Sh. Manoj Jain, Chandigarh V. ITO, Chandigarh

ITA 1029/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86120 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 1029/CHD/2013 ASSESSMENT YEAR: 2009-10 SHRI MANOJ JAIN, VS THE ITO, WARD 5(3), CHANDIGARH CHANDIGARH PAN NO.ACTPJ7080L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 22.12.2014 DATE OF PRONOUNCEMENT : 12.01.2015 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 8.8.2013 OF CIT(A), CHANDIGARH. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS:- GROUND 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME (APPEAL) IS BAD & AGAINST THE FACT OF CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME (APPEAL) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 6 LAKHS ON ACCOUNT OF HOUSEHOLD EXPENSES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS ALREADY WITHDRAWN SUFFIC IENT AMOUNT FROM HIS CAPITAL ACCOUNT FOR MEETING HOUSEHO LD EXPENSES & HIS WIFE HAS ALSO UTILIZED HER SALARY IN COME FOR MEETING HOUSEHOLD EXPENSES. FURTHER THE LEARNED CIT(A) HAS ERRED IN MAKING ADDITION WITHOUT 2 APPRECIATING THE FACT THAT THE ASSESSING OFFICER HA S ACCEPTED SOURCES / WITHDRAWAL FOR HOUSEHOLD EXPENSE S & NO ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES HAS BE EN MADE BY ASSESSING OFFICER. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 6 LAKHS OUT OF TOTAL ADDITION OF RS. 10 LAKHS MADE BY ASSESSING OF FICER ON ACCOUNT OF ADDITION TO CAPITAL ACCOUNT WITHOUT APPRECIATING THE FACT THAT ALL ADDITIONS IN CAPITAL ACCOUNT HAS BEEN MADE OUT OF WITHDRAWAL FORM SAVING ACCOUNT & WITHDRAWAL ACCOUNT SHOWN IN BOOKS OF ACCOUNTS & SAME HAS BEEN VERIFIED BY ASSESSING OFFI CER IN REMAND PROCEEDINGS. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSE SSEE HAD FILED A RETURN OF RS. 9,59,510/- AND ASSESSING OFFICER MAD E VARIOUS ADDITIONS AMOUNTING TO RS. 7,22,93,666/- ON ACCOUNT OF SUNDRY CREDITORS FOR WHICH NO EVIDENCE WAS AVAILABLE IN ADDITION TO THE CAPITA L ACCOUNT, DIFFERENCE IN RECEIPTS, ADDITION IN CAPITAL ACCOUNT AND CASH CRED ITS IN THE FORM OF VARIOUS CREDIT ENTRIES IN THE BANK ACCOUNTS. 4. ON APPEAL, VARIOUS SUBMISSIONS WERE MADE AND VAR IOUS ISSUES WERE REMANDED AND THE ASSESSING OFFICER ACCEPTED THE EXP LANATIONS OF THE ASSESSEE ON ALL THE ISSUES. HOWEVER, LD. CIT(A) WH ILE ADJUDICATING THE ISSUE REGARDING ADDITION OF RS. 10 LAKHS TO THE CAP ITAL, GAVE ONLY PART CREDIT VIDE PARA 6.3 WHICH IS AS UNDER:- 6.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL. THE LD. COUNSEL HAS FILED A COPY OF HIS CAPITAL ACC OUNT, WITHDRAWAL ACCOUNT, LEDGER ACCOUNT AND THE BANK ACC OUNT. THE ASSESSING OFFICER WAS ASKED TO VERIFY THE CONTE NTION OF THE APPELLANT THAT THE DEPOSITS HAD BEEN MADE OUT O F WITHDRAWAL AND THE ASSESSING OFFICER HAS VERIFIED T HE CAPITAL ACCOUNT WITH REFERENCE TO SAVINGS BANK STATEMENT AN D HAS 3 REPORTED VIDE HIS LETTER NO. 10213 DATED 14.03.2013 THAT THE CREDITS IN CAPITAL ACCOUNT WERE EXPLAINED. IT IS, H OWEVER, SEEN THAT THE AMOUNT OF ADDITION TO THE CAPITAL ACCOUNT ALMOST TALLIES WITH THE WITHDRAWALS MADE AND IN THAT SITUA TION, NO AMOUNT OUT OF WITHDRAWALS WILL BE LEFT FOR HOUSEHOL D EXPENSES. IT APPEARS THAT THE APPELLANT MIGHT HAVE UTILIZED PART OF THE WITHDRAWALS FOR HOUSEHOLD PURPOSES, BUT HE IS TRYING TO COVER UP THE ADDITION TO THE CAPITAL ACCO UNT OUT OF WITHDRAWALS. THE APPELLANT HAS NOT EXPLAINED THE SO URCE OF AMOUNT SPENT TOWARDS HOUSEHOLD PURPOSES. THE AMOUNT FOR HOUSEHOLD EXPENSES IS ESTIMATED AT RS. 50,000/- PER MONTH AND SO THE AMOUNT FOR THE WHOLE YEAR WOULD BE RS. 6 ,00,000/-. HENCE, OUT OF THE ADDITION TO CAPITAL ACCOUNT OF RS . 10,00,000/-, ONLY RS. 4,00,000/- IS TREATED AS EXPL AINED OUT OF WITHDRAWALS AND REST OF THE WITHDRAWALS OF RS. 6,00 ,000/- IS TREATED TO HAVE BEEN SPENT TOWARDS HOUSEHOLD PURPOS ES. THE ADDITION OF RS. 6,00,000/- IS ACCORDINGLY CONFIRMED . GROUND OF APPEAL NO. 5 IS PARTLY ALLOWED. 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT ISSUE OF WITHDRAWAL WAS NOT THERE BEFORE THE CIT(A) AND, THE REFORE, THIS WOULD AMOUNT TO ENHANCEMENT FOR WHICH NO PROPER NOTICE WA S SENT. ALTERNATIVELY, HE SUBMITTED THAT ASSESSEE HAS SHOWN PROPER WITHDRAWALS AND IN THIS REGARD HE REFERRED TO THE COPY OF THE C APITAL ACCOUNT AVAILABLE AT PAGES 13 & 14 OF THE PAPER BOOK. FURTHER, ASSES SEES WIFE WAS ALSO WORKING AND SHE HAS ALSO WITHDRAWN A SUM OF RS. 1,8 0,000/-. 6. ON THE OTHER HAND, LD. DR SUBMITTED THAT IT IS N OT A CASE OF ENHANCEMENT BECAUSE CIT(A) HAS NOT ACCEPTED THE SOU RCE OF CASH AS EXPLAINED BY THE ASSESSEE. FURTHER, THE ASSESSEE H AS NOT SHOWN ANY WITHDRAWAL FROM HIS ACCOUNT AND THE WITHDRAWAL OF T HE ASSESSEE CANNOT BE ACCOUNTED FOR BECAUSE SHE WAS LIVING IN PANCHKULA A S BECOMES CLEAR FROM THE ADDRESS GIVEN IN THE SALARY CERTIFICATE. 4 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND IN OUR OPINION IT IS NOT A CASE OF ENHANCEMENT BECAUSE ASS ESSEE HAS EXPLAINED THE SOURCES OF ADDITION TO THE CAPITAL BY WITHDRAWALS F ROM VARIOUS ACCOUNTS. THE LD. CIT(A) HAS SIMPLY OBSERVED THAT OUT OF THES E WITHDRAWALS SOME AMOUNT WAS REQUIRED FOR HOUSEHOLD EXPENSES ALSO. A S FAR AS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ASSESSEE HAS MADE SEVERAL WITHDRAWALS, WE FIND THE SAME IS NOT CORRECT BECAUS E PERUSAL OF THE COPY OF THE ACCOUNT AT PAGES 13 & 14 SHOWS THAT PRACTICA LLY NO CASH HAS BEEN WITHDRAWN FROM THE FIRM BY THE ASSESSEE. THE DEBIT REFLECTS ON ACCOUNT OF TDS, PAYMENT ON ACCOUNT OF INSTALLMENT AND TRANSFER TO HIS CAPITAL ACCOUNT. EVEN SOME OF RUPEES WITHDRAWN ON 4.7.2008 HAD ALREADY BEEN TAKEN CREDIT OF BY THE ASSESSEE. APART FORM THIS C ASH OF ONLY RS. 11,000/- RS. 5,000/- AND RS. 3,000/- IS SHOWN TO HAVE BEEN W ITHDRAWN ON 25.7.2008, 29.7.2008 AND 7.3.2009. 8. WE ALSO FIND FORCE IN THE SUBMISSIONS THAT ASSES SEES WIFE IS LIVING AT A DIFFERENT ADDRESS, THEREFORE, NO CREDIT CAN BE GIVEN FROM HER WITHDRAWALS AND FURTHER HER WITHDRAWALS WERE NOT SU BSTANTIATED BEFORE US. HOWEVER, AT THE SAME TIME THE ESTIMATE OF WITHDRAWA LS AT RS. 6 LAKHS SEEMS TO BE ON VERY HIGHER SIDE AND WE REDUCE THE S AME TO RS. 3 LAKHS. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) A ND DIRECT THE ASSESSING OFFICER TO MAKE ADDITION OF RS. 3 LAKHS O N THIS ACCOUNT. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.01.2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH JANUARY, 2015 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR 5