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TMI Blog2012 (11) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the assessee as stock-in-trade without bringing any adverse material on record. CIT(A) deleted the addition placing reliance on decision in case of Neha Builders Pvt Ltd (2006 (8) TMI 105 - GUJARAT HIGH COURT). Nothing could be brought on record by Revenue that aforesaid judgment is not applicable to the present case Addition on account of low household withdrawals - Held that:- There is no basis of estimating household expenditure of the present year of Rs.2,00,000/-. If the AO is depending on the statement of the wife of the assessee, then annual expenditure comes to only Rs.1.44 lakhs, even if it is calculated at the rate of Rs.12,000/- per month. The assessee has declared household expenses at Rs.1.54 lakhs and hence, no addition on this count is called for. Partial addition for alleged income from house property - Held that:- Annual value of this property was estimated by the AO at Rs.5,000/- per month. The claim of the assessee is that for the purpose of computing the annual value of property, which was not actually let out, the municipal valuation should be the basis of determining the annual value. AO directed to compute the municipal value of this property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1 The assessee has purchased a land along with Shri Kantibhai G. Patel in the name of various family members from Shri Kirtikumar K. Shroff and his two sons on which the project of Jolly Plaza has been constructed. The sale deeds for and have been executed in the name of various family members of the assessee and Shri Kantibhai G. Patel. The land divided twenty two plots have been purchased through separate twenty two documents. Eleven documents have been executed in A.Y. 2001-02 and remaining eleven documents have been executed in year relevant to A.Y. 2002-03. The evidence of payment of on money on the purchase of said land was found during the course of search at residence premises of Shri Pratik K. Shroff i.e. son of Shri Kirtikurnar K. Shroff, who was actually the owner of land. The evidence has been found in the form of notings on page-27 of Annexure A-9 seized from the residence of Shri Pratik K. Shroff. In the said noting the sum of Rs. 1 crore have been indicated to be received from Kantibhai assessee and accordingly assessing officer observed that assessee (1/2 share with Kantibhai) should have paid Rs. 50 lacs as on money for purchase of the land. After noting ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y.2000-2001 and on the same paper, the investment of Rs.25,00,000/- was mentioned. The learned CIT(A) has held that when the income has been taxed, there is no justification for again taxing the investment by way of applying this income of A.Y.2001-2002. We do not find any reason to interfere with the order of the learned CIT(A) on this issue, because admittedly, when the income has been taxed, no separate addition can be made in respect of application of the same income in making investment, unless some material is brought on record to show that income taxed in the earlier year was utilised somewhere else and the investment in question is not by way of utilisation of that income. Nothing has been brought on record by the Revenue to show that the income of Rs.60.20 lakhs taxed in A.Y.2000-2001 was not utilised in the present year, and particularly when on the same seized paper, income and investment both were mentioned. Hence, we decline to interfere in the order of the learned CIT(A) on this issue. This ground of the Revenue is dismissed. 7. The ground no.2 of the Revenue s appeal reads as under: 2. The ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt followed by the learned CIT(A) is not applicable to the present case, and since the assessee is in the business of construction, it cannot be said that the shops in question were not held by the assessee as stock-in-trade without bringing any adverse material on record. Hence, we do not find any reason to interfere with the order of the learned CIT(A) on this issue. This ground of the Revenue is also rejected. 12. The ground no.3 of the Revenue s appeal reads as under: 3. The ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.45,389/- on account of low household withdrawals when the assessee failed to discharge the onus to prove that the withdrawals were adequate. 13. The brief facts till the assessment stage are noted by the learned CIT(A) in para-4.1 of his order, which is reproduced below: 4.1 During the course of search at the residence of the assessee, statement of his wife, Smt. Pallavi Ghelani, was recorded. In reply to question no.15 of her statement recorded u/s.132(4 dated 22/12/2004, it was explained by her that the household expenses is around Rs.10,000/- to Rs.12,000/- per month. The AO made the addition of 45,389/- by estimating hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n rendered in the case of Shri Jayvadan Ramniklal Kapadia Vs. DCIT, in ITA Nos.1580-1582, 1584 1585/Ahd/2009 dated 6-5-2011. He submitted copy of the Tribunal decision and drawn our attention to para- 6. He also submitted that municipal value of this property can be seen at page no.12 of the paper book. The learned DR supported the orders of the authorities below. 21. We have considered rival submissions, perused material placed on record and also gone through the orders of the authorities below. We find that the annual value of this property was estimated by the AO at Rs.5,000/- per month. The claim of the assessee is that for the purpose of computing the annual value of property, which was not actually let out, the municipal valuation should be the basis of determining the annual value. No contrary decision is brought to our notice by the learned DR of the Revenue, and hence we direct the AO to compute the municipal value of this property as annual value and then compute the income assessable under the head income from house property . This ground of the assessee in the CO is allowed for statistical purpose. 22. In the result, the CO of the assessee stands allowed for stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Pratik K. Shroff. In the said noting the sum of Rs. 1 crore have ber, indicated to be received from Kantibhai assesses and accordingly assessing officer observed that assesses (112 share with Kantibhai) should have paid Rs. 50 lacs as on money for purchase of the land. After noting made on page no, 60 of Ann. B-2, recovered from Sanjaybhai assessee indicated various sums representing profits earn in different projects. The on money payment is the cost to the assessee and so, it is neutralise and doesn't affect the determination of ultimate profit. Moreover, instead of 50 lacs only 25 lacs have been shown in this paper to have been invested in Athwa gate project. In view of the evidence found, assessing officer issued show cause to the assessee which has reproduced by assessing officer at para no. 5 (page no. 4 5) of the assessment order. Alleged noting recovered from Pratik K. Shroff was indicated in this show cause notice. In response, assessee submitted his reply to assessing officer which has reproduced by assessing officer at para no. 5.2 (page no, 5) of the assessment order. Assessing Officer rejected the contention of assesses as per his findings as per para no. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually received back, but this was also not established by the Revenue by bringing conclusive evidence that the assessee has not received back from these two persons. Considering the facts of the case in its entirety, we are of the considered opinion that the claim of the assessee should be accepted in the interest of justice because three noting on the seized paper of Rs.7 lakhs, Rs.10.25 lakhs and Rs.9.7 lakhs are not in the nature of long term investment, and therefore, it appears to be acceptable that atleast Rs.15 lakhs were also received back out of this total amount of Rs.26.42 lakhs. We, therefore, delete this addition on the basis that this investment is also out of income declared by the assessee of Rs.60.20 lakhs in A.Y.2000-2001. This ground no.1 is allowed. 32. The ground no.2 of the assessee s appeal reads as under: 2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT (A) has erred in partly confirming the addition of Rs.45,000/- out of Rs.2,60,400/- made by the AO for alleged income from house property. 33. Regarding this issue, it was submitted that the same is identical to ground raised by the assessee in its CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions laid down for allowance of depreciation and failed to establish that the asset was put to use for the purpose of business. 40. The brief facts on the issue, till the assessment stage are noted by the learned CIT(A) in para 5.1 of his order, which is reproduced hereinbelow. 5.1 During the year under consideration, assessee has claimed depreciation on motor car of Rs.5,87,212. In the assessment order Assessing officer stated that during the course of assessment proceedings, the assessee was asked to substantiate the claim of depreciation. Assessing officer also observed that assessee did not debit expenses on running and maintenance of vehicle in the profit and loss account. By making observation at Para no. 5 (page no. 3 4) of the assessment order, assessing officer made addition of Rs. 5,87,212 on depreciation of motor car. 41. Being aggrieved, the assessee carried the matter before the learned CIT(A) who has deleted the disallowance, and now the Revenue is before us. 42. The learned DR supported the assessment order whereas the learned AR of the assessee supported the order of the learned CIT(A). The learned DR has also placed reliance on the judgment of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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