Sh. Ashok Kumar Sethi, Phagwara V. The Additional Commissioner of Income Tax, Phagwara

ITA 184/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9601 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Keywords: Unexplained expenditure; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.184(ASR)/2016 ASSESSMENT YEAR:2009-10 PAN: AFIPS1261A SH. ASHOK KUMAR SETHI, VS. ADDL. COMMR. OF INCOME TAX, C/O M/S. FINE SWITCHGEARS, PHAGWARA CIRCLE, INDUSTRIAL AREA, PHAGWARA. PHAGWARA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.SANDEEP VIJH, CA RESPONDENT BY: SH. BHAWANI SHANKER, DR DATE OF HEARING: 28/06/2016 DATE OF PRONOUNCEMENT: 25/08/2016 ORDER PER T.S. KAPOOR, AM: THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF THE LD. CIT(A), JALANDHAR, DATED 04.01.2016, FOR THE ASSESS MENT YEAR 2009-10. THE ONLY GRIEVANCE RAISED BY THE ASSESSEE IN THIS A PPEAL IS AGAINST THE ACTION OF THE LD. CIT(A) BY WHICH HE HAD CONFIRMED PARTLY THE ACTION OF THE AO BY WHICH HE HAD MADE AN ADDITION FOR LOW HO USEHOLD EXPENSES. 2. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, THE ISSUE OF HOUSEHO LD EXPENSES WAS TAKEN UP AND DETAILED EXPLANATION WAS FILED AND I T WAS EXPLAINED TO THE AO THAT WITHDRAWAL OF RS.2,25,000/- WAS MADE BY THE ASSESSEE AND RS.30,000/- HAD BEEN WITHDRAWN BY THE WIFE OF THE A SSESSEE. HE FURTHER ITA NO.184(ASR)/2016 A.Y. 2009-10 2 SUBMITTED THAT ELECTRICITY AND TELEPHONE BILLS WER E SEPARATELY BEING PAID OUT OF THE CAPITAL ACCOUNT. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AO ESTIMATED THE HOUSEHOLD EXPENSES TO THE EXTENT OF RS.50,000/- PER MONTH, WHICH WAS ESTIMATED WITHOUT POINTING OUT ANY UNRECORDED AND UNEXPLAINED EXPENDITURE. THE LD COUNSEL FURTHER SUB MITTED THAT THE ITAT, AMRITSAR BENCH IN THE CASE OF PARMOD SEHGAL, HAS HELD THAT UNLESS WITHDRAWAL OF THE ASSESSEE ARE TOTALLY ABSURD, THE ONUS WAS ON THE AO TO PROVE THAT THESE WERE ON THE LOWER SIDE. IT WAS FU RTHER SUBMITTED THAT ITAT, DELHI BENCH, IN THE CASE OF HAKIM BRIJ LAL SH ARMA VS. ITO, REPORTED AT 11 TTJ 349 HAS HELD THAT ADDITION ON AC COUNT OF LOW HOUSEHOLD EXPENSES WITHOUT SPECIFYING ANY UNRECORD ED AND UNEXPLAINED EXPENDITURE WERE NOT JUSTIFIED. THE LD. COUNSEL SUB MITTED THAT THE WITHDRAWALS IN THE PRESENT CASE ARE NOT ABSURD, AS THE ASSESSEE HAD TO WITHDRAW SUFFICIENT AMOUNT FOR HOUSEHOLD EXPENSES A ND, THEREFORE, IT WAS PRAYED THAT THE ADDITION SUSTAINED BY THE LD. CIT( A) BE DELETED. 3. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO HAS MADE ADDITION OF RS.3,75,000/- FOR LOW HOUSEHOLD WITHDRAWALS AFTER C ONFRONTING THE ASSESSEE ON VARIOUS OCCASIONS DURING ASSESSMENT PR OCEEDINGS. THE LD. CIT(A) HAS PARTLY CONFIRMED THE ACTION OF THE A.O, AND HAS ALLOWED A RELIEF OF RS.30,000/- ONLY ON ACCOUNT OF WITHDRAWAL S OF CASH BY THE WIFE ITA NO.184(ASR)/2016 A.Y. 2009-10 3 OF THE ASSESSEE. WE FURTHER FIND THAT WHILE MAKING THE ADDITION, THE AO AND THE LD. CIT(A) HAS NOT COMPARED THE HOUSEHOLD E XPENSES IN THE EARLIER YEARS AND IN THE SUCCEEDING YEARS WHICH ARE RIGHT INDICATORS AMOUNT OF REASONABLE HOUSEHOLD EXPENSES IN THE CASE OF PRESENT ASSESSEE. THE ARBITRARY ADDITION MADE BY THE AO IS NOT JUSTIFIED. HE SHOULD HAVE TAKEN INTO ACCOUNT, THE ALREADY ACCEPTE D HOUSEHOLD DRAWINGS IN THE EARLIER YEARS OR IN THE SUCCEEDING YEARS TO ESTIMATE THE ADDITION, IF ANY. THEREFORE, WE DEEM IT APPROPRIATE TO REMIT THE MATTER BACK TO THE FILE OF THE AO, WHO WILL DECIDE THE ISS UE AFRESH ON THE BASIS OF THE WITHDRAWALS IN THE PREVIOUS YEARS AND SUCCEEDIN G YEARS. NEEDLESS TO SAY THAT THE ASSESSEE SHALL BE AFFORDED DUE AND ADE QUATE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25/08/ 2016. SD/- SD/- (A.D. JAIN) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER /SKR/ DATED: 25/08/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:ASHOK KUMAR SETHI, PHAGWARA. 2. THE ADDL. CIT, PHAGWARA 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL,