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TMI Blog2019 (12) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed factual finding given by the Ld. CIT(A) could not be controverted by the DR. We find under identical circumstances the Tribunal in assessee s own case for A.Y.2009- 10 has deleted similar addition sustained by the CIT(A) - no infirmity in the order of the CIT(A) in deleting the disallowance made on account of business expenses Addition of unsecured loan - HELD THAT:- As given a finding that the payment was made directly by Standard Chartered Bank to ICICI Bank and, therefore, such entries cannot appear in the bank statement of Mr. Jaswinder Singh. In our opinion such entries cannot appear in the bank statement of the assessee as well as her husband since the amount has been paid directly by Standard Chartered Bank to ICICI Bank for taking over the loan. Since the deletion by the CIT(A) is based on facts and there is nothing on record to controvert the same by revenue, therefore, we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly the ground No.2 raised by the revenue is dismissed. Low house hold expenses - HELD THAT:- CIT(A) while deleting the disallowance has considered the size of the family, withdrawal by other members and has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led cross objection. For the sake of convenience these were heard together and are being disposed of by this common. 2. Facts of the case, in brief, are that the assessee is an individual and derives income from house property and other sources. She filed her return of income on 20.09.2011 declaring loss of ₹ 19,43,284/-. The return was processed u/s. 143 (1). Subsequently the AO reopened the assessment u/s. 147 of the IT Act by recording the following reasons :- As per records ITR for A.Y 2011-12 has been filed on 20.09.2011 declaring Nil income which was processed u/s 143(1) on 26.07.2012 on the same income. On verification of the ITR for the year under consideration it is seen that the Assessee has claimed interest on housing loan to ₹ 2223930/- and claimed as business expenses in the P L a/c under the head Business or Profession. As per ITR I no business activities carried out by the assessee during the year. Only income from Rent and other sources has been shown. Further, the Id. CIT (A) vide her order no. 234/2010-1 l_dated 30.01.2013 for A.Y 2008-09 has confirmed the addition of ₹ 3220478/- made: by the AO on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business profit and such property was shown as stock in trade while filing income tax return. 6. However, the AO was not satisfied with the explanation given by the assessee. He observed that the assessee has not done any business activity and wrongly claimed the interest expenditure of ₹ 21,07,080/- as business expenditure with the intention to evade tax by setting off business loss against the income from house property. 7. Since the assessee has not done any business and has debited interest of ₹ 21,07.080/- and debited various expenses totaling to ₹ 1,21,350/-, the AO disallowed both the amounts treating the business income as nil and made addition of ₹ 22,28,430/-. Similarly in absence of filing of the bank statement of Sh. Jaswinder Singh, the AO made addition of ₹ 2,64,14,000/- being loan obtained from the said person doubting the genuineness of the loan and creditworthiness of the lender. The AO also made addition of ₹ 2,40,000/- on account of low withdrawals on the ground that the assessee has not shown any drawing from the capital account and the assessee is paying 61,000/- for insurance premium and 13,665/- for me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- directly to ICICI Bank and the supporting documents were produced before the AO such as copy of the demand draft, confirmation, bank statement, identity proof, Loan sanction letter of Standard Chartered Bank in case of Sh. Jaswinder Singh, closure letter of ICICI Bank loan etc. The documents already filed before the AO were again filed before the CIT(A). Accordingly it was argued that the addition made by the AO is not justified. 11. So far as the addition of ₹ 2,40,000/- on account of low withdrawal for house hold expenses on ad-hoc basis is concerned it was argued that the AO without considering the fact that assessee is living with her family members who have declared enough drawings which is sufficient to meet the house hold expenses made the disallowance on mere surmises and presumptions. It was accordingly argued that the addition so made by the AO be deleted. 12. So far as the ground relating to validity of reassessment proceedings are concerned the Ld. CIT(A) decided the issue against the assessee by holding that the AO has rightly reopened the assessment since there is tangible material to come to the conclusion that there is escapement of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als that loan availed from ICICI Bank is utilized for purchase of jewellery and property w.e.f.01 -04-2007. No person shall take loan for investment in any jewellery and property. iv. The Intention for purchase of particular assets not depend on the nature of the asset, but it depends on the intension of the Assess for the purpose for which such asset has purchased. In the present case, the Assessee has kept office, raise the loan, made sale and purchase for jewellery and property, spent on stationery and other expenses, which lead to conclude that there is a business conducted by Assessee and the intension to purchase such assets are to conduct the business rather than make the investment. v. The assessee showing the sale purchase of such jewellery and property under the head business and profession, the Assessee also lose the benefit of indexation, which is available when such assets are shown under the head investment. So the Assessee has loose such benefit of indexation for conducting the business and this conduct clearly reveals the intension of Assessee to purchase such assets for business and profession. vi. It was held by Delhi High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the appellant as well as the findings of the Ld. AO. Keeping into consideration the various case laws of the higher appellate authorities and the Hon ble Courts relied on by the Ld. AR I incline to agree with the intention of the appellant that the Ld. AO is not justified in making adhoc addition on account of drawing expenses as the Ld. AO has not given any finding of fact against the assessee in assessment order so as to justify the addition on account of low household expenses. The Ld. A.O. has not discussed the size of family and the withdrawals of other members of the family estimated expenses of assessee in the assessment order without any basis. In view of the above discussion, I delete the addition of ₹ 2,40,000/-. Hence, the ground of appeal is allowed . 16. Aggrieved with such order of the CITA), the revenue is in appeal by taking the following grounds :- (i) Holding that the assessee was engaged in the business, though there was not even a single transaction throughout the year, thus deleting the disallowance of ₹ 22,28,430/- made on account of business expenses. (ii) Holding that the unsecured loan was genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.2007 further the assessee was showing the sale and purchase of the jewellery and property under the head business and profession a detailed factual finding given by the Ld. CIT(A) could not be controverted by the Ld. DR. We find under identical circumstances the Tribunal in assessee s own case for A.Y.2009- 10 has deleted similar addition sustained by the CIT(A) vide ITA No.5994/D/2015 and Co. No.243/Del/2016 order dated 16.10.2017. Under these circumstances we do not find any infirmity in the order of the CIT(A) in deleting the disallowance of ₹ 22,28,430/- made on account of business expenses. The ground of appeal No.1 by the revenue is accordingly dismissed. 19. So far as the ground No.2 is concerned the same relates to the order of the CIT(A) in deleting the addition of ₹ 2,64,14,000/- made on account of unsecured loan. We find the Ld. CIT(A) has accepted the contention of the assessee that the amount of ₹ 2,64,14,000/- is related to repayment of ICICI Loan of the assessee which has been paid by Mr. Jaswinder Singh out of the loan proceeds of ₹ 5 crores taken by Mr. Jaswinder Singh (husband of the assessee) out of loan from Standard Chartere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are different from the cases cited by the appellant in his submissions. The Ld. AO observed that it is established that the assessee has wrongly adjusted the interest on housing loan against the business profit. In view of the above facts, the Ld. AO had reasons to believe that income of ₹ 3395802 /- was remain to be taxed and has escaped assessment. It is a fit case for re-opening the assessment u/s 147 of the IT Act, 1961 for A.Y.2009-10. Accordingly, the Ld. AO initiated the proceedings u/s 147/148 of the Act a notice on 15.03.2013 u/s 148 of the IT Act. On perusal of the records I am of the considered opinion that the Ld. AO has initiated proceedings u/s 147/148 of the Act as he had reason to believe that income has escaped assessment and there is tangible material to come to the conclusion that there is escapement of income in view of the above mentioned facts and circumstances of the case. Therefore, the re-opening proceedings are justified and the action of the Ld. AO is confirmed. Hence, the ground of appeal is dismissed. 22. A number of decisions have been filed by Ld. Counsel for the assessee to the proposition that the reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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