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2014 (9) TMI 197 - ITAT HYDERABADUnexplained expenditure for renovation of flat Held that:- The basis for addition is the seized material - a reference to the seized material a copy of which is assessee's paper book - the AO has treated the expenditure to have been incurred in AY 1996-97 - an expenditure incurred in FY 1995-96 will be noted in February 1998 - For this reason alone the addition made by the AO cannot be sustained - it is a fact on record that besides the seized material, there are no other evidence or material on record to show that the assessee has actually incurred the expenditures noted in the seized material - a reference to the seized material will show that though there are twenty seven items of expenditure, all of them are in round figures only - the seized material is only an estimate - If at all it is to be believed that assessee has actually incurred all these expenditures, it is not at all possible that the department did not come across any bill, voucher or any other material to show incurring of expenditure even in case of a single item mentioned in the seized material - addition is more on presumption than on evidence - addition made is not sustainable - decided in favour of assessee. Addition of undisclosed income Held that:- Assessee had purchased three DDs totaling to ₹ 1 lakh in the name of his sister Smt. Suchitra Krishnamurthy on 03/11/1999 - assessee is not consistent with his explanation in respect of the source of DDs purchased - the purchase of DD has not been reflected in the books of account of the company either on the date of purchase or subsequent thereto - cash flow statement of the assessee, as found by the learned CIT(A), does not show out flow of cash towards purchase of DDs - assessee's explanation that it was out of cash available with him and the company is devoid of merit and cannot be accepted - assessee has not been able to explain the source of purchase of DDs with cogent evidence the order of the CIT(A) is upheld - Decided against assessee. Implant receipts as undisclosed income Held that:- The register was seized from the possession of the company M/s Andromeda Foundation (India) Pvt. Ltd. - assessment if any in reference to the seized material should have been made in case of the company and not the assessee - The department has not brought any material on record to controvert these facts - receipts from implant devices as found noted in the seized material cannot be considered as undisclosed income of the assessee - AO has treated the entire receipts as income of the assessee instead of considering the profit element - the implant receipts as found in the register seized from the possession of the company cannot be treated as undisclosed income of the assessee the AO is directed to set aside the addition Decided in favour of assessee. Undisclosed income Held that:- In a reassessment proceeding on being remanded by the Tribunal the AO cannot consider a issue which was not a subject matter of appeal before the Tribunal relying upon CIT Vs. Late Jawaharlal Nagpal [1987 (8) TMI 41 - MADHYA PRADESH High Court] - The powers of the Tribunal are confined to the subject-matter of appeal as constituted by the original grounds of appeal and such additional grounds as may be raised by the leave of the Tribunal - when the Tribunal allows the appeal and sets aside the assessment and remands the case for making a fresh assessment, the power of the ITO is confined to such subject-matter only - He cannot take up the questions which were not the subject-matter of appeal before the Tribunal - This will be so even though no specific direction has been given by the Tribunal Decided against revenue.
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