TMI Blog2016 (4) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... ve not been considered by the AO, then the provisions of section 147 as well as section 263 of the I.T. Act will become redundant and the condition for their operation will be nullified. Thus we hold that Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO as has been done in the present case. - Decided in favour of assessee Addition on a/c of insufficient withdrawals for household expenses - Held that:- No doubt the appellant is living jointly with his parents and, therefore, withdrawal of all the members of the family living together have to be considered while estimating house hold expenditure. In the capital account of the appellant as on 31.3.2008 drawings of ₹ 2,92,77,983/- have been shown. This fact has been ignored by the AO and also not highlighted in the submission filed on behalf of the appellant. With such large drawings, the question of any addition on account of low house hold expenses does not arise. - Decided in favour of assessee - ITA Nos. 142 & 5789/DEL/2013, ITA NO. 608/DEL/2013 - - - Dated:- 4-3-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iating the facts in proper perspective and without providing any opportunity of hearing on this issue though the whole of the loan has been treated as explained. 5. The appellant craves leave to add, alter, modify and withdraw any ground of appeal before or during the appellate proceedings. ASSESSEE S APPEAL BEING ITA NO. 142/DEL/2013(AY 2008-09) 3. The brief facts of this case are that the assessee has filed the return of income declaring an income of ₹ 1,44,19,770/- on 31.12.2008 which was processed by the AO u/s. 142(1) of the I.T. Act, 1961 (hereafter referred as Act). The case of the assessee was picked up for scrutiny and notice u/s. 143(2) dated 12.1.2009 was issued and served on the assessee. Another notice u/s. 143(2) of the Act was also issued on 25.8.2010. A detailed questionnaire was issued on 13.9.2010. In response to the same A.R. of the Assessee appeared and filed necessary documents which was examined by the AO and lastly the AO made the addition of ₹ 22,82,98,179/- on account of unexplained loan from following persons:- M/s Arlington Impex Pvt. Ltd. ₹ 5,92,01,579/- Sh. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has asked for the Remand Report from the AO who vide Remand Report dated 20.7.2011 submitted that the AR of the Assessee attended the hearing on 24.11.2010, 1.12.2010, 20.12.2010 and 21.12.2010 and filed certain details on this aspect also on which addition has been made i.e. source of loan taken by the assessee during the year. Hence, to say that no sufficient opportunity was given to the assesse on the issue on which subsequently addition was made is factually incorrect. In the rejoinder by the assessee dated 22.11.2011 to the Remand Report of the AO, assessee has submitted that the AO has not controverted the averments of the assessee made in the Application u/r 46 of the I.T. Rules dated 28.4.2011, because the AO was satisfied with the evidence filed before him during the course of hearing and did not require any further evidence to establish the genuineness of the loans. 7. In Para 3.6, the Ld. CIT(A) has mentioned that assessee was asked to show cause notice as to why the request of admitting additional evidence under rule 46A should not be rejected and the assessee vide reply dated 07.11.2012, filed copy of Appeal order dated 06.04.2011 for AY 2006-07 and 2007-08 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the impugned order passed by the Ld. CIT(A) be cancelled and the addition may be deleted. In support of his arguments, he cited the following case laws:- a) CIT vs. Union Tyres 250 ITR 556 (Del. ) b) CIT vs. Sardari Lal Co. 251 ITR 864 (Del.) (FB) c) CIT vs. Rai Bahadur Hardutroy Motilal Chamaria, (1967) 66 ITR 443 (SC) d) Holcim (India) Pvt. Ltd. vs. DCIT 2013 TIOL 903 ITATDel. 8.1 Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal and stated that the same may be restored. 9. We have heard both the parties and perused the relevant records, especially the written submissions filed by the Ld. Counsel of the assessee alongwith the various judgments of the Apex Court as well as Hon ble Jurisdictional High Court. We would like to reproduce the finding given by the Ld. CIT(A) on the issues in dispute which are as under:- (i) With regard ground no. 1 relating to confirming the addition of ₹ 3,87,33,295 out of the loan from M/s Arlington Impex Pvt. Ltd. as deemed dividend u/s. 2(22)(e), the Ld. CIT(A) has given his finding vide para no. 5.4 5.5 at pages 16 17 of the impugned order which are reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uri, the appellant controls 99% share of the company. Section 2(22)(e) provides that 'dividend' includes any payment by a company, company in which the public are substantially interested, made after 31st day of May, 1987 by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares holding not less than 10% of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has substantial interest. Section 2(14)(ii) defines income to include dividend. Therefore, the sums paid by M/s Arlington lmpex Pvt Limited to the appellant Sh Vikrant Puri, who is shareholder and Director of the company, and having controlling rest with his father Sh. Vinay Puri, is chargeable to tax u/s 2(22)(e) read with 2(24)(ii). As the amount outstanding at the end of the previous year was ₹ 3,87,33,295/- the balance of ₹ 2,04,68,314/- having been returned by the appellant to the company during the previous year, only this amount is chargeable. Accordingly, out of the unexplained loan from M/s Arlington Impex Pvt. Ltd., addition of ₹ 3,87,33,295/- is sustained as deemed dividend as discussed above. Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or sister of the spouse of the individual; (iv) brother or sister of either of the parents of the individual; (v) any lineal ascendant or descendant of the individual; (vi) any lineal ascendant or descendant of the spouse of the individual; (vii) spouse of the person referred to in clauses (ii) to (vi);] .. 6.6 The appellant is an individual. He is not related to Sh. DK Gupta. The amounts have been received without consideration. There is no provision of interest for the amounts received. The commercial expediency of these transactions has not been explained or established. In the circumstances, the provisions of section 56(2)(vi) as narrated above would be applicable. Accordingly, I hold that the amount of ₹ 59,21,600/- , being the outstanding balance at the end of the previous year in the name of Sh. DK Gupta and his AOP, to be amount received without consideration chargeable to tax u/s. 56(2)(vi) of the I.T. Act, 1961. Thus, out of ₹ 9,12,96,600/- made by the AO as unexplained loan from Sh. DK Gupta and his AOP, the sum of ₹ 59,21,600/- is sustained as income being amount received without consideration as above. The balance amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the copy of the return of income and computation of Sh. Rajesh Mohan, no income of the two minor daughters has been clubbed. If the two minors are having separate bank accounts, they would have some income which would be taxable. There is no such indication from the documents filed. The AO is directed to inform the AO of Sh. Rajesh Mohan regarding this matter. 8.5 Further, for the reasons detailed in para 6.5 and 6.6. above, I hold that the amount of ₹ 48,00,000/-, being the outstanding balance at the end of the previous year in the name of Smt. Tanisha Mohan, to be amount received without consideration chargeable to tax u/s. 56(2)(vi) of the I.T. Act, 1961. Thus, entire addition made by the AO as unexplained loan from Smt. Tanisha Mohan is sustained as income being amount received without consideration as above. 9.1 We have gone through the assessment order as well as the impugned order passed by the Ld. CIT(A) on the additions in dispute, we are of the view that after admitting the additional evidence, Ld. CIT(A) has held that the stand taken by the Revenue that amount received by the assessee from the company is unexplained cannot be sustained is a correct o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO as has been done in the present case. Therefore, the impugned order on the issues involved in the grounds of appeal are without jurisdiction and is not sustainable in the eyes of law, hence, we cancel the impugned order dated 26.11.2012 being without jurisdiction by accepting the Appeal filed by the Assessee. ASSESSEE S APPEAL BEING ITA NO. 5789/DEL/2013 (AY 2008-09) 10. The Grounds raised in the Assessee s Appeal No. 5789/Del/2013 (AY 2008-09) read as under:- 1. Under the facts and circumstances of the case, the appellate order passed u/s 250 / 154 by the Ld. CIT (A) is illegal being against the principles of natural justice as the application u/s 154 was rejected without providing any opportunity of hearing. 2. Under the facts a, id circumstances of the case, the appellate order passed u/s 250 / 154 by the ld. CIT (A) is illegal as the Ld. CIT (A) has reviewed his own order u/s 250 under the garb of rectification u/s 154. 3. The Ld. CIT (A) has grossly erred on facts as well as in law in not replacing the outstanding balance at the end o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. CIT(A) dated 26.11.2012 relevant for the assessment year 2008-09. The Revenue has challenged the deletion of addition of ₹ 2,04,68,314/-, ₹ 8,53,75,000/- and ₹ 4,00,00,000/- made on a/c of unexplained loan / cash credit raised vide ground no. 2 and also challenged the deletion of addition of ₹ 3,00,000/- made by AO on a/c of insufficient withdrawals for household expenses raised vide ground no. 3. 15. We have discussed in detail about these deletion of additions made by the Ld. CIT(A) while deciding the Assessee s Appeal No. 142/Del/2013, as aforesaid. Keeping in view of our finding, the Revenue s Appeal has become infructuous on the issue no. 2, because we have already cancelled the impugned order being without jurisdiction, as discussed in detail in our aforesaid finding given in para no. 9 to 9.3 of this order. 15.1 As regards the ground no. 2 relating to deletion of addition of ₹ 3,00,000/- made by AO on a/c of insufficient withdrawals for household expenses is concerned, we are of the view that AO has made this addition in dispute on estimate basis. Ld. CIT(A) in the Appeal filed by the assessee has deleted the addition vide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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