TMI Blog2014 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) order of the AO in 2002-03 AY - No evidence to the contrary upsetting these findings as incorrect finding has been placed - the holding period has also not been argued to be incorrect which is more than one and a half year or more. - Decided against Revenue. Deletion of expenses – Held that:- The only relief available to the assessee can be the deletion of the expenditure estimated for the month of June 2006 when Mr. Aman Gupta returned to India - Nothing has been placed on record before us except oral arguments to demonstrate that Mr. Aman Gupta was also financed by his father - No arguments have been advanced requesting for the admission of evidence of withdrawals available to the assessee's husband - In the absence of any relevant evidence the assessee being the best judge to know its affairs, there was no reason to deviate from the order – thus, the addition @ Rs. 1 lac per month for the month of April and May is upheld and the addition to the extent of Rs. 2 lac is sustained – Decided partly in favour of Assessee. Disallowance of foreign visit expenses – Held that:- The claim of the assessee that the amount was sufficient to cover the two foreign travels has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to add, alter and/or amend the above ground of appeal and to raise any other ground of appeal at the time of hearing of the case." 2. The facts qua the departmental appeal as coming from the assessment order are that the assessee is stated to have shown income under the heads of house property, business, capital gain and other sources. She has also been doing business in the year under consideration in her name in shares and securities for which an audit report in Form no-3CD had been filed. As per Report, the assessee was having closing stock of shares of Rs.2,19,15,145/-; the purchases reported during the year were at Rs.60,64,573/-and gross profit from share business was reported at Rs.3,16,531/-. In addition to the normal business of purchases and sales of shares, income had also been shown by the assessee as per the AO from speculation business in shares. The P L account as per the assessment order showed various expenses such as accounting charges, bank charges, DP charges, depreciation, salary, telephones expenses and vehicle expenses. The AO observed that the assessee was running a regular business of sale and purchase of securities as in the earlier years. Apart from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in page 4-5 of the assessment order which reads as under:- "The assessee Smt. Kusum Gupta has been dealing in shares and also making investment in shares. She has kept separate accounts with reference to shares held as investment and shares in respect of which she was trading. A reference in this regard may kindly be made to balance sheets furnished by her, which are already placed in records. A reference may kindly be made to the detail of investment as on 31.03.2004 at page 18 of first reply (copy enclosed for ready reference) wherein investment in shares of Toplight Commercials Ltd. has been depicted at rs.6,31,377/50. This investment is in respect of purchase of one lac shares the delivery of which was taken by the assessee in her D-Mat account placed at page 48 of third reply (copy enclosed for ready reference). It would be seen that delivery of 32,750 shares was taken on 18-07- 2003, delivery of 7,250 shares was taken on 05-08-2003 and delivery of 60,000 shares was taken on 05-08-2003. These 1,00,000/- shares were sold post October '2004 for Rs.2,97,82,130/- (excluding STT) and the delivery thereof was also handed over to D- Mat account. Copy placed at page no 49 and 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares yet the deals which have resulted in this windfall in the shape of long term capital gain this year as well as in the preceding year have been routed through a company situated in Calcutta and the shares dealt in are unfamiliar and uncommon. Therefore, surrounding circumstances which throws a light on the real scenario can not be ignored." 2.4. Accordingly considering the applicability in the case of G.Venkata Swami Naidu Co. vs CIT (1959) 35 ITR 594 (SC) and Sardar Indra Singh Sons Ltd. vs CIT (1953) 24 ITR 45 (SC), he was of the view that there was a methodical and systemic approach in the purchasing and selling of the shares which was the hallmark of any business activity. He further held that assessee was neither a promoter of the company nor was involved in the affairs of the company as the assessee did not even otherwise despite being a Director in the security company i.e PEE AAR Securities Ltd. operated by her and her family was aware. Accordingly he was of the view that seen from all angles the profit from sale/purchase of shares is only a part and parcel of the assessee's business of sale/purchase of shares and the exemption claimed was disallowed and the profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares also not be treated as part of the normal business activity and therefore assessable under the head 'business' instead of capital gain. As mentioned by AO, specific reply was not filed by the appellant. Rather it was submitted that facts are exactly identical as they were for A.Y. 2005-06 wherein also this issue was involved and the same submission may be considered for this year also subject to change of figures." 3.2. The deficiency pointed out by the AO was summarized in para 3.1.2 by the CIT(A) in the following manner :- "i). The fact that the appellant has been engaged in the business of sale and purchase of shares for many years. The transaction shown under the head investment is not different but is very much similar and identical looking to the quantum, magnitude and nature of shares to the operations normally associated with her trade and business. ii). There was a methodical and systematic approach to earn profit by purchasing and selling the shares which is hallmark of any business activity. iii). The shares in question are such which are not normally transacted on stock exchange. iv). The assessee herself is a Director-cum-share holder in a security comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in different portfolios such as Investment Portfolio and Business Portfolio as all she had to do was to bifurcate the income earned under different portfolios for taxation purposes which she had done in the computation of income as well as in the Profit Loss Account filed during the course of assessment proceedings. Attention was invited to Circular No.4/2007 dated 15.06.2007 which confirmed that it is possible for a tax payer to have two portfolios i.e an investment portfolios comprising of securities which are treated as capital assets and a trading portfolio comprising of stock-in-trade which are to be treated as trading assets and the assessee may have income under both the heads. It was also argued that the AO has not disputed the genuineness of the transaction and has also not controverted the declaration of the assessee regarding holding of such shares as investment in the previous preceding year which was also assessed by him and he had also failed to bring on record any concrete material to justify that the profit earned by the assessee on sale of such investment was a business income. Copies of return for the assessment years 2001-02, 2002-03, 2003-04, 2004-05, 2005-06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant to keep these two portfolios totally separate without mixing and thereby creating any confusion. 3.3.2. The AO is contradicting his own action as if it is his case that appellant is having only one portfolio of trading then he should have taken entire investment in shares as appearing in the balance sheet towards closing stock of shares at cost or market price which ever is less and worked out the profit of the trading business accordingly. This he has neither done in AY. 2006-07, the year in which the investment in OSASCIN was shown for the first time in b/s nor in this year or subsequent years. It is also seen that earlier the scrutiny assessment u/s 143(3) has been done for the assessment year 2002-03 and in this assessment also the maintenance of two separate portfolios by the appellant has been accepted by the AO. 3.3.3. It is also seen that the frequency of purchase and sale of shares kept in investment portfolio is not very large. In other words normally they are being kept for a fairly long time. Thus basic objective appears to keep them as investment to earn profit on appreciation. I do not agree with the observation of the AO. that no dividend has been earned on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s indicative of intention of trade. Similarly, ratio between the purchases and sales and the holdings may show whether the assessee is trading or investing (high transactions and low holdings indicate trade whereas low transactions and high holdings indicate investment.) (4) Whether purchase and sale is for realizing profit or purchases are made for retention and appreciation in its value? Former will indicate intention of trade and later, an investment. In the case of shares whether intention was to enjoy dividend and not merely earn profit on sale and purchase of shares. A commercial motive is an essential ingredient of trade. (5) How the value of the items has been taken in the balance sheet? If the items in question are valued at cost, it would indicate that they are investments or where they are valued at cost or market value or net realizable value (whichever is less), it will indicate that items in question are treated as stock-in-trade. (6) How the company (assessee) is authorized in memorandum of association/articles of association? Whether for trade or for investment? If authorized only for trade, then whether there are separate resolutions of the board of directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stinction between two types of holdings. This could have been done by showing that there is intermingling of shares and transactions and the distinction sought to be created between two types of portfolios is not real but only artificial and arbitrary. Therefore, in absence of any material to the contrary, and on appreciation of cumulative effect of several factors present (as culled out above on the basis of authorities described), we hold that the surplus is chargeable to capital gains only and assessee is not to be treated as trader in respect of sale and purchase of shares in investment portfolio. As result, this ground of the assessee is allowed." 3.9. The reasoning summarized in the earlier part of this order (specific para 3.7) is extracted from the impugned order:- "3.3.7. If we examine the facts of the appellant in light of the principles as set by the above decision of Hon'ble ITAT Lucknow, it will be noticed that on all the principles, the appellant is successfully able to discharge all the tests which have been set and the claim of appellant that these share are forming part of investment portfolio, is found correct. Even the facts of the instant case are exactly id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on no.-8 and Question no-11 recorded in para 4 of the AO and deliberated at length on the ignorance of the assessee in whose the name, the business was being run. Similarly Question No-13 and Question No-20 it was stated would also illustrate these aspects further and the discrepancies noted in the statements recorded it was argued are addressed in Question No-25. The ignorance evident it was argued was further compounded by the answers given to Question No-29 and 30 in which the lady answers it was stated by the Ld. CIT DR that she only remembers her husband and children. Accordingly it was his vehement plea that the business is being run by the husband and not by the assessee. 4.1. Since the Ld. CIT DR has placed heavy emphasis on his arguments to the responses given to the Question, we reproduce para 4 of assessment order hereunder :- "Q.2 What are you doing? Ans. I am house wife. Q.3. What is your husband doing? Ans. I have no knowledge. Q.8. Are you maintaining any bank account and any bank lockers? Ans. I have no bank account and locker. Q.10. Have you any immovable property give complete details? Ans. I have immovable property but these details will be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon by the assessee. After carrying us through the assessment order it was his submission that he would be filing a write up on the legal principles relied upon by the department. In view of the position that after having made his submissions, Ld. CIT DR sought time to place his written submissions, it was proposed to adjourn the case. The Ld. CIT DR stated that since he has already made his arguments and only legal principles will be addressed as such the hearing need not be adjourned. However in the absence of written submission on which the department would want to file and rely it was indicated that the hearing should be adjourned. The Ld. AR responding to the query of the Bench also requested that he may be allowed to address the arguments of the Ld. CIT DR and also be allowed to argue his appeal and stated categorically that he would not be prejudiced by the department filing written submissions subsequently on case law as the assessee's case is fact specific on settled legal issues. Accordingly the Ld. AR advanced arguments on the departmental stand and also on the assessee's appeal to which the Ld. CIT DR also responded again stating that for legal pegal principles he woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeping in view the amount of Rs.33,600 withdrawn by the wife of the assessee. It restored the addition to the extent of Rs.86,400 (1,20,000-33,600). For the assessment year 1995096, the Assessing Officer made an addition of Rs.84,000 on similar grounds, which was upheld by the Tribunal. On appeal to the High Court: Held dismissing the appeals, that the Tribunal had estimated the expenses at the rate of Rs.10,000 per month. Such a finding was essentially a question of fact. It was not open to the court while exercising the jurisdiction under section 260A of the Income Tax Act, 1961, to substitute its own estimate for the estimate of the Tribunal, unless it was shown that the estimate of the Tribunal was arbitrary, unreasonable or irrational. In the present appeal, no such case was made out especially in view of the fact that the assessee was not prepared to furnish any break-up of his household expenses. The reference to the cases of his relatives could not be considered as no details had been furnished about the size of their families, their household expenses and other particulars in respect thereof. Even the amounts of the household expenses in such cases had not been mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speaking, be accepted evidence in a court of law. All relevant circumstances which have bearing on the issue which are revealed in the course of assessment would be covered by the expression "material or evidence" on which A.O. could rely. Burden of proof: Misplaced burden vitiates a judgment.RangamalvsKuppuswamy 2011(2)(OJR)9(SC).The onus that this is not a trade is on assessee( G V Naidu case) since normal presumption is that assessee trades. Consistency rule/res judicata: Assessee again and again harps on these despite clear direction of SC that each year is different and on such an issue this rule does not apply. Raja BahadurVisheshwar Singh y. Commissioner of Income-tax 41 ITR 685(SC)-3 judge bench dt 15.12.60 (iii) that the fact that the Appellate Tribunal had not treated the appellant as a dealer in shares for the assessment year 1941-42 and his profits from the purchase and sale of shares for that year had not been assessed to tax did not operate in any way as res judicata or preclude the Tribunal from holding that he was a dealer in shares for the years 1944-45 to 1948-49. Raja BahadurKamakhyaNarain Singh vs (IT 77 ITR 2S3(SC). Since the present Tribunal had the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the earlier assessment year the assessee was treated as an investor would not stop the assessing authority from considering for the purpose of computation of profits for the succeeding year as to when the trading activities of the assessee began. (3) Also we rely on the case of 18.General Talkies: ITA 4224/D/2010 (PB 128- 135) para 15. Nature of the share/scrip: I had put a question as to what is this scrip. What company? Where traded? Nothing has been told in response. So what is the way to see that these were valued at cost in the portfolio which has been emphasized in the assessee's case. The fundamental rule in these type of cases is that party which asserts must lose if best evidences and details are not produced since such knowledge is within the knowledge of assessee who holds the shares. Associated IndDevt Co P Ltd 82 ITR 586(SC) @ pg 590 Not a solitary transaction as told by AR but 4 transactions in the shares in quick succession. In order to judge the transaction in question the relevant factors are: (1) What was the intention to go for this share? What are the fundamentals of this company? What lured the assessee to go to Calcutta to buy this share? (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly investing in shares and the ratio of sales to investment was very less. The assessee was investing for a long period and offering the long-term capital gain which is more than short-term capital gain and the shareholdings varied for longer period from one year to five years. However, no such facts exist in the present case. In fact in the case of the) assessee the holding of shares vary between one day to 200 days. Therefore, the decision in the case of Gopal Purohit ( supra) is not applicable to the facts of the present case. Smt. Harsha N. Mehta 2011] 43 SOT 332 (Mum.) 7.Gopal Purohit:ITAT: Here no inter mingling of portfolios as in our case. In that case, Interest on loans taken in earlier years were allowed as business expenses. (para 8 and 8.1)(PB 32-33). Similar transactions were treated as capital gains in earlier years.(PB-32) In our case, these were taxed as business.(AY 05-06 etc.). Moreover consistency is never a criterion as held by apex court. This case has also been distinguished by Delhi ITAT and others as a case unique to the facts of that case.(see supra) 8.Sarnath Infra- ITAT- fully distinguishable for its features discussed in PB 44- Para 14(11)and 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated business loss has shown the gain as business loss. Our case obviously is different. Rather in this case again the principle of consistency has not been approved in such type of cases as seen from para 15 of the order. 19. Chandra Global finance: (ITA 1145/D/2011) (Hon'ble AM was a member) PB 124-127) Looking at the substantial investment, period of holding and the nature of business of assessee (not share trading),the ITAT returned a finding that intention is for short term investment. Our case is different. Surendra Buildtech: ITA 141/2012: Del HC: Here the issue was filing documents from asst records to show that facts are incorrectly recorded by CIT{A). HC rejected the claim saying that this should have been filed before ITAT which is a final fact finding authority. Such a perverse finding can be challenged only if such material is before ITAT as the question can be decided on the basis of material before ITAT. This is a well settled law. It is not understood why and how this can help the assessee in shutting down revenue to bring facts before the ITAT, Rather it supports the cause of revenue that all material findings required and all contentions relevant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncept of trade or business. RamNarain Sons (Pr.) Ltd. v. Commissioner of Income-tax 41 ITR 534(SC). (Here intention of making profit is evident. From the features of trader badges of trade as discussed in H Holck Larsen 160 ITR 67(SC) the assessee satisfies most of them to meet the legal requirement) True where the purchase of any article or of any capital investment, for instance, shares, is made without the intention to resell at a profit, a resale under changed circumstances would only be a realization of capital and would not stamp the transaction with a business character Commissioner of Income-tax v. P. K. N. Co. Ltd. [1966] 60 ITR 65 (SC). (But here considering the nature of the scrip, the period of holding( just beyond a year),the cyclical swings in such scrip, it is but natural to hold that this is part of the scheme to make quick tax free profits, not common of an investment.) Intention to resell: The intention to resell would, in conjunction with the conduct of the assessee and other circumstances, point to the business character of the transaction. Commissioner of Income-tax v. Sutlej Cotton Mills Supply Agency Ltd. 100 ITR 706(SC)- 4 judge bench-explaining rati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later stages of the whole operation show that the first step-the purchase of the shares-was not taken as or in the course of, a trading transaction.. CIT vs H Holck Larsen 160 ITR 67(SC). What are such circumstances: few illustration: Shortness of holding: Nature of sale: Whether any urgency for cash as a motive for sale: What primarily influences our minds is the nature of the subject-matter of sale and the shortness of the time between purchase and sale of the shares coupled with the fact that the profit was anticipated or should have been anticipated and that there is no material on record to show that there was any urgency for the assessee to cash the shares so soon. AmirthamAmmal (V.) v. Commissioner of Income-tax 74 ITR 739(Mad). Also see Sutlej Cotton Mills Supply Agency Ltd. 100 ITR 706(SC) where the ITAT decision with this as a factor was endorsed by SC. (here no urgency for assessee to sell just on completion of a year) Borrowal of funds: Indicates as an added factor to show the intention to trade (Dalhousi investment 68 ITR 486) but the reverse that purchase was out of self generated funds is of no consequence as it is not an essential feature of a business to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of investment for earning income from dividends, but was with a view to earn profits by resale of those shares. Dalhousie Investment Trust Co. Ltd. v. CIT (1968) 68 ITR 486(SC)-a 3 judge bench at Pg 492-493: The conduct of the assessee is not to hold them as investment and earn some dividend income but to trade in shares. This is clear from the frequency and nature of transactions in such type of shares. e.g. in AY 05-06, she has dealt with similar penny stock of Top Light Commercial where shares worth 6.31 lakh was sold in little more than a year for Rs.2.97 cr. Notably SEBI has warned the investors that brokers like P Nahata and S jhunjhunwala have INDULGED IN CREATION OF ARTIFICIAL MARKET AND PRICE MANIPULATION THROUGH CROSS DEALS AND SYNCHRONIZED TRANSACTIONS IN SCRIP OF TOPLIGHT COMMERCIAL LTD and passed orders against these brokers. Merely because the assessee has shown these shares as investments in its books of account, it cannot be said that these shares were held on the investment account, whereas in fact the close perusal of the transactions clearly shows how the assessee has purchased and sold such shares. Rather we may rely on the apt observation of a 3- ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rguments in the manner in which they have been advanced by the CIT DR were assailed as an attempt to create unnecessary suspicion which has no relevance for deciding the issue. It was emphasized that had the AO doubted he would have resorted to applying section 68 which he was duty bound to apply if the genuineness of the transaction was questioned by him which was not the case. The arguments questioning why a broker has invested through another broker in Calcutta Stock Exchange which leads to a doubt in the mind of the Ld. CIT DR it was stated has been addressed by the assessee in the written submissions reproduced in the impugned order itself and is addressed by the statement that there is no bar to purchase from any stock exchange in the country. The arguments of the Revenue based on suspicions and no evidence were assailed. It was questioned that where is the bar to such an action and what is wrong has not been addressed by the CIT DR. It was also his argument that to buy in a falling market is a prudent decision and to sell in a rising market is also a prudent decision and it does not lead to any reason justifying the upsetting of the impugned order. It was argued that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod has not been doubted or rebutted by the Revenue. The consistent disclosure by the assessee over the years in the factum of maintaining of two separate portfolios, it was argued has not been rebutted by the Revenue as admittedly no evidence to the contrary has been led. It was his argument that relying on principles randomly from different decisions have no relevance as without establishing that the facts are pari materia, the principles applied do not become applicable. It was reiterated that facts have not been rebutted. It was vehemently emphasized that the Revenue has not rebutted that the assessee has shown separate investment in her balance sheet based on the investment portfolio demonstrated by the balance sheets of the last 7 years on facts and contrary to this no evidence has been led and only arguments and theories based on suspicions have been canvassed which it was urged should be dismissed. 6.3. On the basis of these facts, it was his submission that as per the settled legal principles, the impugned order deserves to be upheld as the frequency of purchase and sale of shares is not very large and they have been held for a fairly long time and the basic objective s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifically invited to DCIT vs R.K.Sons (HUF) in ITA No-174/Del/2012 (copy placed at page 78 to 90 of the paper book, specific page-89). It was also submitted that a very recent judgement of the Jurisdictional High Court rendered on 17.05.2012 in CIT vs Surendra Buildtech Pvt. Ltd. is also relied upon. Filing a copy of the said decision it was submitted that the impugned order is further fortified by the said decision. 6.7. CIT vs Global Credit Capital of Delhi High Court in ITA No.-1942/2010 (copy placed at page 10 to 11) was also relied upon in support of the impugned order. Similarly CIT vs Rohit Anand 327 ITR 445 (Del) [copy placed at page 21 to 22 of the paper book] and CIT vs M/s Jubilant Securities Pvt. Ltd. published in 333 ITR 445 (copy placed at pages 54-56 of the paper book) were also relied upon. Specific attention was invited to the observations in para 9 of the same at page 75 of the paper book in the case of CIT vs Vinay Mittal in ITA No-1172/Del/2012 (copy placed at pages 65-72 of the paper book) of the Jurisdictional High Court was also referred to so as to contend that they fully apply to the present case. It was argued that dividend is not necessarily the only co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been shown to be incorrect on facts. The settled legal position permits the assessee to maintain two separate portfolios which admittedly has been done. This findings is found recorded in para 3.3 of the impugned order which has been extracted in page 8 9 of this order. Similarly the fact that this was not the first year when the assessee has shown separate investment in her balance sheet has been taken into consideration by the CIT(A) who has considered the copies of the balance sheet for the last 7 years which was found to support the facts that the assessee has regularly been maintaining two separate portfolios which finding is recorded in para 3.3.1 of the impugned order, nothing has been placed before us by the Revenue to upset this finding. It is also seen that the CIT(A) records that he has personally verified the position for the last 7 years from the P L A/c of the assessee as well as the inventory of closing stock and then has come to a finding that neither during the year nor in the earlier years the assessee has ever traded in those shares which are kept as an investment. No attempt has been made by the Revenue to upset this finding as the line of argument adopted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rguments advanced on behalf of the Revenue that the attitude to purchase in a falling market and sell in a rising market is a ground to interfere with the finding to our minds may have relevance if the case of the Revenue is that the assessee is manipulating the market which admittedly is not the case of the department. The judgements and the case laws relied upon by the Ld. CIT DR, it is seen operate on entirely distinct and separate peculiar facts and circumstances, the arguments that the AO is not fettered by technical rules of evidence is a settled legal position and it is an accepted legal position that all relevant circumstances which appear on the issue and the material which may not strictly be evidence under the Indian Evidence Act can be taken into consideration by the AO to inquire probe and consider however in order to lead to the conclusion that material which is not an evidence to justify the addition has been that material which has the sanctity of a fact. As such the judgements relied upon in the context of the said proposition addressing the settled legal position and cannot be read out of context. The judgements relied upon in the context of the proposition that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g therein that she and her husband has withdrawn Rs.193000/- for household expenses including expenses on double trip to foreign countries by the family. It has also been stated that no amount was sent during the year to her son. This explanation of the assessee is incomplete. She has tried to evade the answer in respect of educational expenses of her son in a school in UK. Unless details of expenses and source of such expenses are furnished, the contention of the assess can not be accepted. In the A.Y. 2004-05, the assessee has stated that Rs.564000/- sent as fees to University of Sheffield. In addition to above, there were expenses on account of to and fro journey during the year. There were expenses on account of boarding and lodging, books, clothing etc. Taking all these facts into consideration, there is no other alternative but to estimate the expenses on the education of her child. In the preceding year, miscellaneous expenses on boarding lodging etc. has been estimated at Rs.1 lakh per month. Therefore total expenses on the education of her son come to Rs.3 lakhs plus Rs.564000. Thus expenses of Rs.864000/- has been incurred for which no explanation has been filed. As per d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Aggrieved by this addition of Rs. 3 lac the assessee is in appeal before the Tribunal. Mr. Aggarwal contended that nothing has been brought on record by the department to show why the son, Mr. Aman Gupta be supported by the assessee i.e the mother and not by the father who also had substantial earnings in his own right as he too is an income tax assessee. It was vehemently contended by him that nothing has been brought on record to show firstly that the expenditure of Rs. 1 lac was warranted on facts and secondly that the son was supported only by the mother and the father made no contribution. In the circumstances it was his submission the estimate made in an arbitrary manner deserves to be deleted. In the alternate it was his argument that it was excessive. 9.1. The Ld. CIT DR on the other hand submitted that the onus was on the assessee to show that Mr. Aman Gupta during his stay abroad had adequate funds at his disposal due to his own efforts. No such evidence it was submitted is available on record. It was also his submission that in support of the arguments that Mr. Aman Gupta was supported by the father, the position remained the same, as no evidence is available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been stated that the expenses have been met out of drawings shown under the head household expenses. In the same reply it has been stated that expenses for household have been Rs.293000/- met out of withdrawals by the assessee and her husband. These expenses are just sufficient to meet the household expenses. No details regarding expenses on foreign visits have been filed. The assessee has visited Dubai from 13.4.2006 to 19.4.2006 and she along with her daughter visited Singapore from 6.6.2006 to 11.6.2006. No details of expenses on ticket and hotel etc has been filed. Now there is no other alternative but to estimate these expenses on the basis of status of the family. The expenses are estimated for Dubai visit at approximately at Rs.1.5 lakhs and for Singapore visit of the family are estimated at Rs.2 lakhs. This will result in an addition of Rs.3.5 lakhs. Penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income are initiated separately on this score." 11.1. In appeal before the First Appellate Authority it is seen that it was contended that the assessee visited Dubai for a period of 5 days only and to Singapore for a period of 5 days only. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n suspicion and estimates deserves to be deleted and such actions it was submitted have been judicially frowned upon. 12.1. Ld. CIT DR on the other hand vehemently contended that the onus placed on the assessee has not been discharged. It was his argument that in the absence of any information placed on record by the assessee, the AO was left with to choice but to arrive at an estimate. It was his submission that even today the assessee does not care to place on record as to how she traveled and where she stayed and instead has chosen to argue on legal principles and the necessary facts known to the assessee are not placed on record. Addressing the arguments that she has not maintained any record it was his submission leads to only one conclusion that the same has to be estimated. In these circumstances the impugned order it was his submission deserves to be upheld. 12.2. We have heard the rival submissions and perused the material available on record. It is seen that the claim of the assessee that Rs.2,93,000/- was sufficient to cover the two foreign travels has not been accepted by the department. Before us it has been claimed that the said sum was over and above what was ava ..... X X X X Extracts X X X X X X X X Extracts X X X X
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