessee had reasonable explanation cannot be assessable as undisclosed income. He submitted that since the assessee in the instant case is only a Hawker and has disclosed business income on account of selling of Pooja items the same should not have been enhanced by the AO. 11. So far as addition made by the AO to the undisclosed income on account of Fixed Deposits made by the assessee is concerned, he submitted that if the original investments in Fixed Deposit with Vijaya Bank are considered, then no addition is called for. Referring to page 58 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the details of Fixed Deposits on the date of search, i.e. on 17-09-2002, which are as under : Modi Group case Details of FDRs as on 17-09-2002, i.e. as on the date of search On Chintamani Pat Pedhi PN Modi MP Modi RP Modi AP Modi SP Modi Total Chintamani Patsanstha 150000 50000 150000 100000 100000 550000 Chhatrpati Agrasen 40000 140000 40000 20000 40000 280000 Lokmanya Patpedhi 200....
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....and circumstances of the case, the addition on account of business income for different assessment years appears to be in the higher side. We therefore direct the AO to substitute the income excluding Fixed Deposits and deduction u/s.80L and exemption limit as under : Income returned by the assessee before claiming deduction u/s.80L and exemption limit (Rs.) Income assessed by the AO excluding FDR and deduction u/s.80L and exemption limit (Rs.) To be determined as per our direction 51,700/- 51,700/- N/A 50,858/- 91,358/- 55,000/- 58,121/- 94,621/- 60,000/- 56,262/- 56,262/- 60,000/- 58,821/- 71,321/- 60,000/- 62,154/- 66,099/- 65,000/- 15. So far as addition on account of FDR is concerned, we find the AO has made addition on the ground that the Fixed Deposit with Vijaya Bank was matured on 22-08-1995 and was transferred from Vijaya Bank OD Account No.8/95 but the assessee could not produce the details of the Fixed Deposit Receipt pertaining to F.Y. 1995-96. The assessee has also not explained the source of deposit in the yearly details of Fixed Deposit receipts with supporting evidence and material such as copy of statement of Vijaya Bank OD account etc. Furth....
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....find the details of addition after appeal effect is as under : Sr. No. A.Y. Income returned by the assessee before claiming deduction u/s.80L and exemption limit (Rs.) Income assessed by the AO excluding FDR and deduction u/s.80L and exemption limit (Rs. Addition to the income on estimate basis made by the AO (Rs.) Addition on account of FDR made by the AO (Rs.) 1 1997-98 48,956/- 48,956/- NIL 2 1998-99 48,338/- 48,338/- NIL 3 1999-2000 55,064/- 55,064/- NIL 4 2000-01 58,497/- 58,497/- NIL 20,432/- 5 2001-02 57,038/- 72,238/- 15,200/- 6 2002-03 62,764/- 64,848/- 2,084/- -- -- -- 3,30,657/- 3,47,941/- 17,284/- 20,432/- 19. In the light of our discussion in the case of Late Prakashchand Nandlal Modi we direct the AO to compute the business income for A.Y. 2001-02 at Rs. 60,000/- and for A.Y. 2002-03 at Rs. 65,000/-. So far as addition on account of FDR is concerned, the same is directed to be deleted. Grounds raised by the assessee are accordingly partly allowed. ITA No.751/PN/2014 (Savita Prakashchand Modi) : 20. Grounds raised by the assessee are as u....
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....ss and status of the assessee, we direct the AO to delete the addition of Rs. 50,000/- in A.Y. 200-01. Similarly, the amount of Rs. 85,000/- has been explained to be out of gifts from the husband of the assessee which has been disbelieved by the revenue authorities. It is also a fact that assessee has filed the return showing business income of Rs. 28,000/- for A.Y. 200-01 and Rs. 51,475/- for Rs. 2002-03. Since we have accepted the gift of Rs. 50,000/- in A.Y. 200-01, therefore, after considering the business income of Rs. 28,000/- for A.Y. 2000-01 and business income of Rs. 51,475/- in A.Y. 2002-03 which comes to Rs. 79,475/-. Even if the gift of Rs. 1,25,000/- from the husband is disbelieved, even then with nominal past savings the business income for A.Y. 2001-02 and 2002-03 almost explains the deposit of Rs. 85,000/-. Under these circumstances, we are of the considered opinion that no addition is called for in the instant case. The grounds raised by the assessee are accordingly allowed. ITA No.752/PN/2014 (Ratimohan Prakashchand Modi) : 24. Grounds raised by the assessee are as under : "1. The CIT(A) erred in determinin....
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....om the business income declared by various family members. Since various family members are staying together, it is possible that the parents keep the deposits in the name of their children. Considering the totality of the facts of the case, we are of the considered opinion that the deposit of Rs. 1 lakh by the assessee stands explained in the light of the cash flow statements and the details given. We therefore direct the AO to delete the addition. The grounds raised by the assessee are accordingly allowed. ITA No.753/PN/2014 (Archana Prakashchand Modi) : 28. Grounds raised by the assessee are as under : "1. The CIT(A) erred in determining the undisclosed income at Rs. 21,197/- by not allowing the proper credit for the available cash flow for the investment in FDRs and by confirming the additions to the estimated business income. 2. The undisclosed income should be determined at Rs. NIL. 3. The appellant craves leave to Add/Alter/Amend/Delete any of the grounds of appeal." 29. After hearing both the sides, we find the only addition made by the AO is on account of FDR made by the assessee amounting Rs. 66,985/-, the details of which are as under : Sr.....