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TMI Blog2012 (9) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... s Goa tour for explaining the source of expenditure. Therefore, CIT(A) was right in confirming the addition - against assessee. Addition on Household Expenses - Held that:- CIT(A) was right in holding the addition of ₹ 30,000/- on account of household expenditure - against assessee. Addition on account of stamp paper purchase - Held that:- Persuing the statement u/s 132(4) the assessee had hardly purchased stamps valued ₹ 710/- during the year under consideration and remaining stamps were either purchased by other parties or purchased by the assessee in different years. Thus, the CIT(A) was not justified in holding the addition of ₹ 13,650/- - in favour of the assessee. Addition on account of speculative trading - Held that:- It is evident from the documents seized that some of the dividends slips were in the name of assessee and his family members. - the estimate made by the A.O. appears to higher side further the assessee had disclosed shares and securities in the name of the family members in their return. Therefore the CIT(A) order is confirmed to the tune of ₹ 7,00,000/- instead of ₹ 15,00,000/- - partly in favour of assessee. Addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g investments of ₹ 28,845/- is shares securities to be from undisclosed income. 10. The Ld. CIT (A) has erred in confirming addition made by AO of ₹ 1,00,000/- on account of undisclosed expenditure on furniture. 11. The Ld. CIT (A) has erred in confirming addition made by AO of ₹ 30,000/- on account of undisclosed expenditure of religious donations. 12. 13. The Ld. CIT (A) has erred in confirming additions made by AO of ₹ 11,000/- ₹ 6,000/- made on a/c of undisclosed expenditure on tour to Singapore Goa respectively. 14. 15. The Ld. CIT (A) has erred in confirming addition made by AO of undisclosed household expenditure of ₹ 30,00/- of ₹ 15,000/- on renovation expenditure. 16. The Ld. CIT (A) has erred in confirming addition of ₹ 13,650/- made by AO on a/c of stamp papers being purchased from undisclosed income of the assessee. 17. The Ld. CIT (A) has erred in confirming addition of ₹ 15,00,000/- made by AO on the basis of paper found at the time of search of speculative trading in shares/debentures as undisclosed income of the assessee. 18. The Ld. CIT (A) has erred in confirming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under consideration in the income of the assessee. 7. Being aggrieved by the order of the A.O., the assessee filed first appeal before ld. CIT (A), who has adjudicated this issue on page 5 in paragraph no.8 and allowed marginal relief of ₹ 55,509/- and confirmed the addition of ₹ 3,00,000/-. The ld. CIT(A) had given this relief by considering the Instruction No.1916 dated 11.05.1994 and statement recorded u/s 132(4) of the IT Act. 8. Now, the assessee is in appeal before us. The ld. Counsel for the assessee filed paper book and contended that this jewellery was belonged to them. The appellant s daughter purchased gold bonds weighing 500 gr. which was on conversion gold bond to gold ornaments were 545 gr. These facts are on record and disclosed by his daughter in her return of income (page reference 180 to 196). The assessee s daughter had categorically admitted during course of search and seizure proceeding u/s 132(4) of the IT Act in reply to question no.6 (page reference 22 of paper book), which is reproduced as under:- I am giving the details hereinbelow. (1) One set of gold with one necklace, two earrings, two bangles and one ring. (2) One set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred page no.179 and return of Smt. Sharmistha H. Patel was filed on 13.03.1986. The assessee s daughter as per page no.182 purchased another diamond jewellery valued ₹ 4,400/- which had been reflected in return for A.Y. 81-82. The another gold bond certificate evidence from page nos. 185 196 of paper book dated 23.07.1980 in the name of Nina Harish Patel which has been disclosed in the regular return of the assessee s daughter. The A.R. further has given re-conciliation of the jewellery as under:- 13. (A) Gold jewellery - Total jewellery found 1634.2gms (a) Sharmistha 1072.7 gms (b) Neena 561.5 gms Benefit of instruction No. 916 950 gms Balance jewellery 684.2 gms ( B) Diamond jewellery Sharmistha ₹ 1,99,380/- Neena ₹ 30,290/- Total Rs.2,30,670/- (c) Silver Utensils ₹ 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewellery with evidence submitted in paper book. The total jewellery was found in weight of 1634 gms. As per Board Circular No.1916 dated 11.05.1994, credit of 500gms jewellery is to be given on the basis of Hon ble Gujarat High Decision in the case of CIT vs. Ratanlal Vyaparilal Jain Tax Appeal Nos. 661 662 of 2009, decided on July 19, 2010 in which the Hon ble Gujarat High Court has held that Board s Instruction No. 1916 dated 11.05.1994 is the guideline not only procedure but explanation of source as in Hindu family jewellery is gifted at the time of social function viz. marriage, birth day, marriage anniversary and other festivals. We are of the considered view that to the extent of 600 gms gold jewellery value ₹ 1,54,200/- (600 gms. value ₹ 1,54,200/- @ 2570 per 10 grams as on 31.03.1987) held unexplained and CIT (A) is justified to the extent of ₹ 1,54,200/- in confirming the addition and remaining addition of ₹ 1,45,800/- is deleted. Accordingly these grounds of appeal are partly allowed. 10. Ground no.-9 is against the addition of ₹ 28,845/-. The A.O. observed that during the course of search and seizure proceeding, shares and debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Expenditure on furniture Rs.1,00,000/- 11. Religious donations Rs.30,000/- 12 13. Expenditure on tour to Singapore Goa Rs.11,000/- ₹ 6,000/- 14 15. Household Expenses ₹ 30,000/- ₹ 15,000/- 15. The A.O. observed in assessment order that during the course of search expensive expenditure on furniture fitting at the office and at the residence was found. It was not recorded in the regular books of account. Similarly, evidences were found on having incurred expenditure on religious donation, expenses on tour to Singapore Goa by the assessee s children, low household expenditure and renovation expenditure of residence of the assessee. The assessee was interrogated during the course of statement u/s 132(4) of IT Act and he admitted household expenses per month ₹ 1500/- to 2000/- which are not matching with withdrawal and same were incurred from his undisclosed professional receipts. The assessee had disclosed ₹ 30,000/- on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sional Circle-1, Ahmadabad (paper book page no.44) and vide his letter dated 25th Sepetemebr 2002 before the CIT(A) as per page no.136 of paper book. During the course of search some receipts of religious donation was found but this was managed by the assessee s father and receipts were related to previous year not the year under consideration and disclosure was made by the assessee to buy the peace of mind if anything was found out during the search operation. The appellant had disclosed ₹ 11,000/- on account of Singapore trip of daughter who was group leader of school tour and all the particulars mentioned in diary related to school trip and also related the previous year not the year under consideration. Likewise expenditure on Goa tour of ₹ 6000/- was disclosed by him but same were related to the previous year. The appellant disclosed amounting ₹ 30,000/- on account of household expenditure but household during the assessment year was ₹ 38,572/-. As per Section 69C of IT Act any expense incurred unaccounted it can be added in which it has been incurred. Therefore, learned counsel argued that all the disclosure was made to buy the peace. Another side, ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mp papers were purchased by the different clients of the assessee as it is convenient for them to purchase the stamp in the name of any legal representative which can be used by any of them. The A.O. did not find the assessee s reply convincing, thus, he made the addition of ₹ 13,650/- in the income of the assessee. 20. The CIT(A) also confirmed the addition on page 18 of the CIT(A) order in paragraph no.11 because the stamps were found in the possession of the assessee and no material was brought on record by the appellant that stamp papers were purchased by other. 21. Now the assessee is before us. Ld. Counsel for the assessee contended that all the stamps were not pertained to assessee himself. The appellant filed the bifurcation of stamp purchased before the CIT(A) and claimed that stamp valued ₹ 6098/- purchased in the name of assessee and remaining stamp valued ₹ 7552/- in the name of different parties. He further claimed that during the year under consideration only stamp ₹ 710/- were purchased. Thus, no addition is called for. Whereas, ld. CITD.R. vehemently argued that ld. CIT(A) had considered all the evidence. Therefore, the order of the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unrecorded shares income arising out of investment. 24. Being aggrieved by the order of the A.O., the assessee filed first appeal before CIT(A) who had adjudicated this issued from page nos. 19 to 21 and confirmed the addition by observing as under:- The argument of the appellant and the facts of the case have been considered. The main plea taken by the appellant is that the seized papers showing the transactions of shares does not pertain to him. It pertains to its clients of the appellant who belong to popular group. But the appellant has not produced any evidence to show that the transactions does not pertain to him. A mere claim that it pertains to someone else is not enough. If the documents have been found in his possession, it is for him to lead the evidence to show that it does not relate to him. Further, the A.O. has mentioned that the attention of the appellant was drawn to the pages 27 to 92 of Annexure Y-4, which are slips issued by various share brokers in the names of family members of the appellant and also towards other loose papers. The appellant could not explain it properly, hence the A.O. considered that the transactions were conducted by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imize the tax-liabilities. Q.14. How many of your clients sought such advice during the past five years? Ans. It is not possible to give the exact figure. Q.15. Is it a regular feature that you render such advice? Ans. No. Occasionally I render such advice. Q.16. In your opinion how many clients seek such an advise in a year? Ans. Very few. Q.17. When very few clients come for seeking such advice then you must be able to specify whether the persons connected with page 60 of Annexure Y-1 had come for such an advice or not? Ans. Yes, they had come. Q.18. What fees did you charge from them for this particular advice? Ans. No specific fees is charged for such an advice from regular clients and in this case no fees for this advice was charged. Q.19. So one thing is clear that page 60 of Annexure Y-1 came to you for seeking advice for sale of share. Is that correct? Ans. It was in relation to share. I am not sure whether it was for sale of share, calculation of capital gains or preparing of return of Income. Q.20. In response to Q. No.17 you had stated that the person connected with the said document had come to you for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the orders of the authorities below and submission made by the assessee and heard the arguments from both sides. It is evident from the documents seized that some of the dividends slips were in the name of assessee and his family members. Further, the profit on purchase and sale of the share has calculated by the assessee on those seized papers. The appellant had not brought on record any evidence that these papers were pertained to Popular Groups or either assessee s client. The appellant had not substantiated his claim before the A.O., CIT(A) and also before us with evidence that these papers were pertained to different persons. However, the estimate made by the A.O. appears to higher side further the assessee had disclosed shares and securities in the name of the family members in their return. Therefore, we confirm the CIT(A) order to the ₹ 7,00,000/- instead of ₹ 15,00,000/-. Thus, the assessee gets relief of ₹ 8,00,000/-. The assessee s appeal is partly allowed on the ground. 27. Ground no.18 is against the addition of ₹ 1,50,000/- on account of payment made to Modern Engineering and Moulding Company by Ms. N.H. Patel. As per pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search. During the course of search and seizure operation client general index register was seized from premises of the assessee. He had total number of clients 4875/-. Even then the appellant had not filed the return for A.Y. 87-88. The appellant was given reasonable opportunity before estimating the professional receipts. The appellant replied vide his letter dated October,27, 1993 and total receipts had been disclosed from professional business at ₹ 4,41,507/-. He further admitted during the course of recording the statement u/s 132(4) that Amounts received by me from various persons which come to me for professional advice other than my clients are not recorded by me in my regular Books of accounts. The A.O. estimated the income @ ₹ 200/- per client at ₹ 9,75,000/- and after reducing the disclosed receipts of ₹ 4,41,507/-. The remaining amount of ₹ 5,33,500/- was added in the income of the assessee. 32. CIT(A) had confirmed the addition on page nos.24 and 25 of the CIT(A). The observation made by the CIT(A), which is reproduced as under:- The argument of the appellant and the facts of the case have been considered. It has been f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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