TMI Blog2016 (4) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, expenditure on tour and travels, expenses for special occasion of celebration on anniversaries / birthdays, medical expenses, etc. The assessee has not furnished any details to explain as to how all these essential expenses to pull on the day to day life have been incurred. I therefore, conclude that these expenses have been met from the undisclosed sources of income of the assessee. Therefore estimate an amount of ₹ 1,00,000/- p.m. as his personal expenses. Accordingly an amount of ₹ 12,00,000/- is added as assessee’s total taxable income under section 69C - thus we set aside the ground to the file of the CIT(A), thus ground No.3 is allowed for statistical purposes. Addition u/s 14A - HELD THAT:- The assessee has earned dividend income and LTCG against which, no expenses have been said to be attributable. AO has mechanically applied Rule 8D which admittedly is not applicable in AY 2006-07. Once that is so, then the entire basis of computation of disallowance is incorrect. Looking to the nature of expenditure and claim of the assessee that it has business loss which has been assessed by AO also, we are of the opinion that this matter should be set aside to the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Commissioner of Income-Tax (Appeals) has erred in law and facts in not appreciating that the rejection of books of accounts of the appellant was incorrect and unjustified. 3. The Ld. Commissioner of Income-Tax (Appeals) has erred in law in confirming the disallowance of interest expenditure amounting to ₹ 3,71,710. 4. The Ld. Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming the following expenses claimed by the appellant: (a) Depreciation of ₹ 8,470/- (b) Appeal filing fees of ₹ 33,270/- (c) Professional fees of ₹ 21,37,853/- (d) Repair maintenance charges of ₹ 52,600/- (e) Bank charges of ₹ 3,644/-. 5. The Ld. Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming the addition on account of personal household expenses of ₹ 6,00,000/- . 3. At the outset, the Ld. Counsel submitted that, ground No.1 is not pressed, accordingly, ground No.1 is treated as dismissed as not pressed. 4. So far as the issue relating to ground No.2 3 us concerned, it has been submitted that the Tribunal in the case of Pratima Mehta and other similar cases of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of communication from custodian, that was not able to prove that the books of account drawn were based on the information gathered from the office of the custodian that the very basis of preparation of the books of account led foundation. Finally, he upheld the order of the AO. He also mentioned in the case of Shri Hitesh Mehta, husband of the assessee similar issue had been dismissed by the CIT (A)-40 Mumbai for the A.Y. 2006- 07.He also mentioned that while deciding the grounds of appeal for the rejection of books of account, he had kept in mind the decision of CIT(A)-40 Mumbai delivered in the case of Shri Hitesh Mehta for the AY 2006-07. 4.2 Before us, AR submitted that in the case of Hitesh Mehta, for the A.Y. 2006-07, Tribunal has decided the issue on 26.04.2013 (ITA No. 7726/Mum/2010). DR supported the order of the FAA. 4.3 We have heard the rival submission and perused the material before us. We find that H Bench of Mumbai Tribunal, vide its order dated 26.04.2013,in the case of Hitesh Mehta for the AY 2005-06 has dealt the issue as under: 3.3.We have heard the rival submissions on this issue and perused the material on record. The perusal of para 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir modern standard of living, there ought to be sizeable expenses incurred by the assessee. Such expenses in the nature of household and personal expenses may comprise of kitchen/food expenses, expenses for maintenance of residence, expenditure on education of children, expenses on religious occasions, expenditure on tour and travels, expenses for special occasion of celebration on anniversaries / birthdays, medical expenses, etc. The assessee has not furnished any details to explain as to how all these essential expenses to pull on the day to day life have been incurred. I therefore, conclude that these expenses have been met from the undisclosed sources of income of the assessee. I therefore estimate an amount of ₹ 1,00,000/- p.m. as his personal expenses. Accordingly an amount of ₹ 12,00,000/- is added as assessee s total taxable income under section 69C of the I.T. Act, 1961 on this account . 9. Here also, similar issue is involved as was there in ground No.3 before the Tribunal in the aforesaid case and accordingly, consistent with the same order, we set aside the ground to the file of the CIT(A), thus ground No.3 is allowed for statistical purposes. 10. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and on perusal of the relevant finding given in the impugned orders, we find that, it is seen that assessee has incurred following expenditures in AY 2006-07 and 2007-08 and also the nature of expenditure has been explained in following manner:- Sr. No. Particulars A.Y. 2006-07 A.Y. 2007-08 Remarks Amount (Rs.) Amount(Rs.) 1 Appeal filing fees 33,270 44,270 Expenses incurred for filing appeals before judicial authorities. 2 Professional fees As per govt. order for tax respondent 21,37,853 57,494* Amount paid for professional/legal services rendered to Appellant with respect to tax representation. 3 Bank charges 3,644 12,709 Charges debited by the bank 4 Repair and maintenance 52,600 - Society maintenance charges incurred in respect of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may comprise of kitchen/food expenses, expenses for maintenance of residence, expenditure on education of children, expenses on religious occasions, expenditure on tour and travels, expenses for special occasion of celebration on anniversaries / birthdays, medical expenses, etc. The assessee has not furnished any details to explain as to how all these essential expenses to pull on the day to day life have been incurred. I therefore, conclude that these expenses have been met from the undisclosed sources of income of the assessee. I therefore estimate an amount of ₹ 1,00,000/- p.m. as his personal expenses. Accordingly an amount of ₹ 12,00,000/- is added as assessee s total taxable income under section 69C of the I.T. Act, 1961 on this account . 18. The Ld. CIT(A) gave part relief and reduced the addition to ₹ 6 lakhs. 19. Before us, the Ld. Counsel submitted that, assessee is living in joint family set-up and most of the expenses have been incurred by other family members. He submitted that, professional fees to the consultants and other expenditures have been mainly incurred by Dr. Hitesh S. Mehta. Looking to the overall withdrawals by the family members, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... household expenses and that some of the additions have been confirmed on account of personal household expenses by the Department. On these facts and circumstances, we inclined to scale down the additions to ₹ 3 lakhs. Accordingly, addition sustained on account of personal household expenses would be ₹ 3 lakhs. Accordingly, the ground No.5 of the assessee is partly allowed. 22. Now, will first take-up appeal for assessment year 2007-08, vide which following grounds have been raised:- Following grounds of appeal are without prejudice to each other: 1. The Ld. Commissioner of Income-Tax (Appeals) ought to have appreciated that as per the decision of the Hon ble Special Court dated 30.04.2010 in MP No.41 of 1999, the assets under consideration and the consequent income belongs to Shri Harshad S Mehta and hence the income assessed by the Assessing Officer ought to have been taxed in the hands of Shri Harshad S Mehta and not in the hands of the appellant. 2. The Ld. Commissioner of Income-Tax (Appeals) has erred in law and facts in not appreciating that the rejection of books of accounts of the appellant was incorrect and unjustified. 3. The Ld. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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