Sanjay Hirwat, V. CoMMissioner of Income Tax(Appeals),

ITA 136/JAB/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5617 (ITAT-JABALPUR)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 07-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R LATHORIYA

Judgement Text

1 I.T.A. NO.136 /JAB/2015 (ASSESSMENT YEAR :2009-10 ) IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BEFORE S/SHRI N.S. SAINI (AM) N. K. CHOUDHRY (JM ) I.T.A. NO.136 /JAB/2015 (ASSESSMENT YEAR :2009-10 ) SANJAY HIRAWAT, KATANGI,DISTRICT: BALAGHAT (MP) VS. ITO, WARD, BALAGHAT PAN/GIR NO. : AANPH 0015 P ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : SH. D.R.LATHORIYA DATE OF HEARING : 07-04-2016 DATE OF PRONOUNCEMENT : 07-04. 2016 O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM A N ORDER OF THE LD CIT(A)-1, JABALPUR DATED 303.2015. 2. AN ADJOURNMENT PETITION DATED 4.4.2016 WAS FILED BY THE ASSESSEE, WHICH IS ON RECORD. THE BENCH WAS OF THE VIEW THAT THE APPEAL CAN BE DISPOSE D OF IN THE ABSENCE OF THE ASSESSEE AND, THEREFORE, THE APPEAL WAS HEARD EXPATE QUA ASSESSE E AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. GROUND NO.1 IS DIRECTED AGAINST THE ORDER OF LD C IT(A) CONFIRMING THE DISALLOWANCE OF TELEPHONE EXPENSES TO THE EXTENT OF RS.3,350/-. 2 I.T.A. NO.136 /JAB/2015 (ASSESSMENT YEAR :2009-10 ) 4. THE BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINED ANY CALL REGISTER AND NON-BUSINESS USE OF TEL EPHONE CANNOT BE RULED OUT. HE, THEREFORE, MADE AN ADHOC DISALLOWANCE OF 1/10 TH OF THE TOTAL EXPENDITURE OF RS.33,500/- CLAIMED BY THE ASSESSEE AND MADE AN ADDITION OF RS.3,350/- TO TH E INCOME OF THE ASSESSEE. 4. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. LD D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BE LOW. 6. AFTER CONSIDERING THE SUBMISSIONS OF LD D.R. WE FIND T HAT THE AO HAS MADE DISALLOWANCE OF 10% OUT OF TOTAL EXPENDITURE CLAIMED UNDER THE HE AD TELEPHONE EXPENSES BY THE ASSESSEE ON THE GROUND THAT NON-BUSINESS USES OF THE TELEPHONE CA NNOT BE RULED OUT. IN OUR CONSIDERED OPINION, NO DISALLOWANCE CAN BE MADE BY THE AO ON THE BASIS OF SUSPICION. HE HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD TO SHOW THAT THE EXPENDITU RE CLAIMED BY THE ASSESSEE IS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS OF TH E ASSESSEE BEFORE MAKING ANY DISALLOWANCE. IN ABSENCE OF SUCH MATERIAL ON RECORD, TH E DISALLOWANCE MADE BY THE AO CANNOT BE SUSTAINED IN THE EYE OF LAW . HENCE, WE SET ASIDE TH E ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.3,350/-. THIS GROUND IS ALLOWED. 7. IN GROUND NO.2, THE GRIEVANCE OF THE ASSESSEE IS THAT LD CIT(A) ERRED IN ENHANCING MINE DEVELOPMENT EXPENSES BY RS.5,20,920/-.. 8. THE BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED MINE DEVELOPMENT EXPENSES OF RS.5,78,800/- . THE MINE DEV ELOPMENT EXPENSES HAVE BEEN INCURRED FOR CLEARING OF TOP SOIL AND OTHER IMPURITIES BEFORE THE EXTRACTION OF ORE. THE DETAILS OF 3 I.T.A. NO.136 /JAB/2015 (ASSESSMENT YEAR :2009-10 ) THESE EXPENSES ARE NOT VERIFIABLE AND IN ORDER TO COVER ANY LEAKAGE OF REVENUE, A LUMPSUMP DISALLOWANCE OF RS.40,000/- IS MADE TO THE INCOME OF TH E ASSESSEE BY THE AO. 9. ON APPEAL, LD CIT(A) ENHANCED THE DISALLOWANCE TO R S.5,20,920/- BY CITING VARIOUS JUDGMENTS OF HONBLE HIGH COURTS AND THE TRIBUNAL AT PAGES 8 TO 68 OF THE IMPUGNED ORDER. 10. HAVING HEARD THE LD D.R. WE OBSERVE THAT THE LD CIT(A) HAS NOT GIVEN HIS OWN FINDINGS ABOUT THOSE DECISIONS HOW THE FACTS OF THOSE DECISIONS ARE IDENTICALLY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE AND THERE APPLICABILITY TO THE ASSESSEES CA SE. IN OUR CONSIDERED VIEW BY CITING PLETHORA OF JUDGMENTS WITHOUT STATING HOW THE Y ARE APPLICABLE TO THE FACTS OF THE ASSESSEES CASE, LD CIT(A) IS NOT JUSTIFIED IN ENHANCING THE DISALLOWANCE OF MINE DEVELOPMENT EXPENSES FROM RS.40,000/- TO RS.5,20,920/-. WE ALSO OB SERVE THAT THE AO HAS ALSO MADE ADHOC DISALLOWANCE OF RS.40,000/- OUT OF MINE DEVELOPME NT EXPENSES ON THE GROUND THAT LEAKAGE OF REVENUE CANNOT BE RULED OUT. IN OUR VIEW, NO DISALLOWANCE CAN BE MADE OF ANY EXPENSES CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME ME RELY ON THE BASIS OF SUSPICION AND DOUBT.. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTH ORITIES BELOW AND DELETE THE ADDITION OF RS.5,20,920/- AND ALLOW GROUND OF APPEAL BY THE ASSESSEE . 11. IN GROUND NO.3 OF APPEAL, THE GRIEVANCE OF THE A SSESSEE IS THAT LD CIT(A) ERRED IN MAKING ADDITION OF RS.35,000/- IN HOUSEHOLD EXPENSES. 12. THE BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERV ED THAT THE ASSESSEE HAS SHOWN WITHDRAWAL IN THE NAME OF HUF AND WIFE AT RS.1,97,34 0/-. THE FAMILY MEMBERS OF THE ASSESSEE COMPRISES OF CHILDREN, WHO ARE STUDYING IN NAGPUR, HENCE , THE DRAWING IS NOT SUFFICIENT CONSIDERING THE STATUS OF THE ASSESSEE AS A LEADING BUSINESSM AN AND, THEREFORE, MADE AN 4 I.T.A. NO.136 /JAB/2015 (ASSESSMENT YEAR :2009-10 ) ADDITION OF RS.35,000/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF LOW WITHDRAWAL OF HOUSEHOLD EXPENSES. 13. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE AO. 14. LD D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW . 15. AFTER HEARING LD D.R., WE FIND THAT THE ADDITIO N OF RS.35,000/- WAS MADE BY THE AO ON ACCOUNT OF LOW WITHDRAWAL FOR HOUSEHOLD EXPENSES ON THE GROUND OF CONSIDERING THE STATUS OF THE ASSESSEE AS A LEADING BUSINESSMAN AT NAGPUR, THE HOUSE HOLD DRAWING OF RS.1,97,340/- WAS INSUFFICIENT AND LD CIT(A) HAS CONFIRMED THE SAME WITH OUT GIVING ANY REASON. WE FIND THAT NO MATERIAL WAS BROUGHT ON RECORD EITHER OF THE LOWER AU THORITIES WHICH OF THE EXPENSES INCURRED BY THE ASSESSEE ARE NOT COVERED BY THE DRAWINGS SHOWN BY TH E ASSESSEE OF RS.1,97,340/- AND NO MATERIAL WAS ALSO BROUGHT ON RECORD TO SHOW THAT THE ACT UAL EXPENSES INCURRED BY THE ASSESSEE FOR HOUSEHOLD EXPENSES WERE MORE THAN THE HOUSEHOLD DRA WINGS OF RS.1,97,340/- IN THE ABSENCE OF THE SAME, WE SET ASIDE THE ORDERS OF LOWER AUT HORITIES BELOW AND DELETE THE ADDITION OF RS.35,000/- AND ALLOW THIS GROUND OF THE ASSESSEE. 16. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 /4/2016 . SD/- SD/- (N.K.CHOUDHRY) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER JABALPUR, DATED 7 / 4/2016 PARIDA , SR. PS 5 I.T.A. NO.136 /JAB/2015 (ASSESSMENT YEAR :2009-10 ) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : SANJAY HIRAWAT, KATANGI,DISTRICT: BAL AGHAT (MP) 2. THE RESPONDENT: ITO, WARD, BALAGHAT 3. THE CIT(A)-1. JABALPUR 4. CIT . JABALPUR 5. DR, ITAT, JABALPUR 6. GUARD FILE. BY ORDER, //TRUE COPY// SR. PS, ITA T, CAMP: JABALP UR