TMI Blog2016 (7) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... property in the hands of the assessee. As such, the ends of justice would meet adequately if the impugned order on this issue is set aside and the matter is restored to the file of AO for computing the capital gain in the hands of the assessee, after reducing the cost of acquisition, etc. from the full value of consideration. Addition under the head ‘Telephone expenses' - Held that:- After considering the submissions made on behalf of the assessee and the relevant material, it is observed that the AO made addition @ 20% of telephone expenses at ₹ 14,600/-. When the assessee himself disallowed 20% of telephone expenses on account of personal user in his computation of income, there remains no valid reason for making or sustaining any further addition on this score. Addition towards personal expenses in the purchases made through credit cards - Held that:- We are not inclined to disturb the sustenance of this addition because it was the assessee himself who agreed for the addition when certain personal expenses were found to have been incurred through his credits that were debited in the books of account of the assessee. Therefore, uphold this addition. Addition of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. The first issue raised in this appeal is against the confirmation of addition of ₹ 6,93,000/-. Briefly stated, the fact of this issue are that the assessee deposited a sum of ₹ 11,41,000/- in cash in his bank account, comprising of two amounts, namely, ₹ 4,23,000/- and ₹ 6,93,000/-. The instant dispute is only about the second item of cash deposit in the bank account amounting to ₹ 6,93,000/-. On being show caused to explain the nature of this cash deposit, the assessee submitted that the Board of Directors of Fusion Electrodes India Pvt. Ltd., authorized the assessee to sell the land registered in the name of the company. It was only pursuant to such authorization by the company that the assessee sold the property and received a sum of ₹ 6,93,000/-. The AO noticed from the resolution passed by the Board of Directors on 4.5.2007 that the assessee owned right to sell the lease right in the property. No documentary evidence was filed to substantiate the cost of acquisition of the property by the assessee. Accordingly, sale amount of ₹ 6,93,000/- was treated by the AO as short-term capital gain. The ld. CIT(A) upheld the addition. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to be taxed in the hands of the assessee alone. 6. The next pertinent question is about the computation of capital gain. The amount of ₹ 6,93,000/- added by the AO is admittedly the sale consideration for the transfer of leasehold right which has been taken as short-term capital gain in the hands of the assessee. Any income chargeable to tax under the head Capital gains is computed by reducing cost of acquisition, cost of improvement and expenses incurred in relation to the transfer of property from the full value of consideration received on the transfer of property. Under no circumstance, the entire sale consideration can be treated as the amount of capital gain, as has been done extantly. In view of the fact that the assessee acquired the ownership of property in satisfaction of his claims due from the company, it is this amount, being the claim due from the assessee company, in satisfaction of which the assessee was given lease hold right in the property, would become the cost of acquisition in the hands of the assessee. There is no material available on record to show the amount representing such cost of acquisition of the property in the hands of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such details, the AO noticed that some of the expenses incurred were personal in nature. On being confronted with the fact, the assessee agreed to surrender a sum of ₹ 50,000/- out of total expenses booked through credit cards. Accordingly, the AO made addition of ₹ 50,000/-, which came to be upheld in the first appeal. 11. Having regard to the facts of the instant case, I am not inclined to disturb the sustenance of this addition because it was the assessee himself who agreed for the addition when certain personal expenses were found to have been incurred through his credits that were debited in the books of account of the assessee. I, therefore, uphold this addition of ₹ 50,000/-. This ground fails. 12. The next ground is against confirmation of addition of ₹ 10,000/- out of conveyance expenses, staff welfare, inward remittance, printing, advertisement and sale promotion, etc. The assessee incurred the following expenses which were debited in his books of account:- Conveyance Expenses 83,961/- Staff Worker Welfare 4,071/- Inward Remittance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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