Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Smt. Rashmi Chhibba Jauhar, C/o. Chandra Shekhar Barola Versus The ACIT, Circle, Noida

2017 (11) TMI 640 - ITAT DELHI

Disallowance of vehicle running and maintenance expenses - allowable business expenses - Assessee argued that it is an adhoc addition - Held that:- We 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 v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see 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 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tatement 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, 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

respect of purchase of the vehicle and from the account submitted by the assessee it was seen that assessee paid total of ₹ 4,93,085 to M/s. Kotak Mahindra Primus Ltd., and no source have been explained. Assessee through his synopsis submitted that Hyundai Car was purchased on 13th April, 2005 for ₹ 5,80,417 and loan was taken from M/s. Kotak Mahindra Primus Ltd., on 04th October, 2005 for ₹ 4,50,000 and there are withdrawals of ₹ 1,40,000 from the Bank on 17th March, 201 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 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. Therefore, addition was correctly made against the assessee. - Repayment of loan to M/s. Kotak Mahindra Bank, Assessee fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

explain the source of purchase of the car. - ITA.No.3035/Del./2017 - Dated:- 9-11-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER For The Assessee : Shri Rohit Tiwari, Advocate For The Revenue : Shri Kaushlendra Tiwari, Sr. D.R. ORDER This appeal by assessee has been directed against the order of the Ld. CIT(A)-I, Noida, dated 24th February, 2017, for the A.Y. 2006-2007 on the following grounds : 1. That on the facts & in the circumstances of the case and in law. the order passed by the Ld. Comm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) grossly erred on the facts and circumstances of the case 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 ₹ 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 peruse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ery 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 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 fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ravelling 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. Therefore, the entire amount of ₹ 1,28,343 was disallowed. 3.2. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d from the credit card statement. Photo copy of the Registration Certificate for the car purchased was filed. The A.O. on perusal of the credit card statement found that the same does not show any entry of ₹ 32,871 as claimed by assessee for purchase of jewellery nor the narration in credit card reveals purchase of jewellery. Hence, investment in jewellery is treated as unexplained investment under section 69 and added in the hands of the assessee. 3.3. With respect to purchase of car also .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as 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 ₹ 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. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ned 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 au .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sited 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 workin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee challenged the addition made on account of purchase of jewellery and two cars respectively for enhancement for repayment of loan to Kotak Mahindra Bank. The A.O. found that the credit card statement did not show any entry of purchase of jewellery. Similarly, with respect to claim of purchase of cars also no source has been shown by assessee and no such entry was appearing in the bank statement. The A.O. therefore, added ₹ 16,27,809 under section 69 of the I.T. Act. The Ld. CIT(A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 withdr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pril, 2005 and the insurance under the M.V Act was taken on 13/04/2005. It is therefore, clear that the entire expenditure on purchase of vehicle, its registration with the M. V. Authorities and insurance, etc., was incurred by the appellant on or before 13/04/2005. No evidence has been furnished by the appellant either before the Id. A.O. or in the present proceedings to show that vehicle was sold to her without realizing the full price and the registration and insurance were also granted to he .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purchase of this vehicle and from the account submitted by the appellant it is seen that the appellant has paid total of ₹ 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome 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 vehicle on 10/10/2005 on which about ₹ 10,00,000/- as stated by the appellant was incurred. The appellant claims that this was financed by her out of the sale proceeds of the first vehicle and thereafter, taking a loan of Rs, 5,00,000/- from HDFC bank which is sought to be corroborated by a letter issued by the HDFC bank dated 26/12/2005 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le Rules a copy of which has been filed by the appellant in the present proceedings. Obviously, the appellant could not have financed the purchase of second vehicle in October, 2005 from the alleged sale proceed of the first vehicle in February, 2006. No material has been brought on record by the appellant to show that the alleged sale consideration was received by her prior to the sale of the first vehicle on 18/02/2006. Therefore, the admitted expenditure of Rs, 5,00,000/- over and above the l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y 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 tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lant 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 or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee has taken loan of ₹ 4,50,000 from Kotak Mahindra Bank and also claimed to have made withdrawals. The Ld. CIT(A) found that the claim of assessee to be absurd because the vehicle was purchased in the month of April, 2005 and insurance was taken on 13th April, 2005. Therefore, entire expenditure for purchase of car must have been incurred by assessee on or before 13th April, 2005. The assessee did not furnish any evidence before the authorities below to show that vehicle was sold to her .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e account submitted by the assessee it was seen that assessee paid total of ₹ 4,93,085 to M/s. Kotak Mahindra Primus Ltd., and no source have been explained. Learned Counsel for the Assessee through his synopsis submitted that Hyundai Car was purchased on 13th April, 2005 for ₹ 5,80,417 and loan was taken from M/s. Kotak Mahindra Primus Ltd., on 04th October, 2005 for ₹ 4,50,000 and there are withdrawals of ₹ 1,40,000 from the Bank on 17th March, 2015. The Ld. CIT(A), the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

chase 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. Therefore, addition was correctly made against the assessee. 12.1. As regards repayment of loan of ₹ 4,93,085 to M/s. Kotak Mahindra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a 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 interference is called for in the matter. 12.2. As regards the second vehicle purchased by assessee of ₹ 10,14,521 on 15th October, 2005, the assessee claimed that part of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version