Sh. Sukhwinder Singh, Ludhiana V. DCIT, Ludhiana

ITA 1219/CHANDI/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1429 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-12-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 21-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: JYOTI
• Keywords: Income from undisclosed sources
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: SMC BENCH: CHANDIGARH BEFORE HONBLE SHRI D K SRIVASTAVA, AM ITA NOS. 1219-1220/CHANDI/2009 ASSESSMENT YEAR: 200 0-01 & 2005-06 SUKHWINDER SINGH V D.C.I.T.C.C.II, LUDHIANA S/O SHRI HARBANS SINGH 1410, ST NO. 6, KWALITY ROAD, LUDHIANA PAN: AWNPS 4596 E (APPELLANT-ASSESSEE) (RESPONDENT) APPELLANT BY: MS. JYOTI, ADVOCATE RESPONDENT BY: MS. JAI SHREE SHARMA, DR ORDER BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. CIT(A) ON 9.11.2009. THEY RELATE TO AYS 2000-01 AND 2005-06. ASSESSMENT YEAR 2001-02 2. FACTS GIVING RISE TO THE APPEAL ARE THAT A SURVE Y OPERATION U/S 133A OF THE INCOME-TAX ACT WAS CARRIED OUT AT THE RESIDENTIAL P REMISES AND THE LOCKER OF THE ASSESSEE. NOTICE U/S 153 WAS ISSUED BY THE ASSESSIN G OFFICER (AO IN SHORT) REQUIRING THE ASSESSEE TO FURNISH HIS RETURN OF INCOME PURSUA NT TO WHICH THE ASSESSEE FILED HIS RETURN OF INCOME RETURNING TOTAL INCOME AT RS. 55,0 00/-. DURING THE COURSE OF SCRUTINY, THE ASSESSEE FILED CASH FLOW STATEMENT BEFORE THE A O IN WHICH HE DECLARED OPENING CASH BALANCE OF RS. 61,500/-. THE AO CALLED UPON TH E ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE AFORESAID OPENING CASH BALANCE. I N REPLY, HE ASSESSEE SUBMITTED THAT THE OPENING BALANCE CAME OUT OF HIS PAST SAVINGS. T E AO DID NOT ACCEPT THE AFORESAID EXPLANATION ON THE GROUND THAT THE INCOME SHOWN BY THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR WAS JUST RS. 60,000/- WHICH WAS HARD LY SUFFICIENT TO MEET THE HOUSEHOLD EXPENSES. ON APPEAL THE LD. CIT(A) CONFIRMED THE AF ORESAID ADDITION. GROUND NO. 1 TAKEN BY THE ASSESSEE BEFORE THIS TRIBUNAL IS DIREC TED AGAINST THE AFORESAID ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). GR OUND NO. 1 READS AS UNDER: 1 THAT THE LD. CIT(A)-I, LUDHIANA HAS ERRED IN CON FIRMING THE ADDITION OF RS. 61,500/- MADE BY THE AO ON ACCOUNT OF OPENING B ALANCE SHOWN IN THE CASH FLOW STATEMENT AS ON 1.4.99 WTIHOUT CONSIDERING THE REPLY FILED THE APPELLANT. THEREFORE, ADDITION OF RS. 61,500/- IS UNCALLED FOR UNWARRANTED AND MAY BE DELETED. 1219 & 1220/CHANDI/2009 2 2 3. IN SUPPORT OF APPEAL, THE LD. COUNSEL FOR THE AS SESSEE HAS FILED SUBMISSION WHICH READS AS UNDER: THAT THE APPELLANT FILED AN APPEAL BEFORE THE LD. CIT(A)-I, LUDHIANA WHO VIDE HIS ORDER DATED 9.11.2009 DELETED THE ADDITION OF R S. 2,18,488/- MADE ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT AND RESTORED TH E ADDITION OF RS. 61,500/- AND RS. 12,000/-. THAT THE APPELLANT FILED AN APPEAL BEFORE THE LEARN ED I.T.A.T. AGAINST THE ADDITION OF RS. 61,500/- AND RS. 12,000/- WHICH IS FIXED FOR HEARING BEFORE YOUR HONOUR ON 7.9.2000. THAT THE LEARNED AO MADE THE ADDITION OF RS. 61,500 /- ON ACCOUNT OF OPENING BALANCE SHOWN IN THE CASH FLOW STATEMENT AS UNEXPLA INED AMOUNT. THAT THE BALANCE OF RS. 61,500/- HAS BEEN TAKEN FROM THE CLO SING BALANCE OF CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 1998-99. THAT THE COPY OF THE CASH FLOW STATEMENT WAS FILED BEFORE THE AO AND BEFORE THE LD . CIT(A)-I, LUDHIANA WHICH SHOWS THE CLOSING BALANCE AS ON 31.3.99 WAS RS. 61, 500/- WHICH IS THE OPENING BALANCE FOR CASH FLOW STATEMENT FOR THE FINANCIAL Y EAR 1999-2000. THAT THE AO MADE THIS ADDITION OF RS. 61,500/- WITH OUT ANY REASON MENTIONED IN THE ORDER WHEREAS NO DEFECT WAS IN POINTED OUT IN T HE CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 1998-99. IN VIEW OF THE ABOVE SAID FACTS IT IS REQUESTED BEF ORE YOUR HONOR TO DELETE THE ADDITION OF RS. 61,500/- MADE BY AO WITHOUT ANY BAS IS AND MATERIAL ON THE FILE. 4. IN REPLY, THE LD. DR SUPPORTED THE ORDERS PASSED BY THE AO AND THE LD. CIT(A). 5. I HAVE HEARD BOTH THE PARTIES. IT IS TRUE THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO SUBSTANTIATE HIS CLAIM THAT HE HAD OPEN ING CASH BALANCE OF RS. 61,500/- AS CLAIMED BY HIM IN THE CASH FLOW STATEMENT FILED BEF ORE THE AO. THE ASSESSEE HAS A FAMILY OF FOUR PERSONS. THE INCOME DECLARED BY HIM IN THE IMMEDIATELY PRECEDING YEAR WAS JUST RS. 60,000/-, WHICH, IN THE OPINION OF THE AO, WAS NOT SUFFICIENT TO MEET THE HOUSEHOLD EXPENSES. THE FACT HOWEVER REMAINS THAT E VERY HOUSEHOLD WOULD HAVE SOME CASH AVAILABLE TO MEET THE EMERGENCY. IN THIS VIEW OF THE MATTER, I RESTRICT THE ADDITION TO RS. 30,000/- INSTEAD OF RS. 61,500/- MADE BY THE AO. 6. THE OTHER ADDITION MADE BY THE AO, WHICH IS SUBJ ECT MATTER OF APPEAL, IS OF RS. 4,000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS TO MEET THE HOUSEHOLD EXPENSES. THE AO HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD TO JU STIFY HIS ESTIMATION OF HOUSEHOLD EXPENSES OF RS. 5,000/- INSTEAD RS. 4,000/- CLAIMED BY THE ASSESSEE. THE AO OUGHT TO HAVE COLLECTED DETAILS REGARDING HOUSEHOLD EXPENSES , E.G., SCHOOL FEES, INSURANCE 1219 & 1220/CHANDI/2009 3 3 PREMIUM, ELECTRICITY, ETC. HE HAS HOWEVER CHOSEN NO T TO MAKE ANY RELEVANT INQUIRY TO ASCERTAIN THE QUANTUM OF HOUSEHOLD EXPENSES. IN THI S VIEW OF THE MATTER, THE ADDITION OF RS. 12,000/- MADE BY THE AO ON ACCOUNT OF LOW HO USEHOLD EXPENSES IS DELETED. GROUND NO. 2 IS ALLOWED. ASSESSMENT YEAR 2005-06 8. GROUND NO. 1 TAKEN BY THE ASSESSEE READS AS UNDE R: 1 THAT THE LD. CIT(A)-I, LUDHIANA HAS ERRED IN NOT DECIDING THE GROUND OF APPEAL NO. 1 REGARDING ADDITION OF RS. 75,000/- MAD E BY THE AO ON ACCOUNT OF PROFIT EARNED ON THE SALE OF PLOT. 9. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE AFORESAID GROUND AND HENCE GROUND NO. 1 TAKEN BY TH E ASSESSEE IS DISMISSED. 10. GROUND NO. 2 TAKEN BY THE ASSESSEE READS AS UND ER: 2 THAT THE LD. CIT(A)-I, LUDHIANA HAS ERRED IN CON FIRMING THE ADDITION OF RS. 50,000/- MADE BY THE AO ON ACCOUNT OF MARRIAGE EXPENSES WITHOUT CONSIDERING THE REPLY FILED BY THE APPELLANT. THAT THE ABOVE SAID ADDITION HAS BEEN MADE WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. THEREFORE, ADDITION OF RS. 50,000 IS UNC ALLED FOR UNWARRANTED AND MAY BE DELETED. 11. THE AO HAS MADE THE IMPUGNED ADDITION WITH THE FOLLOWING OBSERVATIONS: AS REGARDS THE MARRIAGE OF HIS DAUGHTER PERFORMED IN NOVEMBER, 2004, HE CLAIMED TO HAVE INCURRED EXPENSES OF RS. 2 LACS AS CONSIDERED IN THE RELEVANT CASH FLOW CHART BUT WITHOUT ANY DETAILS THEREOF FOR WHICH IT WAS INCURRED. EVEN NO DETAILS OF GUEST AND DOWRY ITEMS ETC. WAS FURNIS HED. HENCE, THE EXPENSES OF RS. 2 LACS CLAIMED TO HAVE BEEN SPENT BY THE ASSESS EE ON THE MARRIAGE OF HIS DAUGHTER IS ALSO CONSIDERED TO BE LOW WHICH IS ESTI MATED AT RS. 2,50,000/-. THIS RESULTS INTO ADDITION OF RS. 50,000/- WHICH IS ALSO MADE TO HIS TOTAL INCOME ON ACCOUNT OF UNEXPLAINED EXPENSES INCURRED ON THE MAR RIAGE AND REPRESENTING INCOME FROM UNDISCLOSED SOURCES FOR WHICH TOO, THE ASSESSEE IS TREATED TO HAVE CONCEALED THE PARTICULARS THEREOF. 12. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE IMPU GNED ADDITION WITH THE FOLLOWING OBSERVATIONS: 1219 & 1220/CHANDI/2009 4 4 6.2 I HAVE ANALYZED THE MATTER AND FIND THAT THE E STIMATION DONE BY THE AO IS REASONABLE ON ACCOUNT OF MARRIAGE O THE APPELLAN TS DAUGHTER. THUS, THIS GROUND OF APPEAL IS DISMISSED. 13. IN SUPPORT OF APPEAL, THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ADDITION MADE BY THE AO WAS NOT BASED ON ANY MATERI AL OR BASIS AND THEREFORE, IT SHOULD BE DELETED. 14. IN REPLY THE LD. D.R SUPPORTED THE ORDER PASSED BY THE AO AND THE LD. CIT(A). 15. I HAVE HEARD BOTH THE PARTIES. NEITHER THE AO N OR THE LD. CIT(A) HAS GIVEN ANY BASIS OR MATERIAL FOR MAKING OR SUSTAINING THE IMPU GNED ADDITION. BOTH THE AUTHORITIES HAVE BASED THEIR ACTIONS ON PURE CONJECTURES AND SU RMISES, WHICH HAVE NO LEGS TO STAND. IN THIS VIEW OF THE MATTER, THE IMPUGNED ADD ITION IS DELETED. GROUND NO. 2 TAKEN BY THE ASSESSEE IS ALLOWED. 16. GROUND NO. 3 TAKEN BY THE ASSESSEE READS AS UND ER: 3 THAT THE LD. CIT(A)-I, LUDHIANA HAS ERRED IN CON FIRMING THE ADDITION OF RS. 8000/- ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS WITHOUT GIVING INTO FACTS IN THE CASE. THEREFORE, ADDITION OF RS. 8000/- ON ACCO UNT OF LOW HOUSE HOLD WITHDRAWALS IS UNCALLED FOR UNWARRANTED AND MAY BE DELETED. 17. IT WAS STATED BY THE ASSESSEE BEFORE THE AO THA T HE HAD WITHDRAWN A SUM OF RS. 82,000/- TO MEET THE HOUSE HOLD EXPENSES. THE AO CO NSIDERED THE SAID WITHDRAWAL AS INSUFFICIENT AND ACCORDINGLY ADDED A SUM OF RS. 8,0 00/-. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE IMPUGNED ADDITION. 18. I HAVE HEARD BOTH THE PARTIES. NEITHER THE AO N OR THE LD. CIT(A) HAS GIVEN ANY BASIS OR DETAIL OR MATERIAL FOR ESTIMATING THE HOUS EHOLD EXPENSES AT RS. 90,000/- AS AGAINST RS. 82,000/- SHOWN BY THE ASSESSEE. IN THIS VIEW OF THE MATTER, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IS D ELETED. GROUND NO. 3 TAKEN BY THE ASSESSEE IS ALLOWED. 19. IN VIEW OF THE FOREGOING, BOTH THE APPEALS STAN D PARTLY ALLOWED. ORDER PRONOUNCED ON 11 TH JANUARY 2011 SD./- (D K SRIVASTAVA) ACCOUNTANT MEMBER CHANDIGARH, THE 11 TH JANUARY, 2011 SURESH 1219 & 1220/CHANDI/2009 5 5 COPY TO: 1. THE APPELLANT, SUKHWINDER SINGH, 1410, ST NO. 6, KWALITY ROAD, LUDHIANA 2. THE RESPONDENT, THE D.C.I.T, C.C-II, LUDHIANA 3. THE CIT (C), LUDHIANA 4. THE CIT(A)-I, LUDHIANA 5. THE DR, INCOME-TAX DEPARTMENT, CHANDIGARH TRUE COPY ASSISTANT REGISTRAR, ITAT, CHANDIGARH