TMI Blog2007 (6) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... Act completed prior to the search in respect of six assessment years referred to in section 153A(b) of the Act and in the second proviso to section 153A, has also been included in the assessment framed u/sn 153A of the Act. In such circumstances the plea of the assessee cannot be accepted. Ground No. 1 is, therefore, rejected. Books of account rejected - estimation of income - In the present case, the Assessing Officer in coming to the conclusion that the income of the assessee from buffing and polishing was at Rs. 5,50,000 has not brought any material on record. In fact it has been a wild guess, on the part of the Assessing Officer. The addition having been made without any reference to either the past history in assessee's case or any special circumstances suggesting earning of higher income by the assessee, or any comparative case, the addition deserves to be deleted and the same is directed to be deleted. The 6th ground of appeal of the assessee, is allowed. Income from sale of scrap - HELD THAT:- We are of the view that the addition made by the Assessing Officer and sustained by the CIT (Appeals) deserves to be deleted. There has been no basis for the estimati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction. In the circumstances, the Assessing Officer ought to have exercised his discretion in not making an addition u/s 68 of the Act. Accordingly, we delete the addition made in respect of the credits appearing in the name of Shri Mohan Lal and Shri P.K. Sharma. Ground No. 2 of the assessee, is partly allowed. Addition of low withdrawals for meeting the house-hold expenses - HELD THAT:- We are of the view that the addition has been made without any basis and the explanation of the assessee in this regard is found to be satisfactory. The addition made is directed to be deleted. The third ground of appeal of the assessee is allowed. In the result, Income-tax Appeal are partly allowed while other Income-tax Appeal is dismissed. - P. M. Jagtap Accountant Member And N. V. Vasudevan Judicial Member For the Assessee : Neeraj Jain For the Respondent : B. P. Misra ORDER PER N.V. VASUDEVAN, JUDICIAL MEMBER. - These are appeals by the assessee against three different orders of the ld. Commissioner of Income-tax, (Appeals)-I, Ludhiana, all dated 18-10-2006, relating to the assessment years 1998-99, 1999-2000 and 2000-01 respectively. 2.1 Firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no requirement for an assessment made under section 153A of the Act being based on any material seized in the course of search. Further under the second proviso to section 153A pending assessment or re-assessment proceedings in relation to any assessment year falling within the period of six assessment years referred to in section 153A(b) of the Act shall abait. Thus the Assessing Officer, gets jurisdiction for six years assessment years referred to in section 153A(b) of the Act for making an assessment or reassessment. It is not the complaint of the assessee that any income, which is already subjected to assessment under section 143(3) or under section 148 of the Act completed prior to the search in respect of six assessment years referred to in section 153A(b) of the Act and in the second proviso to section 153A, has also been included in the assessment framed under section 153A of the Act. In such circumstances the plea of the assessee cannot be accepted. Ground No. 1 is, therefore, rejected. 3.1 Ground Nos. 2, 6 and 7 raised by the assessee, read as follows:- 2. It is contended that the ld. CIT (Appeals) has erred in upholding that the Assessing Officer was justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being heard to the assessee, make the assessment of total income to the best of his judgment. In the present case, the Assessing Officer in coming to the conclusion that the income of the assessee from buffing and polishing was at Rs. 5,50,000 has not brought any material on record. In fact it has been a wild guess, on the part of the Assessing Officer. The addition having been made without any reference to either the past history in assessee's case or any special circumstances suggesting earning of higher income by the assessee, or any comparative case, the addition deserves to be deleted and the same is directed to be deleted. The 6th ground of appeal of the assessee, is allowed. 4.1 As far as the 7th ground of appeal is concerned, it is seen that the Assessing Officer made an addition of Rs. 19,990, on the following facts:- The assessee had shown income from sale of scrap at Rs. 3,510. According to the Assessing Officer, this income shown was very low in the type of business carried on by the assessee. He estimated an income of Rs. 23,500 from sale of scrap and made an addition of Rs. 19,990. 4.2 On appeal by the assessee, the CIT (Appeals) confirmed the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has not been able to Jet in any evidence or to show as to how the source of Rs. 40,000 deposited in the capital account was from disclosed sources. On the other hand, general argument was advanced that because of lapse of time the assessee has not been able to explain the source properly. It has also been argued that the plea of the assessee has to be accepted on the basis of probability as the assessee can be expected to have source to the extent of Rs. 40,000. We are of the view that such general submissions cannot be accepted. The assessee having failed to explain the source with regard to the deposit under capital account, the addition of Rs. 40,000 was justified and the same is confirmed and the third ground of appeal of the assessee, is dismissed. 6.1 The 4th ground of appeal of the assessee, reads as follows:- 4. It is contended that the ld. CIT (Appeals) has erred in upholding an addition of Rs. 7,511 made by the Assessing Officer on account of disallowance of public relation expenses. 6.2 The assessee had claimed an expenditure of Rs. 7,511 as public relation expenses. The assessee submitted that these expenses were in addition to welfare expenses and staff w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions. We are of the view that this addition has been made purely on surmises and conjectures. The estimate of house-hold expenses as made by the Assessing Officer is without any basis. In the light of the categorical assertion that the quantum of household expenses was only Rs. 99,800 and in the light of the withdrawal by the assessee's husband of Rs. 60,000 from his books of account and the surrender of Rs. 39,800 before the Income-tax Settlement Commission, there was no basis for the Assessing Officer to have made the impugned addition and the same is directed to be deleted. Ground No. 5 of the assessee is allowed. 8. In the result, the appeal filed by the assessee, is partly allowed. I.T. Appeal No. 4344 (Delhi) of 2006-Assessment year: 1999-2000 9. The first ground is identical to ground No.1 raised in the earlier appeal. For the reasons stated therein, this ground of appeal of the assessee, is dismissed. 10.1 The second ground of appeal of the assessee, reads as follows: 2. It is contended that the ld. CIT (Appeals) has erred in upholding an addition of Rs. 1,11,542 made by the Assessing Officer on account of disallowing the expenses out of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 13.1 The second ground of appeal of the assessee, reads as follows:- 2. It is contended that the ld. CIT (Appeals) has erred in confirming the addition of Rs. 38,000 made by the Assessing Officer as unexplained deposit under section 68 of the Income-tax Act, 1961. 13.2 From an examination of the books of account of the assessee, the Assessing Officer noticed that there were three cash credits in the cash book of M/s. B.M. Associates, the details of which were as follows:- Date Amount Name 8-8-1999 Rs. 18,000 Mohan Lal 21-8-1999 Rs. 5,000 P.K. Sharma 21-8-1999 Rs. 20,000 Salender 13.3 The assessee filed confirmation from all the three creditors. In respect of confirmation of Shri Salender Vashist, no address was given in the confirmation. In respect of Shri P.K. Sharma and Shri Mohan Lal, the address given was Kundan Colony, Ballabgarh, Faridabad and 2-NH, NIT, Faridabad, respectively. The Assessing Officer has made an observation that despite b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of Shri Mohan Lal and Shri P.K. Sharma. Ground No. 2 of the assessee, is partly allowed. 14.1 The third ground of appeal of the assessee, reads as follows:- 3. It is contended that the ld. CIT (Appeals) has erred in upholding an addition of Rs. 24,000 made by the Assessing Officer on account of low house-hold expenses. 14.2 The addition of low withdrawals for meeting the house-hold expenses has been made under the same facts and circumstances in which they were made in assessment year 1998-99. The annual house-hold expenses of the family was stated to be a sum of Rs. 1,22,500. Shri C.P. Kaushik had surrendered Rs. 1,04,500 before the Hon'ble Income-tax Settlement Commission on account of low withdrawals of meeting the house-hold expenses. The assessee had shown withdrawal of Rs. 18,000. Thus, the house-hold expenses were claimed to have been met by the assessee. The Assessing Officer was of the view that Rs. 18,000 shown as withdrawal by the assessee was too low. An addition of Rs. 18,000 was made by the Assessing Officer for meeting the house-hold expenses from undisclosed sources. We are of the view that the addition has been made without any basis and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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