MRS. SPUREET KAUR NAGI,MUMBAI vs. ACIT CC-20, MUMBAI

These are the seven appeals filed by one Assessee Mrs Supreet Kaur Nagi [Assessee/ Appellant] for seven assessment years where in assessment is made by the Assessing officer pursuant to search on 30/5/2008. Many of the issues involved in these appeals are common. Both the parties argued them together and therefore these [7] appeals are disposed by this common order.

ITA No. 5940/Mum/2019 is filed by the assessee against the order of Commissioner of Income-tax (Appeals)-51, Mumbai [the learned CIT (A)] dated 24.07.2019 for A.Y. 2003-04 raising following grounds of appeal:-

The brief fact of the case shows that assessee is an individual deriving income from business and profession from interior designing and artist. She filed her return of income on 20th October, 2003, declaring total income of ₹1,51,320/-. Subsequently, search took place on Nagi Group on 30 May 2008. Notice under Section 153A of The Income-Tax Act, 1961 (the Act) was issued. In

On scrutiny, the Assessing Officer noted that credit in the bank account of the assessee was of ₹16,38,128/-. Assessee could not explain satisfactorily the source of such credit to the extent of ₹12,89,721/- which was added by the learned Assessing Officer under section 69A of the Act. Assessee has claimed business expenditure of Rs 176997/-. The learned Assessing Officer further disallowed 25% of such expenditure as assessee failed to furnish third party documentary evidences. Therefore, disallowance out of the expenditure was of ₹44,249/-. Accordingly, the assessment was completed under section 153A read with section 143(3) of the Act at ₹15,89,560/-.

Assessee, aggrieved with assessment order preferred appeal before the learned CIT(A). With respect to the addition of ₹12,89,721/-, ld CIT [A] noted that the correct sum is not ₹16,33,128/- but only ₹15,90,555/-. He examined each of the credits and ultimately held that a sum of ₹2,69,736/- and another sum of ₹1,30,000/- remains unexplained. Therefore, the addition was confirmed to that extent. With respect to the disallowance of the expenditure of ₹44,249/-, it was confirmed as assessee agreed for the same adhoc disallowance during the course of

Assessee is aggrieved with that order and therefore, is in appeal before us.

Learned Authorised Representative submitted a Paper Book and case law compilation.

With respect to ground no [1] , He submitted that total cash summery was submitted before the learned Assessing Officer, which has been confirmed by the learned Assessing Officer in the remand report. He submitted that ₹1,30,000/- has been received from the relatives of the assessee and looking to the nature of the family, above small loan of ₹1,30,000/- should not have been added as income of assessee. He further submitted that the loan amount is very small and therefore, the Permanent Account Number as well as the confirmation could not be obtained. He stated that the names of the family members are already available on the record.

With respect to the addition of ₹2,69,736/-, he submitted that out of ₹4,63,500/- the learned CIT(A) has considered the amount of cash sales only of ₹1,93,764/- and made the addition of

With respect to Ground no. [2], he submitted that merely because the assessee agreed during the course of assessment proceedings the expenditure could not have been disallowed. He submitted that compete details of such expense in form of ledgers accounts and vouchers/supporting were produced but it is not possible to maintain 100 % third party evidences.

The learned Departmental Representative supported the orders of the lower authorities.

We have carefully considered the rival contentions and perused the orders of the lower authorities. The first ground of appeal is with respect to the confirmation of the addition of ₹2,69,736/- and ₹1,30,000/- under section 69A of the Act. We find that assessee has deposited a cash of ₹4,63,500/-. The claim of the assessee is that she has withdrawn

Ground no. 2 is with respect to disallowance of expenses being 25% of ₹1,76,997/- which has been agreed by the assessee before the learned Assessing Officer. The assessee also did not deny that the complete third party evidences are not available with her. Accordingly, we do not find any infirmity in the order of the learned CIT(A) in confirming this disallowance. Accordingly, ground no. 2 of the appeal is dismissed.

Accordingly, ITA No. 5940/Mum/2019 for Ay 2003-04 filed by the assessee is partly allowed.

ITA No. 5941/Mum/2019, is filed by the assessee against the order of the learned CIT(A) for A.Y. 2004-05 dated 24.07.2019 raising following grounds of appeal:-

Brief fact of the case shows that assessee filed her 6th return of income on January 2005, at ₹1,36,002/-. Pursuant to search, on issue of notice under section 153A of the Act, She filed her return of income on 17th November, 2009, at ₹5,09,466/-. The learned Assessing Officer found that assessee has deposited ₹22,49,052/- in her bank account, out of which she could not satisfactorily explain source of ₹19,58,733/-, which was added under section 69A of the Act. Further, total expenditure of ₹2,86,042/- was claimed as allowable deduction, assessee could not furnish third party documentary evidences and therefore, ₹71,510/- being 25% of the various expense was disallowed. Further, Assessing Officer noted that assessee has renovated her flat and therefore,

On appeal, the learned CIT(A),

The assessee is aggrieved with that order and is in appeal before us.

The learned Authorized Representative submitted a paper book and case law compilation.

With respect to Ground no [2] he submitted that on identical reasons as prevalent in A.Y. 2003-04, assessee submitted that total credit of ₹11,16,590/- is out of known sources. He referred to page no. 5, stating that while explaining the sources of the same, assessee has stated that these are the cash deposits out of the funds withdrawn from her bank account. He referred to the page no. 6 of the order of the learned CIT(A), wherein the submissions are made. He submitted that undisputedly the cash of ₹3,83,000/- has been withdrawn from the bank account which has not been used by the assessee anywhere else and therefore, while explaining the total source of deposits in bank account of ₹11,16,590/-, the credit of ₹3,83,000/- should have been allowed to the assessee.

The learned Departmental Representative vehemently supported the order of the lower authorities. With respect to ground no. [2] On account of availability of cash out of earlier bank withdrawals the learned Departmental Representative submitted that it is the duty of the assessee to show that for what purposes cash was

We have carefully considered the rival contentions and perused the orders of the lower authorities. During the course of assessment proceedings, it was found that assessee has deposited ₹11,16,590/- in her bank account. The assessee explained that ₹4,48,270/- has already been offered as income, ₹2,90,320/- is on account of sales and ₹3,83,000/- is cash deposited by the assessee from her own fund which are available with the assessee on account of her withdrawal from bank account. Revenue authorities denied the set off ₹3,83,000/- hold that assessee need to explain the reason for withdrawal from the bank account as well as its redeposit. We find that this is identical to ground No.1 in appeal of the assessee for A.Y. 2003-04. In this year also, there is no evidence with the Revenue that earlier cash withdrawal from the bank account by the assessee has been used for any other purpose other than re- depositing it in the bank account of the assessee. In absence of any contrary finding, merely because assessee did not submit the reason for withdrawal

Ground no. 1, is with respect to the addition of ₹3,20,000/- under section 69C of the Act. During the course of search a loose paper pertaining to Orion Enterprises was found wherein the extra work of ₹6,40,000/- was mentioned. There was no address or date mentioned there on. During the course of appeal before the learned CIT(A), assessee submitted letter dated 23rd December 2011 from Orion Enterprises that above document belongs to them. It was further stated that this was a quotation for the work to be done for Mr. Marwah, in his flat at 902, Imperial heights, Pali hill. Orion Enterprises further stated that assessee has received advances on account of the above work and it has been offered for income tax as income in A.Y. 2006-07. Assessee also submitted the copy of account of advance received from Mr. Manish Marwah for the above work by Orion Enterprises and also the copy of the invoice and agreement for work done. There is no evidence that the above

In the Result, ITA No. 5941/Mum/2019 filed by the assessee for A.Y. 2004-05 is allowed.

This appeal is filed by assessee against the order of learned CIT(A) dated 24th July, 2019 for A.Y. 2005- 06 raising solitary ground of appeal regarding confirmation of addition of ₹2,08,242/- and ₹8,35,300/- under section 69A of the Act.

The fact of the case shows that assessee filed her return of income on 6th January 2005 at ₹ 1,74,389/-. Consequent to search and in response to notice under section 153A of the Act, she filed her return of income on 17th November, 2009, at ₹6,24,638/-.

During the course of assessment proceedings, the learned Assessing Officer found that she has deposited ₹57,22,157 in her bank account out of which she could not explain source of ₹55,35,768/- and therefore, same was added under section 69A of the Act. Consequently, assessment order under section 143(3) read with Section 153A of the Act was made on 30th December, 2010 at a total income of ₹61,60,410/-.

Assessee preferred the appeal before the learned CIT(A), who after taking remand report of the learned Assessing Officer noted that the correct figure of bank deposit is only ₹41,31,305/-

Assessee is aggrieved by that order and has preferred this appeal before us.

The learned Authorized Representative submitted a paper book where n he submitted cash flow statement as well as other documentary evidences.

He submitted that sum of ₹2,08,242/- is loan and gifts received from relatives and further cash deposit of ₹8,35,300/- is from the bank accounts. He referred to the cash flow statement placed at page no. 2 and 3 of his Paper Book. He also referred to the remand report placed at page 11 of the Paper Book. Therefore he submitted that sum deposited in bank accounts is partly out of sales, cash withdrawn from bank accounts earlier and loan from relatives.

The learned Departmental Representative supported the order of the learned CIT(A).

We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that during the year, the correct deposit in various bank account of the assessee was only

Further, with respect to the loan, the assessee gets relief of ₹25,000/- as per earlier year’s reasoning out of the addition of ₹2,08,242/- and balance addition of ₹1,83,242/- is confirmed. Accordingly,

In the result, ITA No. 5942/Mum/2019 for A. Y. 2005-06 filed by the assessee is partly allowed.

ITA No. 5943/Mum/2019 is filed by the assessee against the order of the learned CIT(A) dated 24th July 2019, for A.Y. 2006-07. Assessee is aggrieved by the order of confirmation of addition of ₹50,000/- under section 69A of the Act and further, the disallowance of 25% of total expenditure of ₹10,54,973/- i.e. ₹2,63,743/- on adhoc basis.

The brief fact shows that assessee filed her return of income on 30th October 2006, at ₹6,80,851/-. On search, in response to notice under section 153A of the Act on 17th November, 2009, she filed her return of income declaring income of ₹8,73,615/-.

During the course of assessment proceedings, the learned Assessing Officer found that total credits in the bank account of the assessee is ₹71,94,129/- out of which source could not be explained to the extent of ₹58,16,658/- which was added under section 69A of the Act. Further, ₹2,63,743/- being 25% of the total expenditure was disallowed on

Assessee approached the learned CIT(A), who after obtaining the remand report from the learned Assessing Officer held that there is no credit of 58,16,658/- but the correct sum of credit is only ₹16,21,552/-. He upheld the addition to the extent of ₹50,000/- which was stated to be out of cash withdrawal from the bank account. He further confirmed the disallowance of ₹2,63,743/- out of the expenses.

The assessee is aggrieved with that order and is in appeal before us.

The learned Authorised Representative and learned Departmental Representative are heard. The Paper Book submitted by the assessee is perused. On careful consideration, we find that during the course of assessment proceedings ₹16,21,552/- was found to be deposited as credit entries in the bank statement. The assessee submitted the reconciliation statement as well as the cash summery ₹50,000/- was shown by the assessee as cash deposited in the bank account. At page no. 3, assessee submitted a cash summary, as per cash summary total opening cash on hand is ₹1,31,890/-. Further, cash withdrawal from the bank account of ₹39,000/- and cash sales of

Ground no. 2 is with respect to the disallowance of expenditure. We find that assessee has given a detailed summary of expenditure, which are reproduced at page no. 2 of the assessment order. The complete detail of ₹10,54,973/- of various expenditure includes depreciation of ₹2,28,640/- is available in assessment order itself. Further, interest expenditure on motorcar is of ₹45,131/- has been incurred by the assessee for which third party evidences are available. The gross receipts of the assessee from business is shown at ₹13,77,471/-. The books of the assessee are audited under section 44AB of the Act. The reasons given by the learned Assessing Officer for the

In the result, ITA No. 5943/Mum/2010 for A.Y. 2006-07 is partly allowed.

This appeal is filed by the assessee against the order of the learned CIT(A) dated 24th July, 2019,

The fact shows that the assessee filed her return of income on 26th July 2007, at ₹5,94,620/-. Pursuant to search on 30th May, 2008, notice under section 153A of the Act was issued and in response to that assessee filed return of income on 16th November, 2009, at ₹5,94,620/-.

Assessee preferred an appeal before the learned CIT (A). The learned CIT(A) held that

Therefore, assessee is aggrieved with that order and has preferred the appeal before us.

The ground no. 1 is against the confirmation of addition of cash deposit of ₹5,15,000/-, ₹ 4 lacs on account of unexplained fixed deposit and ₹6,31,790/- on account of dividend and mutual fund income not offered for taxation.

On careful consideration and on perusal of hearing both the parties, we find that the assessee has explained the source of cash deposit of ₹5,15,000/- being withdrawal from her own bank account. This ground is identical to ground in earlier years, where the learned CIT(A) disbelieved that cash withdrawn from the bank account of the assessee are available with her. The learned CIT(A) held that it is merely a bald statement without any supporting evidence. In the earlier years, we have reversed the finding of

The next addition is of ₹6,31,790/-. This amount has been shown by the assessee as dividend income and mutual fund receipts. The learned Assessing Officer and the learned CIT(A) disbelieved the explanation of the assessee that any such income from dividend has been shown by assessee not in her return of income. We also find that no dividend income has been shown by assessee in her return of income. However, the assessee has stated before us that she has received certain dividend and also received the maturity or redemption of mutual funds. It was stated that such mutual fund might have resulted into some income but the whole receipt of ₹6,31,790/- cannot be considered as income. On hearing both the parties, we set aside this issue back to the file of the learned Assessing Officer with a direction to the assessee to show the dividend income received by her and its taxability. Similarly, she is also directed to show the redemption of mutual fund and income arising there from. The learned Assessing Officer

With respect to sum of ₹ 4 lacs being shown as received from fixed deposits, fact shows that at the time of explanation with respect to total credit entries in the bank statement, assessee has stated that ₹4 lacs are credited in the bank statement on account of maturity of fixed deposits. Naturally, when the sum is credited in the bank account of ₹4 lacs same cannot be said to be an unexplained investment for that year. However, it is not clear and could not be shown by the assessee before the lower authorities that when the fixed deposit was obtained and when it matured, and consequently what the interest thereon is. As assessee has stated that amount received is on account of maturity of fixed deposit, the onus lies on the assessee to show that when the fixed deposit was obtained and taxability of corresponding interest thereon. She is directed to submit relevant details before the learned Assessing Officer. The learned Assessing Officer may examine the same and decide this issue.

The [2] ground of appeal is with respect to the addition of ₹24,92,000/-. The fact shows that a loose paper numbers 21 and 22 are found during the course of search. On page no. 22 certain noting were found which shows that there is an office area of 390 sq. Ft. . Noting also has reference of ₹ 28,80,000/-. This sum is bifurcated in ₹13,93,000/- has been shown in cheque and ₹ 14,87,000/- have been shown in cash. The noting also shows details relating to registration of the property. The backside of the above page shows details of various fixed deposits. It is also mentioned that per sq. ft. rate is ₹7,236/-. When it is multiplied to area of 398 sq. ft., the resultant figures is ₹28,79,928/-. As there is mention of ₹13,93,000/- by cheque, the remaining amount of ₹ 14,87,000/- was added as unexplained investment of the assessee under Section 69B of the Act. The learned CIT(A) confirmed the action of the learned Assessing Officer.

Similarly, on the backside of the same paper there is a mentioned of fixed deposit amounting to ₹10,05,000/- and the learned Assessing Officer also made the addition of the same which was also confirmed by the learned CIT (A).

Ld DR also supported orders of lower authorities.

We have carefully considered the contentions of parties as well as reasons given by authorities in their orders. On careful perusal of page nos. 21 and 22, it is apparent that details mentioned at page no. 21 at page no. 22 relates to the same property, we hold se because of the area of the property as

With respect to the addition of ₹10,05,000/-, there is a mention of fixed deposits of ₹10,05,000/- on that loose paper. Assessee has stated that she has fixed deposit of ₹ 45 lacs as on that date. Therefore, amount of ₹10,05,000/- is covered in the fixed deposits of ₹ 45 lacs. Assessee has also stated that the details are available in the balance sheet of the assessee. The learned Assessing Officer as well as the learned CIT(A) both did not consider the above explanation of the assessee. We hold that when assessee is having fixed deposit of ₹45 lacs and when assessee claims that fixed

The fact shows that the search took place in the case of the assessee on 30th May, 2008 and subsequently, on 29th September, 2008, assessee filed her return of income at ₹1,54,080/-. Notice under Section 153A was issued on 16th September 2009. In response to which, assessee filed her return of income on 16th November 2009, at ₹99,64,080/-. The learned Assessing Officer issued notice and passed assessment order under Section 143(3) read with Section 153A of the Act on 13th December, 2010, wherein the total income of the assessee was assessed at ₹2,33,82,840/-. The learned Assessing Officer made several disallowance and addition. The assessee aggrieved with that preferred an appeal before the learned CIT(A) who passed an order on 30th August 2019, partly allowing the appeal of the assessee. Therefore, assessee is aggrieved with that.

Ld CIT [A] sustained following disallowances / additions :

The ld AR submitted the paper book containing seized documents as well as submissions before lower authorities. He also submitted a case law paper book.

Ld DR relied up on orders of lower authorities with respect to each of additions.

We have carefully heard the rival contentions and perused the orders of lower authorities, paper book

The first ground of appeal is against the addition of ₹34 lacs confirmed by learned CIT(A). The fact shows that during the course of search a paper was found as annexure A-1 of 47. This document is placed at page no. 4 of the paper book submitted. On reading of the above paper, the learned Assessing Officer noted that there are two figures mention of

There is one more figure of ₹5,00,000 mentioned against MSF and therefore, the learned Assessing Officer was of the view that as figure against the name of MSF is mentioned ₹ 5,00,000/- , the figure mentioned against AB of 15 and MSF of 14, are also in lacs but written in two digits. Therefore, the learned Assessing Officer was of the view that against the AB, the sum is ₹ 15 lacs instead of ‘15’ and Sum against the MSF is ₹ 14 lacs against ‘14’ and therefore, the total addition of ₹29 lacs (+) plus 5 lacs was made under Section 69A of the Act. Order of ld AO was confirmed by ld CIT [A] .

Assessee explained that this is merely a loose paper and does not have any evidentiary value. It was

With respect to the MSF 14, it was stated that Mark S Fernandez is a loan creditor of Orion Enterprises, in which the assessee is a partner. ₹14,000/- was the interest amount payable to Mark S Fernandez on the loan with Orion Enterprise. Since, assessee is working partner of Orion Enterprise; these transactions are noted by her. It was also stated that Mark S Fernandez has given a loan of ₹12 lacs on 18th January 2007, to Orion Enterprises out of which ₹10 lacs was repaid on 31.03.2007 and therefore, addition of ₹ 14 lacs is unwarranted. It was submitted that interest expenditure of Rs 14000/- pertains to Orion enterprises as claim by

Assessee also stated that in remand report also, the learned Assessing Officer did not comment on the same but justified by saying that though the figures are returned in double digit but they are in lacs. The learned Authorized Representative therefore submitted that addition of ₹ 29 lacs confirmed by the lower authorities is on conjuncture and surmises.

The learned Departmental Representative vehemently supported the order of the lower authorities.

We have carefully considered the rival contentions. we have also perused page no. 5 of Annexure A-1, which is placed at page no. 4 of the paper book. On careful perusal of the above document, it is apparent that there are figures mentioned in thousands, in five digits, in six digits and also in two digits. Therefore, it is apparent that there is no justification for considering a double-digit figure mentioned on the seized document as 7 digit figures. If that be so then all those double-digit figures must be considered as amounts in lakhs and sums mentioned in lakhs should also be extrapolated. The seized paper is a reference of

During the course of assessment proceedings, assessee stated that whatever the labour charges outstanding in the books of account is only of ₹ 1,10,973/- as payable as on 31st march, 2008. It was submitted that there was no outstanding labour charges of ₹ 17 lacs. The learned Assessing Officer disbelieved these explanations and made the addition of ₹ 17 lacs. The learned CIT(A) granted the credit of ₹ 1,10,973/- and confirmed the addition of ₹ 15,89,027/-.

The learned Authorized Representative referred to page no. 9 of the paper book and submitted that these are the documents prepared by audit team at the time of finalization of the accounts, where certain noting were made by the auditors. This

The learned Departmental Representative supported the orders of the lower authorities.

We have carefully considered the rival contentions and found that the impugned document was found from the premises of Orion Enterprises. Admittedly, in the seized paper the name of the assessee is not mentioned. Further, the learned Authorized Representative of the assessee has specifically stated that these documents are the audit query sheets of the auditors and not in the handwriting of the assessee. When these documents do not pertain to the assessee and when assessee has stated that the query should be raised in case of

Ground no. 3 is with respect to the addition of ₹ 8,84,792/-. This addition has arisen on account of seized document. The copy of such seized document is placed at page no. 10 of the Paper Book. It mentions that assessee has received ₹ 6th 1,59,792/- from M/s Sundram Motel on November 2007. Further, on 28th June 2007, ₹75,000/- was received and on 11th July 2007, ₹6,50,000/- was received. Thus, the learned Assessing Officer was of the view that a sum of ₹8,84,792/- is received from the above party which has not been disclosed by the assessee and

The learned Authorized Representative submitted that these are the loose papers not in the handwriting of the assessee, it is undated. Assessee further submitted that ₹1,59,792/- received on 6th November 2007, is a part redemption amount received from BNP Paribus fund. This is not from Sundram Motel but Sundram Mutual Fund. It was stated that the resultant capital loss is also disclosed in computation of total income as capital gain/loss of the assessee and further, the same was also received in the bank account of the assessee. Therefore, it cannot be unaccounted income of the assessee.

Assessee, with respect to the sum of ₹6,50,000/- on 11th July, 2007, it is submitted that this fund is transferred from assessee’s own bank account no. 201086 with HDFC bank vide cheque no. 161459 and therefore, it is not unaccounted professional fees but transfer of funds from one bank account to another bank account. Both the bank accounts are placed in the paper book.

The learned Departmental Representative supported the orders of the lower authorities. The learned Departmental Representative supported the order of the lower authorizes. He submitted that the assessee did not submit proper information before the lower authorities.

We have carefully considered the rival contentions and perused the order of the lower authorities. On careful consideration of the various information submitted by the assessee, we find that the above additions made in the hands of the assessee is on account of complete misreading and misunderstanding on the part of the lower authorities. On 6th November 2007, the assessee received a sum of ₹ 1,59,792/-, which is credited in the bank statement, which is also placed at page no. 49 of the Paper Book. This is received from Sundram BNP Paribas Mutual Fund on account of

Ground no. 4 of the appeal is against sustaining the addition of ₹ 9 lacs under Section 69 of the Act. The fact of the case shows that based on certain seized documents there is mention of ‘bills to be obtained for furniture and fixture of ₹ 9 lacs’. The assessee submitted that these are mere noting during the course of audit but no such transaction has taken place. Or it is that in case of Orion enterprises , the auditors did not find the relevant bills in the files at the time of their examination and it is mentioned I so in their audit query sheet. The learned Assessing Officer did not believe assessee and made the addition of ₹ 9 lacs.

Before the learned CIT(A) assessee reiterated the submission made before the learned Assessing

The learned Authorized Representative reiterated the same submission before us also and stated that these were the discussions during the course of audit of Orion Enterprises, the documents were found from the premises of Orion Enterprises and therefore, no addition should be made in the hands of the assessee.

The learned Departmental Representative supported the order of lower authorities.

We have carefully considered the rival contentions and perused the orders of the lower authorities. The seized documents were placed at page no. 8 of the Paper Book which reference to Orion Export for the year ended on 31st March 2008. The title of the page says that it is ‘checking of ledgers’. At serial no. 4, there is mention that purchase bills are required for furniture and fixtures account for ₹ 9 lacs. The assessee has explained that there is no addition of furniture and fixture in the audited balance sheet and further, these expenses were

Ground no. 5 is with respect to the addition of ₹ 1,17,164/-. No arguments are advanced on this ground. In view of this, no interference is called for and ground no. 5 is dismissed.

Accordingly, the appeal of the assessee for Assessment Year 2008-09 in ITA No. 6548/Mum/2019 is partly allowed.

The fact shows that the on the basis of search on 30th May, 2008, return of income filed on 16th October, 2009, at a total income of ₹6,67,100/-. The assessment under Section 143 read with Section 153B of the Act was passed on 13th December, 2010, at the total income of ₹4,89,07,513/-. The learned Assessing Officer in all made twelve different additions/ disallowances amounting to ₹4,82,40,353/-. The assessee preferred an appeal before the learned CIT(A), who partly allowed the appeal of the assessee and therefore, assessee is in appeal against the additions sustained by the learned CIT(A).

The first ground of appeal is against the addition of ₹ 4 lacs. The fact shows that according to page no. 1 Annexure A-1, seized during the search, it shows that assessee received gift of ₹2 lacs each from his father and his brother. Assessee was questioned and it was stated that no such transactions took place. However, during the course of assessment proceedings on 16th December, 2010, assesses submitted that she is the only daughter and her father and brother has decided to give 2 lacs each to her and therefore, these gifts are received by the assessee from relatives is exempted. The learned Assessing Officer made additions of these sums

Before us, assessee has submitted confirmation letter of receipt of gift of Rs.2 lacs each from the father and brother of the assessee. Same are placed at page no. 50 and 51 of the Paper Book. On careful consideration of the same, we find that the father of the assessee, Col. GS Sudan, retired, residing at Jammu Tawi, having a Permanent Account Number AHYPS3964L, as confirmed that he has given a gift of ₹ 2 lacs to her daughter. Further, Mr. Amrit Pal Singh, residing at Gurgaon, brother of the assessee having Permanent Account Number AOBPS5351P, has also confirmed that he has also given gift of ₹2 lacs to her sister. These confirmations were not available before the lower authorities. In view of this, we set aside ground no. 1 back to the file of the learned Assessing Officer with a direction to assessee to show that the gift

Ground no. 2 is against the addition of 90 lacs confirmed by the learned CIT(A). Facts noted from the orders of the lower authorities shows that the learned assessing officer has made an addition of Rs 2.70 crores on account of unexplained investment u/s 69C in respect of acquisition of one property at Delhi on the basis of Notings in the seized material. The assessing officer noted that as per one seized document placed at page number 6 of annexure A – 1, there were Notings of loan taken from banks et cetera aggregating to ₹ 536 lakhs and EMI for loan was also mentioned. In the loans, a loan was included of Rs 105 lakhs for a property at Delhi . Below the Notings of the loans there were Notings suggesting that the aggregate consideration for the Delhi property is for ₹ 265 lakhs which comprised of cheque component of rupees hundred and 40 lakhs and cash component of ₹ 125 lakhs.. Down payment of ₹ 35 Lacs for the said loan of rupees hundred and 5 lakhs for the property was to be arranged from internal sources of the assessee. As per seized document i.e. page number seven of annexure A – 1, cash

The matter reached before the learned CIT – A. He considered the explanation of the assessee as well

Therefore the assessee is aggrieved, the learned authorised representative referred to the paper book and submitted that though the learned CIT – A as agreed that the transaction of Delhi property has not materialised, still he proceeded to make an addition of ₹ 90 lakhs out of the same. He submitted that the main reason for which the learned CIT – A has made the addition is with reference to the assumption made by him that assessee has already having ₹ 90 lakhs in her hand. He submitted that this is the case of search, had the amount been available with the assessee, it would have been found during the course of search. There is no reason given by the learned CIT – A that if the Delhi property has not materialized by the assessee, why would assessee borrow a loan of ₹ 45 lakhs from somebody else and where from the assessee would on a further 45 lakhs. He therefore submitted that the addition of ₹ 90 lakhs made by the learned CIT – A is merely on the basis of conjectures and surmises and with no evidence. He

The learned departmental representative vehemently supported the orders of the lower authorities.

We have carefully considered the rival contention and perused the orders of the lower authorities. It is apparent that the learned assessing officer on the basis of the seized paper has made an addition of ₹ 2.70 crores in the hands of the assessee stating that the loose papers shows that how the funds would be arranged for payment of consideration of above property partly by cheque or partly by cash. Therefore it was assumed by the learned assessing officer that assessee has purchased the above property. This fact was proved by the assessee in negative by showing that this property been purchased by any of the group concerns of the assessee on assessee herself, at least the cheque consideration would have been recorded in the books of account of these concerns or assessee herself. Further for payment of cheque consideration, there would have been a corresponding bank transactions. There is no such evidence. The learned CIT – A therefore deleted the addition of ₹ 2.70 crores in the hands of the assessee. However the learned CIT – A stated that for cash payment the assessee has arranged a loan

Ground number 3 is with respect to the addition of ₹ 1,280,000/– u/s 69B of the act confirmed by the learned CIT – A. During assessment proceedings AO noted that in the course of search action certain slips giving description of jewelry and also the value/amount were seized aggregating to ₹ 1,280,000/–. When questioned, assessee submitted that the above slips are merely estimates and the transactions have never materialised. The AO noted that description of the jewelry on the sale slips do not match with any of the jewelry items found at the time of search action and therefore he made the addition.

The matter reached before the learned CIT – A after obtaining the remand report on submission of the assessee as well as the joint of the assessee confirmed the above addition.

The learned authorised representative submitted that these are the loose papers which does not have any evidentiary value and are merely estimation. Assessee has never purchase such jewelry. He stated that the assessing officer and stated that assessee might have sold the jewelry to pay of the existing liability. He therefore submitted

The learned departmental representative vehemently supported the orders of the lower authority and stated that the assessee is giving contradictory submissions before the lower authorities and therefore the addition deserves to be confirmed.

We have carefully considered the rival contention and perused the orders of the lower authorities. The learned assessing officer has categorically noted that page 8 of annexure A – 1 newspaper five pages 1 – 47 papers for seized during the course of search at the office premises of orean enterprise, CSR designers, orion exports and other concerns. The page contains the Notings including the value of jewelry items of ₹ 1,280,000/–. We have carefully perused the above document. On the above document on the upper side the reference of several flight details of four different persons. At the bottom of the page assessee has mentioned as Under:-

Ground number 4 is with respect to the addition of ₹ 383,000 u/s 69B on the basis of the Notings in the seized material. During the course of assessment proceedings the learned assessing officer observed that certain documents having Notings of purchases/remaking of jewelry were seized. Assessee could not explain the Notings with evidences and therefore this was added as income of the assessee.

On appeal before the learned CIT – A, the submissions of the assessee, remand report of the

Learned authorised representative reiterated the submissions made before the lower authorities. The learned departmental representative supported the order of the learned CIT – A.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that seized documents shows that there are Notings of making charges of ₹ 22,000 and also cost of stone emerald of ₹ 107,000/–. This fact was not denied by the assessee before the lower authorities or before us. In view of this we dismiss ground number 4 of appeal.

Ground number 4 is with respect to the addition of ₹ 1,236,900 u/s 69B of the act. The fact shows that ₹ 9.55 lakhs were added by the learned assessing officer u/s 69B on the basis of inventory of expensive watches and electronic item is made at the time of search. Further in addition of ₹ 281,000 was also made on the basis of inventory of luxurious purses at the time of search. Therefore the addition of ₹ 1,236,900/– was made. Before the assessing officer assessee contested that the valuation is on higher side and further certain watches are received as gift and therefore could not have been added to the income of the assessee.

Ground number six is with respect to the addition confirmed by the learned CIT – A of ₹ 1,867,098/– u/s 69B of the act. The facts relating to this ground shows that during the course of search jewelry amounting to ₹ 2,299,004/– was found. The source of such jewelry was questioned. The assessee submitted that these are the gift received at the time of her marriage however did not submit any evidence substantiate the same. Therefore the learned assessing officer granted the benefit of 500 g as per instruction number 1916 and made the

The matter was agitated before the learned CIT – A. The submission of the assessee, remand report of AO and rejoinder of the assessee was considered and thereafter he confirmed the addition of ₹ 1,867,098/–.

The learned authorised representative stated that assessee has not purchased above jewelry but has been received by her from various relatives and friends at the time of her marriage and therefore no addition in her hand can be made.

The learned departmental representative payment please supported the orders of the lower authorities and referred to the inventory of jewelry found. He submitted that if the assessee has received these items as gift from her friends and relatives at the time of marriage, she should have submitted the confirmation or at least the details from womb these gifts have been received. In absence of this there is no infirmity in the order of the lower authorities.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that jewelry has been found during the course of search from the possession of the assessee. The jewellery was inventorised. The claim of the

Ground number 7 is with respect to the confirmation of addition of ₹ 1,976,500/– the facts relating to the above addition so is that on the basis of the inventory of paintings made at the time of search the learned assessing officer observed that the inventory total to ₹ 1,976,500/–. The assessee submitted that most of these paintings were personal paintings made by her and the balance are commercial paintings which have been shown in her books of accounts at the actual cost. The learned assessing officer noted that the number of paintings are commercial paintings and the value adopted by the Department while valuing them is the cost incurred for the paintings. Therefore he made an addition of ₹ 1,976,500/–.

When the matter reached before the learned CIT – A the assessee gave a list of 44 paintings and it was stated that the big and small paintings found

The learned authorised representative submitted before us that assessee is by profession and artist and muralist. The paintings inventorise itself shows the name return of the assessee on those paintings. The paintings which are purchased by the assessee are already accounted for in her books of accounts. He therefore submitted that the inventory of the

The learned departmental representative vehemently supported the orders of the lower authorities.

We have carefully perused the orders of the lower authorities and the submission made before us. The inventory of the paintings are also produced before us. It is apparent that in most of the paintings the name of artist/painter “Rouble Nagi” is mentioned. It is stated before us that this is the name used by the assessee for her paintings. Most of the other paintings, the name of the artist is unknown. The valuation has been made by the revenue for each of the painting and there is no basis available that how the above paintings have been valued. Naturally if the paintings are made by the assessee herself, it cannot be added in the hence of the assessee u/s 69B of the act. In view of this we set- aside the whole issue back to the file of the learned assessing officer with a direction to the assessee to segregate each of the painting if made by her. The AO is directed to verify and reduce the addition to that extent. Further, the amount of printing already recorded in the books of accounts of the assessee

Ground number 8 is with respect to the addition of ₹ 6,634,555/– u/s 69B of the act. The fact relating to the above addition shows that certain slips having noting of sale/purchase of jewelry which were seized at the time of search action shows that there is sale and purchase of jewelry. There were such 43 slips. The assessing officer questioned the assessee. The assessee having denied that these are only estimates and have never materialised. The learned assessing officer made an addition for the reason that in some of the slips actual payments are also mentioned. Accordingly the total amount of ₹ 6,634,555/– was added.

The matter reached before the learned CIT – A. The remand report on the submission of the assessee and rejoinder of the assessee was obtained. The learned CIT – A noted that in the statement of author recorded at the time of such assessee herself has admitted that the jewelry mentioned in 43 slips are actual purchases. Further some of the jewelry mentioned in the same slip was actually found at the time of search. On some of the slips

The learned and authorised representative submitted that all these loose lips are prepared by the jeweler Anmol Jwellers, turner Road Bandra Mumbai. It was also stated that the above is well is ready to confirm that the jewelry mentioned on loose lips were neither sold to the assessee nor purchased.

The learned departmental representative vehemently supported the orders of the lower authorities.

We have carefully considered the rival contention as well as perused the orders of the lower authorities. We have also verified annexure A – one wherein 42 small slips in numbers on 19 white sheets was found. On verification of those sheets, it was mentioned on each of them as an estimate. In some of these Sheets there is also the mention of balance payment. There are also references that he folded jewelry is given back there would also be some credit in the name of Mr Sanjay Kumar amounting to ₹ 2 lakhs which is paid by credit card of HDFC bank. Invoice is prepared by Anmol Jwellers. The total transactions recorded in all these jewelry slips is ₹ 6,634,555/–. However at the time of search only jewelry worth ₹ 1,867,098/– was

Ground number 9 is with respect to the disallowance of expenditure to the extent of 25%. The assessee has incurred total expenditure of ₹ 1,829,201/– the learned assessing officer disallowed 25% thereof amounting to ₹ 4,57,300/–. The learned CIT – A also confirmed the same.

Both the parties submitted that this is identical to the ground decided in the case of the assessee for assessment year 2008 – 09.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that we have already decided this issue in assessee’s own case for assessment year 2008 – 09 wherein we have directed the learned assessing officer to restrict the disallowance of expenditure to the extent of only 10%. The learned that AO is

In the result ITA number 6835/M/2019 four assessment year 2009 – 10 filed by the assessee is partly allowed.