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TMI Blog2015 (5) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed in response to the notices issued u/s 153A become the original returns of income for all the years under consideration. Consequently the impugned assessments are to be considered as original assessments in the hands of the assessee. The assessing officer is entitled to examine all the issues, since these assessments shall not fall in the category of “concluded assessments” in the absence of original return of income filed u/s 139 of the Act. Accordingly, we reject this ground also.- Decided against assessee. Column no.7 of notice of demand issued u/s 156 of the Act was left blank and hence the said notice was invalid - Held that:- The clerical errors would not vitiate the assessment orders and accordingly, we reject this ground also.- Decided against assessee. Additions made on account of low withdrawals made for household expenses - Held that:- assessing officer has simply estimated the household expenses without bringing any other material on record. The submission of the assessee is that he was maintaining a simple life and further the money withdrawn from his wife’s account was also used towards household expenses. Admittedly, the assessing officer did not conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination. - Decided in favour of assessee for statistical purposes. Estimation of commission income on providing accommodation bills - Held that:- A question may arise as to whether the deduction directed to be given in the preceding paragraph is valid, since the resultant assessed income of AY 2010-11 would become lower than the income returned by the assessee. The fact remains that the assessee did not visualise the addition relating to Commission income at the time of filing returns of income of the years under consideration and hence there was no occasion for him to claim deduction of the commission income. Since the commission income has been estimated by the tax authorities as well as by us, the aggregate amount of net commission income finally assessed should be given deduction in order to arrive at completeness. Addition of balance value of Jewellery/cash found at the time of search over and above that surrendered by the assessee - Held that:- Though the entire value of jewellery has been assessed in AY 2010-11 in accordance with the provisions of the Act, however in practice, the jewellery is accumulated over the years. It is known to everyone that the rate of gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.10.2009. On the very same day, the assessee was also subjected to search operations and a statement u/s 132(4) of the Act was taken from the assessee. At that point of time, the assessee was furnished with a copy of statement given by Shri Mukesh Jain and the C.A shri Nirmal Doshi, referred above. The assessee admitted that he had used the above said concerns for providing accommodation entries to various parties on receipt of nominal commission. He also submitted that he has shared part of commission to the above said persons. Subsequently a statement was recorded from the assessee u/s 131 of the Act on 19.11.2009. In that statement, he admitted that he received commission @ 0.2% on the value of accommodation bills provided. 3. The assessee did not file return of income u/s 139 of the Act for any of the years under consideration. Consequent to the search operations, the AO issued notices u/s 153A of the Act and the assessee filed returns of income in response to the same. In all the returns, the assessee disclosed income from Salary and income from other sources. From AY 2006-07 onwards, the assessee disclosed commission income also as his business income. The assessee also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has filed these appeals before us. 8. We have heard the parties and perused the record. We notice that the assessing officer has assessed the income declared by the assessee and also assessed commission income estimated by him. Having assessed the income, the assessing officer has also proceeded to assess the cash outgoings by way of investments also. There should not be any doubt that the same would result in double assessment of same income. Further, we notice that the assessing officer has rejected the financial statements filed along with the returns of income, but used the details available therein for the purpose of assessments. Besides the above, as stated above, the assessing officer has estimated the household expenses and assessed the difference between the amount so estimated by him and the amount shown by the assessee in the financial statements, which was rejected by him. Thus, it is seen that the assessing officer has partially accepted the financial statements and hence there is inconsistency in the approach adopted by the assessing officer. 9. In all the years, the assessee has taken certain legal issues. The first issue was that the tax authorities were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of search. Since the impugned assessments are the original assessments in the hands of the assessee, in our view, the assessee cannot take support of the decision rendered by the Delhi bench of Tribunal. In our view, the assessing officer is entitled to examine all the issues, since these assessments shall not fall in the category of concluded assessments in the absence of original return of income filed u/s 139 of the Act. Accordingly, we reject this ground also. 11. Another legal ground urged by the assessee is that the Column no.7 of notice of demand issued u/s 156 of the Act was left blank and hence the said notice was invalid. In our view, the clerical errors would not vitiate the assessment orders and accordingly, we reject this ground also. 12 We shall now deal with the grounds urged on merits. The assessee is challenging the additions made on account of low withdrawals made for household expenses. The additions made by the AO are tabulated as under for the sake of convenience. ASSESSMENT YEAR DRAWINGS ESTIMATED BY THE AO DISCLOSED BY THE ASSESSEE ADDITION MADE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40,000 We order accordingly. The order of Ld CIT(A) on this issue stands modified accordingly and the assessing officer is directed to sustain the addition towards insufficient drawings to the extent stated in the table given above. 14. The next issue contested by the assessee in all the years is in respect of addition made under the head Unexplained investments . We have earlier noticed that the assessee had furnished financial statements along with the returns of income filed for the years under consideration. The assessee had disclosed the payments made towards Life Insurance premium schemes, Public provident fund schemes. Besides, the assessee had also disclosed certain loans and advances and Investment in shares. Since the assessing officer rejected the financial statements, he assessed all the above said items as income of the assessee. We have also earlier noticed that the assessing officer has assessed the income declared by the assessee, which was included in the financial statements. Further, the assessing officer has given credit for the drawings disclosed in the financial statements. Hence, it is seen that the assessing officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished. In this regard, the Ld A.R invited our attention to the confirmation letter furnished in the paper book. Accordingly he contended that the observations made by the tax authorities are against the facts prevailing on record. Since the confirmation letter furnished by the assessee was omitted to be examined by the tax authorities, we are of the view that this issue requires fresh examination at the end of the assessing officer. Accordingly, we set aside the order of the Ld CIT(A) on this issue and restore the same to the file of the assessing officer for fresh examination. The assessing officer, while examining this issue, should also keep in mind about the difficulties that may be faced by the assessee in furnishing the details in view of lapse of about 11 years. 17. The next common issue that arises in AY 2006-07 to 2010-11 relates to the estimation of commission income on providing accommodation bills. We earlier noticed that the assessee had declared the commission income @ 0.20% in the statement taken from him. However, in the letter filed before the assessing officer, the commission income was declared @ 0.25%. However, the assessing officer has estimated the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed both the income as well as investment. We have also noticed that the same would result in double assessment of same income, which is not envisaged in the Income tax Act. As per the record, we notice that all the income earned by the assessee has culminated into the investment made in Jewellery. We have also noticed that the assessee has offered a sum of ₹ 78,47,730/- as his income in AY 2010-11. In view of the same, the assessee has contended before the assessing officer that the commission income should also be assessed in that year only. The assessing officer has rejected the said claim on the reasoning that the assessee would have received the commission income every year. We find merit in the reasoning given by the assessing officer. Accordingly, we are of the view that he is justified in holding that the commission income is assessable every year. However, since the said income has culminated into jewellery investment, we are of the view that the cumulative commission income finally assessed from AY 2006-07 to 2010-11 after giving effect to our order, should be given deduction against the income offered towards investment made in Jewellery. We find support for our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessment of balance amount of jewellery is not justified. With regard to the cash, the Ld A.R submitted that the addition of ₹ 30,200/- is also not warranted, since the book balance was not considered by the assessing officer. 24. The Ld D.R strongly defended the order of Ld CIT(A). However, we find merit in the contentions of the Ld A.R. Though the entire value of jewellery has been assessed in AY 2010-11 in accordance with the provisions of the Act, however in practice, the jewellery is accumulated over the years. It is known to everyone that the rate of gold is rising consistently over the years. However, the value of jewellery has been assessed in AY 2010-11 by taking the rate prevailing in that year. Further, the Indian families normally own certain quantity of jewellery over the years. Considering all these facts, we are of the view that there is no justification in assessing the balance value of jewellery amounting to ₹ 10,29,020/-. With regard to the cash also, the assessing officer has not given credit for book balance. Considering the smallness of the amount, we are of the view that the addition of ₹ 30,200/- is also not warranted. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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