TMI Blog2017 (12) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... ot contain any infirmity. Therefore, we confirm the order passed by the ld. CIT(A). Addition under the head of unexplained expenditure and addition under the head concealed income earned from security charges - Held that:- AO during the assessment proceedings made his own estimate of what the assessee would have spent but we observe that the assessee had been supported by his son and his father was getting tax free pension which was sufficient to meet the family expenses. Therefore, considering the factual position, we are of the view that the order passed by the CIT(A) does not contain any infirmity. Therefore, we confirm the order passed by the CIT(A). Regarding securities charges AO treated the sum of ₹ 71,937/- as concealed income ignoring the explanation that the amount paid to security personnel had to be increased by the like amount and consequential there would be no effect on the income. We note from the remand report that the AO has not controvert the fact that payment of ₹ 71,937/- to security personnel was debited to the security service charges received account resulting in netting off of the receipts to that extent. Therefore, the assessee’s explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 54,20,000/- in the savings bank a/c of Indusind bank Khanna and ₹ 19,00,000/- found credited into the S.B A/C No. 018- E04964-010, Indusind Bank, Khanna. When the Assessing Officer asked to explain about the source of cash deposit of ₹ 54,20,000/-, then the assessee explained that, it was a sale proceeds of 4 lands belongs to Hardev Singh kler, father of the assessee, including the value of crop sales. Out of ₹ 54,20,000/-, the amount of ₹ 50,02,500 explained as a sale proceeds of the four lands and ₹ 4,25,000/-explained as a sale proceeds of crops standing on the aforesaid lands. In respect of ₹ 19,00,000/-, the assessee explained that it is a sale proceeds of personal effects of Mr. Hardev Singh, the father of the assessee. The assessee also explained the AO that Mr. Harnek Singh returned 8 pcs of Antiques and therefore the assessee returned ₹ 5,00,000/- to him. Therefore, the assessee got only ₹ 14,00,000/- ( ₹ 19,00,000 - ₹ 5,00,000) on account of sale of personal effects. In the course of the assessment proceedings, the assessee explained to AO that he had received in cash on behalf of his father Hardev Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration amount was duly registered with the registering authority on September 19, 2008. The sale deed for ₹ 4,12,500/- was also in respect of agricultural land bellowing to the assessee s father and was executed by Shamsher Singh Kler as constituted attorney of the assessee s father even though not expressly stated therein. Household goods including silver belonging to the assessee s father were sold for ₹ 14,00,000/-. The sum of ₹ 4,25,000/- represents sale proceeds of the agricultural crop from the agricultural land of the assessee s father arising from cultivation thereof during the years 2005-08 prior to sale of the land. The assessee s father received from the assessee the entire amount of ₹ 68,27,500/- . It was submitted that nexus between the money received by the assessee on account of his father deposited in the said bank account and the transactions contained in the documents submitted to the ITO was clearly established. There can be no dispute that the assessee s father was the owner of agricultural land, which was sold on September 19, 2008 for cash consideration. The assessing officer disregarded the submission of the assessee and add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that addition of cash credits was open to the authorities only when there was material to show that the assessee carried on an independent business apart from the business on which the assessment was being made. The CIT(A) noted that the assessee resides at Kolkata. The bank account was opened by the assessee on September 19,2008 at Khanna in the State of Punjab. On the same day, four conveyance deeds were said to had been executed before the Additional District Sub-Regisrar, Khanna by Shamsher Singh as constituted attorney of the assessee s father Hardev Singh for sale of Hardev Singh s agricultural land for an aggregate sum of ₹ 50,02,500/-. It was claimed that this amount, along with another sum of ₹ 4,25,000/- referable to cultivation of the said land during 2005-2008 prior to its sale, the said was deposited in the said bank account in amounts under ₹ 10,00,000/- on a daily basis from September 19, 2008 to September 25, 2008, except on September 21, 2008, which was a Sunday. The CIT (A) observed thatin connection with the assessee's claim of sale of agricultural land, the Assessing Officer has questioned the authenticity of the replies received fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference in the contents of the photocopies of the sale deeds submitted at the time of assessment and the certified copies subsequently received from the Additional District Sub-Registrar, Khanna. In fact, the said official had stated in his letter dated June 10, 2013 that the contents of the sale deeds on stamp paper and those of the certified copies are the same. The CIT(A) observed that the controversy raised by the Assessing Officer with regard to land revenue records was also unjustified. The Patwari Form No. 10 for Jamabandi years 2002-03 and 2007-08 have been certified by the Patwari to be correct as per records. Further, even according to the registering authority, the land sold was agricultural. The CIT(A) noted that while considering the explanation of the assessee, the AO had acted unreasonably. The CIT(A) noted that the cash deposit in the bank to the extent of ₹ 4,25,000/- is claimed to be the amount received from the cultivation of the land during 2005- 2008, prior to its sale. The Assessing Officer had sent a summons to the cultivator Nirmal Singh who got it in Punjab on the date fixed for his appearance before the Assessing Officer at Kolkata. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 5,00,000/- as contradicting his previous affidavit dated November 16, 2011. The second affidavit explaining the inadvertent omission in the first affidavit cannot be considered as contradicting the first affidavit. It simply seeks to state a fact which got left out in the first affidavit. Even the AO has added ₹ 14,00,000/- accepting the return of ₹ 5,00,000/- to Harnek Singh. The CIT(A) observed that the particulars of the household articles were mentioned in the sale bill. Such articles were items like furniture and fixture, carpets, camera, TV, refrigerator, binoculars, exercising equipment, utensils, paintings, pen sets, wristwatch, cigar case, old collector s wine bottles, some antiques, an silver flower pot and some silver. Such articles were accumulated by the assessee s father over his lifetime. The assessee s father was a decorated soldier and was 84 years of age in 2008. The assessee s father sold the articles and the buyers paid ₹ 19,00,000/- for the same by a/c payee cheque. Later, since the purchaser returned a few of the items, therefore a sum of ₹ 5,00,000/- was returned to him by cheque. Therefore, the CIT(A), considering these facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles. 3.5 Before us, the ld. counsel for the assessee has submitted the copy of sale deed of agricultural land vide Sale Deed Nos.2956, 2953, 2955, and 2954. The sale deed contains the details of agricultural land and details of the buyers and sellers of the agricultural land. The assessee also submitted the identity of the buyers and sellers of landand the copy of the passport. The ld. counsel submitted that a major part of the money deposited in the bank account represented sale proceeds of his father s agricultural land. The assessee used to provide security service and received a very small amount during the year under consideration from the business of security services. The assessee has explained the nature and source of the cash deposit in the bank account and there is clearly a nexus between the money deposited in the bank and sale of the land. The ld. counsel also pointed out that sale deeds provided by the Additional District Sub-Registrar, Khanna are acceptable documents and since the said official had obtained photo identities of the parties, there remains no doubt about the existence of the buyers. In a one-off transaction of the kind, the seller cannot be fault ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation was that the assessee s father in his affidavit dated November 16, 2011 did not mention about the return of ₹ 5,00,000/-. He considered the subsequent affidavit dated January 10, 2013 of the assessee s father about the return of ₹ 5,00,000/- as contradicting his previous affidavit dated November 16, 2011. The second affidavit explaining the inadvertent omission in the first affidavit cannot be considered as contradicting the first affidavit. It simply seeks to state a fact which got left out in the first affidavit. Even the AO has added ₹ 14,00,000/- accepting the return of ₹ 5,00,000/- to Harnek Singh. The particulars of the household articles were mentioned in the sale bill. Such articles were items like furniture and fixture, carpets, camera, TV, refrigerator, binoculars, exercising equipment, utensils, paintings, pen sets, wristwatch, cigar case, old collector s wine bottles, some antiques, an silver flower pot and some silver. Such articles were accumulated by the assessee s father over his lifetime. The assessee s father is a decorated soldier and was 84 years of age in 2008. The assessee s father sold the articles and the buyers paid ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom security charges. 4.1 Brief facts qua the issues are that during the course of scrutiny proceedings the A.O added ₹ 93,484/- u/s 69C on account of unexplained expenditure because assessee made a little drawings for family expenses. Therefore, the AO made the addition, after observing the luxurious life style of the assessee. The ld Counsel pointed out that the assessing officer made addition on account of low drawings but the Ld. CIT (A) deleted the addition because the assessee was supported by his son. The ld. Counsel for the assessee has submitted before us that for the addition of ₹ 93,484/- on account of low drawings, the AO made his own estimate of what the assessee would have spent. The AO compared such estimate of ₹ 1,71,484/- made by him with the withdrawal of ₹ 78,000/- made by the assessee from his security services business and added the balance, that is, ₹ 93,484 (Rs.1,71,484- ₹ 78,000) . The assessee s contention that his son supported him and further that he was in receipt of tax free pension, therefore, the amountwas quite enough to run the family. Therefore, the addition on account of low drawings should be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the security service charges of ₹ 1,62,536/- shown in the profit and loss account were increased by ₹ 71,937/-, the payment made to security personnel shown as expenditure in the profit and loss account would also have to be increased by the like amount. The AO, however, treated the sum of ₹ 71,937/- as concealed income ignoring the explanation that the amount paid to security personnel had to be increased by the like amount and consequential there would be no effect on the income. We note from the remand report that the AO has not controvert the fact that payment of ₹ 71,937/- to security personnel was debited to the security service charges received account resulting in netting off of the receipts to that extent. Therefore, the assessee s explanation that if the security charges received were to be increased by ₹ 71,937/- to ₹ 2,34,473/-, the payment made to security personnel of ₹ 65,364/- was also required to be correspondingly increased by ₹ 71,937/- with no effect on the taxable income is quite acceptable and therefore, we confirm the order passed by CIT(A). 4.3 In the result, the appeal filed by the Revenue (Ground No.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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