9911796707
TMI Blog2023 (1) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with Income-Tax Appellate Tribunal, Allahabad Bench, Allahabad(hereinafter called " the tribunal") , reads as under:- "1- That in any view of the matter the assessment order dated 25.03.2014 passed u/s 143(3) of the IT Act by the assessing officer by determining the income at Rs. 77,86,860/- whimsically and his action as partly confirmed by the learned Commissioner of Income Tax (Appeal) ignoring the correct facts is bad both on the facts and in law. 2- That in any view of the matter the appellant claimed the expenditure against the professional receipt but the learned Commissioner of Income Tax (Appeal) allowed only 40% of the expenditure instead of 60% which is unfair and on too Lower side because for generating professional receipt huge overhead expenditures under various heads were incurred, and even in this regard observations of the Commissioner of Income Tax (Appeal) at page 20 of the his order are contrary to the actual facts of the case. 3- That in any view of the matter agriculture income of Rs. 2 lacs disclosed by the appellant as per past practice as considered and confirmed as professional receipt by the two lower authorities without appreciating the correct f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash as gift from relatives. The assessee was asked by the AO to prove the creditworthiness , genuineness of the aforesaid transactions, and furnish the income tax returns and confirmatory letters of his wife and other relatives from whom the assessee has claimed to have received gifts in cash. The assessee could not ultimately furnish the requisite details to prove, substantiate and satisfactorily explain the ingredients of Section 68 with respect to the aforesaid sum of Rs. 12,00,000/- and Rs. 19,50,000/- which stood credited in the assessee's books of account , and the aforesaid amount of Rs. 12,00,000/- as well as Rs. 19,50,000/- was added by the AO to the income of the assessee as assessee's professional receipts by invoking provisions of Section 68 of the Act. 3.2 Further, from the AIR information and on-going through the 26AS generated from AST software of the department, it was observed by the AO that the assessee has deposited Rs. 31,86,420/- in cash in State Bank of India, High Court Branch, Allahabad in his Bank Account No. 30747477708 which was not disclosed/declared by the assessee to the Department. The said bank account is in the name of the assessee, and the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O treated the same as assessee's undisclosed receipt and deemed it to be the income of the assessee , which stood added by the AO to the income of the assessee u/s 69A of the 1961 Act. 3.4 Further, the AO observed that the assessee has shown agricultural income of Rs. 2,00,000/- in its return of income filed by the assessee with department. The AO asked assessee to substantiate the same, but the assessee could not substantiate the same. The AO observed that the assessee furnished copy of annual 'Khautauni' in which the owner of the land was one Mr. Hari Mohan s/o Late Shri S. D. Gautam. The AO observed that the assessee is neither owner of the said land nor the assessee produced any receipts in support of the income so received. The AO also observed that no evidence is brought on record that any agricultural operations were carried out by the assessee in the said land . The AO treated said cash income of Rs. 2,00,000/- as professional receipts of the assessee, and added back the same to the income of the assessee u/s 68 of the 1961 Act. 4.1. Being aggrieved by assessment framed by the AO, the assessee filed first appeal with Ld. CIT(A) . Ultimately, the assessee could not prove a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 12,00,000/- in cash from his wife Smt. Abha Gautam which was credited in the capital account in the assessee's books of accounts, and a further sum of Rs. 19,50,000/- was received in cash from various relatives as gifts which was also credited in capital account in the assessee's books of accounts . It was also submitted that a sum of Rs. 31,86,420/- (Rs. 20584/- were bank charges debited by bank which was allowed as deduction) was deposited in cash by assessee in his bank account number 30747477708 maintained with SBI, High Court Branch , Allahabad . It was submitted that assessee has further received in cash Rs. 2,00,000/- agricultural income , which was declared in the return of income. It was submitted that these entire four credits/receipts aggregating to Rs. 65,15,836/- were treated by ld. AO as undisclosed professional receipts and brought to tax, while ld. CIT(A) also treated the said receipts as undisclosed professional receipts but allowed 40% expenses from these undisclosed professional receipts while balance 60% was treated as income from profession and brought to tax. It was submitted that so far as relief granted by ld. CIT(A) is concerned , the same has attained f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was declared in the revised computation of income filed before the AO. It was submitted that there were two bank accounts maintained by assessee with the SBI, High Court Branch, Allahabad, out of which one bank account was declared ,while another bank account bearing account no. 30747477708 maintained by assessee with SBI, High Court Branch, Allahabad was not disclosed to department , in which Rs. 31,86,420/- was deposited in cash, and it was an inadvertent clerical mistake of the assessee in not disclosing the said bank account to the department and not offering to tax said cash deposits. 5b. The Ld. Sr. DR submitted that ld.CIT(A) is more than reasonable in allowing 40% expenses against undisclosed professional receipts. It was submitted that Revenue has not filed an appeal against the decision of ld. CIT(A) granting part relief to the assessee. The Ld. Sr. DR relied upon the appellate order passed by ld. CIT(A) , and prayers were made to uphold the appellate order passed by ld. CIT(A) 5c. The Ld. Counsel for the assessee submitted in rejoinder that the assessee is an advocate and lenient view should be taken. 6. We have considered rival contentions and perused the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its capital accounts in the books of accounts Rs. 12,00,000/- as cash received allegedly from his wife Mrs. Abha Gautam and also the assessee has credited Rs. 19,50,000/- to his capital account with its books of accounts being received in cash allegedly as gifts from relatives. The assessee was asked to explain the same by the AO, but the assessee could not prove , substantiate and offer satisfactory explanation before the AO as to creditworthiness of the persons making such payments in cash nor genuineness of the transaction could be proved, and ultimately not being satisfied, the AO brought to tax aforesaid amount of Rs. 12,00,000/- as well Rs. 19,50,000/- as undisclosed professional income of the assessee by invoking provisions of Section 68 of the 1961 Act. The AO further observed that the assessee has shown alleged agricultural income received in cash in its ITR filed in return of income. The assessee on being asked by AO, could not satisfactorily explain as to the ownership of land in his name, receipts issued for agricultural produce nor the assessee could prove carrying out of agricultural operations for earning agricultural income , and the said alleged agricultural in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) so far as relief granted to the assessee has attained finality. The ld. Counsel for the assessee has submitted before us that the assessee is not agitating so far as treatment by AO as well ld. CIT(A) of all the aforesaid four credits/receipts aggregating to Rs. 65,15,836/- being treated as undisclosed professional receipts , and the only grievance which the assessee is agitating before tribunal is that the assessee should be allowed 60% of the aforesaid undisclosed professional receipts as deduction towards expenses instead of 40% allowed by ld. CIT(A), while rest 40% of the aforesaid undisclosed professional receipts can be brought to tax as income of the assessee, as there are several expenses to be incurred by the assessee as advocate for which no receipts are available such as court fee, stamp duty, notarial charges etc. which expenses should be allowed as deduction while computing income chargeable to tax w.r.t. undisclosed professional receipts . Further, it is claimed that the assessee has withdrawn Rs. 6,00,000/- in cash from this undisclosed bank account of the assessee maintained with SBI, which is claimed to be spent towards expenses for earning aforesaid undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh of Rs. 2,00,000/- from the said undisclosed bank account number 30747477708 maintained by assessee with SBI, High Court Branch , Allahabad. Then , there was refund of Rs.2,00,000/- each three cheques aggregating to Rs. 6,00,000/- from 'Goenka Motors' on 28.12.2010 which were refund by 'Goenka Motors' through cheques issued from HDFC bank presented through clearing house. Then , on 30.12.2010 and 31.12.2010, the assessee's above bank account was debited with 2 cheques of Rs.2,00,000/- each vide cheque no. 80273 and 80274. the assessee has claimed that this Rs. 4,00,000/- was also cash withdrawn from said undisclosed bank account of the assessee with SBI. The bank balance on 31.12.2010 with this undisclosed bank account of the assessee with SBI, was Rs. 27,27,498/-. Thereafter, again consistently large number of deposits continued in the said bank account until 31.03.2011. Thus, the only withdrawal from this bank account was Rs. 6,00,000/- during the entire year.So far as cash receipt of Rs. 12,00,000/- allegedly from wife , cash receipt of alleged gift from relatives of Rs. 19,50,00/- as well alleged agricultural income of Rs. 2,00,000 are concerned , the same are accounted for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, stood fully utilized/consumed as detailed above, and nothing remains further to be appropriated towards expenses to be set off against undisclosed professional receipts to the tune of Rs. 65,15,836/-, as whatever expenses already incurred being spent from the books of accounts viz. Rs. 23,12,706.60 were already set off by assessee against declared professional receipts to the tune of Rs. 36,68,810/- and interest income to the tune of Rs. 95,149.49, to arrive at net profit of Rs. 14,51,252.89. The ld. CIT(A) while adjudicating appeal has already allowed deduction/set off of unrecorded expenses to the tune of 40% of undisclosed professional receipts , to be set off against undeclared professional receipt of Rs. 65,15,836/-which means that undisclosed/unrecorded expenses to the tune of Rs. 26,06,334/- were allowed by ld. CIT(A) to be set off against undisclosed professional receipt of Rs.65,15,836/- , while at the most the assessee has cash availability of Rs. 6,00,000/- during the year under consideration (being cash withdrawn from the undisclosed bank account) to meet unrecorded/undisclosed expenses to be set off against undisclosed professional receipts and for that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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