Ritesh Kumar , Hanumangarh Town V. ITO, Ward-1, Hanumangarh

ITA 102/JODH/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6240 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 20-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (SMC), JODHPUR BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 102/JODH/2018 (ASSESSMENT YEAR-2013-14 RITESH KUMAR, PROP.- M/S BIRBAL DAS RITESH KUMAR, SHOP NO. 32B, NAI MANDI, HANUMANGARH TOWN. VS INCOME TAX OFFICER, WARD-1, HANUMANGARH. (APPELLANT) (RESPONDENT) PAN: AEYPG 5732 M ASSESSEE BY SHRI SAHIL GOYAL REVENUE BY SHRI ASHOK KHANNA JCIT DR DATE OF HEARING 23/05/2018 DATE OF PRONOUNCEMENT 25/05/2018 O R D E R PER: R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), BIKANER, DATED 25/10/2017 FOR THE A.Y. 2013-14 IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED T O AS THE ACT, FOR SHORT]. 2. THE FIRST GRIEVANCE OF THE ASSESSEE RELATE TO DI SALLOWANCE MADE U/S 14(A) OF THE ACT READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) AMOUNTING TO RS. 8 ,72,955/-. 2 ITA 102/JODH/2018 RITESH KUMAR VS. ITO 3. THE MAIN CONTENTION OF THE LD AR OF THE ASSESSEE THAT THE INVESTMENT WAS MADE OUT OF INTEREST FREE FUNDS AVAI LABLE WITH THE ASSESSEE. HE INVITED OUR ATTENTION TO THE INTER EST FREE RECEIPTS OF RS. 14.15 LACS FROM SH. BAGGA SINGH, S/ O- SH. MAHENDER SINGH AND RS. 6.85 LACS FROM SH. TARSEM SI NGH, S/O- SH. DEEP SINGH AGGREGATING TO RS. 21 LACS ON 07/5/2 012 CREDITED IN BANK OF BARODA-CC A/C PRIOR TO MAKING P AYMENT OF RS. 7.00 LACS ON 12/5/2012 AND RS. 7,48,346/- ON 26 /05/2012 TO BROKER SURESH RATHI SECURITIES PVT. LTD. FROM THE S AID BANK ACCOUNT. 4. I HAVE CONSIDERED THE RIVAL CONTENTION AND FOUND THAT THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPOSITION THAT NO DISALLOWANCE U/S 14A READ WITH RULE 8D, IN RESPECT OF INTEREST IS WARRANTED IF THE INVESTMENT IS MADE OUT OF INTEREST FREE FUND AVAILABLE WITH THE ASSESSEE. I FOUND THAT THE INVES TMENT OF RS. 7 LACS ON 12/5/2012 AND RS. 7,48,346/- ON 26/5/2012 W AS OUT OF INTEREST FREE RECEIPTS FROM SHRI BAGGA SINGH AND SH RI TARSEM SINGH. SINCE THE INVESTMENT WAS OUT OF INTEREST FRE E FUNDS, NO DISALLOWANCE IS WARRANTED. ACCORDINGLY, I DIRECT TH E ASSESSING OFFICER TO DELETE THE DISALLOWANCES OF INTEREST SO MADE. 3 ITA 102/JODH/2018 RITESH KUMAR VS. ITO 5. THE ASSESSING OFFICER HAS ALSO MADE AN AD HOC DISALLOWANCE OF 10% OF THE EXPENDITURE CLAIMED UNDE R SEVEN HEADS OF EXPENSES. 6. AFTER CONSIDERING THE NATURE OF EXPENDITURE SO I NCURRED VIS A VIS NATURE OF BUSINESS, I DIRECT THE ASSESSING OF FICER TO RESTRICT THE DISALLOWANCES TO THE EXTENT OF 5%. 7. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 1,33,000/- FOR LOW WITHDRAWAL ON ACCOUNT OF HOUSEHOLD EXPENDIT URE. 8. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUN D THAT THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 1,33,000 /- BY PRESUMING THAT THE ASSESSEE SHOULD HAVE HOUSEHOLD E XPENSES OF RS. 3.00 LACS. WHILE WORKING OUT THE ADDITION, THE ASSESSING OFFICER TOOK WITHDRAWAL OF RS. 1.47 LACS BY THE ASS ESSEE AND RS. 18,000/- BY HIS FATHER, WHEREAS THERE WAS WITHDRAWA L OF RS. 1.49 LACS BY THE ASSESSEE AND RS. 1.47 LACS AND RS. 24,500/- BY HIS FATHER AND MOTHER RESPECTIVELY. AFTER TAKING IN TO CONSIDERATION, THE WITHDRAWAL BY FATHER AND MOTHER OF THE ASSESSEE, WHO WERE RESIDING WITH THE ASSESSEE, NO A DDITION IS WARRANTED ON ACCOUNT OF LOW WITHDRAWALS. ACCORDINGL Y, I DIRECT 4 ITA 102/JODH/2018 RITESH KUMAR VS. ITO THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 1.33 LACS MADE FOR LOW HOUSEHOLD WITHDRAWALS. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 25/05/2018. SD/- [R.C. SHARMA] ACCOUNTANT MEMBER DATED : 25/05/2018 *RANJAN COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6. GUARD FILE (ITA NO. 102/JODH/2018) ASSISTANT REGISTRAR JODHPUR BENCH