Shri Prashant Vasantlal Choksi, Surat V. The Income tax Officer,Ward-3(1), Surat

ITA 1586/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5936 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 26-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 08-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H P MEENA
• Assessee Lawyers: MITESH M MOD I

Judgement Text

ITA.1585-86 08 A.Y.2005-06 1 IN THE INCOME_TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI T. K. SHARMA AND SHRI D.C. AGRAWA L SURAT CAMP. (1) ITA. NO.1585 /AHD/08 (ASSESSMENT YEAR: 2005 06) (2) ITA. NO.1586/AHD/08 (ASSESSMENT YEAR: 2005 06) SHRI VASANTLAL M. CHOKSI 3/658, NAVAPURA, KARVA ROAD, SURAT. VS THE INCOME TAX OFFICER, WARD 3(1), AAYAKAR BHAVAN, MAJURA GATE, SURAT. (APPELLANT) (RESPONDENT) PAN:AFAPS 0389 F SHRI PRASHANT VASANTLAL CHOKSI, 41, ADARSH SOCIETY, ATHWALINES, SURAT. VS THE INCOME TAX OFFICER, WARD 3(1), AAYAKAR BHAVAN, MAJURA GATE, SURAT. (APPELLANT) (RESPONDENT) PAN:AFAPS 0387 F APPELLANT BY : SHRI MITESH M. MODI RESPONDENT BY : SHRI H. P. MEENA, SR. D.R. ( (( ( )/ )/)/ )/ ORDER PER SHRI D.C. AGRAWAL. THESE ARE THE TWO CROSS APPEALS INVOLVING COMMON ISSUES AND HENCE THEY ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVE NIENCE. I.T.A. NO.1585/AHD/08 A.Y. 2005-06 . 2. IN THIS APPEAL FOLLOWING GROUNDS ARE RAISED :- ITA.1585-86 08 A.Y.2005-06 2 1. THE LD. C.I.T.(A)-II, SURAT HAS ERRED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE ORDER OF THE A.O. IN MAKING FOLLOWIN G ADDITIONS/DISALLOWANCES :- PARTICULARS. AMOUNT OF ADDITION/DISALLOWANCE (IN RS.) ON ACCOUNT OF ALLEGED LOW HOUSEHOLD WITHDRAWALS. 62,735/- ON ACCOUNT OF MOTOR CAR EXPENSES. 20,012/- 2. THE LD. C.I.T.(A) HAS ERRED IN OVERLOOKING AND I N SUMMARILY REJECTING THE DETAILED STATEMENT OF FACTS SUBMITTED ALONG WITH MEMORANDUM OF APPEAL, VARIOUS DOCUMENTS AND EVIDENC ES PLACED IN PAPER BOOK FILED AND BOOKS OF ACCOUNT, ETC., PRO DUCED BEFORE HIM ON VARIOUS DATES OF HEARING, WHILE ACCEPTING THE LO P-SIDED AND FACTUALLY INCORRECT VERSION OF THE LD. A.O. AND HEN CE, NOT JUSTIFIED. 3. THE FACTS OF THE CASE ARE THAT A.O. FOUND THAT A SSESSEE AND HIS FAMILY MEMBERS ARE 6 PERSONS AND HAVE TOGETHER SHOWN WITHD RAWALS FOR HOUSEHOLD PURPOSES AT A SUM OF RS.2,34,530/-. IN ABSENCE OF D ETAILS FURNISHED BY THE ASSESSEE A.O. ESTIMATED THE HOUSEHOLD EXPENDITURE A T RS.3,60,000/- I.E. RS.5,000/- PER MONTH AND ADDED 50% OF THE DIFFERENC E IN THE HANDS OF THE ASSESSEE AND 50% DIFFERENCE IN THE HANDS OF SHRI PR ASHANT VASANTLAL CHOKSI I.E. THE OTHER CASE WHICH IS TAKEN UP TOGETHER FOR ADJU DICATION. 4. THE LD. C.I.T. (A) CONSIDERED THAT EXPENDITURE O F RS.3,60,000/- PER YEAR IS REASONABLE CONSIDERING THE FACT THAT ASSESSEE HAD T O INCUR EXPENDITURE ON MAINTENANCE OF RESIDENTIAL PREMISES, HAS TO PAY MUN ICIPAL TAXES, INCUR EXPENDITURE ON GAS, ELECTRICITY AND WATER BILLS, TR ANSPORT, DOMESTIC SERVANTS, MEDICINES, EDUCATION OF CHILDREN ETC. THERE WOULD BE EXPENDITURE ON TRAVELING OR ON ATTENDING THE SOCIAL FUNCTION WITH THE RELATIONS . IN ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE HE CONSIDERED THAT ANNUAL EXPENDITURE OF RS. 3,60,000/- AND ADDITION DIVIDED BETWEEN TWO ASSESSE S IS REASONABLE. ITA.1585-86 08 A.Y.2005-06 3 5. WE HAVE HEARD LD. A.R. AND LD. D.R. 6. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR THE INTERFERENCE IN THE ORDER OF THE LD. C.I.T. (A). IT IS BECAUSE ASSESSEE HAS FAIL ED TO FURNISH ANY DETAILS OF VARIOUS EXPENDITURE INCURRED. THE ESTIMATE MADE BY THE A.O. AND CONFIRMED BY LD. C.I.T. (A) IS VERY REASONABLE AND DOES NOT REQU IRE ANY INTERFERENCE. THE LD. A.R. COULD NOT POINT OUT HOW THESE EXPENSES ARE ON HIGHER SIDE. AS A RESULT THIS GROUND OF APPEAL IS REJECTED. 7. REGARDING ADDITION MADE ON ACCOUNT OF MOTOR CAR EXPENSES, THE A.O. FOUND THAT ASSESSEE HAS CLAIMED THE EXPENDITURE OF RS. 28,183 AS ACCOUNTANT SALARY AND MOTOR CAR EXPENSES. THE A.O. TOOK THE V IEW THAT SUCH EXPENDITURE COULD NOT HAVE BEEN INCURRED TOWARDS EARNING OF INC OME FROM INTEREST AND REMUNERATION FROM PARTNERSHIP FIRM. THE ASSESSEE CL AIMED THAT SUCH EXPENSES HAVE BEEN CLAIMED OVER SEVERAL YEARS AND HAVE BEEN ALLOWED BY THE A.O. IN A.Y. 2004-05 THE DISALLOWANCE WAS RESTRICTED TO 2/3 RD OF THE EXPENSES CLAIMED. THE LD. C.I.T. (A) FOLLOWED THE DECISION OF THE TRI BUNAL IN THE CASE OF THE ASSESSEE FOR THE PREVIOUS YEAR WHERE DISALLOWANCE O F 3/4 TH OF EXPENSES WAS CONSIDERED EXCESSIVE AND REDUCED THE SAME TO 1/4 TH . IN EARLIER YEARS ASSESSEE HAD HIS OWN PROPRIETARY BUSINESS REQUIRING EXPENDIT URE ON MOTOR CAR AND ACCORDINGLY 3/4 TH OF EXPENSES WAS CONSIDERED AS FOR THE BUSINESS PUR POSES. THE LD. C.I.T.(A) ALLOWED THE CLAIM FOR ACCOUNTANT SALA RY AT RS.1,500/- AND ALSO HELD THE VIEW THAT ONLY 1/4 TH OF CLAIM OF MOTOR CAR EXPENSES SHOULD BE ALLOWED. HE ACCORDINGLY CONFIRMED THE DISALLOWANCE AT 3/4 TH OF THE CLAIM. 8. THE LD. A.R. SUBMITTED THAT IF THE TRIBUNAL HAS ALLOWED THE CLAIM OF 3/4 TH IN PREVIOUS YEAR THEN C.I.T.(A) WAS INCORRECT TO DISAL LOW THE CLAIM AT 3/4 TH THIS YEAR. THE LD .D.R. ON THE OTHER HAND RELIED ON THE ORDER OF AUTHORITIES BELOW. ITA.1585-86 08 A.Y.2005-06 4 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE O F THE VIEW THAT THIS YEAR THE PROPRIETARY BUSINESS WAS ABSENT AND THEREFORE, THE DECISION OF THE LD. C.I.T. (A) IS CORRECT AS NO EXPENDITURE IS PRACTICALLY REQ UIRE TO RUN ANY BUSINESS. 1/4 TH EXPENDITURE ALLOWED BY THE LD. C.I.T.(A) IS OBVIOUS LY FOR EARNING REMUNERATION FROM THE PARTNERSHIP FIRM. THIS IS REASONABLE AND D OES NOT CALL FOR INTERFERENCE. AS A RESULT APPEAL FILED BY THE ASSESSEE IS DISMIS SED. ITA. NO.1586/AHD/08. 10. THE FOLLOWING GROUNDS ARE RAISED :- 1. THE LD. C.I.T.(A)-II, SURAT HAS ERRED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE ORDER OF THE A.O. IN MAK ING FOLLOWING ADDITIONS/DISALLOWANCES :- PARTICULARS. AMOUNT OF ADDITION/DISALLOWANCE (IN RS.) ON ACCOUNT OF ALLEGED LOW HOUSEHOLD WITHDRAWALS. 62,735/- ON ACCOUNT OF MOTOR CAR EXPENSES. 20,012/- 2. THE LD. C.I.T.(A) HAS ERRED IN OVERLOOKING AND I N SUMMARILY REJECTING THE DETAILED STATEMENT OF FACTS SUBMITTED ALONG WITH MEMORANDUM OF APPEAL, VARIOUS DOCUMENTS AND EVIDENC ES PLACED IN PAPER BOOK FILED AND BOOKS OF ACCOUNT, ET C., PRODUCED BEFORE HIM ON VARIOUS DATES OF HEARING, WH ILE ACCEPTING THE LOP-SIDED AND FACTUALLY INCORRECT VER SION OF THE LD. A.O. AND HENCE, NOT JUSTIFIED. 11. THE FIRST ISSUE IS THE SAME AS IN ITA NO.1585/A /08.FOLLOWING OUR REASONING AND ORDER IN THAT CASE WE CONFIRM THE ORD ER OF THE LD. C.I,T.(A) AND DISMISS THE APPEAL FILED BY THE ASSESSEE. ITA.1585-86 08 A.Y.2005-06 5 12. REGARDING SECOND ISSUE THE FACTS ARE ALSO THE S AME AS IN THE CASE OF ITA.NO.1585/AHD/08 EXCEPT EARNING REMUNERATION FROM PARTNERSHIP FIRM THERE IS NO EVIDENCE OF ANY INDIVIDUAL BUSINESS, THEREFORE A LLOWANCE OF 1/ 4 TH OF MOTOR CAR EXPENSES IS REASONABLE AND ACCORDINGLY DISALLOWANCE AT 3/4 TH IS ALSO REASONABLE. THEREFORE, WE CONFIRM THE ORDER OF THE LD. C.I.T. (A) AND DISMISS THE APPEAL FILED BY THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON 18/06/2010. SD/- SD/- ( T.K. SHARMA) (D.C.A GRAWAL) JUDICIAL MEMBER ACCO UNTANT MEMBER. AHMEDABAD. DATED: 18/06/2010. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNED. 5. THE DR.,ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD.