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TMI Blog2019 (12) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... s house hold expenses out of Rs. 1,00,0007- added by the Ld. A.O. The same needs deletion. 3. The Ld. CIT(A) erred in law as well as on facts in confirming an amount of Rs. 77,352/- in respect of profit from trading in shares. The same needs deletion. 4.1 The Ld. CIT(A) erred in law as well as on facts in confirming an amount of Rs. 1,39,217/- in respect of expenditure out of incentive bonus. The same needs deletion. 4.2. The Ld. CIT(A) erred in law as well as on facts in not considering that the incentive bonus was allowed as deduction as expenses following the guidelines issued by the Hon. Gujarat High Court in the case of Kiranbhai H. Shelat 235 ITR 635. The claim needs to be allowed. 4.3. Without prejudice, the claim of the assessee confirmed by the Ld. CIT(A) is allowable as per C.B.D.T' direction. 4.4 Without prejudice, the claim of the assessee confirmed by the Ld. CIT(A) is allowable as per Hon. Supreme Court decision in the case of Shri N.T. Bhuptani. The disallowance needs deletion. 5. Taking into consideration legal, statutory, factual and administrative aspects no disallowance 7 additions ought to have been confirmed as stated above in respect of grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the side of the learned AR for the assessee qua the disallowances made by the authorities below against the fixed conveyance allowance received by the assessee from LIC, we do not find any infirmity in the order of the authorities below. Indeed, the onus lies on the assessee to furnish the details of the expenses incurred by him against the fixed conveyance allowance received from LIC. Hence, in the absence of the documentary evidence, the ground of appeal of the assessee is dismissed. 7. The 2nd issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO by sustaining the addition of Rs. 50,000.00 on account of unexplained household expenses. 8. The AO during the assessment proceedings observed that there should be cash outflow in the year under consideration of the assessee for Rs. 3,25,328.00 only. The details of such outflow of cash stands as under: Cash outgoing of the assessee throughout the relevant year 1. Expenses for allowances Rs. 1,79,2877/- 2. Cash deposited in Axis Bank Rs. 22,000/- 3. Donation in cash Rs. 4,051/- 4. Household expenses Rs. 1,20,000/- Total Rs. 3,25,328/- 8.1 However, the AO foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO was of the view that the assessee is high ranked employee and to maintain his status according to the income he should have incurred monthly household expenses for Rs. 10,000.00. Accordingly, the AO made the addition to the tune of Rs.1 lakh on account of household expenses. However, the learned CIT (A) restricted the addition to the tune of Rs. 50,000.00. 12.1 From the preceding discussion, we note that the AO has made the addition on the basis of the guesswork. In fact, the AO has not brought anything on record about the actual expenses incurred by the assessee with respect to the telephone, mobile, electricity, education of his daughter etc. it is the settled law that there cannot be any addition based on guess work despite how strong the guesswork is. In the case on hand, the reasoning given by the AO for making the impugned addition appears to be strong and reasonable but the same is not supported on the basis of documentary evidence. Therefore we are of the view that no such addition is warranted in the given facts and circumstances. Hence, the ground of appeal of the assessee is allowed. 13. The next issue raised by the assessee is that the learned CIT (A) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the assessee in the income tax return. Accordingly the AO added the impugned amount of profit to the total income of the assessee. 15. Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the order of the AO by observing as under: 4. As regards to the addition of Rs. 77,352/-- on account of undisclosed profit from trading in shares, the assessing officer has discussed this aspect in detail from paragraph 8.1 to 8.9 of the assessment order passed. The assessing officer has tabulated the profits accrued / arisen on sale of shares in Table-A, Table-B, Table-C and Table-D in the assessment order passed. The authorized representative could not give any credible explanation in support of the ground raised pertaining to this addition. Thus, the addition made at Rs. 77,352/- on account of profit in trading of shares stands confirmed. This ground of appeal is dismissed. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. 16. The learned DR before us vehemently supported the order of the authorities below. 17. We have heard the learned DR and perused the materials available on record. The issue in the present case relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR before us vehemently supported the order of the authorities below. 22. We have heard the learned DR and perused the materials available on record. The issue in the present case relates to the disallowance of the expenses for Rs. 1,39,217.00 claimed against the incentive bonus received by the assessee from the employer. The AO was of the view that the impugned amount of incentive bonus represents the salary income as provided under section 17 of the Act. Therefore, no deduction against such incentive bonus can be provided for the expenditure claimed to be incurred against it. The view taken by the AO was subsequently confirmed by the learned CIT-A. 22.1 The learned AR at the time of hearing has not made any submission in the written submission filed before us. As there was no representation from the side of the learned AR for the assessee qua the disallowances made by the authorities below against the incentive bonus received by the assessee from LIC, we do not find any infirmity in the order of the authorities below. 22.2 We also note that there is no provision under the Act authorizing the assessee to claim the deduction against the incentive bonus which is part of the sala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is of no assistance to the appellant. The incentive bonus referred to in the said decision is the special scheme of the company. The question considered in the said decision was as to whether the said bonus would form part of salary as defined under the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979. This Court held, placing reliance on the definition of 'salary' in the said Act that only in case there was remuneration on a regular basis, the same was exigible to tax under the said Act. On facts, it was found that there was no regular payment of incentive bonus. That is not the factual or legal position in the case of the appellant under the Act and, therefore, the said decision is not relevant at all for the purpose of this case. 11. The appellant being a salaried person, the incentive bonus received by him prior to 01.04.1989 has to be treated as salary and he is entitled only for the permissible deductions under Section 16 of the Act. The expenses incurred in the performance of duty as Development Officer for generating the business so as to make him eligible for the incentive bonus is not a permissible deduction and, hence, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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