TaxTMI 
TaxTMI 
TaxTMI 
2003 (9) TMI 293
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.... account of alleged low household expenses. 1,00,000 Estimated addition on account of jewellery. 12,161 On account of alleged interest. 20,000 On account of air conditioner. 5,000 On account of repair/sofa set, etc. 4. That the explanations given, evidence produced and material placed on record have been properly considered and judicially interpreted and the same do not justify the additions made. In any case, the additions are based on mere surmises and conjectures. 5. That the machinery for assessment of undisclosed income of the block period is independent as per the provisions of Chapter XIV-B of the IT Act and the assessment has not been made in accordance with the same. All the additions, which are not related to the documents found during the search, are bad in law. In any case, no additions can lawfully be made on account of estimated household expenses and other outgoings, etc. 6. That, in any case, the material relied upon was not confronted to the appellant and the additions on account of alleged undisclosed income were wrongly made and wrongly computed and the tax was wrongly charged and the charge of surcharge on the tax was not warranted and justified by la....
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....ks were not out of the household withdrawals made by the family members and the deposits pertained to the transactions of sales and purchases made outside the books and were covered in the statement of peak period. The AO provided the assessee with estimate of household expenses under different heads, which had been discussed in the block assessment order at pp. 23 to 26. One of the items was related to the mobiles. The assessee submitted that his son Shri Jatinder Kumar Khurana did not have any mobile as they had only one mobile No. 9810057128 and the same had been declared. As regards the other three mobiles Nos. 9810115881, 9810113352 and 9810115926, it was stated that those were not related to Shri Jatinder Kumar Khurana, son of the assessee, and the bills were wrongly sent to him by the company. It was also stated that no payment had been made in respect of bills related to the aforesaid three mobiles. It was also stated that from the seized documents, it would be clear that no payment had been made and connections were disconnected. 3.1 Regarding R.D. No. 103068, it was stated that the same was in the name of baby Palk d/o Shri Gagan Khurana and was opened in the year 1993 f....
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....ayment for the period 1st June, 1998 to 22nd July, 1999 were as under: Date Amount 22-6-1998 21,320 31-8-1998 11,975 20-10-1998 6,329 22-12-1998 9,081 22-2-1999 12,631 1-4-1999 7,135 11-5-1999 9,703 18-6-1999 2,588 80,762 It was stated that the AO had wrongly stated that the average telephone calls for that period were Rs. 20,000 per month whereas the telephone bills for the period 1st June, 1998 to 22nd July, 1999 were to the tune of Rs. 80,762 which had been debited in the regular books of account. It was also claimed that the telephones at shop and residence were used for business purposes and the expenses were debited in the books of accounts and there was no personal use of telephone and as such the expenses for this purpose out of household withdrawals was 'Nil'. 3.10 As regards the shagans and gifts, the assessee stated that the expenses on this account were not more than Rs. 100 to Rs. 200 per month. 3.11 Regarding educational expenses, the assessee submitted that his son, namely, Shri Pardeep Kumar Khurana had taken up a part time computer course for which the total expenses were at Rs. 2,000 in the entire block period. 3.12 Regarding....
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....000 per month by any yardstick cannot be said to be excessive particularly considering the fact that the appellant has itself shown undisclosed income for the block period at Rs. 11 lacs and he is maintaining a reasonable standard of life having most of the amenities of life including air-conditioners, cars, telephone, jewellary, servants and business at Delhi and Amritsar. As far as the appellant's contention regarding lack of scope in making any estimate of income in a block assessment made under the provisions of Chapter XIV-B for block period is concerned, it may be mentioned that even in the case laws relied upon by the appellant, the respective Tribunals have not held that any estimated addition cannot be made under the block assessment. What has been held in the case laws relied upon by the appellant is that the AO cannot make an estimated addition on arbitrary basis. In the present case, as mentioned in the above paragraphs, the AO before making the said addition has made reference to all the relevant additions and considered them before making the said estimated addition. In view of the above facts and circumstances of the case, I am firmly of the opinion that the appellan....
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....It is also true that in block assessment, the addition can be made (sic) or documents and such other material or evidence which are available with the AO. In the present case, the AO while making the estimation of household expenses for the block period at Rs. 20 lacs has not pointed out any instance where the expenses incurred by the assessee and declared in the books of accounts were on the lower side. In other words, the AO had not brought any material on record in support of his estimation, The learned CIT(A) also while confirming the action of the AO simply stated that the AO had made the estimate of Rs. 20 lacs for the entire block period of 10 years which gave an average estimated expenses of Rs. 2 lacs per year and that estimated expenses of Rs. 2 lacs per year divided over the period of 12 months gave the average monthly expenditure of about Rs. 16,000 which by any yardstick could not be said to be excessive. However, the learned CIT(A) had also not considered this vital fact that in the block period, the addition cannot be made without brining any material on record. It is also true that although estimate can be made, however, that should be based on some concrete materia....