Agnivesh Agarwal, Kolkata V. Addl. CIT, Range-44, Kolkata, Kolkata

ITA 1789/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1491 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 15-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU CIT SR D
• Assessee Lawyers: AMIT SARAF

Judgement Text

ITA NO.1789/KOL/2014 AGNIVESH AGARWAL A.Y.2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I.T.A NO.1789/KOL/2014 ASSESSMENT YEAR : 200 9-10 SHRI AGNIVESH AGARWAL -VS.- ADDL. C.I.T., RANGE-44, KOLKATA KOLKATA [PAN : AFQPA 6572 G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI AMIT SARAF, FCA FOR THE RESPONDENT : SHRI.DAVID Z.CHAWNGT HU, ADDL. CIT, SR.DR DATE OF HEARING : 28.08.2017. DATE OF PRONOUNCEMENT : 31.08.2017. ORDER PER N.V.VASUDEVAN, JM THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 30.06.2014 OF CIT(A)- XXX, KOLKATA RELATING TO A.Y.2009-10. 2. THE GROUNDS OF APPEAL OF THE ASSESSEE READS AS FOLLOWS: 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACT ION OF THE LD AO IN ADDING A SUM OF RS.2,40,000/- UNDER THE HEAD DRAWINGS AND SU CH ACTION OF THE LD CIT(A) IS WRONG AND ILLEGAL. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE ACTI ON OF THE LD AO IN TAKING THE DRAWING FIGURES OF THE APPELLANT ON ADHOC BASIS AND ALSO WITHOUT GIVING A SHOW CAUSE NOTICE IN RESPECT OF SUCH ADDITION AND THUS S UCH ACTION OF THE LD CIT(A) IS WRONG AND I!LEGAL. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACT ION OF THE LD AO IN ADDITION THE DRAWING OF RS.2,40,000/- WITHOUT CONSIDERING TH E DRAWINGS FIGURES OF APPELLANT'S FAMILY AND SUCH ACTION OF THE LD CIT(A) IS TOTALLY WRONG AND ILLEGAL. 4.. FOR THAT THE APPELLANT CRAVES INDULGENCE TO ADD , AMEND, ALTER AND/OR MODIFY THE GROUNDS ON OR BEFORE THE HEARING OF THE APPEAL. ITA NO.1789/KOL/2014 AGNIVESH AGARWAL A.Y.2009-10 2 3. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOM E FROM SALARY AND OTHER SOURCES. FOR AY 2009-10, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,28,12,240/-. IN CAPITAL ACCOUNT OF THE ASSESS EE THERE WAS A NEGATIVE FIGURE OF RS.80,337 MEANING THEREBY THAT THE ASSESSEE DREW NO THING FROM HIS CAPITAL ACCOUNT. THE AO WAS OF THE VIEW THAT SINCE THERE WAS NEITHER DRAWINGS FROM THE ASSESSEES CAPITAL ACCOUNT NOR FROM HIS BANK ACCOUNT, IT WAS N OT KNOWN AS TO HOW THE ASSESSEE MANAGED TO CARRY ON HIS DAY TO DAY LIFE. HE WAS OF THE VIEW THAT CONSIDERING HIS HIGH STATUS AND LIFE STYLE AND THE MARKET VALUE NECESSAR Y TO LIVE LIFE STYLE OF HIS STATUS A MINIMUM SUM OF RS.2,80,000/- WOULD BE NEEDED. SINC E THE SOURCE FROM WHICH THE ASSESSEE WOULD HAVE SPENT THE AFORESAID SUM IS NOT DISCERNIBLE FROM THE RETURN OF INCOME AND ANNEXURES TO THE RETURN OF INCOME, THE A O WAS OF THE VIEW THAT THIS SUM MUST HAVE BEEN MET BY THE ASSESSEE FROM HIS UNDISCL OSED INCOME. HE ACCORDINGLY ADDED A SUM OF RS.2,80,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE CIT(A), THE ASSESSEE SUBMITTED THAT FIRS TLY, THE AO DID NOT GIVE ANY SHOW CAUSE NOTICE TO THE ASSESSEE BEFORE MAKING THE IMPU GNED ADDITION AND THUS ACTED IN FRAGRANT VIOLATION OF THE PRINCIPLES OF NATURAL JUS TICE. SECONDLY, THE ASSESSEE GAVE THE DETAILS OF DRAWINGS OF HIS FAMILY MEMBERS AND EXPLA INED THAT THE TOTAL DRAWINGS OF THE FAMILY WILL HAVE TO BE TAKEN INTO ACCOUNT AND THE D RAWINGS OF OTHER FAMILY MEMBERS WOULD BE SUFFICIENT TO MEET THE DAY TO DAY LIVING E XPENSES OF THE ASSESSEE. THE ASSESSEE GAVE THE DETAILS OF THE FAMILY DRAWINGS, W HICH WAS AS FOLLOWS: DETAILS OF FAMILY DRAWINGS OF AGNIVESH AGARWAL ASSESSMENT YEAR 2009-10 SL.NO. NAME DRAWING (RS.) RELATION PAN 1. AGNIVESH AGARWAL -80,337.00 SELF AFQPA657 2G 2. ANIL AGARWAL 4,158.00 FATHER AFWPA3200 K 3. KIRAN AGARWAL 1,29,947.52 MOTHER ADDPA5222A 4. DWARKA PRASAD AGARWAL 7,36.52 GRAND FATHER ACXPA2281J 5. VEDWATI AGARWAL 9,88,573.00 GRAND MOTHER AFRPA3670G 6. NAVIN AGARWAL 1,55,48,868.97 UNCLE ACTPA4140J 7. RUCHIRA AGARWAL 0.00 AUNTY AFTPA1818A 8. ANNANYA AGARWAL 81,499.83 BROTHER ARGPA3 270K 9. NAIVEDYA AGARWAL 1,93,231.38 BROTHER ALAPA9 173F TOTAL 1,68,73,30.22 ITA NO.1789/KOL/2014 AGNIVESH AGARWAL A.Y.2009-10 3 5. THE CIT(A) DID NOT AGREE WITH THE SUBMISSIONS O F THE ASSESSEE. HE HELD THAT THE PLEA OF THE ASSESSEE THAT HE LIVED ON OTHER DRAWING S WAS BASELESS. HE ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE AO. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LEARN ED COUNSEL FOR THE ASSESSEE REITERATED SUBMISSIONS MADE BEFORE CIT(A). THE LEA RNED DR RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO T HE RIVAL SUBMISSIONS. THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) IN OUR V IEW IS CAPRICIOUS AND DESERVES TO BE DELETED. AN EXPLANATION HAS BEEN OFFERED BY THE ASSESSEE BUT THAT HAS NOT BEEN EXAMINED BY THE CIT(A). THE AO DID NOT GIVE ANY OP PORTUNITY TO THE ASSESSEE AND HE MADE THE ADDITION WITHOUT GIVING ANY SHOW CAUSE NOTICE TO THE ASSESSEE. WHEN AN EXPLANATION IS GIVEN BEFORE CIT(A), HE WAS DUTY BOU ND TO EXPLAIN THE SAME. HE HAS HOWEVER COME TO A CONCLUSION THAT IT CANNOT BE BELI EVED THAT THE ASSESSEE, A MAN OF SUCH A STATURE, LIVED ON THE EARNINGS OF OTHERS. H E HAS GIVEN NO BASIS FOR COMING TO A CONCLUSION THAT THE EXPLANATION OFFERED BY THE ASSE SSEE IS A PLAUSIBLE EXPLANATION. THE BASIS OF THE ADDITION IS AGAIN ARBITRARY, IN AS MUCH AS THE BASIS ON WHICH THE SUM OF RS.2,80,000/- WAS ARRIVED AT IS ALSO SPELT OUT I N THE ORDERS OF THE REVENUE AUTHORITIES. THE PLEA OF THE ASSESSEE HAS TO BE BE LIEVED IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THE ADDITION SUSTAINED BY THE CIT(A) IS ACCORDINGLY DELETED. 9. IN THE RESULT, APPEAL BY THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 31.08.2017. SD/- SD/- [WASEEM AHMED] [ N.V.VASU DEVAN ] ACCOUNTANT MEMBER JUDICI AL MEMBER DATED : 31.08.2017. [RG PS] ITA NO.1789/KOL/2014 AGNIVESH AGARWAL A.Y.2009-10 4 COPY OF THE ORDER FORWARDED TO: 1. SHRI AGNIVESH AGARWAL, C/O R.PATODIA & CO.., 9, JAGMOHAN MULLICK LANE, 3 RD FLOOR, KOLKATA-700007. 2. ADDL. C.I.T. RANGE-44, KOLKATA. 3. C.I.T.(A)-XXX, KOLKATA. 4. C.I.T.- XV, KOLKA TA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFIC E/D.D.O., ITAT KOLKATA BENCHES