9911796707
TMI Blog2010 (12) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 1,00,00,000 TATA 5.4.2005 2,00,00,000 HDFC 6.4.25 50,00,000 Total 4,75,00,000 2.1 In absence of any satisfactory explanation by the assessee with supporting evidences, the Assessing Officer made the addition of Rs.4.75 crores as unexplained 2.2 The Assessing Officer asked the assessee to furnish party-wise details of professional fees received during the year under consideration and reconcile the same with TDS certificates. He also requested the assessee to reconcile the professional fees received by the assessee as per AIR information. The assessee, vide letter dated 8.10.2008 submitted that all professional fees are received by way of cheques and all such cheques received are deposited in his HDFC account. It was further submitted that professional receipts disclosed by the assessee are more than the receipts shown in AIR information and accordingly, there is no discrepancy. The assessee also expressed his inability to furnish party-wise details of professional fees received during the year under consideration. The Assessing Officer noted that 40 items amounting to Rs.47,37,000/- as per page 3 and 4 of the assessment order has not been disclosed as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such parties. It was submitted that the assessee requested for more time as the time allowed was far too short for compliance. The assessee also stated that the addition would lead to mismatch in TDS position, if assessee's income is increased by the amount of addition and that other than the mutual fund transactions, all professional transactions were only routed through OBC. Based on the arguments advanced by the assessee, the CIT(A) remanded this issue also back to the file of the Assessing Officer under Rule 46A with the direction to examine the submissions of the assessee and make further enquiries as deemed fit and to send the remand report. 3.2 As regards the disallowance of Rs.50,000/- on account of expenses attributable to earning of tax free dividend income, it was submitted that no disallowance under the said head was made by the Assessing Officer u/s14A in the previous Assessment Year although similar dividend income was earned by the assessee and similar expenditure was incurred by the assessee. It was submitted that entire expenditure claimed was purely towards professional receipts. 3.3 After obtaining the remand report from Assessing Officer, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of non receipt of TDS certificate from the clients. He submitted that his total professional fees far exceed the fees as per AIR information. He submitted that since he has deposited all his professional fee receipts in one bank account only and there is no information with the department that he has received any other amount which has not been disclosed and/or deposited in some other bank account; therefore, the addition made by the Assessing Officer and sustained by the CIT(A) is uncalled for. 7.1 The ld DR, on the other hand, while supporting the order of the authorities below submitted that since the assessee failed to reconcile the professional fees declared along with receipts appearing in the AIR information; therefore, notwithstanding the fact that the assessee's total receipt is more than the figure disclosed in the AIR information, the Assessing Officer was justified in making the addition and CIT(A) was justified in sustaining the same. 8. We have considered the rival submissions made by both the parties, perused the orders of the authorities below and the paper book filed on behalf of the assessee. There is no dispute to the fact that the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from the clients or from the instructing advocates or CAs, if they have collected the amounts from the clients. Similar explanation have been accepted in the past in scrutiny assessment and no addition has been made, a fact already brought on record. In this view of the matter, we find sufficient force in the submissions made by the assessee that no addition is called for on this account. Accordingly, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. 9. The grounds of appeals 8 to 12 relate to the order of the CIT(A) in sustaining the addition of Rs.75 lacs on account of investment for mutual funds. 10. The assessee at the time of hearing before us, referred to the paper book page 28 and submitted that the investment in DSP Black Rock mutual fund was purchased by his father Mr K R Srinivasan and his name was appearing as joint holder. Referring to page 29 of the paper book, he submitted that investment of Rs.25 lacs in SBI Blue chip mutual fund stands in the name of Smt S. Rajalakshmi, his mother and he is the second holder. Referring to the order of the CIT(A), he drew the attention of the Bench to para 4.2.1 of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has already informed the Assessing Officer having jurisdiction of the above two persons as per his letter dated 17.11.2009 to take necessary action at their end. Therefore, in our considered opinion, the addition is uncalled for on this account in the hands of the assessee. In this view of the matter, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition of Rs.75 lacs. 12. In the grounds of appeal nos 13 to 16 the assessee has challenged the order of the CIT(A) in confirming the addition of Rs.50,000/- made by the Assessing Officer u/s 14A. 13. After hearing both the parties, we find that against the tax free dividend income of Rs.6.39 crores, the assessee has not disallowed any amount on account of expenditure u/s 14A of I T Act r.w.r 8D. We find, the Assessing Officer disallowed an amount of Rs.50,000/- on estimate basis u/s 14A being expenses attributable to exempt income, which has been sustained by the CIT(A). It is the submission of the assessee that the entire expenditure relates to professional income and no part of expenditure relates to earning of tax free dividend income. However, we are unable to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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