TMI Blog2015 (7) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as income of assessee when the only provision under which the SRO value can be considered as deemed sale consideration received is section 50C of the Act. Therefore, once, ld. CIT(A) deleted the addition made by AO u/s 50C of the Act, under no other provision such amount can be assessed. Accordingly, we hold that the amount of ₹ 2,42,000 cannot be treated as concealed income of assessee. - Decided in favour of assessee. Addition on on account of low withdrawals for household expenses - Held that:- The addition made on account of alleged low drawings for household expenditure is purely on conjectures and surmises. There is no material before AO to show that the monthly expenditure of ₹ 42,070 towards assessee’s household needs is inadequate. While assessee has brought material on record to demonstrate the actual expenditure incurred by assessee towards education of his children and other household activities, AO has no evidence to back his quantification of monthly expenditure of ₹ 70,000. Considering the expenditure incurred by assessee on the education of his children as well as the fact that assessee is staying in his own house, expenditure shown by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhani corroborates availability of cash at the time of search. That being the case, cash found cannot be treated as unexplained as it is linked to remuneration received in cash. Therefore, there being no positive evidence brought on record by department to controvert the claim of assessee that cash found belong to M/s Maheswari Brothers, whereas, the claim of assessee being backed by evidence, we are of the view that addition of ₹ 43,83,250 representing cash found at the time of search is not justified. Accordingly, we delete the same.- Decided in favour of assessee. - ITA Nos. 1639, 1640 & 1641/Hyd/2014 - - - Dated:- 15-7-2015 - Shri B. Ramakotaiah and Shri Saktijit Dey, JJ. For the Petitioner : Shri K.A. Sai Prasad For the Respondent : Shri Rajat Mitra ORDER PER SAKTIJIT DEY, J.M.: These appeals by the same assessee are directed against a common order dated 20/08/2014 of ld. CIT(A)-I, Hyderabad for the AYs 2006-07 to 2011-12. However, present appeals are for AYs 2009- 10, 2010-11 and 2011-12. Since issues and facts involved in these appeals are more or less identical, these appeals were clubbed and heard together, therefore, we find it to conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived by assessee and assessed it to capital gain. Accordingly, he made addition of ₹ 2,42,000. Being aggrieved of such addition, assessee preferred appeal before ld. CIT(A). 5. In course of hearing of appeal, it was submitted by assessee that difference between the value adopted by assessee and that of the SRO being marginal, provisions of section 50C should not have been applied. In support of such contention, assessee also relied upon a number of decisions. Ld. CIT(A) after considering the submissions of assessee with reference to the provisions contained u/s 50C of the Act, observed that computation of capital gain by AO by taking into the value determined by SRO for stamp duty purpose was correct. However, she deleted the addition by observing that as addition is not based on any incriminating material, no such addition can be made in assessment made u/s 153A. Having held so, she further directed AO to treat the amount of ₹ 242,000 as concealed income of assessee and bring to tax as per the provisions of incometax Act. 6. Challenging the aforesaid direction of ld. CIT(A), ld. AR submitted before us, the direction is not only irrelevant but is totally against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses. 12. Briefly the facts relating to this issue are, during the assessment proceeding, AO while verifying the details was of the view that the amount shown by assessee towards household expenses are inadequate considering the social status of assessee, size of his family, expenses on education of children as well as lifestyle. He, therefore, called upon assessee to submit a detailed note with necessary evidence to substantiate the drawings made by him for household expenses. Though, assessee furnished details explaining that the drawings made towards household expenses is sufficient to meet the expenditure but the AO was not convinced with the same. He observed that assessee s daughter is pursuing BDS degree in dental college at Wardha, Maharashtra from AY 2008-09 and assessee s son is studying in school. He stated that assessee s family consists of five members. Therefore, considering the aforesaid facts, household expenditure of ₹ 5,04,847 claimed to have been incurred by assessee during the AY under consideration, which comes to ₹ 42,070 per month is not adequate. AO was of the view that considering the social status and other relevant factors, the average mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure, in our view, is just and reasonable. On the other hand, monthly expenditure of ₹ 70,000 adopted by AO, in our view, is high and excessive and has no nexus with the material on record. In view of the aforesaid, we are unable to sustain the addition of ₹ 3,33,151 made by AO. Accordingly, we direct the AO to delete the same. 16. The next issue as raised in ground No. 4 is with regard to addition of ₹ 26,700 for non production of freight bills. 17. Briefly the facts are during the assessment proceeding, AO while examining assessee s claim of expenditure in respect of his proprietary business observed that assessee was not able to produce proper bills vouchers for expenditure on freight. He, therefore, called upon assessee to show cause why the expenditure incurred should not be disallowed. In response to the query raised by AO, it was submitted by assessee that he generally maintains proper freight bills, however, considering the volume of transactions some bills tend to be misplaced and or lost. Therefore, all the bills relating to the entire expenditure cannot be produced. AO after verifying the submissions of assessee, disallowed an amount of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 43,80,250 on account of cash found during the course of search and seizure operation. 24. Briefly the facts relating to this issue are, in course of search and seizure operation at the residential premises of assessee, cash amounting to ₹ 44,83,250 was found. As assessee was not present at his residence at the time of search, assessee s wife was called upon to explain the source of cash found. However, as stated in the assessment order, in the statement recorded from assessee s wife u/s 132(4) on 08/09/10 she failed to properly explain the source of cash found. Subsequently, assessee was asked to explain the source of cash found at the time of search. In his reply, assessee stated that cash belongs to M/s MBG Group and the same was kept in his residence for security purpose. During the assessment proceeding also assessee was again called upon to explain the source of cash found at his residence. In response to the query raised by AO, assessee submitted a letter of confirmation from M/s MBG Commodities Pvt. Ltd. wherein it was stated that out of the cash found at the residence of assessee ₹ 40 lakhs belong to the firm M/s MB Brothers. It was further stated, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., when questioned about the cash payments made to Sri Santosh Kumar Agarwal which was evident from the seized material page nos.83 to 87 of A/MBCL/09 has stated that Sri Santosh Kumar Agarwal was paid in cash for chit payment also. sri Bijay Kumar Mandhani has categorically stated in his statement that the amounts reflected in the ledger account were drawn by Sri Santosh Kumar Agarwal in lieu of remuneration from Maheswari Brothers Group. The appellant's contention is that out of cash found from his residence of Rs .43,83,250, an amount of ₹ 40 lakhs belongs to Maheswari Brothers group and he offered the balance amount of ₹ 3,83,250 as additional income. If it is a regular practice as per the confirmation, there were only 2 entries, one, the opening balance as on 1-4-2010 and the other after the cash found at Santosh Kumar Agarwal's residence i.e., on 9-9-2010, and there were no other entries before search and after search. Moreover, Sri Bijay Kumar Mandhani did not own up the cash on the day of search that the company's cash was lying with Sri Santosh Kumar Agarwal. It is surprising to note that while appellant is not aware of the accounts maintained b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that amount of ₹ 40 lakh belong to M/s Maheswari Brothers and the rest of cash amounting to ₹ 3,83,250 belong to assessee. Ld. AR drawing our attention to the extract from cash book of M/s Maheswari Brothers submitted, as on 07/09/10 there is a closing balance of ₹ 61,71,760.33, therefore, the firm was having sufficient balance out of which the amount of ₹ 40 lakh was given to the director for safe custody. Explaining the allegation of AO to the effect that when the amount of ₹ 40 lakh was given to assessee as per the books of account of firm on 09/09/10, how could it form part of seized cash, ld. AR submitted before us, as per the general practice no entry is made in the books of account of firm when cash is given to assessee for safe custody and similarly, no entry is made when assessee returns the cash back to the firm on the next day. It was submitted, when cash was seized on 08/09/10 assessee could not return the cash to the firm on 09/09/10, therefore the firm has to record entry in its books debiting the amount in the name of assessee. Ld. AR submitted, even assessee is having enough cash balance to the extent of ₹ 28 lakh in the books o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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