Shri Arjanbhai Kadwabhai Harnia, Surat V. The Income tax Officer,Ward-8(2), Surat

ITA 1070/AHD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60350 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 02-04-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 12-03-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV SRDR
• Assessee Lawyers: YOGESH B SHAH
• Keywords: Business income

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ %&'( %&'( %&'( %&'(, , , , )* + ) )* + ) )* + ) )* + ) ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1070/AHD/2007 [ASSTT.YEAR : 2002-2003] ARJANBHAI KADWABHAI HARNIA A-25, MANGAL GROUP SOCIETY VED ROAD, SURAT. /VS. ITO, WARD-8(2) SURAT. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI YOGESH B. SHAH + 2 3 )/ REVENUE BY : SHRI B.L. YADAV, SR.DR 5 2 &(*/ DATE OF HEARING : 2 ND APRIL, 2012 678 2 &(*/ DATE OF PRONOUNCEMENT : 18-5-2012 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME TAX (APPEALS)-V, SURAT FOR THE ASSESSMENT YEAR 2002-200 3. 2. THE GROUND NO.1 OF THE ASSESSEES APPEAL READS A S UNDER: 1. THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THE EVIDENCES SUBMITTED REGARDING AGRICULTURAL INCOME A ND CONFIRMING THE ADDITION OF RS.60,000/- MADE ON ACCO UNT OF HOUSE HOLD EXPENSES. ITA NO.1070/AHD/2007 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FILED NECESSARY EVIDENCES OF SIZE OF FAMILY AND THE AGRICULTURE INCOME IN THE NATIVE PLACE BEFORE THE AO, WARD-8(1) , SURAT. HE SUBMITTED THAT THERE WAS SOME COMMUNICATION GAP AND THEREFORE THE SAME WAS NOT COMMUNICATED TO THE AO, WARD-8(2), SUR AT AND THERE WAS NO CASE FOR NON-COMPLIANCE ON THE PART OF THE A SSESSEE. HE SUBMITTED THAT CONSIDERING THE AGRICULTURE INCOME, HOUSEHOLD EXPENSES SHOWN AT RS.20,000/- FOR A LOWER INCOME CL ASS OF PERSON WAS JUSTIFIED. THE LEARNED DR HAS OPPOSED THE SUBMISSI ONS OF THE LEARNED COUNSEL OF THE ASSESSEE. HE SUBMITTED THAT NUMBER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO EXPLAIN ITS CASE BY T HE AO. HE REFERRED TO THE RELEVANT PARAGRAPHS OF THE ORDERS OF THE AO AND THE CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. 4. WE HAVE CONSIDERED SUBMISSIONS OF THE BOTH THE P ARTIES AND HAVE PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE IS AN INDIVIDUAL AND IS DOING DIAMOND LABO UR WORK AND SOME BROKERAGE THEREIN. THE TOTAL INCOME SHOWN BY THE A SSESSEE FROM THE DIAMOND LABOUR AND BROKERAGE WAS RS.72,510/-. THE ASSESSEE HAS FILED THE DETAILS OF SIZE OF HIS FAMILY AS WELL AS EVIDENCE REGARDING HAVING EARNED AGRICULTURE INCOME AT HIS NATIVE PLAC E WHICH WAS NOT CONSIDERED BY THE AO DUE TO SOME COMMUNICATION GAP AS THE INFORMATION WAS FILED BY THE ASSESSEE WITH AO, WARD -8(1) AND THE ASSESSMENT WAS FRAMED BY THE AO, WARD-8(2), SURAT. CONSIDERING THE COPIES OF THE EVIDENCES FILED BY THE ASSESSEE REGAR DING THE AGRICULTURE INCOME AND THE FACT THAT THE ASSESSEE BELONGS TO LO WER INCOME GROUP, WE HOLD THAT THE ENDS OF JUSTICE SHALL BE MET, IF T HE ADDITION ON THIS COUNT IS RESTRICTED TO RS.20,000/- AS AGAINST RS.60 ,000/- SUSTAINED BY ITA NO.1070/AHD/2007 -3- THE CIT(A), AND ACCORDINGLY, THE GROUND NO.1 OF THE ASSESSEE IS PARTLY ALLOWED. 5. THE GROUND NO.2 OF THE ASSESSEES APPEAL READS A S UNDER: 2. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.40,000/- MADE ON ACCOUNT OF OPENING BALANCE OF R S.40,000/- WITHOUT TAKING INTO ACCOUNT THE AGE AND PAST HISTOR Y OF THE APPELLANT AND NOT APPLIED ORDINARY PRUDENCE AND DIL IGENCE TO THE FACTS OF THE CASE. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE WAS DOING DIAMOND LABOUR AND BROKERAGE FOR THE PAST NUMBER OF YEARS AND WAS 37 YEARS OF AGE DURING THE RELEVANT YEAR AN D THIS IS THE FIRST YEAR OF THE ASSESSMENT OF THE ASSESSEE AND THE OPEN ING BALANCE OF RS.40,000/- COULD NOT BE SAID TO BE EXCESSIVE. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 7. WE HAVE CONSIDERED SUBMISSIONS OF THE BOTH THE P ARTIES AND HAVE PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE WAS DOING DIAMOND LABOUR AND BROKERAGE FOR THE PAST NUMBER OF YEARS, WHICH COULD NOT BE CONTROVERTED BY THE AO . THE ASSESSEE WAS 37 YEARS OF AGE DURING THE RELEVANT PERIOD AND THE RELEVANT ASSESSMENT YEAR 2002-2003 WAS THE FIRST ASSESSMENT YEAR OF THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASES, WE ARE OF THE VIEW THAT THE OPENING BALANCE DECLARED AT RS.40 ,000/- BY THE ASSESSEE COULD NOT BE CONSIDERED AS UNJUSTIFIED OR EXCESSIVE, AND ACCORDINGLY, NO ADDITION ON THIS COUNT WAS CALLED F OR, WHICH WAS ACCORDINGLY DELETED AND THE GROUND NO.2 OF THE ASSE SSEE IS ALLOWED. 8. THE GROUND NO.3 OF THE ASSESSEES APPEAL READS A S UNDER: ITA NO.1070/AHD/2007 -4- 3. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ESTIM ATE OF BUSINESS INCOME AT RS.1,00,000/- MADE BY THE AO. 9. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE HA S DECLARED ITS BUSINESS INCOME AT RS.72,510/- AND THE AO ESTIMATED THE SUM OF RS.1,00,000/-. THE ADDITION MADE BY THE AO WAS SUS TAINED BY THE CIT(A) BY OBSERVING THAT THE ASSESSEE COULD PRODUCE FEW VOUCHERS WITH REGARD TO BROKERAGE INCOME RECEIVED BY THE ASS ESSEE AND THESE VOUCHERS WERE FOUND KATCHHA VOUCHERS WITHOUT SHOWING PROPER DETAILS OF QUANTUM OF WORK CARRIED OUT FOR SUCH BRO KERAGE INCOME AND MOST OF THE VOUCHERS DID NOT HAVE ANY DATE ETC. IN OUR CONSIDERED VIEW, THIS REASONING OF THE CIT(A) IS NOT SUSTAINAB LE. FOR AN INDIVIDUAL, WHO WAS HAVING A VERY SMALL INCOME FROM BROKERAGE, IT COULD NOT BE EXPECTED THAT THE VOUCHERS PRODUCED BY THE ASSESSEE SHOULD CONTAIN THE FULL AND PROPER DETAILS OF QUANT UM OF WORK CARRIED OUT FOR WHICH THE BROKERAGE WAS EARNED. THERE IS N O MATERIAL BROUGHT ON RECORD TO SUGGEST THAT THE ASSESSEE HAS ACQUIRED ANY ASSET OR HAS MADE SOME INVESTMENTS DURING THE RELEVANT PERIOD. IN THESE FACTS OF THE CASE, WE HOLD THAT THE ESTIMATE MADE BY THE AO OF THE BUSINESS INCOME OF THE ASSESSEE IS WITHOUT ANY EVIDENCE. AC CORDINGLY, THE ADDITION MADE ON THIS COUNT IS DELETED AND THE AO I S DIRECTED TO ASSESS THE BUSINESS INCOME AS DECLARED BY THE ASSESSEE, AN D THE GROUND NO.3 OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT