Nafees Sagir Ahmad Qureshi, Ghaziabad V. ITO, Hapur

ITA 1739/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6214 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 29-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 24-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Keywords: Unexplained cash credit

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 E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1739/DEL/2014 1739/DEL/2014 1739/DEL/2014 1739/DEL/2014 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2008 2008 2008 2008 - -- - 09 0909 09 MR. NAFEES SAGIR AHMAD MR. NAFEES SAGIR AHMAD MR. NAFEES SAGIR AHMAD MR. NAFEES SAGIR AHMAD QURESHI, QURESHI, QURESHI, QURESHI, TAURI HOUSE, BSR ROAD TAURI HOUSE, BSR ROAD TAURI HOUSE, BSR ROAD TAURI HOUSE, BSR ROAD, ,, , HAPUR. HAPUR. HAPUR. HAPUR. PAN : AADPR0089L. PAN : AADPR0089L. PAN : AADPR0089L. PAN : AADPR0089L. 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 AKHILESH KUMAR, ADVOCATE. RESPONDENT BY : SHRI P. DAM KANUNJNA, SENIOR DR. DATE OF HEARING : 29.03.2016 29.03.2016 29.03.2016 29.03.2016 DATE OF PRONOUNCEMENT : 31.03.2016 31.03.2016 31.03.2016 31.03.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-0 9 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), MUZAF FARNAGAR DATED 19 TH NOVEMBER, 2013. 2. THE ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS. HOWEVE R, THEY ARE AGAINST THE FOLLOWING THREE ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) :- (I) UNEXPLAINED CREDITORS : `5,83,200/- (II) TOWARDS UNVERIFIABLE PURCHASES : `5,96,846/- (III) TOWARDS LOW HOUSEHOLD WITHDRAWALS : `1,44,178/- ITA-1739/DEL/2014 2 3. AT THE TIME OF HEARING BEFORE US, THE LEARNED COU NSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE IS CARRYING ON SMALL BUSINE SS OF TRADING OF BUFFALO OMASUM. THE ASSESSEE FILED THE RETUR N DISCLOSING TOTAL INCOME AT `2,27,884/- BUT THE ASSESSING OFFICER M ADE HUGE ADDITIONS AND DISALLOWANCES AMOUNTING TO `13,24,224/- THEREBY DETERMINING THE ASSESSED INCOME AT `15,52,058/-. HE SUB MITTED THAT THE CONFIRMATION OF ALL THE CREDITORS WAS DULY FURNISH ED BEFORE THE ASSESSING OFFICER. SIMILARLY, THE ASSESSEE HAS FURNISHED TH E NECESSARY PARTICULARS WITH REGARD TO EACH AND EVERY EXPENDITUR E. THE ACCOUNTS OF THE ASSESSEE ARE AUDITED. HE FURTHER SUBMITTED THAT THE HOUSEHOLD EXPENDITURE IS MAINLY MET BY ASSESSEES WIFE SMT. FARJAN A WHO IS DOING HANDICRAFT JOB WORK. HE, THEREFORE, SUBMITTED THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE NOT JUSTIFIED AND LIA BLE TO BE DELETED. HE ALTERNATIVELY SUBMITTED THAT IF AT ALL THE ENTIRE ADDITIONS ARE NOT DELETED, THEN A REASONABLE ADDITION MAY BE SUSTAINED. HE ALSO REQUESTED THAT THE SET OFF OF ADDITION SUSTAINED FOR UN VERIFIABLE PURCHASES SHOULD BE GIVEN AGAINST THE ADDITION TO BE SUST AINED AGAINST UNEXPLAINED CREDITOR/HOUSEHOLD EXPENDITURE, IF ANY. 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF AUTHORITIES BELOW AND HE SUBMITTED THAT SINCE IT IS A SMALL MATTER, THE BENCH MAY MAKE A REASONABLE ESTIMATE. 5. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AN D PERUSING THE ASSESSMENT ORDER, WE DEEM IT PROPER TO UPHOLD THE D ISALLOWANCE OUT OF VARIOUS EXPENSES AMOUNTING TO `5,96,846/-. THE ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAS NOT PRODUCED BILLS AND VOUCHERS OF VARIOUS EXPENSES AS WELL AS PURCHASES. HE HAS, THEREFORE, ESTIMATED THE GROSS PROFIT AS DISCLOSED BY THE ASSESSEE IN T HE LAST YEAR AND THE DIFFERENCE IS ADDED AS UNVERIFIABLE EXPENDIT URE. AFTER CONSIDERING THE FACTS OF THE CASE AND ARGUMENTS OF BOTH THE SIDES, WE ITA-1739/DEL/2014 3 SUSTAIN THE DISALLOWANCE ON ACCOUNT OF UNVERIFIABLE PU RCHASES AND OTHER EXPENSES AMOUNTING TO `5,96,846/-. 6. SO FAR AS THE ADDITION TOWARDS THE UNEXPLAINED CRE DITORS IS CONCERNED, WE ACCEPT ASSESSEES ALTERNATIVE SUBMISSION OF T HE SET OFF AGAINST THE ADDITION SUSTAINED UNDER THE HEAD UNVERI FIABLE PURCHASES. SINCE THE ADDITION MADE AND SUSTAINED FOR UNVERIFIAB LE PURCHASES IS MORE THAN THE ADDITION FOR CREDITORS, WE ALLOW THE SE T OFF OF DISALLOWANCE SUSTAINED UNDER THE HEAD UNVERIFIABLE PU RCHASES AGAINST THE ADDITION FOR CREDITORS AND HOLD THAT NO SEPARATE ADDITION FOR UNEXPLAINED CREDITORS AMOUNTING TO `5,83,200/- IS TO BE MADE. 7. SO FAR AS HOUSEHOLD EXPENSES ARE CONCERNED, WE FIND THAT THE ASSESSING OFFICER MADE THE ADDITION OF `1,44,178/- WITH THE FOLLOWING FINDING:- THE ASSESSEE HAS WITHDRAWN FOR HOUSEHOLD EXPENSES AT RS.25,456/- WHICH IS LOW. ASSESSEES COUNSEL SUBMITTED THAT HIS WIFE SMT. FARJANA CONTRIBUTED RS.72,178/- FO R HOUSE HOLD WITHDRAWALS AND THE INCOME OF THE ASSESSEES WIFE IS SAID TO BE FROM HANDICRAFT JOB WORK AND SHE I S NOT ASSESSED TO TAX. IN VIEW OF THE FACT THAT HAVING TWO SC HOOL GOING, SHE IS INVOLVED IN HOUSEHOLD/PERSONAL WORK AND T HE SAID WITHDRAWALS ARE MERE A COLOURABLE DEVICE. ACCORDINGLY EQUAL AMOUNT OF RS.72,000/- IS ADDED TO T HE INCOME OF THE ASSESSEE TREATING UNEXPLAINED CASH CREDITS. THERE ARE 5 MEMBERS IN THE FAMILY AND 2 SONS ARE SCHOOL GOING. ACCORDINGLY, TOWARDS LOW HOUSE HOLD WITHDRA WAL, RS.72,000/- ARE ADDED TO THE INCOME OF THE ASSESSEE BEIN G A NON-VEGETARIAN FAMILY AND HIGHER EXPENSES ARE REQUIRED. 8. FROM THE ABOVE, WE FIND THAT AT THE END OF HIS F INDING, THE ASSESSING OFFICER HAS MENTIONED ACCORDINGLY, TOWARDS LOW HOUSE HOLD WITHDRAWAL, RS.72,000/- ARE ADDED TO THE INCOME OF T HE ASSESSEE BEING A NON-VEGETARIAN FAMILY AND HIGHER EXPENSES ARE REQUI RED. HOWEVER, ITA-1739/DEL/2014 4 WHILE MAKING THE FINAL COMPUTATION, HE MADE THE ADD ITION OF `1,44,178/-. IT SEEMS THAT THE ASSESSING OFFICER HAS AL SO ADDED `72,178/- BEING CONTRIBUTION OF ASSESSEES WIFE SMT. FA RJANA TOWARDS HOUSEHOLD EXPENSES. IN OUR OPINION, THERE WAS NO JUSTIF ICATION FOR THE ADDITION OF `72,178/- BEING THE CONTRIBUTION OF ASSESSE ES WIFE TOWARDS THE HOUSEHOLD EXPENSES. IF THE ASSESSING OFFICER ACCEPTED HER CLAIM OF CONTRIBUTION TOWARDS HOUSEHOLD EXPENDITURE, HE SHOULD HAVE GIVEN THE SET OFF OF THE SAME WHILE ESTIMATING THE HOUSEHOLD EXPE NDITURE OF THE ASSESSEE. EVEN IF THE SAME IS NOT ACCEPTED, THEN ALSO, TH ERE IS NO JUSTIFICATION FOR ADDITION OF THE SAME IN THE HANDS OF THE ASSESSEE. IN ANY CASE, WHEN THE ASSESSING OFFICER HIMSELF HAS MENTIONED AFTER ALL DISCUSSION THAT `72,000/- ARE ADDED TO THE INCOME OF T HE ASSESSEE, WE ARE OF THE OPINION THAT THERE IS NO JUSTIFICATION OF THE ADDITION OF `1,44,178/-. 9. NOW, WE COME TO THE ALTERNATIVE SUBMISSION OF THE A SSESSEE WITH REGARD TO SET OFF OF ADDITION SUSTAINED UNDER THE HEAD UNVERIFIABLE PURCHASES. THE ADDITION SUSTAINED UNDER THE HEAD UNV ERIFIABLE PURCHASES WAS `5,96,846/-. THE SET OFF OF `5,83,200/- HAS BEEN GRANTED WHILE CONSIDERING THE ADDITION FOR UNEXPLAIN ED CREDITORS. THE REMAINING SET OFF OF `13,646/- (`5,96,846 - `5,83,20 0) IS AVAILABLE FOR ALLOWING SET OFF AGAINST HOUSEHOLD EXPENDITURE. AFTER ALLOWING THE SAME, THE ADDITION SUSTAINED FOR LOW WITHDRAWAL OF HOU SEHOLD EXPENDITURE IS `58,354/- (`72,000 - `13,646). 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 31.03.2016. SD/- SD/- (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-1739/DEL/2014 5 COPY FORWARDED TO: - 1. APPELLANT : MR. NAFEES SAGIR AHM MR. NAFEES SAGIR AHM MR. NAFEES SAGIR AHM MR. NAFEES SAGIR AHMAD QURESHI, AD QURESHI, AD QURESHI, AD QURESHI, TAURI HOUSE, BSR ROAD, HAPUR. TAURI HOUSE, BSR ROAD, HAPUR. TAURI HOUSE, BSR ROAD, HAPUR. TAURI HOUSE, BSR ROAD, HAPUR. 2. RESPONDENT : INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD- -- -1, HAPUR. 1, HAPUR. 1, HAPUR. 1, HAPUR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR