2004 (4) TMI 265 - AT - Income Tax

Issues Involved:
1. Addition of Rs. 57,948 in respect of certain expenditure on immovable property at Delhi.
2. Addition of Rs. 70,000 in respect of household articles.
3. Addition of Rs. 52,000 on account of gifts.
4. Addition of Rs. 30,000, Rs. 35,000, and Rs. 52,000 as gifts received by family members.
5. Addition of Rs. 50,000 as gift received by the assessee.
6. Addition of Rs. 3 lakhs in respect of alleged household expenses.
7. Addition of Rs. 19,316 in respect of alleged difference in respect of cost of construction of old Shri Ram Complex.

Detailed Analysis:

1. Addition of Rs. 57,948 in respect of certain expenditure on immovable property at Delhi:
The assessee had debited Rs. 1.41 lakhs in the books of account, representing half share in the property. The AO, based on the VO's report, estimated the investment at Rs. 1,98,948 and added Rs. 57,948 after allowing credit of Rs. 1.41 lakhs. The assessee objected, arguing that the estimation was unjustified and relied on the Supreme Court decision in Smt. Amiya Bala Paul vs. CIT, which held that valuation based on the VO's report was not justified. The tribunal found no incriminating document suggesting higher expenditure and deleted the addition, accepting the ground.

2. Addition of Rs. 70,000 in respect of household articles:
The AO observed that the assessee had surrendered Rs. 70,000 for household articles. The assessee contended that only Rs. 43,420 was surrendered, with Rs. 70,000 being surrendered by her husband separately. The tribunal found that the AO's figure was not based on any seized material and restricted the addition to Rs. 43,420, as surrendered by the assessee, accepting the ground.

3. Addition of Rs. 52,000 on account of gifts:
The AO treated Rs. 52,000 received as foreign gifts as undisclosed income. The assessee argued that these were genuine NRI gifts disclosed in the return for AY 1994-95, filed before the search, and provided supporting documents. The tribunal noted that no incriminating documents were seized during the search to doubt the genuineness of the gifts and deleted the addition, accepting the ground.

4. Addition of Rs. 30,000, Rs. 35,000, and Rs. 52,000 as gifts received by family members:
The AO added these gifts as undisclosed income, observing that the assessee failed to prove the relationship, occasion, and purpose. The tribunal noted that the assessee had not provided satisfactory details to the AO but had submitted documents before the tribunal. The matter was restored to the AO for fresh adjudication, directing the assessee to provide necessary details, treating the ground as allowed for statistics.

5. Addition of Rs. 50,000 as gift received by the assessee:
The AO added Rs. 50,000 received as a gift by the assessee as undisclosed income. The tribunal restored this matter to the AO for fresh adjudication, similar to the previous issue, treating the ground as allowed for statistics.

6. Addition of Rs. 3 lakhs in respect of alleged household expenses:
The AO added Rs. 3 lakhs for low household withdrawals, considering the assessee's social status and locality. The assessee argued that the estimation was not based on any seized material and had already shown reasonable expenses. The tribunal found that the AO's estimation was not justified without seized material and deleted the addition, accepting the ground.

7. Addition of Rs. 19,316 in respect of alleged difference in respect of cost of construction of old Shri Ram Complex:
The AO added Rs. 19,316, representing the assessee's share of the difference in valuation based on the VO's report. The assessee objected, citing the Supreme Court decision in Smt. Amiya Bala Paul. The tribunal found no material suggesting higher investment and deleted the addition, accepting the ground.

Conclusion:
ITA No. 1241 was allowed, and ITA No. 1219 was treated as allowed for statistics.

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