TMI Blog2018 (10) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration by an individual as Hindu Undivided family - Held that:- Sub-sections 56(2)(v), 56(2)(vi) & 56(2)(vii) shall not be applicable if any sum is received from any relative ( as defined in explanation (e) to section 56). There is no mention about the occasion to be a necessary condition for receiving any sum from any relative. In the instant case, the alleged gifts of ₹ 50,000/-, ₹ 1,00,000/- and ₹ 50,000/- for A.Ys. 2004-05, 2005-06 & 2006-07 have been received from relatives of the assessee i.e. father and sister-in-law through account payee cheques/demand draft. Therefore, the same cannot be included in the income of the assessee by any cannon of law. We, therefore, set aside the finding of the lower authorities and delete the addition made on account of unexplained gifts - Decided in favour of assessee Disallowance of expenses of vehicle expenses and vehicle insurance - CIT(A) partly deleted the disallowance and sustained to the extent of ₹ 10% of the alleged expenditure - Held that:- We find that the expenditure in the nature of vehicle expenses and vehicle insurance have been incurred by the assessee in the course of business of earning co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d - Held that:- The assessee received an advance of ₹ 2,31,000/- for sale of this agricultural land. For some reason this deal could not be completed. The assessee forfeited 10% of the advance amount and paid back the remaining amount of ₹ 2,07,900/- to the proposed buyer. Sum of ₹ 23,100/- being 10% of the advance amount was reduced from the total cost of land of ₹ 3,51,240/- and the remaining amount of ₹ 3,28,140/- has been shown in the balance sheet as on 31st March 2008. Both the lower authorities has considered the amount of ₹ 23,100/- as income of the assessee. In our view, as the assessee has reduced the forfeited amount from the cost of land as the deal could not materialized, the cost of land has been reduced by ₹ 23,100/- and the lower authorities erred in confirming the addition of ₹ 23,100/-. We accordingly delete the same. - decided in favour of assessee. Disallowance of deduction u/s 80C for the repayment of house loan - investment eligible for section 80C was ₹ 1,10,191/- which included the repayment of housing loan of ₹ 12,346/- - Held that:- We find force in the contention for the Ld. counsel for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 2009-10 as well as A.Y. 2010-11. Necessary details were filed and return of income for all these seven assessment years were submitted. Following income was declared and assessed: S. No. Assessment Year Total income Date of filing of return Income Assessed 1 2004-05 Rs.2,33,900/- 27.01.2005 3,93,310/- 2 2005-06 Rs.2,90,310/- 05.10.2005 4,84,590/- 3 2006-07 Rs.3,18,530/- 31.10.2006 4,03,340/- 4 2007-08 Rs.3,92,380/- 24.03.2008 6,86,900/- 5 2008-09 Rs.2,90,860/- 19.02.2009 4,88,840/- 6 2009-10 Rs.4,27,130/- 06.10.2009 6,06,650/- 7 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l on this ground is dismissed. 8. We have heard the rival contentions and perused the material available on record before us. Through this common ground Nos.1 1.1 of assessee has challenged the validity of all the assessment orders framed u/s 153C r.w.s. 143(3) of the Act. The ld. counsel for the assessee argued on length submitting that the case of the assessee falls under second proviso of section 153B of the Act which relates to time limit for completing of assessment u/s 153A of the Act and as contemplated by the Ld. counsel for the assessee that the time limit for framing the assessment in the case of assessee was getting time barred on 31st December 2012 whereas the assessment have been framed on 22.03.2013. The basis of the above contention is to show that second proviso to section 153B of the Act is applicable to the assesse as the search has been conducted between 1st April 2004 to 31st March 2010 as the date of search is 20.11.2009. We, however find that under the Income tax act assessment of income of any other person where the search has been conducted u/s 132 of the Act is to be framed as the provisions of section 153C of the Act. For adjudication of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to him, or ( b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or ( c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. . 9. From the perusal of proviso to section 153C(1) of the Act which provides that the date on which the jurisdictional Assessing Officer of the person to be assessed u/s 153C of the Act, receives the books of account or documents or assets seized by the Assessing officer having the jurisdiction of the person who was searched then such date should be construed as a reference to the date of initiation of search u/s 132 or making for requisition u/s 132A in the second proviso sub-section(1) of section 153A (1) of the Act. This means that the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the category of relatives provided in explanation (e) of section 56 of section (2) of the Act. The gifts have been treated as unexplained only for the reason that the assessee was unable to quote the occasion for which she had received the gifts. The action of the Ld. AO have been confirmed by the Ld. CIT(A) also. 14. From perusal of section 56 sub-section (2) as well as explanation (e), we find that sections 56(2)(v), 56(2)(vi) 56(2)(vii) which provides a cap of sum received without consideration by an individual as Hindu Undivided family to be taxed as income from other sources, if amount exceeding the cap provided in these sub-sections is received by the assessee. However, the above sub-sections 56(2)(v), 56(2)(vi) 56(2)(vii) shall not be applicable if any sum is received from any relative ( as defined in explanation (e) to section 56). There is no mention about the occasion to be a necessary condition for receiving any sum from any relative. In the instant case, the alleged gifts of ₹ 50,000/-, ₹ 1,00,000/- and ₹ 50,000/- for A.Ys. 2004-05, 2005-06 2006-07 have been received from relatives of the assessee i.e. father and sister-in-law through accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as balance sheet and capital account placed in the paper book we find that in the balance sheet under the head loan taken from ICICI, Bank, assessee has reduced the portion of principal loan amount of ₹ 35,593/- whereas the interest on loan of ₹ 1,07,759/- have been reflected in the capital account placed at page 15 of the paper book and this interest amount is shown as a part of the withdrawal of ₹ 1,34,760/-. We, therefore, find merit in the contention of the Ld. counsel for the assessee and are of the view that the assessee has duly disclosed the interest expenditure of ₹ 1,07,759/-. 20. Both the lower authorities erred in sustaining the addition for unexplained expenditure. We, accordingly delete the addition of ₹ 1,07,579/- and allow ground no.3 of the assessee for A.Y. 2007-08. 21. Next common issue relating to A.Ys. 2008-09, 2009-10 2010-11 has been raised in ground No.3 towards disallowance of assessee s claim of interest on loan claimed as on deduction under the head income from house property. 22. We have heard the rival contentions and perused the material available on record before us. We find that the assessee claimed deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance amount and paid back the remaining amount of ₹ 2,07,900/- to the proposed buyer. Sum of ₹ 23,100/- being 10% of the advance amount was reduced from the total cost of land of ₹ 3,51,240/- and the remaining amount of ₹ 3,28,140/- has been shown in the balance sheet as on 31st March 2008. Both the lower authorities has considered the amount of ₹ 23,100/- as income of the assessee. In our view, as the assessee has reduced the forfeited amount from the cost of land as the deal could not materialized, the cost of land has been reduced by ₹ 23,100/- and the lower authorities erred in confirming the addition of ₹ 23,100/-. We accordingly delete the same. Ground no.4 of assessee appeal for A.Y. 2008-09 is allowed. 26. Apropos Ground No.5 for A.Y. 2010-11, the assessee has challenged the upholding of the addition of ₹ 12,346/- for disallowance of deduction u/s 80C for the repayment of house loan. 27. We have heard the rival contentions and perused the material available on record before us. We observe that Ld. Assessing Officer after noticing that the assessee had made a false claim for interest paid for housing loan further obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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