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TMI Blog2013 (9) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... the total price estimated by the A.O. as per this page. This addition is totally baseless and deserves to be deleted. Accordingly, addition is hereby deleted - Decided in favour of assessee. Unexplained investment - Addition on account of expenses shown in the books of account/balance sheet on account of house/farm house - Held that:- This addition pertains to an investment already shown in house/farm in his final account and books of account pertaining to this A.Y. No incriminating evidence was found in this regard during search in the third party. Therefore, this amount cannot be treated as unexplained investment by any means and by simply observing that proper books were not maintained. The investment of ₹ 3,00,024/- represents purchase of land on which house was constructed. The assessee had submitted copy of registered sale deed in support of the investment. The said land was purchased in the joint name of the assessee and his brother Shri Gautam Sharma. The investment is verifiable from the sale deed also. Decided in favour of assessee. Unexplained house hold expenses - Held that:- The facts of this issue are that various members of the family made withdrawals amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of silver cannot be ruled out as expenditure, which were found from the family of such a big means. However, the reliance of the ld. CIT(A) on Instruction No. 1916 may not be correct in law. However, the spirit of this Instruction should be given regard to. Accordingly, we do not find any merit in this ground and dismiss the same - Decided against revenue. Addition on the basis of difference of cost of construction - CIT(A) deleted the addition - Held that:- the assessee is engaged in construction business only and therefore, deduction for self supervision should be allowed to the assessee in view of various judicial pronouncements in this regard. Considering the fact that no evidence was found during the course of search proceedings regarding supervision of construction of these properties having been outsourced, we find no folly in the finding of the ld. CIT(A) - Decided against revenue. - ITA Nos. 213 to 215/JU/2013, ITA Nos. 259 to 260/JU/2013 - - - Dated:- 24-9-2013 - SHRI HARI OM MARATHA AND SHRI N.K. SAINI, JJ. For The Appellant : Shri Amit Kothari For The Department : Shri Deepak Sehgal ORDER PER BENCH:- This is a bunch of five appeals - thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the search proceedings. Therefore, the submissions made by the assessee could not be verified from any books of accounts or supporting evidence. It was further mentioned that during the course of his statements during the search and seizure operations, Shri Mohan Lai Suthar stated on 15/12/2009 in reply to question no. 27 to 29 pertaining to Annexure AS-1, page 20, that this paper pertained to transactions relating to 47 Bighas of land in Ram Nagar and project developed by him and his partners. It was admitted by him that the cost of purchase of this land was ₹ 4,81,54,774/- in F.Y. 2004-05 and by F.Y. 2005-06 all the plots were sold for a total sale consideration of ₹ 5,32,21,764/-. It was admitted by the assessee that he was working along with Mr. Mohan Lal Suthar for getting the necessary approvals from the Municipal Corporation/UTI and getting the necessary 'patta' and clearances. Thus, he cannot claim that he did not know about this scheme. As for the submissions that no investment was made on purchase of land and the payments to the sellers were made from the advances received from the buyers of land, the A.O. found it to be unacceptable. He further obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iary persons get their shares, as settled between them when land is directly transferred and sold by the owner of the land to the prospective buyers of the land. There is nothing unnatural in this claim of the assessee. The assessee has already offered for taxation his profit, rather to say, more than what has been calculated, which is evident from page 68 of the PB, a copy of document found from Shri Mohan Lal Suthar wherein he has suffered tax thereon in A.Y. 2006-07. We do not see any reason to make any addition on account of investment in the land being 1/4th of the total price estimated by the A.O. as per this page. This addition is totally baseless and deserves to be deleted. Accordingly, addition of ₹ 1,20,38,693/- is hereby deleted and Ground No. 2 of this appeal is allowed. 5. Ground No. 3 of this appeal relates to addition of ₹ 3,00,240/- made on account of expenses shown in the books of account/balance sheet on account of house/farm house. 5.1 Facts of this ground are that the assessee had incurred expenditure on construction in property. The matter had been referred to the DVO and the assessee had not furnished any details before him either. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned addition. 11. Ground No. 3 pertains to invalidity of the addition of ₹ 70,556/- sustained on account of alleged unexplained house hold expenses. 11.1 Briefly stated, the facts of this issue are that various members of the family made withdrawals amounting to ₹ 2,89,444/- which has been treated by the A.O. as inadequate for meeting the house hold expenses. This estimation of the A.O. is based on no evidence. Therefore, such addition cannot be encouraged and has to be out rightly rejected. We order to delete the sustained addition of ₹ 70,556/- and allow Ground No. 3 of this appeal. 12. Ground No. 4 pertains to addition of ₹ 19,41,689/- on account of expenses shown in the books of account/balance sheet on account of house/farm house. Ground No. 1 of revenue s appeal is connected with this ground. 12.1 Facts of this ground are that the assessee had incurred expenditure on construction in property. The matter had been referred to the DVO and the assessee had not furnished any details before him either. The assessee was not maintaining any books of account so it was not possible to verify whether the expenditure on construction was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to ₹ 1,65,400/- was found out of which ₹ 1,25,000/- was seized. It was stated from the side of the assessee family that this amount is verifiable from regular books of account but the A.O. observed that during the course of search the assessee was not able to explain this cash and regular books of account were found to be not properly and regularly maintained. Therefore, he has made impugned addition of ₹ 1,65,400/-. The ld. CIT(A) has also confirmed this addition more or less on the same reasoning. 16.2 Before us, both the rival representatives reiterated their earlier stand. After considering the rival submissions in the light of obtaining facts, we have found that copy of cash book from 11.12.2009 to 16.12.2009 had been filed by the assessee as part of paper book. None of the entries were verifiable, no evidence had been given regarding the transactions recorded in this cash book. The statements taken during the course of search and seizure operation were also perused. Balance on the date of search was ₹ 1,65,400/-. All the entries are found to be on account of professional fees received by the assessee. In our considered opinion, credit of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to income earned by the assessee and separate surrender in relation to investment/expenditure made has also been taken. It was only contended that the correct working of undisclosed income is therefore required to be made because the credit for the income declared has to be given against the investment made. The assessee has surrendered an income of ₹ 20 lakhs in A.Y. 2007-08, ₹ 13 lakhs in A.Y. 2005-06 and 2006-07, ₹ 30 lakhs in A.Y. 2008-09 and ₹ 50 lakhs in A.Y. 2009-2010. Besides the above, the assessee has also surrendered income in each of the preceding years. The assessee has duly shown ₹ 35 lakhs in construction of house, ₹ 35 lakhs in construction of complex and ₹ 25 lakhs in farm house and had only claimed credit of the income available with him on account of various income surrendered by him in the various years prior to search. This claim of the assessee is quite justified and as per law. The assessee produced complete books of account alongwith fund flow statement to indicate the availability of fund to make various investments as shown above. The observation of the A.O. and sustenance of protective addition in the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53/- being the total value of silver articles found out of total jewellery of ₹ 11,06,079/- found during search. To that extent, the assessee could furnish details and the ld. CIT(A) deleted the addition by relying on Board Instruction No. 1916 which speaks about gold articles and not silver articles. 21. After considering the rival submissions, this small quantity of silver cannot be ruled out as expenditure, which were found from the family of such a big means. However, the reliance of the ld. CIT(A) on Instruction No. 1916 may not be correct in law. However, the spirit of this Instruction should be given regard to. Accordingly, we do not find any merit in this ground and dismiss the same. Ground No. 1 stands dismissed. 22. Ground Nos. 2 and 3 already stand decided alongwith the Grounds of assessee. In the same manner, these grounds stand dismissed. 23. Ground No. 4 is regarding deletion of addition of ₹ 9,51,465/- made on the basis of difference of cost of construction. 23.1 The ld. CIT(A) deleted the addition of ₹ 9,51,465/- made on account of difference in cost of construction estimated in the valuation report as shown by the assessee group on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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