BECHAR G. PATEL,MUMBAI vs. DCIT CEN CIR 22, MUMBAI

We have heard the arguments advanced by the learned representative of the parties and perused the record carefully. The only point which has been challenged by the assessee is in connection to the addition of Rs.2,72,000/- on account of foreign travelling expenses. The assessee filed his return of income for the A.Y.2010-11 declaring his income of Rs.10,27,110/-. Thereafter search and seizure action were taken u/s. 132 the Income Tax Act, 1961 ( in short “the Act”) on 16.11.2009 in case of M. R. Construction and M/s. Option Developers and Builders. During the said action, the copy of the passport of the assessee was found and inventorised. The assessee visited at UAE on 19.06.2009 and London on 14.07.2009 and again on London on 23.07.2009. At the time of assessment proceedings, Assessing Officer asked the assessee to explain the expenses in connection with his foreign travelling. The assessee replied that he went for event at UAE on 19.06.2009 and London on 14.07.2009 and 23.09.2009. However the assessee explained that he visited the said countries for the purpose of his business. However, no documents were furnished by the assessee in support of the claim of expenditure. The Assessing Officer estimated the expenses on adhoc basis to the tune of Rs.2,72,000/- as travelling bills, hotel bills etc. were not produced. Subsequently, assessee preferred the appeal before the learned CIT(A) and learned CIT(A) allowed the appeal to the extent of amount of Rs.97,345/- which has already been shown by the assessee in his return of income as A.Y.2010-11 travelling expenditure. The learned representative of the assessee has argued that the assessee stayed with his family friend residing at London Shri Dilip Patel 2 Jersey Clause Welling Brough Northamptonshire NN84UA United Kingdom and in this regard certificate of Shri Dilip Patel has also been produced but the same was not considered by learned CIT(A) wrongly and illegally and the assessment was confirmed which is on the basis of estimation / adhoc basis. In support of these contentions the learned representative of the assessee has placed reliance upon the law settled in ACIT Vs. Nitin Mukesh Mathur (88 TTJ 220) (Mum), Bajrang Lal Bansal Vs. DCIT (150 Taxman 29)(Del.), & Jagdish Duggal Vs. ACIT (24 DTR 174)(Chd.)(Trib). It is also argued that the assessment cannot be made on the basis of surmises and conjectures and on estimated basis and reliance placed upon law settled in Dhirajlal Girdharilal Vs. CIT (26 ITR 736)(SC). It is also argued that without any incrementing material no addition of any kind can be made in view of the law settled in CIT Vs. Teletornics Dealing System (P) Ltd. (228 Taxman 194)(Bom). Learned Representative of department has strongly relied upon the finding of the learned CIT(A). After going through the careful thoughts the argument advanced by the learned representative of the parties and perusing the record it is observed that with regard to the food and stay during London visit the assessee filed the letter of Shri Dilip Patel which was not considered by the Assessing Officer. No enquiry of any kind was done to discredit the A.Y.2010-11 said piece of evidence. When some evidence has been adduced by the assessee but the same was not considered and nor proper enquiry was done to discredit the same then in the said circumstances the addition made on the basis of estimation does not seems justifiable accordance with the law. No estimation can be made on the basis of surmises and conjectures. We are of the view that the matter is required to be reconsidered afresh after giving proper opportunity of being heard in accordance with law. Therefore we order accordingly.

Accordingly the appeal filed by the assessee is hereby partly allowed for statistical purpose.