AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 958
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....eproduced as under: "GROUND I:- On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal) - 54, MUMBAI (hereinafter fan referred to as 'the CIT(A)') has erred in confirming an addition of Rs.1,31,495/- as unexplained expenditure us. 69 in respect of the credit cards expenses alleged as unverifiable The appellant being aggrieved, prays that the addition made on account of unexplained expenditure us. 69 to the extent of Rs. 1,31,495/- being unjustified, unwarranted, bad in law and illegal be deleted." GROUND II:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of current liabilities and unsecured loans taken in the name of Rakesh Survey Rs 8,80,000/- and Shree Mukund Associates Rs 35,00,000/- aggregating to Rs. 43,80,000/-as unexplained cash credit for u/s. 68 of the Act. The appellant being aggrieved, prays that the addition made on account of current liabilities and unsecured loans as unexplained cash credit u/s. 68 to the extent of Rs 43,80,000/- being unjustified, unwarranted, bad in law and illegal be de....
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....re the ld. CIT(A) who partly allowed the appeal of the assessee. Again, not satisfied with the finding of Ld CIT(A), the assessee is in appeal before us. 5. The ground no. 1 of the appeal relates to addition of Rs.1,31,495/- confirmed by the ld. CIT(A) in respect of credit card expenses. 6. The facts qua this issue are that during the course of search, various credit cards were found and vide notice u/s. 142(1) of the Act, the assessee was specifically asked to furnish details of payments for all credit/debit cards with him. On comparison of the details submitted by the assessee, the Assessing Officer observed that certain credit cards were not disclosed/accounted for by the assessee. Accordingly, a show cause notice dated 07.12.2011 was issued to the assessee, in reply to which, it was explained by the assessee that those credit card transactions were not reflected in his balance sheet because the same relates to his HUF and are duly accounted for in that entity. However, the Assessing Officer did not accept the same as the details obtained from various banks in respect of those credit cards clearly show that the same are in the name of assessee only. Further, the stand of t....
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....s. 667200/- made by the Assessing Officer. However, if aggregate payments are to be considered for the year, then Rs. 654204/- needs to be considered. Since, the payments of Rs. 5,35,705/- are duly verified and stands reconciled, the differential amount of Rs. 1,18,499/- (Rs. 654204 (-) Rs. 535705), is only amount has not been explained by way sources of cheque. The Ld. Counsel of the assessee has shown year wise cash withdrawal by the assessee, which are placed on record. In our opinion, the amount of said withdrawal is sufficient to explain the source of balance amount of Rs.1,18,499/-. Accordingly, the addition on account of credit card payment is deleted. 11. The ground no. 2 relates to addition of Rs. 43,80,000/- confirmed by the ld. CIT(A) u/s. 68 of the Act. 12. The brief facts qua this issue are that the assessee had shown unexplained liabilities in his balance sheet which amounted to Rs. 6,70,30,000/-. This liability included amount of Rs. 8,80,000/- from Mr. Rakesh Surve and Rs. 35,00,000/- from Shree Mukund Associates. The AO made addition for entire liability of Rs. 6,70,30,000/- u/s. 68 of the Act as the assessee failed to discharge his onus to prove the same. Du....
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....eld and balance Rs.6,26,50,000/- was deleted. 13. The ld. Counsel of the assessee referred to the remand report called from the Assessing Officer by the ld. CIT(A) and submitted that all the loans are accepted as genuine by the Assessing Officer and hence, the addition be deleted.Alternatively, he submitted that the assessee has already expired and it was very difficult for his widow, who is legal heir of assessee, to gather documents from various persons, still one more opportunity might be provided for gathering documents from relevant person and file before the AO. 14. The ld. Departmental Representative appearing for the Revenue objected and submitted that the remand report has not accept genuineness of the loans taken by the parties namely Rakesh Surve and M/s. Mukund Associates and hence, requested to upheld the addition confirmed by the ld. CIT(A). 15. We have heard rival submission and perused relevant material on record. We have gone through the remand report reproduced at para 11.2 of the CIT(A)'s order. We find that the assessee has collected documents for discharging onus of the assessee and in most of the cases, documents have been filed. In respect of Rakesh ....
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....st on bank loan (Rs. 56,866/-) cannot be disallowed on ad-hoc basis. The Only expenses, which could be disallowed are for Motor car ( Rs. 12,500/-) and telephone expenses (Rs. 23,497/-) , but the quantum of those expenses claimed is not too high as compared to the business activity of the assessee , so same does not deserve any disallowance . Accordingly, the disallowance confirmed by the ld CIT(A) is deleted. 20. The ground no. 4 of the appeal relates to the disallowance of interest of Rs. 16,19,127/- u/s. 36(1)(iii) of the Act. 21. The brief facts qua, this issue is that the assessee has claimed bank interest of Rs. 16,19,127/- in his Profit & Loss A/c. The Assessing Officer observed that the bank loans are personal in nature. In response thereto, the assessee explained that these loans were business loans with personal guarantee given by the assessee and utilized for advancing amounts for purchasing plots of land. However, the Assessing Officer rejected the explanation given by the assessee. The ld. CIT(A) also confirmed the disallowance for the reasons that the assessee has not furnished any evidence of advancing loan for business as contended before the Assessing Officer....
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....e addition to the extent of Rs 6,03,000/- as unverifiable transactions in respect of Plot No: 154 Sector-44 by the appellant with M/s. Madan Associates. The appellant being aggrieved, prays that the addition made on account of unverifiable transaction in respect of Plot No 154 Sector-44 with M/s Madan Associates to the extent of Rs. 6,03,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND III:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of other cash / unaccounted transaction to the extent of Rs. 1,63,22,000/- by treating it as unexplained expenditure us. 69C of the Act. The appellant being aggrieved, prays that the addition made on account of unexplained expenditure us. 69C to the extent of Rs. 1,63,22,000/-being unjustified, unwarranted, bad in law and illegal be deleted GROUND IV :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of consideration received for plot no: 22 Sector 6 Airoli to the extent of Rs. 20,34,625/-from out of Rs. 1,24,18,570/....
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.... GROUND IX:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of disallowance of interest us. 36(1) (iii) to the extent of Rs. 24,13,176/- alleging it being not for the business purposes. The appellant being aggrieved, prays that the addition made on account of disallowance of interest us. 36(1)(iii) to the extent of Rs. 24,13, 176/-being unjustified, unwarranted, bad in law and illegal be deleted GROUND X:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of disallowance of donation of Rs. 10,000/-. The appellant being aggrieved, prays that the addition made on account of disallowance of donation u/s. 80G be deleted." 25. The ground No. 7 of the appeal was revised/modified by the assessee on 20/09/2022. The said revised ground is reproduced as under: "REVISED GROUND VII TO BE READ AS UNDER:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of current liabilities and unsecured loans as unexplained cas....
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...., Sector-5, Vadghar admeasuring 400 sq. metre totalling 600 sq, metre and the balance out of 10,000 sq, metre was not supplied to Madan Kolambekar. In respect of supply of Kaccha plot no. 33 in Vadghar Node to M/s Madan Associates; the appellant had agreed to supply appx.10,000 sq.m.of plot at Vadghar Node to Shri. Madan Kolambekar. Shri.Sunil Gulati had received Rs. 55,00,000/- in cash from MadanKolambekar and Rs.2.21.00,000/-, through cheques. Thus, Rs. 2,76,00,000/- only was received by the Appellant in respect of land to be supplied to Kolambekar in Vadghar Node Area. In view of the above, from the addition of Rs.3.50 Crores, the addition of Rs. 55,00,000/- is sustained being cash payment received Shri Madan Kolambekar in respect of land supplied to Shri Madam Kolambekar in Vadghar Node Area. Accordingly, the ground no.1 of appeal is partly allowed." 29. Before us, the Ld. counsel of the assessee submitted as under: "Amount received from Madan Kolambekar Rs. 55,00,000/- The A.O. has made addition of Rs. 3,50,00,000/- from out that a cash receipt of Rs 55,00,000/- has been sustained by the learnedCIT(A)-54. We categorically denied the recei....
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....eproduced by the Assessing Officer is extracted as under: 32.1 In view of no supporting evidence filed by the assessee, the Assessing Officer held the amount of Rs.63,29,500/- as unexplained expenditure under section 609C of the Act. On further appeal, the Ld. CIT(A) after verification of submission of the assessee found that payment of Rs.57,26,000/-was made through cheque and accordingly, he deleted the addition to that extent and upheld the addition to the extent of Rs.6,03,000/-. 33. Before us the Ld. counsel of the assessee relied on the order of the Tribunal for assessment year 2003-04 to 2007-08 in ITA No. 3496 to 3498, 4794 & 4795/mum/2015 and submitted that Tribunal has held that assessee was engaged in real estate as agency work of purchase and sale on behalf of other parties and the Assessing Officer had not brought on record anything to suggest that those land transactions were done by the assessee in his name. 34. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Regarding the transaction of the assessee the Tribunal (supra) has observed that assessee was engaged in brokering activity of purchase....
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....ri Peter Anton Patil @Machado. and remaining Rs.6 lakh was paid by Shri B. Chajjer. The AO observed that apart from the above payments, apparently no payments are seen to have been made against the remaining 2 plots i.e. 550 Ulwe and 300 Ulwe. Thus, as per the page, the assessee has made cheque payments of Rs.4 lakh and cash payment of Rs.3 lakhs. The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. The assessee failed to furnish any details and explanation about the source of these payments. Accordingly, the AO made addition U/s.69C of Rs.7,00,000/- on account of unaccounted payment(which include unaccounted cash payment of Rs.3 lakh) Further, the AO has also invoked provisions of section 40A(3) of the I.T. Act and has disallowed an amount of Rs.3,00,000/-. (ii) The AO observed that page no.2 and 3 of Annexure A-1 impounded from Arneja Office, contained cash payment of Rs.73,50,000/- were made by the assessee to Mr. Vinay Gosawi. As per entries on these pages, total cash payment of Rs.66,00,000/- and cheque payment of R$.7,50.000/- has been made by the assessee in respect of several/properties. The....
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....other relevant details. The assessee failed to furnish any details and explanation about the source of these cash payments. The AO observed that, cash payments of R$.1.00,000/-have been made during the F.Y.2007-08 and cash payments of Rs.1.30.000/- have been made in F.Y. 2008-09 by the assessee. Accordingly, the AO made addition of Rs.1,30,000/- u/s.69C on account of unaccounted cash payment Further, the AO has also invoked provisions of section 40A(3) of the I.T. Act and has disallowed an amount of Rs. 1,30,000/(Cash expenditure). (vi) The AO observed that page no.43 and 60 of Annexure A-3 impounded from Arneja Office, contained total payment of Rs. 16,72,000/- is made by the assessee which includes cash payment of Rs.2,25,000/-. The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. The assessee failed to furnish any details and explanation about the source of these cash payments. The AO observed that during the F.Y. 200809, an amount of Rs.16,72,000/- of unaccounted payments (which include unaccounted cash payment of Rs.2,25,000) were made by the assessee. Accordingly, the AO made addition of Rs. 1....
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.... Rs.56,00,000/- on account of unaccounted cash. Further, the AO has also invoked provisions of section 40A(3) of the I.T. Act and has disallowed an amount of Rs.56,00,000/-(Cash expenditure). (x) The AO observed that page no.23 of Annexure A-2 seized from Kaveri Bldg contained total amount paid of. to Rakesh. Surve Rs.1,17,50,000/-), Sumeet Bacchewar (Rs.5,00,000/-) and Labchand (Rs.12,50,000/-). The payments are in respect of various properties/plots and are in the form of on-money payments'. The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. The assessee failed to furnish any details and explanation about the source of these cash payments. Accordingly, the AO made addition of Rs.1,35,00,000/- u/s.69C on account of unaccounted cash payment. Further, the AO has also invoked provisions of section 40A(3) of the I.T.Act and has disallowed an amount of Rs. 1,35,00,000/- (Xi) The AO observed that page no.24 of Annexure A-2 impounded from KaveriBldg containe two tables. One table shows details of 13 plots and the other table shows details of 11 plots (with file nos.). As regards 13....
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....ted.Further, the assessee has stated that Cheques of Rs4,00,000/- are accounted for in the books of accounts. Since the appellant has substantiated his claim by furnishing necessary evidence during the appellate proceedings, the addition of Rs.7 lakhs is deleted. (b) In point no. (ii) above, out of the total addition of Rs. Rs.63,50,000/- the appellant was able to substantiate claim of Rs.7.50 lakhs. However, cash amount of Rs.56 lakhs is not explained by the appellant. Hence, addition to the tune or Rs.7.50 lakhs is deleted and Rs.56 lakhs is upheld. C) In point no. (ill) above, the AO had made addition of Rs. Rs.65,00,000/-on account of cash received. The appellant was unable to substantiate this claim of Rs.65 lakhs. Hence, the addition of Rs.65 lakhs is upheld. d) In point no. (iv) above, the addition of Rs.1,20,85,000/- has already been considered in Ground no.4. Hence, the same being repetitive, addition of Rs.1,20,85,000/- is deleted. e) In point no. (v) above, the AO had made addition of Rs. Rs. 1,30,000/- on account of unaccount cash payment. The appellant was unable to substantiate this claim of Rs. 1,30,000/-, Hence, the addit....
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....f Annexure A-1 impounded/seized from Arenja Office, amount of Rs. 56,00,000/-paid in cash and Rs. 7,50,000 in cheque to Vinay Gosavi. (ii)The learned Assessing officer has made additions for Rs.65,00,000/- on basis ofPage 17 ofAnnexureA1impounded/seized from Arenja Office, being the amounts paid to various farmers directly by Bhanwarlal Chhajer. This record has been kept by appellant's office staff as a record of transactions arranged by the appellant for the sake of taking up the matter with the landowners-cum-farmers. (iii)The learned Assessing officer has made additions for Rs. 1,30,000/- (out of total Rs. 2,30,000/- the A.O. has added Rs.1,00,000 in A.Y. 2008-09) on basis of Page 30 & 45 of Annexure A-1 impounded from Arenja Office, amount of Rs. 1,30,000/- paid to Kam.lakar S. Tandel. (this property to belonging to Kamlakar Tandel was sold to by Kaeser Khan) The cheque amount has been recorded through my account which was shown in my bank statement on 04.04.2008. All the cash amounts were paid by the buyer on behalf of whom I negotiated the deal. This record is kept by my office staff as a record of transactions arranged by me for the sake of taking up th....
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.... counsel of the assessee has also submitted that the assessee has kept record of the transaction of the dealings between the developers of the lands and the farmers for the sake of taking up the matter with the landowners cum farmers only. We find that no enquiry has been made by the Assessing Officer from either the farmers are from rural land developers regarding the cash component of the transactions nor any adverse finding of investigation wing has been brought on record by the Assessing Officer. The relevant finding of Tribunal (supra), wherein the assessee has been held to be only dealmaker is reproduced as under: "3.2 Same has been opposed before us inter alia submitting that CIT(A) was not justified in confirming the estimation of turnover and profit thereon at Rs. 15,22,780/-. Ld. Authorized Representative submitted that addition in question is not justified by way of making estimation of turnover and profit thereon. Assessing Officer has not given actual working as to how the estimated turnover of Rs.38,06,951/- was calculated. The stand of deceased assessee has been that he used to deal in Navi-Mumbai areas.He used to identify those suitablelocations of....
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....20,34,625/- sustained by the Ld. CIT(A), against the addition of Rs.1,24,18,570/-which was made by the Assessing Officer in relation to plot No. 22, Sector Six, Airoli relying on page No. 49of Annexure 2 from Kaveri building. 41.1 Regarding the addition, the Ld. CIT(A) has observed as under: "13.3 The facts of the case and findings of the AO recorded in the Assessment Order and the written submissions of the appellant have been considered. The AO observed that page no 49 of Annexure 2 seized from Kaveri Bldg showed allotment of certain properties to the assessee against part consideration of plot no.22 sector 6, Airoli. Total value of 4 flats in 'Muktai' on plot 6A, Sec.6, Koparkhairane is worked out at Rs.31,27.580/-; that of 4 flats in Raj Uday Society on plot 109, sec. 1, Sampada worked out at Rs.80,56,500/- and that of 1 flat in Sairaj Aptt on plot 83 & 84, Sec. 1, Sanpada worked out at Rs. 12,34,490/. Thus, the total value of all these properties against part consideration of plot no.22, sector 6, Airoli was Rs.1,24,18,570/-, The A made addition of Rs.1,24,18,570/- on account of unaccounted/undisclosed income of the assessee. The appellant....
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....t, as a consideration for his efforts so far made by him, had requested for an allotment of one flat for himself, in the Raj Uday Cooperative Housing Society Building, from the said builder. It is only the said proposal of the Appellant's request that is contained in Page no.49 of Annexure-2, seized from Kaveri Building However the builder M/s Raj Homes Udayvansh Builders & Developers had not agreed to give one flat requested for by the Appellant. Hence, the Appellant did not receive any flat from the builder, as MIs Raj Homes Udayvansh Builders & Developers has not allotted any flat to the Appellant. This fact can be verified from the said builder M/s Raj Homes Udavansh Builders & Developers himself or from the Housing Society concerned. NO addition can be made in the assessment on account of the alleged purchase of the said flat, ONLY on the basis of a proposal which never materialized. Hence. it is prayed that the addition confirmed in this regard to the extent of Rs. 20,34,625/- should be deleted." 43. Before us the ld. Counsel of the assessee has also filed additional evidence that the allottees of said flat are differen....
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....the assessee had already stated source of cash found as out of withdrawal from bank accounts and advance from landowners or purchase a plot. Before us, the Ld. Counsel of the assessee has given undertaking that the legal heir of the assessee has agreed for collecting evidence from the banks and from the landowners to support of the availability of cash in the hands of the assessee. We are of the opinion that the interest of substantial justice one more opportunity should be allowed to the legal hair of the assessee to substantiate the source of cash found from the assessee. Accordingly, we set aside the finding of the Ld. CIT(A) on the issue in dispute and restore the matter back to the file of the ld. Assessing Officer for verification of the claim of the assessee. The assessee is directed to file all the necessary evidence in support of source of the cash availability along with cash statement in the form of the cash book. The ground No. 5 (five) of the appeal of the assessee is accordingly allowed for statistical purposes. 48. The ground No. 6 of the appeal of the assessee relates to addition confirmed by Ld. CIT(A) for unexplained investment in jewelry of Rs.16,81,573/-again....
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.... be explained in the hands of the assessee and should not be subject matter of the addition by the AO on the ground that assessee was unable to explain the possession thereof to his satisfaction. Further, Tribunal Bench Chandigarh in the case of Smt Neena Syal Vs ACIT (1998)(9) TMI 114 and Mumbai Bench of Tribunal in the case Mrs Nawaz Singhania Vs DCIT Central Circle(2018)(1) TMI 21has also treated the amount of the jewelry as per CBDT instruction (supra) as explained in the hand of an assessee. In view of the above precedents, we feel it appropriate to restore the matter to the file of the Assessing Officer for allowing benefit of jewelery as per the CBDT instruction (supra) in accordance with law and also examine the claim of the assessee in respect of the balance amount of the jewelry if any out of the disclosure of Rs. 70 lakhs claimed to have been made by the assessee for assessment year 2008-09 and 200910. Accordingly, the ground of the appeal of the assessee is allowed for statistical purposes. 52.1 In modified ground No. seven, the assessee has challenged addition of Rs.3,33,62,724/-confirmed by the Ld. CIT(A) under section 68 of the Act out of the addition of Rs.5,12,9....
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....n, addition of Rs.30,557/-made on account of certain expenses is upheld. Accordingly, ground no. 12 of the appeal is dismissed." 53. We have heard rival submissions of the parties on the issue in dispute and perused relevant material on record. Regarding the addition of Rs.2,16,00,000/-pertaining to m/s Mahavir Universal homes Private Limited, the Ld. counsel of the assessee submitted that addition for this amount has already been made in assessment year 2008-09. He submitted that the said loan had been confirmed by the Assessing Officer in assessment year 2008-09, which has been deleted by the Ld.(CIT(A) and therefore no addition should have been made in the year under consideration. On perusal of the order of the Ld. CIT(A) for assessment year 2008-09 , we find that in para 11.4(iii) the Ld. CIT(A) has deleted the unexplained credit of Rs.2,16,00,000/- in respect of M/s Mahavir Universal Homes Private Limited. The relevant finding of the Ld. CIT(A) is reproduced as under: "11.4 The facts of the case and findings of the AO recorded in the AssessmentOrder, remand report of AO and the written submissions of the appellant have been considered. i. ...........
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....eal of the assessee is accordingly allowed for statistical purposes. 54. In ground No. 8, the assessee has challenged disallowance of expenses of Rs.30,557/- being 25% of expenses on motor car, depreciation, interest on loan, telephone expenses etc. 55. We find that identical issue of ad-hoc addition in respect of the similar expenses has been deleted by us in assessment year 200809, according to following our finding in assessment year 2008-09, the ground of the appeal of the assessee is allowed. 56. The ground No. 9 of the appeal of the assessee relate to disallowance of interest under section 36(1)(iii) of the Act amounting to Rs.24,13,176/-. 57. We find that identical issue raised in assessment year 2008-09, has been deleted by us, therefore following our finding in assessment year 2008-09 on the issue in dispute, the ground no. 9 of the appeal of the assessee for the year under consideration is also deleted. 58. In the result, the appeals of the assessee for assessment year 2008-09 and 2009-10 are allowed partly for statistical purposes. Order pronounced in the open Court/under Rule 34(4) of the ITAT Rules, 1963 on 02/02/2023. ============= Document 1 Sr....