Jugal Kishore Arora, New Delhi V. ACIT, New Delhi

ITA 1500/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7215 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR GUPTA
• Keywords: Unexplained expenditure; Search and seizure
• Section: 153A; 201; 69A; 13

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1500/DEL/2016 (ASSESSMENT YEAR: 2008 - 09 ) JUGAL KISHORE ARORA, 201, VIPPS CENTRE, 2, COMMUNITY COMPLEX, MASJID MOTH, GK - II, NEW DELHI PAN: AAJPA9385M VS. ACIT, CENTRAL CIRCLE - 28, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANAT KAPOOR, ADV REVENUE BY: SHRI RAJESH KUMAR GUPTA, CIT DR DATE OF HEARING 31/10 / 201 9 DATE OF PRONOUNCEMENT 2 7 / 01 / 2020 O R D E R PER PRASHANT MAHARISHI, A. M. 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - 29, NEW DELHI DATED 21.01.2016 FOR THE ASSESSMENT YEAR 2008 - 09. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE ASSESSMENT ORDER PASSED U/S 153A/143(3) AND THE ADDITIONS/ DISALLOWANCES MADE ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 2. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ACTION OF THE AO IN MAKING ADDITION/DISALLOWANCE TO THE EXTENT OF RS. 3,70,000/ - . 3. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ACTION OF THE AO IN MAKING ADDITION OF RS.20,000/ - BY TREATING IT AS PERQUISITE WITHIN THE AMBIT OF S. 17(2)(III) OF THE INCOME TAX ACT, 1961. 4. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERR ED IN LAW AND ON FACTS IN UPHOLDING THE ACTION OF THE AO TO THE EXTENT OF MAKING ADDITION OF RS. 1,50,000/ - ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENTS UNDER SECTION 69A OF THE INCOME TAX ACT, 1961. 5. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION MADE BY THE AO TO THE EXTENT OF RS. 2,00,000 ON THE ACCOUNT OF ALLEGED LOW HOUSEHOLD WITHDRAWALS. PAGE | 2 6. THAT THE CIT(A) FAILED TO APPRECIATE THAT THE ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER ARE MADE MERELY ON THE BASIS OF SURMISES AND CONJECTURES AND CONTRARY TO FACTS AND EVIDENCE ON RECORD AND CANNOT BE JUSTIFIED. 7. THAT THE ADDITIONS AND DISALLOWANCES MADE ARE UNJUST, ARBITRARY AND ARE ALSO HIGHLY EXCESSIVE. 8. THE EXPLA NATIONS GIVEN, THE EVIDENCE PRODUCED AND MATERIAL PLACED HAS NOT BEEN PROPERLY CONSIDERED AND JUDICIALLY INTERPRETED AND THE SAME DO NOT JUSTIFY THE ADDITIONS/ ALLOWANCES MADE. 3 . BRIEF FACTS OF THE CASE SHOWS THAT ASSESSEE FILED RETURN OF INCOME ON 29.08.20 08 DECLARING INCOME OF RS. 51 , 27 , 577/ - . THE RETURN WAS REVISED AT RS. 71 , 27 , 578/ - . THE REASON FOR REVISION IS THAT ASSESSEE HAS SURRENDERED RS. 20 LAKHS ON ACCOUNT OF D IF FERENCE OF DECLARED AND FOUND AT THE TIME OF SEARCH. ASSESSMENT U/S 153A WAS PASSED ON 30.12.2009 AT RS. 8 3 , 71 ,277/ - . ADDITIONS OF RS. 314200/ - WAS MADE ON ACCOUNT OF CASH FOUND AT THE RESIDENCE. HOWEVER, RS. 7 LAKHS WERE ADDED ON ACCOUNT OF UNACCOUNTED EXPENDITURE OF HOUSEHOLD EXPENDITURE. 4 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A), WHO DELETED RS. 209500/ - AGAINST THE ADDITIONS OF PERQUISITE AND RETAIN THE ADDITION OF RS. 20,000/ - ONLY. WITH RESPECT TO THE ADDITION OF RS. 3 14200/ - ON ACCOUNT OF CASH FOUND HE SUSTAINED THE ADDITIO N OF RS. 1.5 LAKHS AND DELETED RS. 164200/ - . WITH RESPECT TO THE ADDITION OF RS. 7 LAKHS ON ACCOUNT OF HOUSEHOLD EXPENDITURE HE DELETED RS. 5 LAKHS AND SUSTAINED RS. 2 LAKHS. THEREFORE, ASSESSEE IS IN APPEAL TO THE EXTENT OF ADDITION SUSTAINED BY THE LD CI T(A). 5 . THE LD AR AND THE LD DR WERE HEARD. 6 . GROUND NOS.1 AND 2 ARE GENERAL IN NATURE HENCE, THEY ARE DISMISSED. 7 . GROUND NO. 3 IS WITH RELATION TO SUSTAINING THE ADDITION OF RS. 20,000/ - U/S 17(2)(III) OF THE ACT. 8 . BRIEF FACTS OF THE CASE SHOWS DURING SEARCH A PURCHASE BILL OF EXERCISE EQUIPMENT FOR FITNESS WAS FOUND. THE BILL WAS IN THE NAME OF KOHINOOR FOODS LTD. THE ASSESSEE IS A DIRECTOR OF THAT COMPANY AND DRAWS SALARY. THE BILLS WAS FOR RS. 229500/ - . THE LD AO MADE AN ADDITION HOLDING THAT AS THE EQUIPM ENT AND THE RECEIPT IS DISCOVER AT THE RESIDENCE OF THE DIRECTOR IT RESULTED INTO BENEFIT OF THE ABOVE SUM AND TAXED AS PERQUISITE. THE LD CIT(A) HELD THAT ONLY 10% OF THE SUM SHOULD BE CHARGED AS PERQUISITE. WE FIND THAT EQUIPMENT IS USED BY THE ASSESSEE WHO IS AN EMPLOYEE OF A COMPANY AND PAGE | 3 THE EQUIPMENT IS OWNED BY THE COMPANY. ACCORDING TO SECTION 17(2)(C) THE COST OF FURNITURE SHALL ONLY BE ADDED AS PERQUISITE WHEN THE ASSESSEE IS PROVIDED AND ACCOMMODATION OWNED BY THE EMPLOYEE OR TAKEN ON LEASE BY THE EMPLOYER. IN THE PRESENT CASE INFORMATION OF THE CONDITION EXISTS AND THEREFORE, WE DIRECT THE LD AO TO DELETE THE ADDITION OF RS. 20,000/ - IN THE HANDS OF THE ASSESSEE. GROUND NO. 3 IS ALLOWED 9 . GROUND NO. 4 IS WITH RESPECT TO THE ADDITION OF RS. 150,00 0/ - IN THE HANDS OF THE ASSESSEE. IT WAS FOUND THAT DURING THE COURSE OF SEARCH CASH OF RS. 258200/ - WAS FOUND AND THEREFORE, RS. 2 LAKHS WAS SEIZED. THE LD AO MADE AN ADDITION OF RS. 314200/ - . THE LD CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS. 56,000 / - AS THE FIRST INSTANCE AS NO SUCH CASH WAS FOUND. WITH RESPECT TO RS. 258200/ - HE RESTRICTED THE ADDITION TO THE EXTENT OF RS. 150,000/ - FOR THE REASON THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE OF HOUSEHOLD WITHDRAWAL. 10 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT THAT THE ASSESSEE IS SHOWING AN INCOME OF RS. 5127577/ - AND FURTHER REVISED IT TO RS. 7127578/ - FOR ASSESSMENT YEAR 2008 - 09. THEREFORE, IT CANNOT BE DISBELIEVED THAT THE ASSESSEE WOULD HAVE RS. 258200/ - IN HIS HAND OUT OF PAST WITHDRAWAL. AS TH ERE IS NO EVIDENCE IN FAVOUR OF THE ASSESSEE BUT THE AMOUNT SHOWN AS INCOME BY THE ASSESSEE CLEARLY GOES IN FAVOUR THAT HE COULD HAVE SAVE D AT LEAST RS. 258000/ - OUT OF HIS SAVINGS. IN THE RESULT , THE ADDITION OF RS. 150,000/ - SUSTAINED BY THE LD CIT(A) IS DESERVED TO BE DELETED. ACCORDINGLY, GROUND NO. 4 OF THE APPEAL IS ALLOWED. 11 . GROUND NO. 5 IS WITH RESPECT TO THE ADDITION SUSTAINED OF RS. 2 LAKHS ON ACCOUNT OF HOUSEHOLD WITHDRAWAL. THE ASSESSEE HAS ALREADY SHOWN THE HOUSEHOLD WITHDRAWAL OF RS. 1240000/ - FOR THE YEAR OUT OF ABOVE WITHDRAWAL RS. 9 LAKHS IS WITHDRAWN FOR THE HOUSEHOLD EXPENDITURE. MERELY, BECAUSE THE EARLIER YEAR EXPENDITURE WAS HIGHER COMPARED TO THIS YEAR EXPENDITURE OF HOUSEHOLD , THE LOWER AUTHORITIES HAVE MADE AND SUSTAINED THE ADDITION TO THE EXTENT OF RS. 2 LAKHS. THE ASSESSEE WAS PUT A DRACONIAN MEASURE OF SEARCH AND SEIZURE WHEREIN, NO EVIDENCE WERE FOUND EXCEPT JEWELLERY OF RS. 20 LAKHS. THEREFORE, NO EVIDENCE THAT THE ASSESSEE HAS INCURRED ANY HOUSEHOLD EXPENDITURE WHICH IS NOT SUP PORTED BY THE AMOUNT OF WITHDRAWAL PAGE | 4 MADE BY HIM. IN VIEW OF THIS WE DIRECT THE LD AO TO DELETE THE ADDITION OF RS. 2 LAKHS ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL. GROUND NO. 5 IS ALLOWED. 12 . ALL OTHER GROUNDS ARE GENERAL IN NATURE AND HENCE, DISMISSED. 13 . IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 / 01 / 2020 . - SD/ - - SD/ - ( SUDHANSHU SRIVASTAVA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 / 01 / 2020 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI