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2017 (6) TMI 517 - AT - Income TaxReopening of assessment - unexplained investments - assessment year 2006-07 and 2008-09 - Held that:- Assessing Officer was precluded from making the additions to the returned income, considering the fact that the income referred to in the reasons recorded for issuance of notice u/s 147/148 of the Act has not been assessed. Therefore, the additions of ₹ 22,48,808/- made to the returned income during the reassessment proceedings are beyond the jurisdiction of the Assessing Officer and deserve to be set aside. See CIT Versus Jet Airways (I) Ltd.[2010 (4) TMI 431 - HIGH COURT OF BOMBAY ] Addition u/s 68 - non explanation to the source of capital - Held that:- The explanation of the Assessee is purely based on the affidavit of the mother, Mrs Meena Godbole and find that apart from making general averments of having advanced monies to the Assessee during the period 2001 to 2011, no specific details have been provided. It is also not stated as to the manner in which the amounts have been advanced to the Assessee. The affidavit also does not bring out any concrete sources of income available with Mrs Meena Godbole to justify the gifting of amounts to the Assessee. Therefore, it is a case where the explanation furnished by the Assessee is neither amenable to any verification and nor it refers to any specific source of funds. Therefore, the income tax authorities have rightly considered the sum as unexplained cash credit within the meaning of Section 68 of the Act. Thus, on this aspect, Assessee fails. Deemed dividend addition u/s 2(22)(e) - Held that:- As no business considerations have been explained for the giving and receipt of monies from the company. Therefore, we uphold the invoking of section 2(22)(e), in principle. With regard to the quantum of amount assessable u/s 2(22)(e) we have perused the statement of account pertaining to the period under consideration and in terms there of, it is quite clear that the opening balance of ₹ 6,52,674/- cannot be construed an amount received during the year, and thus the same cannot be assessed u/s 2(22)(e) in this year. AO has assessed an amount of ₹ 3,93,445/- which is the closing balance at the end of the year, a part of which is from the opening balance. The only amount which can be assessed u/s 2(22)(e) is a sum of ₹ 1,50,000/- advanced to the Assessee on 17.7.2008 as is evident from the statement of account placed. Therefore, we direct AO to restrict the addition on account of deemed dividend under section 2(22)(e) of the Act to ₹ 1,50,000/- as against ₹ 3,93,445/- made by him. Adhoc disallowance made out of the expenses debited to the Profit and Loss Account on account of the telephones, car, computer expenses etc. - AO disallowed 20% of the total expenses, being ₹ 18,662/- and the same has been reduced by the CIT(Appeals) to 10% - Held that:- It is quite clear from the order of the authorities below that the disallowance is purely adhoc based on mere surmises and conjectures and therefore the same is directed to be deleted in its entirety. Thus, on this aspect also, Assessee succeeds.
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