TaxTMI 
TaxTMI 
2021 (8) TMI 952
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....there remains only two (2) grounds of appeal for adjudication. Ground no. 1 is against the action of the Ld. CIT(A) in upholding the action of the AO to add Rs. 19,04,784/- under suspense account. 4. The assessee is an individual who owns a proprietary concern viz. M/s. D.P. Ahuja & Co. which carries on the profession of patent and trade mark attorneys. And the assessee also has business of post production of films, income from capital gain and other sources. The AO has disallowed an amount of Rs. 19,04,784/- which was shown by the assessee under the head suspense account by holding as under: "It is further seen from the balance sheet of M/s. D.P. Ahuja & Co as at 31st March 2011 that an amount of Rs. 19,04,734.47 is mentioned as suspense (subject to pending adjustment) the counsel of the assessee during the course of hearing stated that this amount includes advance etc. Since advance itself has a component of income embedded in it as discussed above and which is accepted by the assessee also. Assesses in any case is fallowing cash system of accounting. No further details are available on record regarding this hence this amount is also treated as a component of assessee....
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....r, according to the Ld. AR, the Ld. CIT(A) brushed aside the evidence produced in an arbitrary manner and confirmed the addition. According to the Ld. AR, without prejudice to the aforesaid submission to show that the assessee has already offered to tax Rs. 16,50,203/- in subsequent assessment years out of the addition made by AO in this relevant assessment year to the tune of Rs. 19,04,784/-, the balance amount is only to the tune of Rs. 2,54,581/-, and on merits regarding the suspense account maintained by the assessee, the Ld. A.R. submitted that the assessee has numerous clients all over the world in respect of his profession as a patent and trade mark attorney and the assessee had shown return of income showing a total income of Rs. 22,35,63,349/-. It has been brought to our notice that the amount shown in the suspense account are those amounts deposited by the clients from various parts of the world and whose payers are not identifiable in the relevant year of deposits; and those un-identifiable payers whose receipts are shown in the suspense account maintained by the assessee, which practice assessee has been following for a long time; and whenever the assessee is able to id....
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....if the assessee has already offered for taxation Rs. 16,50,203/- in the subsequent assessment years out of this amount added by the AO in this relevant assessment year to the tune of Rs. 19,04,784/-, then addition of Rs. 16,50,203/- need to be deleted. Coming to the balance amount of Rs. 2,54,581/- the details of which are given in page 29 of the paper book, we note that these are receipts from FYs 2005-06 to 2010-11. This amount if the assessee has offered to tax in the subsequent assessment years then it should not be taxed and this also the AO need to consider afresh after verification and pass order in accordance to law. 6. Coming to the next ground of appeal of the assessee which is against the action of the Ld. CIT(A) in confirming the addition of Rs. 18,74,907/- made by AO invoking section 14A of the Income Tax Act, 1961 (hereinafter referred to as the "Act") read with Rule 8D of the Income Tax Rules, 1968 (hereinafter referred to as the "Rules"). 7. The AO noted that the assessee has shown dividend from shares and mutual fund of Rs. 2,13,68,176/- which was claimed by him as exempt. According to the AO, in the computation of total income the assessee has not computed a....
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....tisfaction that he does not agree with the view taken by the assessee. There is however no embargo to recording this view as part of the body of the order. The admonishment put forth by the plethora of judicial pronouncements is that the AO should not arbitrarily and without discussing the view of the assessee, summarily reject the latter's submissions and put forth a calculation of his own. He has to reject the assessee's submissions on cogent grounds showing his satisfaction - though. of course, these cogent grounds are open to judicial scrutiny. In view of the foregoing discussion, I find that the AO has recorded his satisfaction which the appellant himself has reproduced in his submissions. The same is not being repeated here for reasons of brevity. But I cannot agree with the contention of the appellant that the AO did not record his reasons, Now coming to the merits of the issue, The undisputed fact is that the appellant maintains two separate books of account. One for his business and the other for his investment activity. In fact the AO has observed this when he says that expenses have been debited to the business side of the accounts. The appellant earns a....
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....submission that relief has been allowed by other CIT(A) in this case, it can only be said that the entire argument narrated above is based on facts and perhaps some hitherto unknown facts were perhaps brought to the notice of the other authorities which the appellant has committed to done in the present appeal. Based on the present set of facts I find myself incapable of drawing any other inference than the one mentioned supra. The ground stands dismissed." 8. Aggrieved by the aforesaid action of the Ld. CIT(A), the assessee is in appeal before us. 9. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee has prepared separate income and expenditure account (personal) where dividend income of Rs. 2,13,68,176/- (refer page 9 of paper book) which assessee claimed as exempt. According to Ld. AR, even though the portfolio management expenses of Rs. 39,18,761/- has been debited as expenses relating to portfolio management expenses, this expenses has not been claimed as deduction in the computation of total income which fact has not been verified by the AO or the Ld. CIT(A). According to Ld. AR, the assessee has incurred ....