9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 1486 - AT - Income TaxUndisclosed income Held that - The assessee has failed to prove by any documentary evidence that the income of assessee was below taxable limit - The assessee during the course of assessment proceedings was non-cooperative and non-complied with the notices issued by AO - The AO is justified to estimate, considering the quantum of income declared by assessee in the preceding as well as in the succeeding assessment years in taking average of the same Decided against assessee. Foreign travelling expenses Held that - The assessee has not furnished any evidence to support her explanation that during her visits to Dubai she stayed with her husband and her husband born the expenses of boarding, lodging, local traveling etc on her behalf The onus is on the department to prove that the said expenses were not incurred by husband of the assessee but were born by the assessee from undisclosed income No incriminating evidence was found during the course of search regarding undisclosed income attributable to foreign travelling of the assessee - The ld. CIT(A) is justified in deleting the addition of Rs.2,75,000/- which has been estimated on account of boarding, lodging, local travelling and entertainment etc The ld. CIT(A) was not justified to estimate a sum of Rs.25,000/- per trip aggregating to Rs.75,000/- as undisclosed income of the assessee on account of foreign traveling particularly when no evidence is placed on record and the said estimation is made arbitrarily and not on any cogent material on record Partly allowed in favour of assessee. Calculation mistake Held that - The bills were prepared for less quantity and the actual delivery was higher and the total difference was only 300 ltrs The AO applied rate of Rs. 12.10/- per litre sales for the said excess comes to Rs.3,630/- but the addition as such made by AO is Rs.36,000 - Assessee has asked for relief by taking the correct figures and without disputing the rate and the quantity as considered by the authorities Decided in favour of assessee. Gold and diamond jewellery found in search Mismatch with wealth tax return Held that - Total weight and value of the jewellery found during the course of search and disclosed in the Wealth Tax returns and under the VDIS declarations are same - It could be possible that items of VDIS and exact specifications were not reported due to inadvertence particularly when the assessee had disclosed jewellery in her VDIS declaration - The difference in specifications were due to making and remaking of those jewellery items - The value of specifications were small it should be accepted that there was no non disclosure of income on this account Decided against Revenue. Fall in GP rate Held that - The firm Sunil Chemical Industries dealt with petrochemical products having higher margin and whereas the new firm in which the assessee was a partner only for four months were dealing in Petroproducts - AO compared unlike products and compared GP of the assessee firms of 0.81% as against GP of the earlier firm which was 2.9% - The assessing officer has not pointed out any discrepancy in the accounts of the proprietary concern - The expenses claimed were genuine or were bogus or inflated or were incurred for any purpose other than business purpose - The book result declared by the proprietary concern cannot be disbelieved. Interest on overdraft expense - The overdraft fully or partly was not utilized by the appellant for any purpose other than her business purposes - The basis adopted by the assessing officer to work out the admissible interest expense was not correct - Outstanding liability on the last day of the accounting period is no parameter to work out the admissible interest expense - The actual working on the basis of the utilized overdraft facility on day to day basis and over the time should be considered - The assessing officer should have seen the total gross profit generated by the appellant. Discount received by the appellant is linked with the transactions of purchase and sale Decided against revenue.
Issues Involved:
1. Validity of the order passed under Section 158BC. 2. Computation of total undisclosed income. 3. Additions as undisclosed income for the assessment years 1989-90, 1994-95, and 1995-96. 4. Addition of Rs. 75,000 for travel expenses. 5. Addition of Rs. 1,31,640 as income of proprietary concern 'Sunil Chemical Industries.' 6. Deletion of addition of Rs. 21,731 for unexplained jewelry. 7. Restriction of disallowance related to foreign travel expenses. 8. Deletion of addition of Rs. 40,416 for the proprietary concern's gross profit. Detailed Analysis: 1. Validity of the Order Passed Under Section 158BC: The assessee's appeal included a ground challenging the validity of the order passed under Section 158BC, claiming it was "bad in law and ab initio void." However, this ground was not pressed during the hearing, leading to its dismissal. 2. Computation of Total Undisclosed Income: The assessee contended that the Assessing Officer (AO) erred in computing the total undisclosed income at Rs. 5,04,800. The Tribunal noted that the assessee failed to provide evidence that her income for the relevant assessment years was below the taxable limit. Therefore, the AO's estimation of income based on preceding and succeeding assessment years was upheld. 3. Additions as Undisclosed Income for Assessment Years 1989-90, 1994-95, and 1995-96: The AO estimated the undisclosed income for these years due to the non-filing of returns and lack of details from the assessee. The CIT(A) confirmed these additions, stating that the burden of proof was on the assessee to show that the income had already been disclosed. The Tribunal agreed with the CIT(A) and upheld the additions, noting the assessee's non-cooperation during the assessment proceedings. 4. Addition of Rs. 75,000 for Travel Expenses: The AO estimated travel expenses for the assessee's trips to Dubai, which were partly accepted and partly denied by the CIT(A). The CIT(A) deleted Rs. 2,75,000 of the addition but sustained Rs. 75,000. The Tribunal found no evidence that the assessee incurred these expenses from undisclosed income and deleted the remaining Rs. 75,000 addition, thereby allowing the assessee's appeal on this ground. 5. Addition of Rs. 1,31,640 as Income of Proprietary Concern 'Sunil Chemical Industries': The AO made this addition based on seized documents showing discrepancies in dispatch quantities and unrecorded sales. The CIT(A) confirmed Rs. 1,27,960 of the addition but provided relief of Rs. 3,680. The Tribunal identified a calculation mistake and directed that the addition should be Rs. 3,630 instead of Rs. 36,000, allowing partial relief to the assessee. 6. Deletion of Addition of Rs. 21,731 for Unexplained Jewelry: The AO added Rs. 21,731 for unexplained jewelry items that did not match the specifications in the Wealth Tax returns and VDIS declarations. The CIT(A) deleted this addition, noting that the total weight and value of the jewelry were consistent, and the discrepancies were minor. The Tribunal upheld this deletion, agreeing with the CIT(A)'s reasoning. 7. Restriction of Disallowance Related to Foreign Travel Expenses: The AO restricted the disallowance of foreign travel expenses to Rs. 75,000, which the CIT(A) confirmed. The Tribunal found that the department failed to provide evidence that the assessee incurred these expenses from undisclosed income, leading to the deletion of the Rs. 75,000 addition. 8. Deletion of Addition of Rs. 40,416 for the Proprietary Concern's Gross Profit: The AO added Rs. 40,416 based on a comparison of gross profit rates. The CIT(A) deleted this addition, stating that the AO did not provide a basis for applying a higher gross profit rate and did not find any discrepancies in the accounts. The Tribunal upheld the CIT(A)'s decision, noting the lack of contrary evidence from the department. Conclusion: The Tribunal allowed the assessee's appeal in part, providing relief on specific grounds, and dismissed the department's appeal, upholding the CIT(A)'s decisions on the deletion of additions for unexplained jewelry and the proprietary concern's gross profit. The Tribunal emphasized the importance of evidence and proper documentation in determining undisclosed income.
|
