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2016 (4) TMI 1348 - AT - Income TaxRejection of books of account - allowance of provisions of interest - HELD THAT:- As decided in HITESH S. MEHTA VERSUS DCIT CENTRAL CIRCLE- 23, MUMBAI [2013 (10) TMI 1065 - ITAT MUMBAI] One of the reasons for not allowing the provisions of interest claimed by the assessee is that the books of accounts produced by the assessee during the assessment proceedings has been held to be unreliable. Shorn off all other unnecessary details, considering the facts and circumstances in toto, we are of the view that it would be appropriate that the issue is set aside to the file of the Ld.CIT(A) to adjudicate afresh on merits in respect of the issue pertaining to the rejection/reliability of the books of accounts produced by the assessee after giving due opportunity of being heard to the assessee Addition u/s 69C - Personal expenses - HELD THAT:- As decided in PRATIMA H. MEHTA case [ 2013 (8) TMI 991 - ITAT MUMBAI] Expenses in the nature of household and personal expenses may comprise of kitchen/food expenses, expenses for maintenance of residence, expenditure on education of children, expenses on religious occasions, expenditure on tour and travels, expenses for special occasion of celebration on anniversaries / birthdays, medical expenses, etc. The assessee has not furnished any details to explain as to how all these essential expenses to pull on the day to day life have been incurred. I therefore, conclude that these expenses have been met from the undisclosed sources of income of the assessee. Therefore estimate an amount of ₹ 1,00,000/- p.m. as his personal expenses. Accordingly an amount of ₹ 12,00,000/- is added as assessee’s total taxable income under section 69C - thus we set aside the ground to the file of the CIT(A), thus ground No.3 is allowed for statistical purposes. Addition u/s 14A - HELD THAT:- The assessee has earned dividend income and LTCG against which, no expenses have been said to be attributable. AO has mechanically applied Rule 8D which admittedly is not applicable in AY 2006-07. Once that is so, then the entire basis of computation of disallowance is incorrect. Looking to the nature of expenditure and claim of the assessee that it has business loss which has been assessed by AO also, we are of the opinion that this matter should be set aside to the file of the AO to work out some reasonable basis for disallowance after examining the nature of accounts and the nature of expenses debited by the assessee. Accordingly, ground No.4 is treated as allowed for statistical purposes. Addition on account of personal household expenses - HELD THAT:- After considering the rival submissions and on perusal of the relevant finding in the impugned order, we find that the addition made by the AO as well as sustained by the CIT(A) are though on ad-hoc basis, but same was done because no details of expenditures was filed by the assessee. Before us, the Ld. Counsel has submitted that, most of the expenses have been incurred by Dr. Hitesh S Mehta and other family members living in a Joint family set-up. Further other members have contributed for household expenses and that some of the additions have been confirmed on account of personal household expenses by the Department. On these facts and circumstances, we inclined to scale down the additions to ₹ 3 lakhs. Accordingly, addition sustained on account of personal household expenses would be ₹ 3 lakhs
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