TMI Blog2016 (1) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... to delete the addition made on this issue in the hands of the three assessees Addition in respect of estimated household expenses - Held that:- CIT(A) has accepted the fact that the amounts withdrawn by the assessee and his family members for personal purposes have been wrongly computed by the assessing officer and he has further held that there is no requirement to make any addition. However, he has taken altogether different stand and has expressed the view that the expenses booked as business expenses shall have personal element and accordingly disallowed a sum of ₹ 1.00 lakh on estimated basis. The Ld CIT(A) has not brought on record as to how much expenses was booked by the assessee as business expense, even though the assessing officer has accepted the entire amount of business expenses claimed by the assessee. However, there is some merit in the observations of the Ld CIT(A) that the personal element involved in respect of Vehicle and telephone expenses could not be ruled out. Accordingly, we modify the order of Ld CIT(A) on this issue and sustain the addition to the extent of ₹ 20,000/- and in our view the same would meet the ends of justice. We direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations u/s 132 of the Act on 18.01.2007. Consequent thereto, the assessments of the years under consideration were completed in the hands of the assessees by making various types of additions. The appeals filed by these assessees were dismissed/partly allowed by Ld CIT(A). The assessees have filed these appeals on the issues confirmed by the Ld CIT(A), where as the revenue has filed the appeals on the issues, where relief was granted by Ld CIT(A). 3. The first common issue urged by all the assessees relate to the addition made to the brokerage income by holding that these assesses have received part of brokerage income in cash and did not disclose the same. The addition made by the AO under this head is tabulated below, for the sake of convenience:- S.No. Name of assessee Amount in dispute (for quantum appeal) in Rs. 1 Chaturbhuj T Batra 92,82,233 2 Varsha Batra, 4,80,000 3 Premkumar Batra 66,64,608 4 Karan Batra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the paper book filed on behalf of the assessee. I find, the Assessing Officer relied on the order in the case of Shri C.B. Batra and held that the assessee is receiving 50% of the brokerage in cash which is unaccounted in the books. I find, the Assessing Officer has taken this view on the basis of seized documents with regard to two properties namely Regiland Flat in 5th' Floor and Flat at Sommerset Building. No independent enquiry from the purchasers has been made. I find, the CIT(A) had mentioned in para 11.1 of his order that 'at the outset it is to be mentioned that there is no clear cut evidence available to show that any cash component is involved in this transaction.' Further the submissions of the assessee before the CIT(A) that the seized document relating to the residential flat was a trade enquiry which was sold two years after and does not relate to Assessment Year 2003-04 could not be controverted by the ld.D.R. Further; the submission of the assessee before the CIT(A) that Flat at Sommerset Building has not been sold and the finding of the CIT(A) that there is no evidence to show that the transaction took place through the assessee also could not be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any credible material on record. Accordingly, we set aside the order passed by Ld CIT(A) in the hands of these assessees for the years under consideration and direct the AO to delete the addition made towards cash component of brokerage. 7. In the case of Chaturbhuj T Batra, the Ld CIT(A), while confirming the addition relating to suppressed cash component of brokerage, granted telescoping benefit of the following additions confirmed by him:- Unaccounted brokerage M/s Vinita Estated - ₹ 25,25,400/- Unaccounted brokerage of Chinar, Rajrishi And Powai properties - ₹ 37,30,690/- The revenue is challenging the telescoping benefit granted by the Ld CIT(A). Since we have deleted the addition relating to Cash component of brokerage, the telescoping benefit given by Ld CIT(A) shall stand vacated and hence the appeal filed by the revenue shall become infructuous. Accordingly we dismiss the appeal filed by the revenue in the case of Chaturbhuj T Batra for AY 2007-08. 8. The next common issue that arises in the case of Shri Chaturbhuj T Batra, Smt. Varsha Batra and Shri Karan Bat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessees. During the course of assessment proceedings also, the assessing officer has failed to bring any material on record to show that the services mentioned in the invoices have been actually rendered or the money has actually passed the hands. At the time of hearing, the Ld A.R submitted that the relevant invoices are undated, unsigned and did not bear the acknowledgement of M/s Vinita Estates (P) Ltd. He further submitted that the director of the above said company as well as the accountant of the above said company has denied the transactions. He further submitted that the statement of actual brokerage given by M/s Vinita Estates (P) Ltd to the assessees herein was furnished to the AO and the assessing officer has not brought any material on record to show that these assessees have received any money over and above that mentioned in the statement. By placing reliance on the decision rendered by Hon ble Supreme Court in the case of Godhra Electricity company (225 ITR 746)(SC), the Ld A.R contended that the assessing officer could assess only the real income has accrued or received or deemed to have been accrued or received. He submitted that the assessing officer has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84 and 85 of the assessment order and the aggregate amount of commission income was arrived as under:- Chinar, Rajrishi, Powai Kandivili properties 53,88,740 Kandivili (another property) 15,60,000 69,48,740 However, while making addition, the assessing officer took the aggregate amount as ₹ 73,93,740/- resulting in enhanced addition by ₹ 4,45,000/-. 14.2 Before Ld CIT(A), the assessee offered certain explanations and hence the first appellate authority called for a remand report from the AO. In the remand report, the assessing officer accepted that a sum of ₹ 32,18,050/- has been accounted for by the assessee and accordingly reported that credit for ₹ 32,18,050/- needs to be given. The Ld CIT(A) also appreciated the casting error pointed by the assessee. Accordingly, he gave relief of ₹ 36,63,050/- (Rs.32,18,050/- + ₹ 4,45,000/-) and confirmed the balance amount of ₹ 37,30,690/-. 14.3 The Ld A.R submitted that the assessee has accepted the addition on this account only to the extent of ₹ 12, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove said explanation of the assessee by placing reliance on the presumption provided in sec. 132(4A) of the Act. In the remand report submitted before the Ld CIT(A), the assessing officer has stated that he had deputed an Inspector to examine the claim of the assessee. However, the Inspector had reported that the assessee could not confirm that the amount of ₹ 17,63,000/- refers to the disputed property. We notice that the assessee has filed a confirmation letter from the developer of land, wherein the developer has accepted the submissions made by the assessee. 14.7 Thus, we notice that the Inspector deputed by the AO to verify the plot has accepted the fact that the land that is going to be developed was a forest land and the same was under dispute. However, he has simply stated that the assessee could not confirm that the entries found in the seized document relate to the very same land. On the contrary, the assessee has also filed a confirmation letter obtained from the developer and the same has been ignored by the tax authorities. Thus, we notice that the assessing officer, by placing reliance on the suspicion of the Inspector, has recommended for confirming this ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to discharge the said burden and hence we have no other option, but to confirm the addition of ₹ 7,17,690/-. In the result, the addition on this issue is confirmed to the following extent:- Addition accepted by the assessee 12,50,000 Income claimed to have been not received 7,17,690 19,67,690 The order passed by Ld CIT(A) on this issue stands modified accordingly and the assessing officer is directed to sustain the addition to the extent stated above. 14.10 The next issue contested by Shri Chaturbhuj T Batra relates to the addition of ₹ 1.00 lakhs confirmed by Ld CIT(A) in respect of estimated household expenses. The assessing officer estimated the house hold expenses of the assessee and noticed that the amount drawn by the family members are less than the amount so estimated. Hence the AO made an addition of ₹ 6,89,332/-. Before Ld CIT(A), the assessee furnished the details of drawings, which was found to be higher than that computed by the AO. The assessee also submitted that the expenses relating to vehicle, telephone and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills by suspecting about the veracity of the same. The gold jewellery weighting 991 grams were found during the course of search. The AO gave credit of 530 grams and took that 461 grams was not explained. The alleged unexplained jewellery was valued at ₹ 3,67,878/- and the same was added by the AO. The AO made additions on substantive basis in the hands of Smt. Varsha Batra and on protective basis in the hands of Shri Chaturbhuj T Batra. The Ld CIT(A) confirmed the additions made in the hands of Smt. Varsha Batra and accordingly deleted the protective addition made in the hands of Shri Chaturbhuj T Batra. 15.2 We heard the parties and perused the record. We notice that the gold and diamond jewellery were essentially claimed to have been accumulated over the years. However, the tax authorities did not accept the claim fully in respect of diamond jewellery. However, in respect of gold jewelly, the said explanation was partially accepted and the credit was given to the following extent:- Varsha Batra 280 gms. Maya Batra 100 gms. Chaturbhuj T Batra 75 gms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 5.00 lakhs were received on various occasions, we notice that the assessee has failed to furnish the details of functions, festivals, name of donors etc. However, one can note that receiving of gifts at the time of festivals and functions is quite common. Further, the assessees herein have also filed income tax returns over the years. Hence, on a conspectus of the matter, we are of the view that the addition on account of diamond jewellery may be restricted to ₹ 1.50 lakhs and we are of the view that the same would meet the ends of justice. Accordingly, we modify the order of Ld CIT(A) on both the issues referred above and direct the AO to sustain the addition relating to diamond jewellery to ₹ 1.50 lakhs and delete the addition relating to gold jewellery. 15.3 In the result, the appeal filed by Smt. Varsha Batra is partly allowed. 16. In the appeal filed by the revenue in the case of Smt. Varsha Batra, the revenue is challenging the telescoping benefit given by the Ld CIT(A). The Ld CIT(A) had confirmed the addition relating to cash component of brokerage and gave telescoping benefit against the addition relating to diamond and gold jewellery, since the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recent circular no.21/2015 dated 10-12-2015 issued by the CBDT. 19. Now we shall take up the appeal filed by Smt. Nisha Batra for assessment year 2007-08. The only individual issue urged therein relates to the addition of ₹ 4,45,000/- on account of diamond jewellery found during the course of search. The explanations furnished by the assessee that the jewellery were received at the time of marriage, festivals and other functions were not accepted by the tax authorities. We have considered an identical issue in the case of Smt. Varsha Batra and we have confirmed addition to the extent of ₹ 1.50 lakhs in her hands for the detailed reasons stated therein. For the identical reasons, we are of the view that the addition of ₹ 4,45,000/- made by the AO is not justified. The assessee has given a list of gold jewelleries received at the time of marriage. The value of those jewellery at the time of search was estimated at ₹ 3,96,085/- and the corresponding cost at the time of her marriage in 1980 stood at ₹ 1,03,797/-. For the detailed reasoning given earlier, we are of the view that the addition on account of gold jewellery is not called for. In respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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