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TMI Blog2019 (10) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... g gift from P.V. Gangadharan, it is true that he could not be located because of his death but it is also true that P.V Gangadharan was not related to the assessee in any manner. Merely because money has come through banking channels, genuineness of the transaction is not established, even if we accept that identity and credit worthiness is established. Gift to unrelated person is not a normal human behavior. No relationship with Gangadharan has been pointed out whether blood relationship or friendship or any other relationship. Similarly, in respect of Oswal Pinto, even correct address could not be brought on record by the assessee. This is also not shown that Oswal Pinto is related with assessee in any manner whether blood relationship, friendship or any other relationship. Hence, on this issue, regarding these three gifts, we find no reason to interfere with the order of the CIT(A). Additions of each being loan from Maxim Lobo and Madhukmar - AO came to conclusion that genuineness of the transaction was not proved by the assessee. He made addition of this amount also. It is by now settled position of law that in respect of addition u/s 68 in respect of cash credit, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RTC, this was gifted by his father-in-law to the assessee. In absence of any evidence in support of this contention, we find no reason to interfere with the order of the CIT(A) on this issue also. Addition in respect of insufficient drawings - HELD THAT:- As stated by the assessee before AO that his monthly expenditure is ₹ 3,000 to ₹ 5,000 per month and he was meeting the same out of his drawings only and not from any other source. Regarding expenses towards house warming, it was submitted that by assessee before the AO that only a few family members were invited and the total expenses were about ₹ 15,000/- although it was noted that as per the statement of assessee s wife, minimum 100 persons including relatives and friends had been invited for function. AO estimated the expenses of the assessee at ₹ 6,500/- p.m. for entire block period. In this manner, he worked out expenses of ₹ 7,99,500/-. Total drawing shown by the assessee and his wife is ₹ 2,65,353/- and shortage of ₹ 5,34,147/- was added. We find that the assessee himself has admitted before AO that his monthly expenses are around ₹ 3,000 to ₹ 5,000/- per month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pressed. We hold accordingly and reject the additional grounds raised by the assessee as not pressed. 3. The ld. AR of the assessee submitted that the Tribunal Order dated 02/01/2009 has been rectified by the Tribunal in MP No.37/Bang/2009 dated 09/09/2009 and as per the same, the Tribunal has restored back one issue to AO in respect of addition of ₹ 92,800/- sustained by the Tribunal out of total addition made by the AO of ₹ 1.95 lakhs on account of unaccounted payments to Mr. John D Souza. The Tribunal, in the MP order held that if any statement is going to be used against the assessee then the assessee has to be confronted, and the assessee has to be given an opportunity to cross examine the person concerned. The Tribunal noted that in the present case, such an opportunity has not been afforded and hence, the Tribunal held in the MP order that the addition of ₹ 1.95 lakhs is restored back to the file of the AO for affording an opportunity to the assessee to cross examine John D Souza. He also filed fresh synopsis in respect of each of the grounds raised by the assessee before the Tribunal. The grounds raised by the assessee be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and liable to be deleted. 6. The authorities below are not justified in making additions of ₹ 3,20,000/-, ₹ 50,000/- and ₹ 50,000/- being loans received by the appellant from Mr. Bhaskar Hegde, Mr.Maxim Lobo and Mr. Madhu Kumar respectively under the facts and in the circumstances of the appellant's case. They failed to appreciate that, Mr.Bhaskar Hegde, is the appellant's co-brother, who was residing in Bombay and monies were received from him by means of account payee cheque. Furthermore, they failed to appreciate that, Mr.Bhasar Hegde, also appeared before the A.O. and confirmed the advance made and therefore, the addition made is opposed to law and facts of the appellant's case and therefore, liable to be deleted. 7. The authorities below are not justified in making an addition of ₹ 1,95,000/- as unaccounted payments made by the appellant in connection with purchase of land and building by the appellant's wife from one Mr. John D'Souza under the facts and the circumstances of the appellant's case. They failed to appreciate factually, no such payment was made to Mr.John D Souza other than the sale cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made is liable to be deleted. 11. The learned CIT(A) is not justified in sustaining an addition of ₹ 3,05,147/- out of a sum of ₹ 5,4,147/- made by the learned A.O. on account of insufficiency in drawings under the facts and in the circumstances of the appellant's case. He failed to appreciate that, the appellant and his wife are given to frugal way of life and do not incur much expenditure and therefore, the drawings admitted by them are sufficient to meet their expenditure and consequently, no addon ought to have been made. Furthermore, the authorities below failed to appreciate that, no evidence was found during the course of search to justify estimate of household expenditure, as contained in the impugned orders and therefore the addition made is arbitrary and liable to be deleted. 12. The above additions made by the AO and sustained by the CIT(A) are contrary to evidence and purely on surmise, assumptions and presumptions and therefore liable to be deleted. 13. The authorities below failed to appreciate that the additions made by way of gifts and cash credits are all supported by evidence found and sei2ed during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this amount of ₹ 55000/- was paid from a different bank account which was closed and therefore, the assessee lost sight of the same while preparing statement of affairs and the ld. AR of the assessee submitted before us that this amount was also out of explained sources. Under these facts, we feel it proper to restore back this matter to the file of the AO for fresh decision. Hence, we set aside the order of the CIT(A) on this issue and restore this matter back to the file of the AO for fresh decision with a direction that he should confront the reply received from the construction company to the assessee and the assessee should also bring on record the details of the said closed bank account from which it is stated that this amount of ₹ 55000/- was paid by the assessee and it is also a disclosed bank account. If the assessee is able to establish this claim, then no addition is justified. The AO should pass necessary order as per law as per above discussion after providing adequate opportunity of being heard to the assessee. Accordingly ground No.3 is allowed for statistical purposes. 6. The next ground on which arguments are advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under these facts, this finding was given by the AO that this gift claim of ₹ 1.20 lakhs from Abbubakar is nothing but undisclosed income of the assessee introduced in the name of Abbubakar. 7.1 Regarding second gift from Gangadharan of ₹ 1.30 lakhs, it was noted by the AO at page 8 of the assessment order that summons was issued to Gangadharan on 23/5/2001 but the summon was returned unserved by the postal authorities with the reason that the said person had deceased and no longer alive. Under these facts, AO came to the conclusion that the assessee was not able to prove genuineness of the transactions since he could not produce bank account of Gangadharan to verify the nature and source. In respect of third gift of ₹ 1 lakh from Oswal Pinto, it is noted by the AO at page 7 of the assessment order that summons were issued to Oswal Pinto on 8/6/2001 but the summons were returned unserved for the reason that address was insufficient. AO noted that the address furnished was given by the assessee and this fact was brought to the knowledge of the assessee. In reply, it was submitted by the assessee before the AO that correct address of Oswal Pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ker and such deposit is not on account of dollar conversion as other deposits, it has to be accepted that the creditworthiness of the donor and genuineness of the transaction is not established and under these facts, we find no infirmity in the order of CIT (A) on this issue. Regarding gift from P.V. Gangadharan, it is true that he could not be located because of his death but it is also true that P.V Gangadharan was not related to the assessee in any manner. Merely because money has come through banking channels, genuineness of the transaction is not established, even if we accept that identity and credit worthiness is established. Gift to unrelated person is not a normal human behavior. No relationship with Gangadharan has been pointed out whether blood relationship or friendship or any other relationship. Similarly, in respect of Oswal Pinto, even correct address could not be brought on record by the assessee. This is also not shown that Oswal Pinto is related with assessee in any manner whether blood relationship, friendship or any other relationship. Hence, on this issue, regarding these three gifts, we find no reason to interfere with the order of the CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t worthiness and genuineness of the transaction and hence, on this issue also, we find no reason to interfere with the order of the CIT(A). Accordingly, ground No.6 is also rejected. 10. Regarding ground No.7 in respect of confirmation of ₹ 92,800/- out of total amount of ₹ 1.95 lakhs, the Tribunal has already restored the matter back to the file of the AO for fresh decision as per Tribunal order in MP No.37/Bang/2009 dated 9/9/2009. Hence, in the present proceedings also, we restore the matter back to the file of the AO for fresh decision with a direction that he should provide the assessee an opportunity to cross-examine John D Souza because it is settled position of law that if any statement is going to be used against the assessee, such statement should be confronted to the assessee and if the assessee likes to cross examine the person who gave the statement, the assessee should be given an opportunity to cross examine the person concerned. Hence, ground No. 7 is allowed for statistical purposes. 11. Ground No.8 is regarding two additions of ₹ 50,000/- each in respect of two blank cheques of ₹ 50,000/- each from A.H. Timbers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that this cheque was given by them without any loan given by the assessee to him or any other person. Hence, we find no reason to interfere with the order of the CIT(A) on this issue also. Accordingly, ground No. 9 is also rejected. 13. Ground No.10 is regarding addition of ₹ 2,43,900/- in respect of deposit in KSRTC. At page 23 of the assessment order, AO stated that slip of paper was found in course of search which showed that a sum of ₹ 2,43,900/- was received by the assessee from KSRTC by crossed cheque during financial year 1998-99. This was shown to the assessee to explain the contents of the slip and the nature of refund of money received from KSRTC. In reply, it was submitted by the assessee before the AO that the assessee s father-in-law Raghava Hegde had made payment towards EMD and security deposit of ₹ 243,900/- for tender for canteen at KSRTC, Bangalore Puttur. It was also submitted that since assessee was in line of restaurant business, bid was made in the name of the assessee but bidding was unsuccessful and KSRTC refunded the deposit made of ₹ 2,43,900/-. Refund was in the name of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses were about ₹ 15,000/- although it was noted that as per the statement of assessee s wife, minimum 100 persons including relatives and friends had been invited for function. AO estimated the expenses of the assessee at ₹ 6,500/- p.m. for entire block period. In this manner, he worked out expenses of ₹ 7,99,500/-. Total drawing shown by the assessee and his wife is ₹ 2,65,353/- and shortage of ₹ 5,34,147/- was added. We find that the assessee himself has admitted before AO that his monthly expenses are around ₹ 3,000 to ₹ 5,000/- per month and the AO has estimated such monthly expenses at ₹ 6,500/- per month and computed total expenses during block period of 123 months at ₹ 7,99,500/- without making any separate addition in respect of house warming party. As per details of club expenses noted by the AO at page 25 of the assessment order, such club expenses are ₹ 31,944/- during October 1998 to March 1999 and in addition to that, telephone expenses of about ₹ 1500/- p.m. during February 1996 to May 1999 as per details noted by the AO at page 25 of the assessment order. Under these facts, estimation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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