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TMI Blog2016 (1) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in confirming this addition in the hands of the three assessees mentioned above. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the addition made on this issue in the hands of the three assessees Addition in respect of estimated household expenses - Held that:- CIT(A) has accepted the fact that the amounts withdrawn by the assessee and his family members for personal purposes have been wrongly computed by the assessing officer and he has further held that there is no requirement to make any addition. However, he has taken altogether different stand and has expressed the view that the expenses booked as business expenses shall have personal element and accordingly disallowed a sum of 1.00 lakh on estimated basis. The Ld CIT(A) has not brought on record as to how much expenses was booked by the assessee as business expense, even though the assessing officer has accepted the entire amount of business expenses claimed by the assessee. However, there is some merit in the observations of the Ld CIT(A) that the personal element involved in respect of Vehicle and telephone expenses could not be ruled out. Accordingly, we modify the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 18.01.2007. Consequent thereto, the assessments of the years under consideration were completed in the hands of the assessees by making various types of additions. The appeals filed by these assessees were dismissed/partly allowed by Ld CIT(A). The assessees have filed these appeals on the issues confirmed by the Ld CIT(A), where as the revenue has filed the appeals on the issues, where relief was granted by Ld CIT(A). 3. The first common issue urged by all the assessees relate to the addition made to the brokerage income by holding that these assesses have received part of brokerage income in cash and did not disclose the same. The addition made by the AO under this head is tabulated below, for the sake of convenience:- S.No. Name of assessee Amount in dispute (for quantum appeal) in Rs. 1 Chaturbhuj T Batra 92,82,233 2 Varsha Batra, 4,80,000 3 Premkumar Batra 66,64,608 4 Karan Batra, 3,02,750 5 Nisha P Batra 4,48,275 The assessing officer mainly placed reliance on certain documents found during the course of search wherein the entries were found to have been made in short form. The assessee gave some explanations with regard to those entries, but the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iland Flat in 5th' Floor and Flat at Sommerset Building. No independent enquiry from the purchasers has been made. I find, the CIT(A) had mentioned in para 11.1 of his order that 'at the outset it is to be mentioned that there is no clear cut evidence available to show that any cash component is involved in this transaction.' Further the submissions of the assessee before the CIT(A) that the seized document relating to the residential flat was a trade enquiry which was sold two years after and does not relate to Assessment Year 2003-04 could not be controverted by the ld.D.R. Further; the submission of the assessee before the CIT(A) that Flat at Sommerset Building has not been sold and the finding of the CIT(A) that there is no evidence to show that the transaction took place through the assessee also could not be controverted by the ld D.R. I find, in para 11.4 of the CJT(A)'s order; the Ld.CIT(A) has mentioned that he was convinced that these seized documents do not indicate any cash component of brokerage received by the assessee. I find despite giving this findings, which are reproduced elsewhere in this order; the CIT(A) sustained the addition on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of brokerage, granted telescoping benefit of the following additions confirmed by him:- Unaccounted brokerage M/s Vinita Estated - ₹ 25,25,400/- Unaccounted brokerage of Chinar, Rajrishi And Powai properties - ₹ 37,30,690/- The revenue is challenging the telescoping benefit granted by the Ld CIT(A). Since we have deleted the addition relating to Cash component of brokerage, the telescoping benefit given by Ld CIT(A) shall stand vacated and hence the appeal filed by the revenue shall become infructuous. Accordingly we dismiss the appeal filed by the revenue in the case of Chaturbhuj T Batra for AY 2007-08. 8. The next common issue that arises in the case of Shri Chaturbhuj T Batra, Smt. Varsha Batra and Shri Karan Batra relates to the addition made on the basis of proforma invoice raised by theses assessees on M/s Vinita Estates (P) Ltd. The addition made by the AO is given below:- (a) Shri Chaturbhuj T Batra 25,25,400 (b) Smt. Varsha Batra 12,34,640 (c) Shri Karan Batra 1,10,060 The facts relating to the above said addition are stated in brief. During the course of search operations, the proforma invoices raised by the above said three parties on M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by M/s Vinita Estates (P) Ltd to the assessees herein was furnished to the AO and the assessing officer has not brought any material on record to show that these assessees have received any money over and above that mentioned in the statement. By placing reliance on the decision rendered by Hon'ble Supreme Court in the case of Godhra Electricity company (225 ITR 746)(SC), the Ld A.R contended that the assessing officer could assess only the real income has accrued or received or deemed to have been accrued or received. He submitted that the assessing officer has not brought any material to show that the income stated in the proforma invoices has accrued to the assessees herein. 12. Thus, we notice that the assessing officer has made the addition by disbelieving the statements given by the assessees and M/s Vinita Estates (P) Ltd and also without bringing any material on record to show that the said statements are against the facts. There should not be any doubt that it would be difficult for anyone to prove a negative fact. As already noticed that the Ld CIT(A) has confirmed this addition only on the reasoning that the assessees have suppressed receipts by receiving them by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and accordingly reported that credit for ₹ 32,18,050/- needs to be given. The Ld CIT(A) also appreciated the casting error pointed by the assessee. Accordingly, he gave relief of ₹ 36,63,050/- (Rs.32,18,050/- + ₹ 4,45,000/-) and confirmed the balance amount of ₹ 37,30,690/-. 14.3 The Ld A.R submitted that the assessee has accepted the addition on this account only to the extent of ₹ 12,50,000/- over and above the amount of commission accounted for by the assessee. He submitted that the transactions in respect of Kandivali flats aggregating to ₹ 17,63,000/- (Rs.100300+102700+1560000) did not fructify and hence the tax authorities are not justified in assessing the same. With regard to the balance amount of ₹ 7,17,690/- (Rs.37,30,690 (-) 12,50,000 (-) 17,63,000), the Ld A.R submitted that the assessee did not realize the said commission even though the transactions relating to the same have been completed. Accordingly he submitted that the addition on this account should be restricted to ₹ 12,50,000/-. 14.4 On the contrary, the Ld D.R submitted that the submissions made by the assessee with regard to the non-receipt of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document relate to the very same land. On the contrary, the assessee has also filed a confirmation letter obtained from the developer and the same has been ignored by the tax authorities. Thus, we notice that the assessing officer, by placing reliance on the suspicion of the Inspector, has recommended for confirming this addition and the Ld CIT(A) has also confirmed the same on the reasoning that the assessee has failed to show that the transactions did not materialize. 14.8 We notice that the assessee has identified the property located in Kandivali area, in respect of which the above said entries pertain to. He has furnished confirmation obtained from the developer to show that the said property could not be developed due to the litigation with the forest department. Thus, the assessee has shown that the said property was not developed at all and hence there is no question of sale of any flat and realization of any brokerage income. On the contrary, the assessing officer has recommended for addition of the brokerage income only on the reasoning that the assessee could not substantiate that the entries found in the seized document relate to the very same property. We notice tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee furnished the details of drawings, which was found to be higher than that computed by the AO. The assessee also submitted that the expenses relating to vehicle, telephone and servant relate to business. After obtaining remand report from the AO, the Ld CIT(A) expressed the view that there is no need to make further addition with regard to house hold expenses. However, Ld CIT(A) observed that the personal element involved in respect of vehicle, telephone and servant expenses cannot be ruled out and accordingly disallowed a sum of ₹ 1.00 lakh out of these expenses. 14.11 We heard the parties on this issue and perused the record. We notice that the Ld CIT(A) has accepted the fact that the amounts withdrawn by the assessee and his family members for personal purposes have been wrongly computed by the assessing officer and he has further held that there is no requirement to make any addition. However, he has taken altogether different stand and has expressed the view that the expenses booked as business expenses shall have personal element and accordingly disallowed a sum of ₹ 1.00 lakh on estimated basis. The Ld CIT(A) has not brought on record as to how much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstandable as to why the entire alleged unexplained jewellery was added in the hands of Smt. Varsha Batra alone, when there are other family members assessed to tax. In any case, we notice that the assessing officer has made the addition without accepting the claim of the assessee that the jewellery was accumulated over the years. It is a known fact that the jewellery invariably forms part of investment plan in every Indian house hold and it also invariably form part of every festival, marriage and other family functions. Hence the claim of the assessee that the jewellery was accumulated over the years could not be altogether ruled out. The circular no.1916 dated 05-05-2014 also supports the said view. However, it is pertinent to note that the said circular was issued in the context of seizure to be made, yet the fact remains that the jewelleries remain integral part of living of Indians. In fact, the tax authorities have also accepted the said fact and hence they have given credit to the extent of 530 gms., of gold jewellery. However, we are of the view that the credit given by the tax authorities appear to be very low vis-à-vis the status of the assessees herein. We notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition relating to cash component of brokerage and sustained the addition relating to diamond and gold jewellery to the extent of ₹ 1.50 lakhs. Hence both the issues urged by the revenue do not survive independently. Accordingly, the appeal of the revenue is liable to be dismissed. Even otherwise, the tax effect involved in respect of this addition is less than ₹ 10.00 lakhs and hence the appeal of the revenue is liable to be dismissed on that count also, in view of the recent circular no.21/2015 dated 10-12-2015 issued by the CBDT. 17. Now we shall take up the appeal filed by Shri Prem Kumar Batra for assessment year 2007-08, wherein the assessee is contesting following individual issues:- (a) Addition towards household expenses - ₹ 1.00 lakh (b) Addition towards unexplained bank deposits - ₹ 1.00 lakh (c) Addition towards unexplained cash deposits - ₹ 0.65 lakh (d) Addition relating to sundry loans and advances - ₹ 9.20 lakhs 17.1 The first issue relates to the addition made by the AO towards house hold expenses. The addition made by the AO was reduced to ₹ 1.00 lakh by Ld CIT(A). We have considered an identical i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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