TaxTMI 
TaxTMI 
2012 (11) TMI 1289
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the remand report of the Assessing Officer which again did not properly consider the Appellant's explanation and the documents relating thereto. 5). The C.I.T (A) completely failed to appreciate that there was bound to be a small time gap between the date of investment as per the AIR report and the date of debit of the payment in the Appellant's bank account, and this was no reason at all for treating the investment as unexplained and adding it to the Appellant's income. 6). The C.I.T(A) failed to appreciate that it was not the case of the I.T. Department that the Appellant had acquired some other investment out of the payment debited in the Appellant's bank account. 7). The CIT(A) failed to appreciate that the investment of ₹ 1,00,00,000/- in HSBC Mutual Fund was fully explained and the payment for this investment was debited to the appellant's bank account on 22.2.2007. 8) The ld CIT(A) and the AO in his remand report erred grossly in stating that the said payment of ₹ 1,00,00,000 related to Franklin Templeton F.M. and not to HSBC M.F. 9. The ld CIT(A) and the AO erred grossly in completely disregarding the complete account statement of the appellant's in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee was drawn that grounds of appeal taken by him are argumentative in nature and whether he would like to file concise grounds of appeal, assessee submitted that only three issues are involved and the same be considered in stead of adjourning the matter to file concise grounds of appeal as he has come from outside Mumbai. 4. In view of this, we have considered the existing grounds of appeal as it is and heard the assessee as well as ld D.R. at length. 5. Facts of the case in brief are that assessee is a Sr. Advocate by profession and filed his e-return of income on 31.10.2007 declaring total income at ₹ 5,68,04,094. The assessment was completed on 31.12.2009 u/s.143(3) of the Act assessing total income at ₹ 30,45,15,670. Assessee filed appeal before ld CIT(A) which was allowed in part. Hence, this appeal by the assessee. 6. In Ground Nos.1 to 12 of appeal, the issue involved is in regard to confirming the action of AO to make the addition of ₹ 2,93,50,000- in respect of Mutual Funds Investment. 7. The Assessing Officer has stated that as per AIR information, assessee has made total investments amounting to ₹ 23,83,43,112/-. Assessee was asked to recon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....64,00,000/-, investment in Standard Chartered Mutual Fund of ₹ 50,00,000/-. It was submitted that except above three investments, all the investments were made out of bank account with HDFC Bank. It was further contended that his mother Smt. S. Rajalaxmi is a separate and independent assessee and name of the assessee in the said investments were appearing as second holder. Ld CIT(A) sought remand report from the AO. AO submitted his remand report dated 20.2.2012, copy of which is placed at pages 2-4 of PB. Ld CIT(A) has discussed the said remand report of the AO in para 1.2.4 as under: "1.2.4 The AO vide remand report dated 20.2.2012 has stated that assessee has to explain the investment by pointing out various debit since bank account. However, this cannot be taken as complete evidence as the cheque issued by the of a particular amount on a particular day maybe for some other investment for example, for example an entry number 9 dated 21/3/07 is showing investment of ₹ 1,00,00,000/- in HSBC MF and assessee has shown a bank entry for its explanation, but that entry of ₹ 1,00,00,000/- is found to be invested in Franklin Templeton, and not in HSBC. The ledger prin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....horities below. He submitted that his mother Smt. S.Rajalaxmi is the first holder in respect of investments of ₹ 29,50,000 made in Birla Mutual Fund, ₹ 64,00,000 and ₹ 50,00,000, respectively in Standard Chartered Mutual Fund. He further referred letter dated 26.11.2009 of HDFC Mutual Fund, copy placed at page 13 of PB to substantiate his submission that his name appears as second holder for ₹ 50,00,000 and ₹ 64,00,000 and the first holder is his mother Smt. S. Rajalaxmi. He submitted that if any addition is to be made, same should be made in the hands of his mother and not in his hands. He submitted that similar issue was considered by the Tribunal for assessment year 2006-07 in I.T.A. No.527/M/2010 vide order dated 8.12.2010 and furnished a copy of the said order to substantiate his submission. 11. He further referred pages 9 & 10 of PB and submitted that the investments in Birla Mutual Fund of ₹ 29,50,000 has also come from the account of his mother and he is the second holder. He submitted that Mutual Fund holding statement placed at page 10 of PB also contains the entry of ₹ 29,50,000 and in respect thereof, his mother is the first ho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment and, therefore, addition sustained by ld CIT(A) be confirmed. However, ld D.R. could not controvert the facts on record that investment of ₹ 29,50,000 in Birla Mutual Fund and ₹ 64,00,000 and ₹ 50,00,000, respectively in Standard Chartered Mutual Fund, the first holder is Smt. S.Rajalaxmi, the mother of assessee and assessee is only a joint holder. 14. Considering the facts of the case as discussed hereinabove, we are of the considered view that there is force in the submission of assessee that investments in respect of which assessee is the second holder and his mother is the first holder, the addition, if any, should have been made on account of unexplained investment in the hands of his mother Smt. S.Rajalaxmi for the above amount and not in the hands of assessee. Further, we observe that Smt. S.Rajalaxmi is assessed to income tax under ITO 12(2)(3) and the identity of assessee's mother is established. Considering the said fact, we hold that there is no justification for making the said addition of ₹ 29,50,000 of Birla Mutual Fund and ₹ 64,00,000 and ₹ 50,00,000/- each in Standard Chartered Mutual Fund in the hands of assessee as assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of professional fees with AIR information has been decided by the Tribunal in his own case for assessment year 2006-07 in I.T.A. No.527/M/2010 vide order dated 8.12.2010 and furnished a copy of the said order to substantiate his submission. He submitted that the basis on which the said entry has been made in the assessment year under consideration is identical to assessment year 2006-07. He submitted that the addition made in the facts and circumstances of the case is not justified. 18. On the other hand, ld D.R. did not dispute above submission of the assessee save and except relying on the order of ld CIT(A). 19. We have considered submissions of ld representatives of parties and perused orders of authorities below as also the copy of remand report placed at pages 6-8 of PB. We have also gone through earlier order of the Tribunal dt.8.12.2010 (supra). 20. We observe that AO made the addition of ₹ 59,28,900 on the ground that assessee could not furnish party-wise details of professional fees receipts and nonreconciliation of professional fees receipts with AIR information. However, ld CIT(A) sustained the addition in part on the ground that some of the entries of AI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t and no addition has been made, a fact already brought on record. In this view of the matter, we find sufficient force in the submissions made by the assessee that no addition is called for on this account. Accordingly, we set aside the order of the CIT(A) and direct the AO to delete the addition." 21. Since facts and the basis for making the addition in assessment year under consideration are identical to assessment year 2006-07, we, following the reasoning as given by the Tribunal in preceding assessment year in the case of assessee viz 2006-07, hold that the addition sustained by ld CIT(A) is not justified and same is deleted. Hence, Ground Nos.13 & 14 of appeal taken by assessee are allowed by deleting the addition as sustained by ld CIT(A). 22. In respect of Ground Nos.15 to 18 of appeal, AO has made the disallowance of ₹ 18,81,658 by following the ratio of decision of ITAT (SB) in the case of Daga Capital Management Services Pvt Ltd. 312 ITR 1(AT) and accordingly, applied the provisions of section 14A r.w. 8D. We observe that assessee contended before the AO that investments made by the assessee are looked after by his father to whom he had not made any payment at an....