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TMI Blog2020 (2) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... other-in-law of the assessee and thus, find no reason to doubt the genuineness and creditworthiness of the gift at ₹ 10 lacs. Accordingly, addition made u/s 68 of the Act to be deleted. Cash gift received from assessee s father as donor has expired after signing an affidavit for the gift given to his son, find no justification in the action of the Ld. AO making the addition for unexplained investment u/s 69 of the Act, since the assessee has duly explained the source of ₹ 2,50,000/- being receipt from his father. Accordingly addition u/s 69 of the Act is deleted - Decided in favour of assessee - ITA No.477/Ind/2016 - - - Dated:- 28-1-2020 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : Shri P.D. Nagar, CA For the Revenue : Shri V.J. Boricha Sr., DR ORDER PER MANISH BORAD, AM. The above captioned appeal filed at the instance of assessee pertaining to Assessment Year 2010-11 is directed against the orders of Ld. Commissioner of Income Tax (Appeals) (in short Ld.CIT(A) ], Bhopal-2 dated 30.10.2015 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(In short t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited accounts and the documents submitted do not establish that the expenditure of ₹ 18,63,552/- was incurred or paid against business receipts of M/s. V.K. Transport in any manner. 2. That the ld. Commissioner of Income Tax(A) erred in law in confirming the addition of ₹ 10 lacs u/s 68 of the Act received by the appellant by way of gift from his mother-in-law on the ground that she was not being assessed to income tax. He erred in not providing reasonable opportunity to locate and furnish gift deed duly signed by her. The addition of ₹ 10 lacs so confirmed is, therefore, wholly unjustified, improper and deserves to be quashed. 3. That the Ld. CIT(A) erred in law in confirming the addition of ₹ 2,50,000/- u/s 69 of the Act being the amount received by way of gift from Shri Nemichand Jain, father of the appellant, who had also confirmed such payment. The additional evidence in the form of confirmation regarding payment from the father was not admitted on the ground that there was no reasonable cause for it non-submissions before the AO. The addition so confirmed is wholly unjustified, improper, bad in law and deserves to be quashed. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . V.K. Transport was started during the year. Copy of profit and loss account of both the businesses are annexed (Page 1 to 6 of P.B). At the outset, following two mistakes were committed by the appellant while submitting the return of income :- (i) Books of accounts of separate division viz. M/s. V.K. Transport were not audited and (ii) Income from said business was offered under the head Income from other sources instead of Income from business . It is submitted that the nature of business in the case of M/s.Vinod Kumar Jain is that of excavation and sale of gitti, muram etc. which also involved transportation thereof. Contrary to this, separate business under the name and style as M/s. V.K. Transport was that of commission agency business of transportation of goods where the Trucks were taken on hire. Details of following major expenses incurred are annexed :- a) Lorry hire expenses charges ₹ 6,71,450/-(Page 7 to 16 of P.B) b) Diesel expenses ₹ 3,79,938/- (Page 17 to 26 of P.B) c) Repa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in profit and loss account. (Page 35 of P.B). ii) The bank account in the name of M/s. V.K. Transport maintained with State Bank of India do not match the credits with ledger account. iii) TDS was not deducted by M/s. Crompton Greaves Limited, M/s. Ratansingh Builders and M/s. Dawat Foods Limited on hiring charges. In fact, TDS was deducted by all of them as evident from copies of accounts at page-36 to 41 of the paper book. iv) Appellant did not deduct tax at source on Lorry hire expenses paid to other transporters hence provisions of Section 40a(ia) are attracted. No explanation was asked for non-deduction. In fact, the Truck owners were having less than 10 Trucks hence TDS was not deducted . II) Amount received from Mother-in-law assessed u/s 68 of the Act. The appellant had purchased residential house during the year for ₹ 27,50,000/- vide registered sale deed executed on 04.09.2009 in joint name with his wife who also contributed towards cost of acquisition. Mother-in-law of the appellant being widow had gifted a sum of ₹ 10 lacs for purchase of said house. She was in possession of said sum out of agricultural proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es below disallowed entire expenditure debited in separate profit and loss account of M/s. V.K. Transport amounting to ₹ 18.63 lacs on the ground that such expenses were not incurred at all. Presuming but not admitting such conclusion, the appellant may please be given telescopic benefit on the ground that part of the expenditure incurred was impliedly available with the appellant which was utilized for investment in residential house, received in the form of gifts from father and mother-in-law of the appellant at ₹ 12,50,000/- in aggregate. Such Telescopic benefit is being allowed by the Hon ble Bench so as to avoid double taxation. [Kindly refer C.I.T. vs. Omprakash Dhanwani, Indore ITA No. 254 to 256/IND/15 order dated17.05.2016]. Kind attention is also invited to judgment in the case of M/s. Sind Medical Stores vs. Commissioner of Income tax (2014) 90 CCH 497 (Raj. HC) wherein vide para-12 of the judgment it was held that when any amount is paid, letter withdrawn from the books would be available for recycling and rotation , unless otherwise established as invested elsewhere by the Revenue . (Copy annexed). It is prayed that disallowance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not shown the business receipts and income under the head business income but this reason alone cannot preclude to assessee for claiming incidental expenses incurred for carrying out business. Though, assessee has declared 6.28% net profit rate on the transport business on the gross receipt of ₹ 19,88,592/-, we in the interest of justice and being fair both the parties and looking to the fact that books of accounts are not audited, are of the considered view that estimating of net profit @ of 8% of the gross receipts of ₹ 19,88,592/- i.e. ₹ 1,59,087/- will be justified. Accordingly additions of disallowance of expenses of ₹ 18,63,552/- is sustained only to the extent of ₹ 34,047/-. Assessee gets relief of ₹ 18,29,505/-. Thus, ground no.1 is partly allowed. 12. As regards ground No.2 3 wherein common issue is raised relating to unexplained gift of ₹ 10 lacs received from mother-inlaw and ₹ 2,50,000/- from father of the assessee. We, observe that the alleged cash gift of ₹ 10,00,000/- ₹ 2,50,000/- were received in cash and during the course of assessment proceedings assessee was unable to file documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee s father has also expired before some time. 16. We, therefore, in the given facts and circumstances of the case and looking to the peculiarity of the facts wherein in the donor has expired after signing an affidavit for the gift given to his son, find no justification in the action of the Ld. AO making the addition for unexplained investment u/s 69 of the Act, since the assessee has duly explained the source of ₹ 2,50,000/- being receipt from his father. Accordingly addition u/s 69 of the Act is deleted. Thus, ground no. 2 3 stands allowed. 17. As regards alternate claim of Telescopic of ₹ 12.50 lacs raised in ground No.4 we find no reason to adjudicate this issue since it will be merely academic in nature as we have already partly allowed assessee s ground no.1 to the extent of deleting addition of ₹ 18,29,505/- and allowed Ground No. 2 3 of the assessees appeal deleting addition of ₹ 10,00,000/- and ₹ 2,50,000/- respectively. Thus, ground no.4 is dismissed as infructuous. 18. In the result appeal of the assessee is partly allowed. The order pronounced in the open Court on 28.01.2020. - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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