TMI Blog2017 (11) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... r the business use. The Ld. Counsel for the Assessee admitted before Ld. CIT(A) that assessee has visited Dubai and the entire expenditure pertains to her Dubai visit. It was found that assessee had no business activities in Dubai and did not produce any evidence or material before A.O. to show that expenditure was incurred for the purpose of business. Since the assessee failed to justify that these expenses were incurred for the purpose of business, there were no justification to interfere with the orders of the authorities below. Further, it was found that during the year assessee was working for an American principal and had no business interest in Dubai. Learned Counsel for the Assessee during the course of arguments could not satisfy as to what business purpose have been served by visiting Dubai.- Decided against assessee. Addition on account of purchase of jewellery - A.O. found that the credit card statement did not show any entry of purchase of jewellery - Held that:- Assessee referred to a bank statement of Citi Bank to show the entry of ₹ 32,871 through card. It is an account maintained by assessee. Therefore, this needs verification at the level of the A.O. I, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... “receipt reference no.”. Both these columns are blank and have not been filled-in. However, rest of the columns are filled-in to show payment of ₹ 4,93,085 on different dates. The assessee shall have to explain the source of the repayment of the loan to M/s. Kotam Mahindra Primus Ltd., However, assessee failed to explain the source of repayment of loan before the authorities below as well as before the Tribunal. Therefore, Ld. CIT(A) was justified in holding that payment is made from unaccounted income. Therefore, enhancement to the extent of ₹ 4,93,085 is wholly justified. As regards the second vehicle purchased by assessee on 15th October, 2005, the assessee claimed that part of the amount is invested after selling the first vehicle in February, 2006. No material has been brought on record by the assessee to show that the alleged sale consideration was received by her prior to the sale of the first vehicle on 18th February, 2006. No satisfactory evidence of withdrawal of the cash prior to purchase of the vehicle have been filed and explained. In its chart the assessee has mentioned certain dates of December, 2005 and January, 2006 of payment for purchase of secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be done from the house and she has to go outside for doing business activities. For visiting such places the assessee using her own car. The expenses relating to that are debited to the P L A/c. the A.O. noted that assessee did not file copy of the account for this expenses. In the absence of copy of the account and observation of the A.O, it was found that assessee is not able to justify claim of all the expenses debited, more so, since assessee own only those cars which she used in the business and does not own any other car. So the element of personal use also cannot be ruled out. The claim was therefore, limited to ₹ 1,50,000 and ₹ 52,381 and was added to the income of the assessee. 3.1. The assessee was required to file details of travelling expenses and state who travelled where and for what and justify if for business purpose. The assessee was required to file copy of the accounts which is reproduced at page-4 of the assessment order in which the assessee claimed travelling expenses of ₹ 1,28,343. However, no reply have been filed. Though the source of payment claim has been shown but bills and evidence of business use has not been established. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le is bogus. The Ld. CIT(A) accordingly, confirmed the addition. 7. The Learned Counsel for the Assessee argued that it is an adhoc addition. I do not agree with the contention of the Learned Counsel for the Assessee. The A.O. has given specific finding that assessee did not file copy of the account of these expenses and has not justified that entire expenditure having used for the purpose of business. The Ld. CIT(A) also found that if the total claim of assessee is considered, then the vehicle must have been used excessively atleast for 300 KM per day. Considering the nature of business of assessee i.e., Consultancy Services carried out from the residence of the assessee, the authorities below were justified in disallowing part of the expenditure. Ground No.2 has no merit and the same is accordingly dismissed. 8. On ground No.3, the assessee challenged the addition of ₹ 1,28,341 on account of travelling expenses. The assessee did not file specific reply before A.O. as per his query. The assessee has not established that the travelling expenses have been incurred for the business use. The Ld. Counsel for the Assessee admitted before Ld. CIT(A) that assessee has visited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l purposes. 10. However, as regards the addition on account of purchase of two cars and enhancement of repayment of loan, the assessee submitted before Ld. CIT(A) that vehicles were purchased by taking loans from the Banks and from personal savings as well as the proceeds of the sale of first vehicle. The Ld. CIT(A) however, confirmed the addition and also enhanced the addition by ₹ 4,93,085 which is said to be repayment of loan to Kotak Mahindra Bank because assessee has failed to explain the source of the same. The findings of the Ld. CIT(A) in paras 14 to 24 of the order are reproduced as under: 14. The appellant claimed to have purchased a luxury Sedan in the month of April, 2005 for ₹ 6,37,279/- ex-showroom and considering the registration and insurance charges the vehicle would have cost about ₹ 7,00,000/-. For this investment the appellant has taken a loan of ₹ 4,50,000/- from Kotak Mahindra Prime Ltd., and has claimed to have incurred the rest of the expenditure by withdrawing money from its bank account with the ABN Amro Bank and the details of withdrawal has been claimed by the appellant to be 16/12/2005 (Rs. 50,000/-), 26/12/2005 (Rs. 1,50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanced 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 the old records and documents. This explanation of the appellant neither has any force nor any merit as the appellate proceedings launched by the appellant against the impugned order dated 28/11/2008 was pending and it was incumbent upon the appellant to preserve the relevant records and documents as it was her obligation to prove her claims. It is trite in law that no one can take advantage of his or her own wrongs or mistakes. If the appellant is not able to prove the necessary records and documents to support her claims she Is bound in law to suffer the consequences. As admittedly, the amount of ₹ 4,93,085/- has been paid to M/s. Kotak Mahindra Primus Ltd., by 26/10/2005 this amount has to be accounted for by the appellant and as appellant has failed to explain its source the same is unaccounted income of the appellant and is added to her taxable income u/s. 251 (1 )(a) of I.T. Act, 1961. The income of the appellant stands enhanced to that extent. 20. The appellant has subsequently purchased another ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 6,37,2791- after running the same for 9 months and for about 67,500/- kms for ₹ 6,43,000/-. However, the appellant failed to lead any such evidence. In view of this the claims of the appellant is clearly afterthought and an attempt to cover up its unaccounted income. The same has no force or merit and is rejected. 24. There is, therefore, no merit in the claim of the appellant that the purchase of the second vehicle was financed by the appellant from the sale proceeds of the first vehicle and the difference of ₹ 5,00,000/- incurred on purchase of vehicle in October, 2005 is clearly unaccounted income of the appellant. The addition to that extent by the ld. AO for the purchase of first vehicle is therefore, correct and the same is confirmed. 10.1. The Learned Counsel for the Assessee filed synopsis on the issue and submitted that the addition is explained through synopsis. 11. The Ld. D.R. on the other hand, relied upon the orders of the authorities below. 12. The assessee did not explain source of the two cars purchased before A.O. and no entry was found in the bank statement to explain source of the purchase of the car. Therefore, addition under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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. Therefore, addition was correctly made against the assessee. 12.1. As regards repayment of loan of ₹ 4,93,085 to M/s. Kotak Mahindra Bank, Learned Counsel for the Assessee filed letter of Kotak Mahindra Bank to the assessee (PB-3) to show that amount have been returned to them. In this letter, column-4 have been mentioned cheque no. the next column-5 is receipt reference no. . Both these columns are blank and have not been filled-in. However, rest of the columns are filled-in to show payment of ₹ 4,93,085 on different dates. The assessee shall have to explain the source of the repayment of the loan to M/s. Kotam Mahindra Primus Ltd., However, assessee failed to explain the source of repayment of loan before the authorities below as well as before the Tribunal. Therefore, Ld. CIT(A) was justified in holding that payment is made from unaccounted income. Therefore, enhancement to the extent of ₹ 4,93,085 is wholly justified. No in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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