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2015 (7) TMI 682 - AT - Income TaxConcealed income of assessee - what should be the sale consideration deemed to have been received by assessee for the purpose of computation of capital gain? - Held that:- there is no dispute to the fact that while assessee in registered sale deed has shown sale consideration at ₹ 21,65,000, registering authority has valued the property for stamp duty purpose at ₹ 24,07,000. Therefore, the sale consideration as per section 50C, which assessee could be deemed to have received is the value adopted by SRO. In fact, not only AO adopted the said value for computing capital gain, but, ld. CIT(A) has also endorsed the view of AO. However, in spite of having held so, ld. CIT(A) in her own wisdom has chosen to delete the addition of ₹ 2,42,000. Revenue has also not challenged that decision. That being the factual position, we fail to understand how ld. CIT(A) can again direct AO to treat the amount of ₹ 2,42,000 as concealed income of assessee. We are at loss to understand under what provision of law such amount can be treated as income of assessee when the only provision under which the SRO value can be considered as deemed sale consideration received is section 50C of the Act. Therefore, once, ld. CIT(A) deleted the addition made by AO u/s 50C of the Act, under no other provision such amount can be assessed. Accordingly, we hold that the amount of ₹ 2,42,000 cannot be treated as concealed income of assessee. - Decided in favour of assessee. Addition on on account of low withdrawals for household expenses - Held that:- The addition made on account of alleged low drawings for household expenditure is purely on conjectures and surmises. There is no material before AO to show that the monthly expenditure of ₹ 42,070 towards assessee’s household needs is inadequate. While assessee has brought material on record to demonstrate the actual expenditure incurred by assessee towards education of his children and other household activities, AO has no evidence to back his quantification of monthly expenditure of ₹ 70,000. Considering the expenditure incurred by assessee on the education of his children as well as the fact that assessee is staying in his own house, expenditure shown by assessee towards household expenditure, in our view, is just and reasonable. On the other hand, monthly expenditure of ₹ 70,000 adopted by AO, in our view, is high and excessive and has no nexus with the material on record. In view of the aforesaid, we are unable to sustain the addition of ₹ 3,33,151 made by AO. Accordingly, we direct the AO to delete the same.- Decided in favour of assessee. Addition for non production of freight bills - Held that:- As could be seen, assessee during the year has claimed the total expenditure of ₹ 1,58,41,375 on account of freight. Whereas, AO has disallowed only negligible amount of ₹ 26,700 out of the expenditure claimed by alleging that bills and vouchers to that extent was not produced by assessee. In our view, when AO has accepted almost 99.9% of the expenditure claimed by assessee by treating it as genuine, there is hardly any scope to believe that assessee would have inflated the expenditure to the extent of ₹ 26,700 only. Therefore, assessee’s explanation that considering the nature of expenditure and volume of transaction some of the vouchers might have been lost is believable. Accordingly, we delete the addition of ₹ 26,700.- Decided in favour of assessee. Addition on account of cash found during the course of search and seizure operation - Held that:- On perusal of the extract of cash book of M/s Maheswari Brothers, copies of which were submitted before us, it appears that the firm was having closing cash balance of ₹ 69,71,760.33 on 07/09/10. Therefore, assessee’s explanation if considered along with availability of cash balance as per the cash book of M/s Maheswari Brothers and also the confirmation letter submitted by M/s MBG Commodities Pvt. Ltd. appears to be credible. As far as the balance cash of ₹ 3,83,250 is concerned, on perusal of the cash book extract of Shiva Shakti Transport, it is seen that the proprietary concern is also having sufficient cash balance in its books. Therefore, assessee’s explanation cannot be brushed aside lightly. Moreover, as could be seen from the order of ld. CIT(A) in the concluding part of her finding she has observed that managing director of the group company Sri Bijay Kumar Mandhani has stated before the department that assessee has been paid his remuneration in cash. Ld. CIT(A), further observed, the statement of Sri Mandhani corroborates availability of cash at the time of search. That being the case, cash found cannot be treated as unexplained as it is linked to remuneration received in cash. Therefore, there being no positive evidence brought on record by department to controvert the claim of assessee that cash found belong to M/s Maheswari Brothers, whereas, the claim of assessee being backed by evidence, we are of the view that addition of ₹ 43,83,250 representing cash found at the time of search is not justified. Accordingly, we delete the same.- Decided in favour of assessee.
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