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TMI Blog2019 (12) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... pite how strong the guesswork is. In the case on hand, the reasoning given by the AO for making the impugned addition appears to be strong and reasonable but the same is not supported on the basis of documentary evidence. Therefore we are of the view that no such addition is warranted in the given facts and circumstances. Hence, the ground of appeal of the assessee is allowed. Profit with respect to share trading activities - HELD THAT:- AR at the time of hearing has not made any representation in the written submission filed before us. As there was no representation from the side of the learned AR for the assessee qua the addition made by the authorities below against the share trading transactions, we do not find any infirmity in the order of the authorities below. Indeed, the onus lies on the assessee to furnish the details of the profit earned by him against the share trading transactions. Hence, in the absence of the documentary evidence, the ground of appeal of the assessee is dismissed. Disallowance for the expenditures incurred against the incentive bonus - HELD THAT:- AR at the time of hearing has not made any submission in the written submission filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added by the Ld. A.O. The same needs deletion. 3. The Ld. CIT(A) erred in law as well as on facts in confirming an amount of ₹ 77,352/- in respect of profit from trading in shares. The same needs deletion. 4.1 The Ld. CIT(A) erred in law as well as on facts in confirming an amount of ₹ 1,39,217/- in respect of expenditure out of incentive bonus. The same needs deletion. 4.2. The Ld. CIT(A) erred in law as well as on facts in not considering that the incentive bonus was allowed as deduction as expenses following the guidelines issued by the Hon. Gujarat High Court in the case of Kiranbhai H. Shelat 235 ITR 635. The claim needs to be allowed. 4.3. Without prejudice, the claim of the assessee confirmed by the Ld. CIT(A) is allowable as per C.B.D.T' direction. 4.4 Without prejudice, the claim of the assessee confirmed by the Ld. CIT(A) is allowable as per Hon. Supreme Court decision in the case of Shri N.T. Bhuptani. The disallowance needs deletion. 5. Taking into consideration legal, statutory, factual and administrative aspects no disallowance 7 additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availability of the supporting evidences. The view taken by the AO was subsequently confirmed by the learned CIT-A. 6.1 The learned AR at the time of hearing has not made any representation in the written submission filed before us. As there was no representation from the side of the learned AR for the assessee qua the disallowances made by the authorities below against the fixed conveyance allowance received by the assessee from LIC, we do not find any infirmity in the order of the authorities below. Indeed, the onus lies on the assessee to furnish the details of the expenses incurred by him against the fixed conveyance allowance received from LIC. Hence, in the absence of the documentary evidence, the ground of appeal of the assessee is dismissed. 7. The 2nd issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO by sustaining the addition of ₹ 50,000.00 on account of unexplained household expenses. 8. The AO during the assessment proceedings observed that there should be cash outflow in the year under consideration of the assessee for ₹ 3,25,328.00 only. The details of such ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration declaring total income of ₹ 5,88,170/-. If the cash on hand out of past savings is taken into consideration, the addition made at ₹ 1,00,000/- is on a higher side. I therefore, direct the assessing officer to restrict this addition to ₹ 50,000/-. This ground of appeal is partly allowed. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. 10. The learned AR before us filed written submissions which are available on record. The learned AR in the written submission contended that the addition of ₹ 1 lacs has been made by the AO without any tangible materials. Therefore the same needs to be deleted. 11. On the other hand, the learned DR vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case the AO has made the addition for ₹1 lakh on account of low household expenses. The AO was of the view that the assessee is high ranked employee and to maintain his status according to the income he should have incurred monthl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med inflated cost of acquisition of the shares by ₹ 25 per share. Accordingly the AO re-determined the profit at ₹ 6,26 only with respect to the trading of shares in the company as discussed above. Table C The assessee in table C has shown the profit of ₹ 32,670.00 in the trading of shares of certain number of companies. However the assessee has not furnished the cost of acquisition of the shares of these companies. Accordingly, the AO, in the absence of information about the cost of acquisition of the shares, has reduced the cost of shares as shown by the assessee by 10%. Thus the AO re-determined the profit of ₹ 41,790 against the profit disclosed by the assessee as discussed above. Table D The assessee has sold shares of the certain companies which were not disclosed in the working sheet submitted by him during the assessment proceedings. The AO worked out the sale price of the shares of these companies at ₹ 38,445.00 and determined the profit at ₹ 11,635.00 being 30.25% of the sale price of the shares as the assessee has not furnished the cost of acquisition of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. 18. The issue raised by the assessee in ground No. 4 is that the learned CIT (A) erred in confirming the disallowance of ₹13,92,174/- for the expenditures incurred against the incentive bonus. 19. The assessee in the year under consideration has received the incentive bonus of ₹ 4,64,056/- from the LIC of India. The assessee against such incentive bonus has claimed deduction of ₹ 1,39,217/- being 30 percent of ₹ 4,64,056/-. As per the assessee, he has incurred the expenses as development officer of LIC to recruit the LIC agents, development of the agents, their arrangement, teamwork and field work expenses. However, the assessee during the assessment proceedings admitted the fact that he does not maintain any documentary evidence in support of such expenses. 19.1 However the AO was of the view that the impugned incentive bonus is part of the salary as provided under section 17 of the Act. The assessee received such bonus for the quantity, quality or volume of the work done by him. As such the amount of incentive bonus does not represent any allowance or reimbursement of expenses prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly noted in the Judgment of the High Court of Kerala, there is no claim by the employee either for reimbursement or exclusion of the actual expenditure incurred in performance of the duty. These two distinctions unfortunately missed the notice of the High Court of Gujarat. The Court in fact was swayed by the letter written by the LIC of India to the CBDT for clarification that, to the extent of 40% of the incentive bonus could be exempted as expenditure incurred for the development of business which made them eligible for the incentive bonus. The High Court of Gujarat failed to take note of the reply by the CBDT that it was for the LIC of India to reimburse the actual expenditure involved in the performance of the duty by the Development Officers and to that extent the same was not to be shown as salary. 9. Compartmentalization of income under various heads and computation of the taxable portion strictly in accordance with the formula of deductions, rebates and allowances are to be done only as per the scheme provided under the Act. As held by this Court in Karamchari Union v. Union of India [2000] 3 SCC 335, the Income-Tax Act, 1961 is a self contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO by disallowing the deduction under section 80 G of the Act. 25. At the outset we note that the assessee has claimed the deduction under section 80 G of the Act for the amount of donation paid to Shri Lalpur Gau Rakshak Mandal for ₹3000.00 only. But the same was disallowed by the AO in the absence of any documentary evidence. The assessee has not preferred an appeal to the learned CIT (A) against the non-disallowance of deduction for the donation paid under section 80 G of the Act. However, the assessee in the ground of appeal has raised the issue before us 1st time. This is also pertinent to note that the assessee or his authorized representative has not made any representation against the ground of appeal raised by the assessee as discussed above. Thus, in the absence of any representation the ground of appeal of the assessee is dismissed. 26. The issues raised by the assessee in ground No. 7 to 10 are general in nature which requires no separate adjudication and therefore we dismiss the same. 27. In the result, the appeal of the assessee is partly allowed. Order pronounced in the Court on 10/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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