9911796707
TMI Blog2017 (11) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... e and in law in partially confirming the action of the Ld. AO of making disallowance on account of purchase of jewelry and purchase of two cars. 5. That the Ld. CIT(A) grossly erred on the facts and circumstances of the case and in law in enhancing the income by making an disallowance of Rs. 4,93,085./- on account of repayment of car loan to Kotak Mahindra Bank." 2. I have heard the learned Representatives of both the parties and perused the material on record. 3. Briefly the facts of the case are that the assessee filed return of income showing taxable income of Rs. 5,05,838. The assessee is doing Consultancy Services. With respect of running and maintenance, assessee has claimed expenses of Rs. 2,02,381 in Profit & Loss A/c. Accordingly, the assessee was required to file copy of account to justify business use since her office is at same place as her residence and she is not required to travel to place of work every day and her buyers are foreign concerns. Therefore, the assessee does not have to travel to the destination of sales also. The assessee explained that she is running her office from residence but all the business activities cannot be done from the house and she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 16,27,809 was made to the income of the assessee. These additions were challenged before the Ld. CIT(A). 4. The Ld. CIT(A) not only confirmed all the additions but also enhanced the addition by Rs. 4,93,085 on account of repayment of car loan to Kotak Mahindra Bank. The appeal of assessee was accordingly dismissed. 5. The assessee is in appeal on the above grounds. Ground No.1 is general in nature and needs no adjudication. 6. On Ground No.2, the assessee challenged the addition of Rs. 52,381 on account of disallowance of vehicle running and maintenance expenses. The assessee did not file copy of the account for these expenses before the A.O. The A.O. also noted that since car has been used for personal purpose as well, therefore, personal use of the car cannot be ruled out. The Ld. CIT(A) noted that assessee has made claim of deduction of expenditure of Rs. 2,02,381 on running and maintenance of the vehicles, therefore, assessee should have run atleast 300 KM per day. The Ld. CIT(A) therefore, found that either the vehicle has not been used as claimed or sale price of the vehicle is bogus. The Ld. CIT(A) accordingly, confirmed the addition. 7. The Learned Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also no source has been shown by assessee and no such entry was appearing in the bank statement. The A.O. therefore, added Rs. 16,27,809 under section 69 of the I.T. Act. The Ld. CIT(A) also found that expenditure of Rs. 32,871 on purchase of jewellery was not found included in the accounts of assessee. The Ld. CIT(A) accordingly, confirmed the addition. 9.1. The Learned Counsel for the Assessee referred to PB-43 which is bank statement of Citi Bank to show the entry of Rs. 32,871 through card. It is an account maintained by assessee. Therefore, this needs verification at the level of the A.O. I, accordingly, set aside the orders of the authorities below and restore this issue to the file of A.O. with a direction to re-decide this issue by verifying the fact of payment through bank statement of Citi Bank. Assessee is directed to produce copy of this bank statement before A.O. for his verification. The A.O. shall give reasonable, sufficient opportunity of being heard to the assessee. Accordingly, part of Ground No.4 of appeal of assessee is allowed for statistical purposes. 10. However, as regards the addition on account of purchase of two cars and enhancement of repayment of loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re outstanding amount to M/s. Kotak Mahindera Primus Ltd. in respect of purchase of this vehicle and from the account submitted by the appellant it is seen that the appellant has paid total of Rs. 4.93.085/- to M/s. Kotak Mahindera Primus Ltd. The appellant has no explanation regarding the source of this amount which it has paid to M/s. Kotak Mahindera Primus Ltd. Obviously, this was the unaccounted income of the appellant. 18. There is no merit in the claim of the appellant and the difference of Rs, 3,00,000/- incurred on purchase of vehicle in April, 2005 is clearly unaccounted income of the appellant. The addition to that extent by the id. A.O. for the purchase of first vehicle is therefore correct and the same is confirmed, 19. Further, the amount of Rs. 4,93,085/- paid to M/s, Kotak Mahindra Primus Ltd. up to 26/10/2005 being the unaccounted income of the appellant is also liable to be added to its income. The appellant was asked to show cause why this amount be not added to its income and its income be enhanced under section 251 (1)(a) of I.T. Act, 1961 the appellant failed to offer any cogent explanation except that the matter being very old she was not able to locate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of the second vehicle in October, 2005 was from unaccounted sources of the income of the appellant. 22. Further, the claim of the appellant that the vehicle purchased by her in April, 2005 for an ex-showroom price of Rs. 6,37,279/- was sold by her in .February, 2006 for Rs, 6,43,000/- is plain scandalous. The luxury sedan purchased by the appellant in April, 2005 was being run for about 300 Kms every day as is evident from the expenditure claimed by the appellant on running and maintenance of vehicles and therefore, taking 25 working days in a month and calculating the same for about 9 months, i.e., April 2005 to February, 2006 the vehicle was run for about 67,500/- kms and the appellant is claiming to have actually sold the vehicle on a price higher than she actually paid to purchase the said vehicle. 23. In view of the apparent absurdity of the claims of the appellant the appellant was asked to lead evidence to corroborate its claim that she had sold her vehicle purchased for Rs. 6,37,2791- after running the same for 9 months and for about 67,500/- kms for Rs. 6,43,000/-. However, the appellant failed to lead any such evidence. In view of this the claims of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained. Learned Counsel for the Assessee through his synopsis submitted that Hyundai Car was purchased on 13th April, 2005 for Rs. 5,80,417 and loan was taken from M/s. Kotak Mahindra Primus Ltd., on 04th October, 2005 for Rs. 4,50,000 and there are withdrawals of Rs. 1,40,000 from the Bank on 17th March, 2015. The Ld. CIT(A), therefore, correctly did not accept the explanation of assessee because the car is purchased in April, 2005 but assessee had taken loan for purchase of car in October, 2005. The claim of assessee was therefore, wholly incorrect and an afterthought. No evidence was furnished by the assessee before the authorities below that vehicle was sold to her without payment. It is also highly improper that seller would sold the car to assessee without any payment. When loan was granted in October, 2005 for purchase of car, there is no question of purchase of car by assessee in April, 2005 without any payment. No evidence of withdrawal from the Bank connected with the purchase of the car in April, 2005 have been submitted before the authorities below. Therefore, authorities below were justified in holding that assessee made purchase of car from undisclosed source. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
