9911796707
TMI Blog2017 (11) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... for past three years and to it added the additions made u/s 69A and 69B of the Act and after granting the credit for the amount disclosed by the assessee in the return of income, made addition of the balance amount. Before us, the Ld.A.R. has not pointed out any grave error in the method of estimation considered by AO. In such circumstances, we find no reason to interfere with the order of Ld.CIT(A) and thus, the ground of the assessee is dismissed. Addition in respect of agricultural income - Held that:- Revenue has also not placed any material on record, to show that the assessee does not own the land or has sold the land or the land is not well irrigated. Considering the income shown by the assessee in earlier years which has also not been doubted by the Revenue and considering the fact that the assessee has shown agricultural income of ₹ 6,71,575/- in the year under consideration as compared to the income of ₹ 6,40,000/- shown in immediately preceding year, the income shown by the assessee seems to be reasonable. Considering the totality of these facts, we are of the view that the agricultural income shown by the assessee does not require any interference and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 for the assessment year 2006-07. 2. The relevant facts as culled out from the material on record are as under :- Assessee is an individual and engaged in hotel business and sale of newspapers. Assessee filed his return of income for A.Y.2006-07 on 31.10.2006 declaring total income of ₹ 21,82,030/- and agricultural income of ₹ 6,71,575/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) of the Act vide order dt.22.12.2008 and the total taxable income was determined at ₹ 65,61,070/- and agricultural income at ₹ 3,50,000/-. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A) who vide order dt.29.11.2013 (in appeal No.SNL/83/11-12) granted partial relief to the assessee. Aggrieved by the order of Ld. CIT(A), assessee is now in appeal before us and has raised the following effective grounds : 1. In the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the addition of ₹ 18,70,360.00 made by the learned Assessing Officer exclusively on assumption / presumption basis of less profit shown and less disclosure during the survey action. The afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The aforesaid addition being arbitrary, perverse, based on surmises and conjure the learned CIT(A) ought to have deleted the said addition. The impugned additions may please be deleted. 3. Before us, at the outset, Ld.A.R. submitted that he did not wish to press ground Nos.2 and 5. Considering the submission of the Ld.A.R., these grounds are dismissed as not pressed. 4. Ground No.1 is with respect to addition of ₹ 18,70,360/-. 4.1 A survey u/s 133A was conducted on 07.02.2006 and it was found that the books of accounts were written till 31.01.2006. On the basis of discrepancies noticed during the course of survey action, assessee disclosed additional income of ₹ 34,64,894/- on various accounts including unaccounted income from un-recorded sales of ₹ 22,09,393/-, excess cash of ₹ 75,501/-, investment in assets at ₹ 10,30,000/- and furniture material stock at ₹ 1,50,000/-. During the course of assessment proceedings on perusal of the Profit and Loss account filed by the assessee, AO noticed that assessee had disclosed net profit of ₹ 20,00,210/- and no trading account was filed by the assessee. AO was of the view that the unrecord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessing officer has pointed out these irregularities to show that all is not well with the appellant's books of account and the same are not reliable. There can be several possible entries on the asset side which only the appellant would know such as, increase in cash, increase in debtors etc. I am in agreement with the assessing officer's finding that by making various adjustments in the books of account the appellant has negated what was offered as additional income during the survey. Therefore, the addition made by the assessing officer is sustained and the ground is rejected. Aggrieved by the order of Ld. CIT(A), assessee is now in appeal before us. 5. Before us, Ld.A.R. reiterated the submissions made before AO and Ld. CIT(A) and further submitted that the investments and excess cash flow pertains to business income as such they were rightly included under the head income from business . He further submitted that, though not admitted, at the most, including the disclosures made u/s 69 of the Act in the Profit and Loss account could be an error on the part of the assessee but it cannot be considered for rejection of books of accounts u/s 145(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. has not pointed out any grave error in the method of estimation considered by AO. In such circumstances, we find no reason to interfere with the order of Ld.CIT(A) and thus, the ground of the assessee is dismissed . 7. Ground No.3 is with respect to addition in respect of agricultural income. 7.1 AO noticed that assessee had shown agricultural income of ₹ 3,21,575/-. The assessee was asked to furnish the evidence of agricultural income and agricultural expenses. Assessee furnished the chart of agricultural income / expenditure (which is reproduced at Page 25 of the assessment order). Assessee also furnished the copies of 7/12 extracts of agricultural land owned by him. AO noticed that assessee could furnish the evidence of sale of sugarcane of ₹ 1,11,707/- which were directly credited to the Bank account. With respect to receipt of balance amount of ₹ 7,15,315/-, the submission of the assessee was that the agricultural produce was sold in open market to various customers and the cash memos and bills were not maintained. The submission of the assessee was not found acceptable to the AO. AO considering the net agricultural income of the assessee to be at & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In appeal the authorized representative of the assessee repeated the arguments produced before the assessing Officer that agricultural produce was sold in open market through traders etc. It was submitted that the assessee has furnished details of agricultural land, bills and vouchers of agricultural expenses and details of agricultural receipts. However, the appellant has not replied to the assessing officer s observation that expenses were mostly supported by self-made vouchers; even the purchase of fertilizers was supported by self-made vouchers. Therefore, I find that the assessing officer s action in considering ₹ 3,21,575/- as income from other sources is justified. Aggrieved by the order of Ld. CIT(A), assessee is now in appeal before us. 8. Before us, Ld.A.R. reiterated the submissions made before AO and Ld. CIT(A) and further submitted that assessee owns 8 acres of land. He further submitted that assessee had shown net agricultural income of ₹ 4,70,000/- in A.Y. 2002-03, ₹ 5,20,000 in A.Y. 2003-04, ₹ 6,40,000/- in A.Y. 2004-05 and ₹ 6,71,575 in A.Y. 2005-06. He submitted that the land owned by the assessee is well irrigated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper has to be printed and published in time. The submission of the assessee was found not acceptable to the AO, in view of the fact that assessee had paid salary ranging between ₹ 78,620/- to a maximum of ₹ 1,06,485/- to various employees. He therefore considered the salary paid to his wife to be excessive. He was of the view that the reasonable salary should be ₹ 1,06,000/- and accordingly disallowed the balance amount of ₹ 50,000/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who upheld the order of AO by holding as under : 12. Regarding the disallowance out of wife s salary, the appellant had submitted that she has shouldered several additional responsibilities due to which there was increase in the business, therefore, she deserved a raise in her salary. Moreover, the payment to a relative is always likely to be more than a non-relative because of the level of confidence a relative inspires. However, these reasons cannot be accepted. I find that the assessing officer was justified in making disallowance of ₹ 50,000/- from the salary paid to assessee s wife. Appellant s ground is rejected. Aggrieved by the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess salary payment was called for. Thus the ground of the assessee is allowed. 13. Ground No.6 is with respect to disallowance of Rs. expenditure of ₹ 81,739/-. 13.1. AO noticed that assessee had debited various expenses on account of telephone charges and travelling expenses aggregating to ₹ 4,08,699/- (the details of which are placed at page 33 of the assessment order). AO was of the view that since assessee has not maintained any telephone / mobile call register, the element of personal expenses cannot be ruled out. He accordingly disallowed ₹ 20% of expenses and made disallowance of ₹ 81,739/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who upheld the order of AO by holding as under : 14. Disallowance of various expenses for personal nature is hereby confirmed. The disallowance of pooja expenses of ₹ 5,369/- is deleted because these kind of expenditure are customary expenditure which are to be incurred in the society. Aggrieved by the order of AO, assessee carried the matter before us. 14. Before us, Ld.A.R. reiterated the submissions made before AO and Ld.CIT(A) and further submitted that assessee ..... 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