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TMI Blog1990 (12) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's reply dt.14th March, 1982was silent on this issue. The ITO was of the view that the assessee has not been able to prove sale or acquisition of ornaments. Accordingly, the amount of Rs. 15,000 was treated as concealed income of the assessee. 4. The matter was carried in appeal before the CIT(A) before whom it was submitted that the gold ornaments were sold on2nd April, 1981to Shri Pritam Singh, permanently settled inTaiwan, in course of his visit ofIndiain March-April 1981. It was further submitted that the said jewellery had been shown by the assessee in his wealth-tax returns for the asst. yr. 1966-67 onwards, until it was disposed of. It was further explained that for the asst. yr. 1971-72 in the assessee's wealth-tax case jewellery was assessed at Rs. 25,000. Part of this jewellery was sold in the asst. yr. 1972-73 whereupon the value of balance jewellery was assessed at Rs. 7,750 for that assessment year. In asst. yr. 1981-82 the market value of this jewellery assessed at Rs. 12,500. That jewellery weighed 95 gms. and comprised of 6 gold bangles, one ring and one necklace. it was also stated that Shri Pritam Singh to whom the ornaments were sold died and, therefore, his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years. The assessee's contention that since his records were taken away by FERA authorities in the year 1985, he could not adduce necessary evidence before the authorities below, does not carry conviction for the simple reason that in the instant case the assessment was first framed on30th Nov., 1983. Therefore, the necessary evidence could have been adduced before the ITO, which has not been done. In reply to a query from the Bench learned counsel for the assessee stated that he was not in a position to state as to when Pritam Singh had died. The assessee has not brought on record any material to show that Pritam Singh had died before the assessment had been completed. Paritam Singh was said to be a friend of the assessee and, therefore nothing could have been easier for the assessee than to file a confirmation from him in support of his case that gold ornaments were sold to him for Rs. 15,000. Even if the assessee was not in a position to obtain confirmation from Shri Pritam Singh, he could have adduced other corroborative evidence in support of his case, which has not been done. Paper No. 30 purports to be a copy of the receipt issued by the assessee regarding sale of gold orn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of IT and subsequently before the ITO. Our attention was also invited to pages 22 to 29 of the paper book to show that the transaction relating to the advance of Rs. 30,000 made by Shri Gopi Chand was genuine and that he had the capacity to advance the loan. It was thus submitted that the onus placed on the assessee was fully discharged and that the authorities below were not justified in disbelieving the assessee's claim. Reliance has also been placed on the decision of the Supreme Court in CIT vs. Orissa Corporation (P) Ltd. (1986) 52 CTR (SC) 138 : (1986) 159 ITR 78 (SC). Learned counsel also submitted that the assessee was not given an opportunity to cross-examine Shri Gopi Chand. However no such plea was raised before the CIT(A) or in the grounds of appeal before us. It is therefore rejected. 9. Learned DRon the other hand fully supported the impugned orders of the authorities below and further contended that the assessee failed to discharge the onus of proving the capacity of the creditor to advance the loan as also the genuineness of the alleged loan transaction. 10. We have considered the submissions made on behalf of the parties and have gone through the record of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee on12th Nov., 1981. It is difficult to believe that Gopi Chand would have advanced Rs. 30,000 to the assessee through a cheque issued on12th Nov., 1981, even though on that date credit balance in his bank account was only Rs. 520. How he could know that next day he would be receiving exact amount of Rs. 30,000 from three different parties. Considering the entire facts of the case and the evidence available on the record including the statements of Shri Gopi Chand we are satisfied that the assessee has not been able to establish the capacity of Gopi Chand to advance the loan of Rs. 30,000 as also genuineness of the alleged loan transaction. The initial burden placed on the assessee could not therefore, be discharged by him. Here it may be mentioned that even though Gopi Chand is an income-tax assessee, but from the facts found by the authorities below it is clear that Gopi Chand filed his income-tax return for the asst. yrs. 1981-82 to 1984-85, returning income just above the minimum taxable limit. The mere fact that he was an income-tax assessee does not prove that he had the capacity to advance a substantial amount of Rs. 30,000. So the addition of Rs. 30,000 made as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he was working as a commission agent in the business of kiryana goods since 1975. He stated that Rama Swarup was his friend and he had advanced Rs. 30,000 to him. The said amount of Rs. 30,000 was received by him from following four persons as commission: . Rs. (1) Shri M.D. Agarwal 10,000 (2) Smt. Pani Agarwal 8,000 (3) Smt. Santosh Devi 7,000 (4) Shri Bhagwan Sahai 5,000 15. When the statement of Shri Satish Chand was subsequently recorded by the ITO, he deposed that the amount of Rs. 30,000 advanced to the assessee was arranged from the aforesaid four parties. Out of them, Smt. Pani Agarwal was his wife; she was a housewife. Smt. Santosh Devi is his sister and is the wife of Shri M.D. Agarwal. Bhagwan Sahai is the uncle of Shri Satish Chand. So, all the four parties are closely related to Shri Satish Chand. It was from these four parties that Shri Satish Chand was said to have obtained money for giving a loan of Rs. 30,000 to the assessee. He filed his income-tax returns only for one year i.e., for the asst. yr. 1980-81, declaring a total income of Rs. 9,890 which was accepted under s. 143(1). No return was filed thereafter. It is clear that Shri Satish Chand is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration was much more and, therefore, it cannot be said that expenditure incurred on printing and stationery for the year under consideration was excessive as compared to the earlier years. It was further submitted that all the payments for printing and purchase of stationery were made through a/c payee cheques and that there was no justification in making any disallowance out of expenses incurred on paper, printing and stationery. 18. We have also heard learned DR who has fully supported the orders of the authorities below on the point. 19. The details of the expenses incurred on paper, stationery and printing are given at pages 4 to 6 of the paper book. I these details give number and date of each bill and the party to whom payments were made. Most of the payments were made to M/s Deepak Sales Agency from whom a certificate was filed, a copy of which is at page 7 of the paper book. The CIT(A) has noted in his impugned order that for the asst. yrs. 1980-81 and 1981-82 expenditure on paper, printing and stationary amounted to Rs. 8,996 and Rs. 9,642 respectively on a turnover of Rs. 1,25,639 and Rs. 2,67,620 respectively. He has further noted that in the asst. yr. 1982-83, turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 was paid for parcel charges. Total expenditure amounted to Rs. 25,580.25, out of which a sum of Rs. 5,811 was reimbursed by FETS. The net amount claimed was Rs. 19,769.40p. 22. After considering the submissions made on behalf of the parties and the material placed on record, including the details of the expenditure on postage, we are of the opinion that there was no justification in making any disallowance out of postage expenses. The disallowance restricted to Rs. 4,000 by the CIT(A) is deleted. 23. Next ground disputes the disallowance of 1/3 rd out of motor car expenses and depreciation on motor car being non-business expenses. Learned counsel for the assessee submitted before us that the disallowance made out of motor car expenses on account of user of the car by the assessee for personal purposes was excessive. It was further submitted that disallowance out of depreciation of motor-car was proposed in the draft assessment order and, therefore, the IAC in his directions given under s. 144B(4) had no jurisdiction to direct the ITO to make disallowance out of depreciation on motor-car. We have also heard the learned DR who has supported the orders of the authorities below on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employees during the year or in earlier years regarding ex gratia payment. He accordingly upheld the disallowance. 27. We have heard the learned authorised representative of the parties on the point. Details of employees and salaries paid to them are given at page 10 of the paper book. Learned counsel for the assessee submitted before us that no bonus was paid to the employees and that only ex gratia payment equal to one month's salary was paid to them. It was also submitted that there was no agreement between the assessee and the employees regarding ex gratia payment and that it was on the ground of commercial expediency that the payment was made. It was further submitted that the payment was made to keep the employees happy and to have cordial relations with them. Considering the facts of the case we are of the opinion that the expenditure of Rs. 8,358 was incurred for the purpose of business and should be allowed as deduction. 28. Rs. 5,392 was disallowed by the ITO on the ground that the claim was not genuine. The disallowance was confirmed in appeal by the CIT(A). Before the CIT(A) it was submitted on behalf of the assessee that payment on account of medical reimbursemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no justification in making disallowance of Rs. 5200 payable to the said persons. The disallowance is accordingly deleted. 32. Next ground relates to the disallowance of Rs. 1,500 out of travelling expenses. The disallowance of Rs. 1,500 was made out of travelling expenses on account of expenses of personal nature. The disallowance was confirmed by the CIT(A). 33. We have heard the learned authorised representatives of the parties. In view of the facts brought on record and taking into consideration the submissions made on behalf of the parties, we hold that disallowance of Rs. 1,500 out of travelling expenses is in order and no interference is called for. 34. Grounds No. 21 to 23 assail the addition of Rs. 26,438 made on account of low withdrawals for household and personal expenses. The assessee showed withdrawals of Rs. 18,067 for household and personal expenses. The details filed by the assessee showed that he made no withdrawals for household expenses in the month of April, 1981. No withdrawals were made in the month of Oct., 1981 except that the assessee withdrew Rs. 3,000 on29th Oct., 1981and deposited Rs. 2,700 on30th Oct., 1981. No withdrawals were made in Nov., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500 by the ITO are quite reasonable. In this view of the matter we uphold the addition of Rs. 16,438 on account of low withdrawals for household and personal expenses. 38. The last ground reads as follows : "The lower authorities have erred in not adopting the A.L.V. of self-occupied residential house No. D-83. Defence Colony, New Delhi in conformity with the judgment of the Supreme Court in the case of Amolak Ram Khosla (1989) 131 ITR 589 (SC). 39. In respect of self-occupied property at D-83, Defence Colony, the ITO assessed income at Rs. 6,288 as declared by the assessee himself. His order on the point was confirmed in appeal by the CIT(A). 40. The only submission made by the learned counsel for the assessee in respect of ground No. 24 was that statutory deduction on account of repairs may be allowed. No other submission was made before us in respect of ground No. 24. The plea that deduction on account of repairs may be allowed, does not arise out of the impugned order of the CIT(A). We, accordingly, reject the contention advanced before us on behalf of the assessee. The finding of the CIT(A) on the point is accordingly confirmed. 41. For the foregoing reasons, the appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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