ITO 22(1)-1, NAVI MUMBAI V. ASHOK P BUSA, MUMBAI

ITA 1928/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1873 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 30-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM GAUR
• Assessee Lawyers: V K TULSIYAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI. BEFORE SHRI R.V. EASWAR, SENIOR VICE-PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER. I.T.A. NO. 1 928/MUM/2009. ASSESSMENT YEAR : 2005-06. THE INCOME TAX OFFICER, SHRI ASHO K P. BUSA, 22(1)-1, MUMBAI. VS. 904, SHATRUNJAY, NEELKANTH VALLEY, 7 TH ROAD, RAJAWADI, GHATKOPAR (E), MUMBAI. PAN AEYPB3959H. APPELLANT RESPONDENT APPELLANT BY : SHRI VIKRAM GAUR. RESPONDENT BY : SHRI V.K. TULSIYAN. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-XXII, MUMBAI DATED 20-11- 2008 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION MADE BY TH E A.O. ON ACCOUNT OF LOW G.P. FROM RS.28,46,866/- (4.2%) TO RS.9,89,762/- (2.10%). 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE A.O. HAD ESTIMATED G.P. ON THE BASIS OF RELIABLE EVIDENCE IN THE FORM OF G. P. DECLARED BY ANOTHER ASSESSEE TRADING IN THE SAME ITEM. 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,94,83 6/- MADE BY THE A.O. ON ACCOUNT OF LOW PERSONAL WITHDRAWAL WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE DE TAILS REGARDING THE HOUSEHOLD EXPENSES AND HAD FURNISHED ONLY A ROUGH W ORKING OF SUCH EXPENSES WHICH WAS FOUND BY THE A.O. AS TOO LO W. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT() ON THE ABOVE GROUND BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RE STORED. 5. THE APPELLANT CRAVES LEAVES TO AMEND OR ALTER ANY G ROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. FACTS IN BRIEF : THE ASSESSEE IS IN THE BUSINESS OF TRADING IN IRO N AND STEEL. THE ISSUES BEFORE US IS IN RESPECT OF THE ESTIMATIO N OF GROSS PROFIT AND ADDITION ON ACCOUNT OF LOW PERSONAL DRAWINGS. 3. ON HEARING SHRI VIKRAM GAUR, LEARNED DR AND SHR I V.K. TULSIYAN, LEARNED COUNSEL FOR THE ASSESSEE, WE FIND THAT AS FAR AS GROUND NOS. 1 AND 2 ARE CONCERNED, THE A. BENCH OF THE TR IBUNAL IN THE ASSESSEES APPEAL AGAINST THE VERY SAME ORDER OF T HE CIT(APPEALS) IN ITA NO. 326/MUM/2009 ORDER 12 TH JUNE, 2009 HAS HELD THAT THE GROSS PROFIT RATE OF 1.5% IN THE INSTANT CASE WILL BE JUS T AND PROPER AND WILL MEET THE ENDS OF JUSTICE. IN VIEW OF THE ABOVE FIND INGS, THESE GROUNDS OF THE REVENUE HAVE TO BE NECESSARILY DISMISSED. 4. COMING TO GROUND NO. 3 I.E. ON AN ADDITION ON A CCOUNT OF LOW WITHDRAWALS, THE FIRST APPELLATE AUTHORITY AT P ARA 9.1 HELD AS FOLLOWS : AN ADDITION OF RS.1,94,836/- HAS BEEN MADE BY THE ASSESSING OFFICER IN THE CASE OF THE APPELLANT ON A CCOUNT OF LOW WITHDRAWALS FOR HOUSEHOLD PURPOSES AS THE ASSESSING OFFICER WAS OF THE OPINION THAT THE AMOUNT OF RS.1,65,164/- SHO WN AS FAMILY 3 WITHDRAWALS OF THE APPELLANT WHOSE FAMILY CONSIST O F SIX MEMBERS, I.E. APPELLANT, HIS WIFE, TWO SONS AND TWO DAUGHTER S-IN-LAWS WAS NOT ENOUGH TO MEET THE STANDARD OF LIVING BEING MAINTAI NED BY HIM. THE ASSESSING OFFICER HAS ESTIMATED RS.5000 PER MON TH PER MEMBER AS THE EXPENSE AND WORKED OUT HOUSEHOLD EXPE NSES AT RS.60,000/- PER MEMBER IN A YEAR. THE APPELLANT IN HIS SUBMISSION HAS VEHEMENTLY OPPOSED THE FINDING OF THE ASSESSING OFFICER AND HAD STATED THAT FOR A MIDDLE CLASS FAMILY LIKE HIS, WITHDRAWALS OF RS.1,65,164/- WAS SUFFICIENT TO MEET DAY TO DAY HOU SEHOLD EXPENSES. REGARDING USAGE OF CAR AND TELEPHONE IT W AS FURTHER STATED THAT APPELLANT HAD HIMSELF DISALLOWED 20% OU T OF TOTAL EXPENSES FOR USAGE OF TELEPHONE AND CAR FROM THE FI RMS ACCOUNT. THEREFORE, THESE EXPENSES WERE NOT COVERED IN THE D RAWINGS. I FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION ON CON JECTURES AND SURMISES. THE ASSESSING OFFICER HAS NOT ILLUSTRATED OR POINTED OUT ANY SINGLE EXAMPLE OR INCIDENCE WHEREIN IT CAN BE H ELD THAT IN THE INSTANT CASE FAMILY RESIDING AS JOINT FAMILY HAS TO BE CONSIDERED AS INDIVIDUALS REGARDING HOUSEHOLD EXPENSES. I FIND TH AT THE ADDITION MADE BY THE ASSESSING OFFICER WOULD HAVE CARRIED WE IGHT IF THE ASSESSING OFFICER HAD CONDUCTED EXHAUSTIVE AND DETA ILED ENQUIRY OR SURVEY OR INVESTIGATION AND HAD GATHERED MATERIA L ON THE BASIS OF WHICH RELIABLE ESTIMATION OF HOUSEHOLD EXPENSES COU LD HAVE BEEN ESTIMATED. SINCE THIS HAS NOT BEEN DONE, I AM INCLI NED TO ACCEPT THE CONTENTION OF THE APPELLANT AND GIVEN TO THE CIRCUM STANCES, I FIND THAT THE ADDITION MADE BY THE ASSESSING OFFICER UND ER THIS HEAD IS NOT JUSTIFIED AND DESERVES TO BE DELETED. THIS IS M ORE SO EVER, AS THE APPELLANT HIMSELF HAS DECLARED WITHDRAWALS OF RS.1, 65,164/- THAT WOULD WORK OUT TO APPROX. RS.14000/- PER MONTH WHIC H SEEMS SUBSTANTIAL TO MEET THE HOUSEHOLD EXPENSES OF THE A PPELLANT WHEREIN THE EXPENSES FOR CAR, TELEPHONE, ETC. ARE B EING MET BY THE BUSINESS. (RELIEF : RS.1,94,836/-). THE LEARNED DR WAS NOT ABLE TO BRING ANYTHING ON RECORD TO DISPUTE THESE FINDINGS OF THE CIT(APPEALS). THUS WE UPHOLD THE FINDING OF THE CIT(APPEALS) ON THIS ISSUE AND DISMISS GROUND NO. 3 OF THE REVENUE. 5. GROUND NOS. 4 AND 5 ARE GENERAL IN NATURE AND R EQUIRE NO ADJUDICATION. 4 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL, 2010. SD/- SD/- (R.V. EASWAR) (J. SUDHAKAR REDDY) SENIOR VICE-PRESIDENT. ACCOUNTANT MEMBER. MUMBAI, DATED : 30 TH APRIL, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.