TaxTMI 
TaxTMI 
2026 (9) TMI 919
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....t appropriately appreciating the evidence that was produced and explanations given for the same. 2. In not allowing a deduction for Brokerage paid to Ajit Rao HUF of Rs. 12,00,000 based on several presumptions and surmises notwithstanding that the said HUF had confirmed to the ld. Assessing Officer on an enquiry u/s 133(6) that they had received the brokerage and offered the same to tax in their ITR." 2.1. The aforesaid two grounds arise from independent additions/disallowance made in the same assessment order and are accordingly dealt with separately hereinbelow. 3. Brief facts of the case are that assessee filed her return of income for the year under consideration on 31.12.2021, reporting total income at Rs. 10,21,47,740/-. During the year under consideration, assessee, along with two other co-owners, sold immovable property situated at Plot No. 20, Rajkamal Bungalow, 10th Road, JVPD Scheme, Juhu, Vile Parle West, Mumbai, vide registered deed dated 22.01.2021, for a total consideration of Rs. 106,00,00,000/-. Assessee held 1/3rd share therein, her corresponding share of sale consideration being Rs. 35,33,33,333/-. Against the resultant long term capital gains of R....
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....th-tax workings for A.Y. 2014-15 relating to jewellery of her ancestors, namely Kantilal C. Parikh Estate (father-in-law), Kantilal C. Parikh HUF, and Kamal Kantilal Parikh Estate (mother-in-law). 4.2. Ld. Assessing Officer did not accept the explanation so furnished. He observed that the letter dated 10.12.2022 of the registered valuer, claimed by assessee to be a valuation report, did not contain an item-wise break-up of the jewellery and was a mere letter reproducing verbatim the sources from which the jewellery had devolved on assessee. It was further observed that assessee had not filed any Wealth-tax return after A.Y. 1997-98, which, according to ld. Assessing Officer, gave rise to a strong indication that the jewellery had been sold off or otherwise disposed of and was not in assessee's possession during the year under consideration; that there was no evidence to prove that the jewellery was actually inherited by assessee; and that, even assuming it was inherited, it might have been sold off prior to the year under consideration. On this reasoning, the entire jewellery of Rs. 67,39,949/- disclosed by assessee was treated as unexplained credit and added u/s 69A. 5. In f....
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.... husband), Ajit Parikh and Arun Parikh. It was submitted that although certain testamentary documents were available, a dispute persisted between the four legal heirs regarding distribution of the estates. During the subsistence of this dispute, assessee's husband, Shri Ashok Parikh, also passed away on 22.07.1996, having bequeathed his entire estate to assessee vide will dated 01.03.1996, failing whom to his son. It was submitted that the estates of the late Shri Kantilal C. Parikh and the late Smt. Kamal Kantilal Parikh accordingly remained undistributed for several decades and were not partitioned until around the year 2015, when it was mutually agreed to equitably distribute the jewellery/ornaments forming part of the said estates and of Kantilal C. Parikh HUF amongst the four legal heirs, extracted below for ready reference: Sr. No. Estate Value of Jewellery (Rs.) Rajendra Parikh Ajit Parikh Anjani Parikh Arun Parikh Kamal Parikh 1. Kantilal C. Parikh (shares: 1/8th each to the four sons; 1/2 to Kamal Parikh) 66,92,128 8,36,516 8,36,516 8,36,516 8,36,516 33,46,064 2. Kantilal C. Parikh HUF (1/4th each to the four sons) 7....
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....n the orders of the authorities below and submitted that the onus lay upon assessee to satisfactorily explain the nature and source of the jewellery, that mere production of decades-old wealth-tax records did not establish continued possession as on the valuation date relevant to the year under consideration and that the orders of the authorities below, being based on a correct appreciation of the material on record, called for no interference. 8. We have heard both the parties and perused the material on record. We have also given our thoughtful consideration to the submissions made as well as the judicial precedents referred before us. The issue before us is whether the jewellery of Rs. 67,39,949/- disclosed by assessee under Schedule AL of her return of income can be treated as unexplained credit u/s 69A of the Act. 8.1. On a consideration of the material on record, we find that the addition has been sustained substantially on the basis of an inference drawn from assessee's non-filing of Wealth-tax returns after A.Y. 1997-98, namely that non-filing establishes that assessee's wealth was below the statutory threshold, from which it was further inferred that the jewellery de....
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....ng, cannot take the place of proof, is well founded and squarely applies to the facts of the present case. 8.3. We also note that Coordinate Bench of ITAT Mumbai has, in ITA No. 3726/Mum/2024 of Nihal Chandrakant Garware v. DCIT, Central Circle 6(4), for AY 2021-22, order dated 28.03.2025 accepted an explanation of jewellery holding by reference to the assessee's status and family circumstances, notwithstanding the absence of contemporaneous purchase bills for every item, and declined to sustain an addition founded on inference alone. The facts of the present case stand on an even stronger footing. Unlike the cited order, which arose from jewellery found in the course of search action u/s 132 of the Act and valued by the Department, the jewellery in the present case was voluntarily disclosed by assessee herself for the first time in Schedule AL upon her income crossing the prescribed threshold and is supported by a documentary trail predating the year under consideration by several decades. 8.4. In view of the foregoing, we hold that the addition of Rs. 67,39,949/- made u/s 69A is not sustainable and is accordingly deleted. Ground no. 1 is allowed. 9. We now take up the di....
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....effort and market knowledge of the individual who performs it, is not a service capable of being rendered by an HUF as such; that the very individual through whom the HUF is said to have acted had already been separately compensated for the identical transaction; and that the additional payment routed through the HUF was, in substance, gratuitous and rightly disallowed. 11. We have heard both the parties and perused the material on record. We have also given our thoughtful consideration to the submissions made as well as the judicial precedents referred before us. The issue before us is whether the payment of Rs. 12,00,000/- to Ajit Rao HUF, over and above an identical payment of Rs. 12,00,000/- already made to its Karta/coparcener Shri Abhiraj Ajit Rao for the same transaction, represents a genuine brokerage expenditure of the assessee or a gratuitous payment not qualifying for deduction u/s 54 of the Act. 11.1. It is well settled that a Hindu undivided family, having no capacity for personal exertion independent of its members, cannot in law be said to render a service that is inherently personal in nature, viz., identifying a suitable property, arranging site visits and ne....
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....rt should have taken note of the finding recorded by the Tribunal and noticed by it earlier, namely, that the remuneration and commission that were earned by the karta were earned by him on account of his personal qualifications and exertions and not on account of the investment of the family funds and, therefore, should have held that the income could not be treated as the income of the HUF." 11.3. Applying the above test to the facts before us, there is no material, and indeed no case set up by assessee that any fund or asset of Ajit Rao HUF was invested or deployed in earning the brokerage in question. On assessee's own submission, the brokerage was earned through the personal effort of an individual, viz., identification of the property, arranging visits and negotiating the price. Where the very individual who is said to have rendered that personal service, Shri Abhiraj Ajit Rao, had already been separately and fully compensated at Rs. 12,00,000/- in his individual capacity for the identical transaction, the further payment of an identical sum routed through "Ajit Rao HUF" cannot, in our view, be said to represent a genuine service rendered by the HUF as such. The confirmati....