Sh. Arvind Kumar Singh, Meerut V. ITO, Hapur

ITA 1155/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0243 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Depreciation; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1155/DEL/2014 1155/DEL/2014 1155/DEL/2014 1155/DEL/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007 - -- - 08 0808 08 SHRI ARVIND KUMAR SINGH, SHRI ARVIND KUMAR SINGH, SHRI ARVIND KUMAR SINGH, SHRI ARVIND KUMAR SINGH, S/O SHRI SITA RAM SINGH, S/O SHRI SITA RAM SINGH, S/O SHRI SITA RAM SINGH, S/O SHRI SITA RAM SINGH, 339, 339, 339, 339, MOHALLA BRAHMNAN, MOHALLA BRAHMNAN, MOHALLA BRAHMNAN, MOHALLA BRAHMNAN, HAPUR. HAPUR. HAPUR. HAPUR. PAN : BBLPS9269N. PAN : BBLPS9269N. PAN : BBLPS9269N. PAN : BBLPS9269N. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1, 1,1, 1, HAPUR. HAPUR. HAPUR. HAPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD KUMAR GOEL, ADVOCATE. RESPONDENT BY : SHRI VIKRAM SAHAY, SR.DR. DATE OF HEARING : 06.04.2015 06.04.2015 06.04.2015 06.04.2015 DATE OF PRONOUNCEMENT : 10.06.2015 10.06.2015 10.06.2015 10.06.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-0 8 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), MUZAFF ARNAGAR DATED 9 TH OCTOBER, 2013. 2. THE GROUND OF APPEAL NO.1 OF THE ASSESSEE IS AS UNDER :- THAT THE LD.A.O. IS IN ERROR IN MAKING ADDITION OF RS.60,000/- AND LD. CIT(A) IS CONFIRMED ON ACCOUNT OF LOW HOUSE HOLD EXPENSES IS NOT ONLY EXCESSIVE BUT ALSO WITHOUT ANY BASIS OR JUSTIFICATION. CONSIDERING THE FA CT THAT THE ASSESSEES FAMILY CONSISTS OF SELF, WIFE AND TWO SCHOOL GOING DAUGHTERS AND THAT THE ASSESSEE IS RESIDING IN HIS PARENTAL HOUSE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS DECLARED A SUM OF `60,000/- FOR ITS HOUSEHOLD EXPENSES, ITA-1155/DEL/2014 2 WHICH WERE QUITE REASONABLE IN VIEW OF THE FACT THAT THE FAMILY OF THE ASSESSEE CONSISTS OF SELF, WIFE AND TWO CHILDREN AND THE CH ILDREN WERE GETTING EDUCATION IN THE TOWN OF HAPUR ITSELF. THE ASSESSEE WAS RESIDING IN HIS PARENTAL HOUSE AND NO RENT WAS BEING PA ID. THERE WAS NO PERSONAL VEHICLE OF THE ASSESSEE. HE SUBMITTED THAT T HE LIC INSTALLMENT HAD BEEN SEPARATELY DEBITED BY THE ASSESSEE. 4. LEARNED DR HAS SUBMITTED THAT THE ESTIMATE OF HOUSE HOLD EXPENSES AT `1,20,000/- WAS QUITE REASONABLE IN THE FAC TS OF THE CASE OF THE ASSESSEE. HE RELIED ON THE ORDER OF THE ASSESSING O FFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT THE ASSESSEE WAS ADMITTEDLY LIVING IN HIS PARENTAL HOUSE IN TH E TOWN OF HAPUR (UP) AND, FOR WHICH, NO RENT WAS BEING PAID. THERE WAS NO VEHICLE IN THE NAME OF THE ASSESSEE. THE LIC PREMIUM W AS BEING SEPARATELY DEBITED BY THE ASSESSEE APART FROM THE HOUSEHO LD EXPENSES OF `60,000/-. THE CASE PERTAINS TO THE FINANCIAL YEA R 2006-07. CONSIDERING THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT NO CASE OF ADDITION ON HOUSEHOLD EXPENSES COULD BE MADE OUT BY TH E REVENUE AND THE ADDITION IS ACCORDINGLY DELETED AND GROUND N O.1 OF THE ASSESSEES APPEAL IS ALLOWED. 6. GROUND NOS.2 & 3 OF THE ASSESSEES APPEAL ARE AS UNDER: - 2. THAT THE LD. A.O. IS IN ERROR IN MAKING ADDITION OF RS.62,802/- AND LD. CIT(A) IS CONFIRMED AS INCOME FROM UNDISCLOSED SOURCES IS VERY EXCESSIVE AND UNJUSTIFIED, THIS IS A DOUBLE ADDITION IN VIEW OF THE FACT THAT AD DITION IN FAMILY EXPENSES HAS ALREADY BEEN MADE. ITA-1155/DEL/2014 3 3. THAT THE LD.A.O. IS IN ERROR IN MAKING ADDITION O F RS.78,540/- AND LD.CIT(A) IS CONFIRMED IS UNCALLED FOR AND IS VERY EXCESSIVE AS THE REPAYMENT OF LOAN WAS MADE OUT OF THE CAR RUNNING INCOME BEFORE DEPRECIAT ION WHICH HAS NOT BEEN CONSIDERED WHILE COMPUTING THE INCOME FROM CAR RUNNING. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS FILED THE CASH FLOW STATEMENT WITH THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) AND A COPY FILED AT PAG E 16 OF THE COMPILATION BEFORE THE TRIBUNAL. IT SHOWS THAT THE A SSESSEE HAS EARNED INCOME OF `2,02,731/- FROM RUNNING OF CAR ON CONTRA CT BASIS BEFORE DEPRECIATION AND, AFTER CLAIMING DEPRECIATION, THE NET INCOME OF `27,561/- WAS DECLARED BY THE ASSESSEE. THE LEARNED CO UNSEL SUBMITTED THAT THE LOAN REPAYMENT TO STATE BANK OF I NDIA AND ALL OTHER OUTGOINGS WERE FULLY COVERED WITH THE CASH FLOW STATEM ENT OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSING OFFICER HAS WRON GLY TAKEN THE NET FIGURE OF INCOME FROM RUNNING OF CAR, AFTER DEDUCTING THE NOTIONAL DEPRECIATION ON THE CAR. HE SUBMITTED THAT THE DEPRECIATION IS A STATUTORY DEDUCTION AND FOR THE PURPOSE OF CASH FLOW STATEMENT, IT IS THE GROSS INCOME DECLARED BY THE ASSESSEE, WHICH IS RELEVA NT. 8. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). HE REFERRED TO THE RELEVANT PO RTION OF THE APPELLATE ORDER PASSED BY THE LEARNED CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. HE RELIED UPON THE ORDER OF THE ASSESSING OFF ICER AND THE CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT THE ASSESSEE HAS FILED A CASH FLOW STATEMENT AND HAS DECLARED THE INCOME FROM RUNNING OF CARS ON CONTRACT BASIS AT `2,02,731/-, BEFORE DEDUCTING DEPRECIATION ON THE CARS. WE FIND THAT IN THE CASH F LOW STATEMENT, IT IS ITA-1155/DEL/2014 4 THE INCOME FROM RUNNING OF CARS, BEFORE THE DEDUCTIO N OF DEPRECIATION THEREON, WHICH IS RELEVANT FOR DECIDING THAT WHETHER THE OUTFLOW IN THE CASH FLOW STATEMENT WAS COVERED FROM THE INFLOW OF THE STATEMENT. WE FIND THAT THE OUTGOINGS IN THE CASH FLOW STATEMENT AS SHOWN IN THE COPY OF CASH FLOW STATEMENT FILED IN THE COMPILATION BEFOR E US, WERE FULLY COVERED WITH THE OPENING CASH AND BANK BALANCE AND I NCOME FROM RUNNING OF CARS, LOANS ETC. AND, THEREFORE, NO CASE OF ADDITION OF `62,802/- AND `78,540/- COULD BE MADE OUT BY THE RE VENUE. THE ADDITIONS SO MADE ARE DELETED AND GROUND NOS.2 & 3 OF THE ASSESSEES APPEAL ARE ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2015. SD/- SD/- ( (( ( INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESID VICE PRESID VICE PRESID VICE PRESID ENT ENT ENT ENT VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI ARVIND KUMAR SINGH, SHRI ARVIND KUMAR SINGH, SHRI ARVIND KUMAR SINGH, SHRI ARVIND KUMAR SINGH, S/O SHRI SITA RAM SINGH, S/O SHRI SITA RAM SINGH, S/O SHRI SITA RAM SINGH, S/O SHRI SITA RAM SINGH, 339, MOHALLA BRAHMNAN, HAPUR. 339, MOHALLA BRAHMNAN, HAPUR. 339, MOHALLA BRAHMNAN, HAPUR. 339, MOHALLA BRAHMNAN, HAPUR. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1, HAPUR. 1, HAPUR. 1, HAPUR. 1, HAPUR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR