TMI Blog2014 (7) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... her claim in the regular return filed in respect to tuition income being accepted and taxed by the predecessor AO cannot be discarded in the absence of any specific incriminating materials to suggest otherwise Decided in favour of Assessee. Addition u/s 69B of the Act Payment made to M/s Shah Construction out of her savings bank account with HDFC bank Held that:- The reasoning of the CIT(A) cannot be sustained for the simple reason that the assessee was in receipt of tuition income which was regularly reflected by her in her duly returned income filed u/s 139(1); and regularly brought to tax and has been as a fact taxed in the hands of the assessee; and moreover we find that the assessee/ appellant had sufficient disclosed income in her saving banks accounts to finance the construction - the amount of ₹ 3,90,000/- has been paid by cheque from HDFC Bank account on 21st December 2005; and M/s. Shah Construction has confirmed that it has received ₹ 3,90,000/- from assessee thus, the addition is liable to be set aside Decided in favour of Assessee. Addition u/s 69C of the Act Held that:- The assessee has made an expenditure of ₹ 3.1,989/- for the AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld ACIT (Circle 23(1), New Delhi on 17.12.2009 for all the six years for Assessment Year 2002-03 to Assessment Year 2007-08 and another notice u/s 153A read with section 147 was issued on 24.12.2009 raising about 10-12 queries for all the said years. For the Assessment Year 2003-04 the assessee had filed income tax return showing an income of ₹ 4,56,793/- whereas, the assessment has been made on an income of ₹ 10,34,790/- resulting in an addition of ₹ 6,84,000/-. Similarly for the Assessment Year 2004-05, the assessee had filed her return of income declaring a total income of ₹ 3,98,334/- , whereas the assessment has been made on an income of ₹ 6,98,334/- resulting in an addition of income of ₹ 3,00,000/-. Similarly for Assessment Year 2005-06, the assessee had filed its return of income declaring total income of ₹ 23,86,590/-, whereas, the assessment has been made on an income of ₹ 26,71,594/- resulting in an addition of ₹ 2,85,000/- and the entire addition for all these years were completed within 13 days after issue of statutory notices. 3. Being aggrieved by the said additions, the assessee filed an appeal before the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in her regular return filed as her undisclosed income under section 69 of the Act. 6. For the Assessment Year 2003-04, the assessee had filed income tax return showing an income of ₹ 4,56,793/- whereas, the assessment has been made u/s 153A read with section 147 on an income of ₹ 10,34,790/- resulting into an addition of ₹ 6,84,000/-. 7. Aggrieved by the said addition made by the Assessing Officer, the assessee preferred an appeal before the ld CIT(A) who has given partial relief to the assessee, wherein, in respect of addition of ₹ 6,84,000/-, the ld CIT(A) has made a finding that an amount of ₹ 3,92,000/- added by the Assessing Officer in the hands of the assessee is not correct, since the very same amount was added and assessed in the hands of the husband of the assessee, therefore it would not be appropriate to again add it in the hands of the assessee. And therefore the addition of ₹ 3,43,000/- was therefore deleted. However, the assessee s claim that an amount of ₹ 3,60,000/- which was shown as income from tuitions was not allowed by the ld CIT(A) and that order of the Assessing Officer was upheld and confirmed by the ld CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20,000/- Do 16.09.2002 1,00,000/- Do 01.10.2002 25,000/- Do 14.11.2002 25,000/- Do 24.12.2002 40,000/- Do 07.01.2003 35,000/- Do 03.02.2003 25,000/- Do 03.03.2003 25,000/- Do 9. Therefore, according to the ld AR, this amount deposited in the account work out to ₹ 3,41,000/-. And for the relevant Assessment Year the assessee had declared a total income of ₹ 4,50,790/- which included ₹ 3,60,000/- as tuition income also. Yet according the ld AR the Assessing Officer erroneously added ₹ 3,41,000/- over and above ₹ 3,60,000/- without giving any credit for ₹ 3,60,000/- which was already taxed in her hands in the relevant assessment year itself. The ld AR pointed out that after the search at her premises on 15.02.2008, the first notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to accumulate and later deposit as lump sum amount, so the ld DR tries to bring out the contradiction in the explanation given by the assessee in respect to tuition income highlighting the lump-sum deposits in the account of the assessee. According to the ld DR, taking these aspects into consideration the ld CIT(A) has rightly upheld the said amount deposited in the account as undisclosed source of income and therefore according to him it is unnecessary to interfere with the impugned order. 10. We have heard both the parties and have perused the record carefully and have gone through the case laws cited by both the parties. The assessee who is admittedly a teacher has been receiving monthly salary from the Sanskriti School in all the relevant assessment years under adjudication. It is an admitted fact that the assessee has been filing returns and has been consistently claiming in the said return certain income as her tuition fee income for the assessment years under adjudication. The amount which has been reflected as tuition fee income has been shown in the regular return filed u/s 139(1) and the same was accepted by the revenue authorities. The issue of reopening of all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- has been declared and assessed as tuition income. There is no material to show that ₹ 3,41,000/- is from a source other than the tuition income; therefore the impugned addition made by the Assessing Officer and later on confirmed by the ld CIT(A) in respect of tuition fee income, which the assessee has been consistently claiming cannot be said to be her income from undisclosed source; and her claim in the regular return filed in respect to tuition income being accepted and taxed by the predecessor Assessing Officers cannot be discarded in the absence of any specific incriminating materials to suggest otherwise; and we hold that the impugned addition based on conjectures and surmises as erroneous and therefore have to be set aside ; and we direct the Assessing Officer to delete all the additions made by the Assessing Officer and confirmed by the ld CIT(A) in respect to the claim of the assessee in respect to tuition fee income for all the Assessment Year under consideration from Assessment Year 2003-04 to Assessment Year 2007-08. 11. In the result the appeal preferred by the assessee on this ground succeeds and we allow the same. 12. In respect of assessment 2006-07 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied for estimating the cost of construction on the said plot of land. The appellant stated that the cost of construction was 3rd class and the construction was of a temporary nature. And further the husband of the appellant being in construction business could procure raw material and labour at the cheapest rates. The appellant submitted before the Assessing Officer a valuation report of a Government approved registered valuer who estimated the cost at ₹ 3,72,000/-. The Assessing Officer ignored the registered valuer s report and took the DM s notified circle rate as the basis and estimated cost of construction at ₹ 5,60,000/-. Besides, he estimated an amount of ₹ 2,00,000/- for the filing and landscaping of the lawn. The total cost was thus estimated at ₹ 7,60,000/-. The Assessing Officer stated that after considering all the cash available with the appellant, the explained source of investment was ₹ 1,18,351/-. The balance of ₹ 7,60,000/-Rs. 1,18,351/- i.e. ₹ 6,41,649/- was considered as unexplained investment. 15. Aggrieved by the said order of the Assessing Officer, the assessee filed an appeal before the ld CIT(A) who was please ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re taxed in the relevant Assessment Years to be undisclosed income, he held the entire investment made on the construction i.e. 3,90,000/- to be from that of assessee s undisclosed income. This reasoning of the ld CIT(A) cannot be sustained for the simple reason that we had already held that the assessee/ appellant was in receipt of tuition income which was regularly reflected by her in her duly returned income filed u/s 139(1); and regularly brought to tax and has been as a fact taxed in the hands of the assessee; and moreover we find that the assessee/ appellant had sufficient disclosed income in her saving banks accounts (P.B.53) to finance the construction; and the amount of ₹ 3,90,000/- has been paid by cheque from HDFC Bank account on 21st December 2005; and M/s. Shah Construction has confirmed vide document dated 23.11.2009 that it has received ₹ 3,90,000/- from assessee. So we delete the said impugned addition of ₹ 3,90,000/-. Therefore this ground of the appeal is allowed. 18. Apropos addition of ₹ 31,989/- u/s 69C of the Income Tax Act, 1961. 19. Brief Facts: That during the course of search u/s 132 certain documents/ receipts of cash were fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) order and does not want us to disturb the same. 22. We have heard both the parties and have gone through the records, we find that the assessee has made an expenditure of ₹ 3.1,989/- for the AY under consideration. The tuition income of the assessee in regular return is ₹ 3,45,000/-. The amount incurred for construction has been paid by the appellant by cheque for ₹ 3,90,000/- to Ms. Shah Construction and it has been confirmed by the receipt. 23. However, we find that the AO did not take into consideration, the fact of payment of ₹ 3,90,000/- to M/s. Shah Construction vide cheque No. 400185 dated 21st December, 2005 (PB 53) for the construction at Noida and though the AO has accepted that an amount of ₹ 63,966/- was withdrawn by the assessee from the bank for the relevant Assessment Year. The AO has erred in making a finding that even if the receipt of cash from tuition income is considered for the purpose of cash in hand with assessee, the amount of withdrawal and also the amount invested in construction of house at Plot No. D-310, Sector-47, Noida is sufficient to meet out the above expenditure in cash. I therefore reject the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has therefore wrongly treated the miscellaneous income of ₹ 10,200/- as shown in the return and did not consider the same as interest income. Therefore, the addition has been wrongly confirmed by the ld CIT(A) and to the extent of ₹ 10,2000/- is wrongly made and need to be deleted. 29. And once ₹ 10,200/- is deleted, the difference is only of ₹ 812 (Rs. 77,924-77,112) between the interest income computed from bank statement by the AO and by the appellant. It was submitted by the ld AR that this sum of ₹ 812 is on account of the fact that at the time of finalizing the return the appellant was not having full bank account of certain non operational banks. Therefore, the appellant on her on worked out interest at ₹ 77,112/- whereas, now the AO as worked out the interest at ₹ 77,924/- from the full bank statement therefore, there is discrepancies of ₹ 812/- which may be added to the income of the appellant. 30. On the other hand the ld DR relies on the decision of the ld CIT(A) and AO. 31. We have heard both the sides and perused the records. We find that in the computation of income, the assessee has shown income from other sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n income and rental income which has already been offered for taxation in the IT return and the assessee has paid full tax on the same. 3. Because the ld Assessing Officer in the assessment order itself has re-produced the explanation to bank entries wherein cash deposit is explained out of the tuition income/ rental income. The ld Assessing Officer has taxed the tuition income and also taxed the cash deposit in bank separately. Hence the assessment order is perverse. The impugned order which confirms the addition is also perverse and is not maintainable. 4. Because on facts in law the addition of ₹ 16,549/- ( being difference of interest on FDR SB A/c taken by the ld Assessing Officer at ₹ 19,430/- and interest income offered by assessee at ₹ 2881/-) is totally wrong, unjustified illegal. Ld Assessing Officer ignored the facts of the case and made addition of ₹ 16,549/- without any basis. Therefore, the basis taken for making addition of ₹ 16,549/- without any basis. Therefore, the basis taken for making addition of ₹ 16,549/- is totally wrong, unjustified and illegal and the same deserves to be deleted in full. 34. 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