Shri Hemant Kumar Jadhav, V. The ITO, Ward 5(2),

ITA 2/IND/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8814 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 01-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S S DESHPANDE
• Keywords: Opportunity of being heard; Additional evidence; Set aside
• Section: 10(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI N.K.SAINI, A.M. AND SHRI BHAVNESH SAINI, J.M. PAN NO. : ADOPJ9832G I.T.A.NO.02/IND/2008. A.Y. : 2004-05 SHRI HEMANT KUMAR JADHAV, ITO, EK-296, SCHEME NO. 54, VS WARD 5(2), INDORE. INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.S.DESHPANDE, C.A. RESPONDENT BY : SMT. APARNA KARAN, ADDL. CIT DR O R D E R PER N. K. SAINI, A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-II, INDORE, DATED 26.10.2007 FOR ASSESSMENT YEAR 2004-05. 2. THE FIRST ISSUE IN THIS APPEAL RELATES TO THE CONFI RMATION OF ADDITION TOWARDS THE ADDITIONAL CONVEYANCE ALLOWANC E AMOUNTING TO RS. 2,13,947/-. 3. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE RECEIVED A GROSS SALARY OF RS. 7,89,400/-. DURING T HE ASSESSMENT -: 2 :- 2 PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE CLAIM ED CONVEYANCE ALLOWANCE OF RS. 2,13,947/-U/S 10(14) READ WITH RUL E 2BB(C). THE AO ASKED TO SUBMIT THE RELEVANT DOCUMENTS. THE ASSE SSEE CLAIMED THAT EXPENSES OF RS. 2.50 LAKHS WERE INCURRED OVER CONVEYANCE. ACCORDING TO THE AO, NO SUPPORTIVE BILLS OR VOUCHER S WERE PRODUCED. HE, THEREFORE, DISALLOWED THE CLAIM OF TH E ASSESSEE AND ADDED RS. 2,13,947/- TO THE TOTAL INCOME. 4. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) AN D SUBMITTED THAT THE ASSESSEE HAD NOT MAINTAINED ANY RECORD OR VOUCHER/BILLS IN PROOF OF CONVEYANCE EXPENDITURE IN CURRED, HOWEVER, CLAIMED THAT THIS AMOUNT WAS INCURRED IN THE FORM O F PETROL AND TAXI FARE. THE ASSESSEE DURING THE APPELLATE PROCEEDINGS ALSO FURNISHED CERTIFICATES FOR THE EXPENDITURE ISSUED BY THE AGEN TS. THE LD.CIT(A) DID NOT ENTERTAIN THE ADDITIONAL EVIDENCE BY STATIN G THAT NO REQUEST WAS MADE TO ENTERTAIN THOSE EVIDENCE U/S 46-A(1) OF THE INCOME-TAX ACT, 1961. 5. AS REGARDS TO THE RELIANCE PLACED BY THE ASSESSEE O N THE JUDGMENT OF THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. A.K. GHOSH REPORTED IN 263 ITR 536, THE LD.CIT(A) O BSERVED THAT -: 3 :- 3 THE FACTS OF THE ASSESSEES CASE WERE DIFFERENT FRO M THE FACTS OF THE CASE RELIED UPON, SINCE THE ASSESSEE MISERABLY FAIL ED TO PROVE THAT THE EXPENSES CLAIMED TO BE INCURRED ON CONVEYANCE WERE ACTUALLY INCURRED. THE LD.CIT(A) ALSO DISTINGUISHED THE JUDG EMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF LIC VS. UNION OF INDIA & OTHERS, 260 ITR 41, RELIED UPON BY THE ASSESSEE B Y STATING THAT EMPHASIS BY THE HONBLE COURT WAS THAT IT WAS FOR T HE ASSESSEE CLAIMING EXEMPTION TO ESTABLISH THAT THE EXPENDITUR E WAS ACTUALLY INCURRED FOR DISCHARGE OF DUTIES. ACCORDINGLY, THE LD.CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OF FICER. NOW THE ASSESSEE IS IN APPEAL. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND A LSO FURNISHED A COPY OF THE FUND FLOW STATEMENT, WHICH IS PLACED AT PAGE NO.44 OF THE ASSESSEES COMPILATION. ON THE BASIS OF SAID STATEM ENT, IT WAS STATED THAT A SUM OF RS. 1,84,000/- WAS INCURRED ON ACCOUN T OF CONVEYANCE EXPENSES THROUGH AGENTS AND RS. 66,000/- WERE INCUR RED BY SELF. IT WAS ADMITTED THAT THE AFORESAID STATEMENT WAS NOT P LACED BEFORE THE AO, HOWEVER, THE SAME WAS FURNISHED TO THE LD.CIT(A ). IT WAS -: 4 :- 4 CONTENDED THAT THE EXPENSES WERE INCURRED BY THE AS SESSEE, SO THE CLAIM WAS ALLOWABLE. 7. IN HER RIVAL SUBMISSION, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE CLAIM OF THE ASSESSE E WAS NOT VERIFIABLE. THEREFORE, THE LD.CIT(A) WAS FULLY JUST IFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS NOTICED THAT THE CERTIFICATES F ROM THE AGENTS WERE NOT FURNISHED TO THE AO, SO HE WAS NOT IN A POSITIO N TO VERIFY THE CLAIM OF THE ASSESSEE. THE LD.CIT(A) HAS ALSO NOT A DMITTED THE ADDITIONAL EVIDENCE ON TECHNICAL GROUND, SINCE THE ASSESSEE HAS NOT MADE SPECIFIC REQUEST TO ADMIT THE ADDITIONAL EVIDE NCE U/S 46A OF THE INCOME-TAX ACT, 1961, BUT IT IS UNDISPUTED FACT THA T THE CERTIFICATES FROM THE AGENTS WERE FURNISHED TO THE LD.CIT(A). WE , THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS DEEM IT PROPE R TO SET-ASIDE THIS ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICA TION AFTER -: 5 :- 5 CONSIDERING THE MATERIAL ON RECORD AND PROVIDING DU E AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. THE NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE CON FIRMATION OF ADDITION TOWARDS THE TWO BANK DEPOSITS OF RS. 38 ,600/-. 10. THE AO MADE THIS ADDITION BY OBSERVING THAT RS. 20, 000/- WAS DEPOSITED IN CASH ON 29.4.2003 WHILE RS. 18,600 /-BY CHEQUE ON 27.10.2003. ACCORDING TO THE AO, THE EXPLANATION OF THE ASSESSEE THAT HE HAD ADVANCED TEMPORARY LOANS TO VARIOUS AGE NTS WAS NOT ACCEPTABLE, SINCE THE ASSESSEE COULD NOT ESTABLISH THE DATE OF ADVANCE, NAME OF SUCH PERSON AND GENUINENESS OF SUC H ADVANCES. HE, THEREFORE, MADE THE ADDITION. WHEN THE MATTER W AS TAKEN TO THE LD.CIT(A), THE EXPLANATION OF THE ASSESSEE WAS THAT THE SUFFICIENT BALANCE WAS AVAILABLE WITH HIM TO ADVANCE THE SAME TO THE AGENTS. IT WAS ALSO STATED THAT THE CHEQUE OF RS. 18,600/- DEP OSITED IN THE BANK WAS REFUND OF THE LOAN AMOUNT ADVANCED BY HIM PRIOR TO 2003 TO SOME AGENTS. THE LD.CIT(A) DID NOT FIND MERIT IN TH E SUBMISSIONS OF THE ASSESSEE AND CONFIRMED THE ADDITION. 11. BEFORE US, THE CONTENTION OF THE LEARNED COUNSEL F OR THE ASSESSEE WAS THAT THE SUFFICIENT FUNDS WERE AVAILAB LE TO THE ASSESSEE FOR MAKING THE DEPOSIT IN THE BANK. HOWEVER, NEITHE R THE AO NOR THE -: 6 :- 6 LD.CIT(A) APPRECIATED THIS FACT IN RIGHT PERSPECTIV E. IN HER RIVAL SUBMISSIONS, THE LEARNED DEPARTMENTAL REPRESENTATIV E SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 12. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES, IT IS NOTICED THAT IN THE INSTANT CASE THE ASSESSEE CLAIM ED THAT SUFFICIENT FUNDS WERE AVAILABLE FOR MAKING THE DEPOSITS IN THE BANK. HOWEVER, THE FUND FLOW STATEMENT WAS NOT FURNISHED TO THE AO BY THE ASSESSEE. WE, THEREFORE, DEEM IT PROPER TO SET ASIDE THIS ISS UE ALSO BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 13. THE LAST ISSUE VIDE GROUND NO. 3 RELATES TO THE CON FIRMATION OF ADDITION OF RS. 90,000/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF LOW HOUSE HOLD EXPENSES. 14. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT T HE AO ASKED THE ASSESSEE TO FURNISH THE EVIDENCE OF WITHDRAWAL FOR HOUSE HOLD EXPENSES. THE CLAIM OF THE ASSESSEE WAS THAT A SUM OF RS. 2,02,266/- WAS WITHDRAWN FOR HOUSE HOLD EXPENSES. THE AO POINT ED OUT THAT THE WITHDRAWALS INCLUDED MUTUAL FUND PURCHASE, NSC PURCHASES, HOUSE HOLD ITEMS PURCHASE AMOUNTING TO RS. 30,000/- , RS. 20,000/- AND RS. 30,000/- RESPECTIVELY. ACCORDING TO HIM, TH E ASSESSEE -: 7 :- 7 INCURRED HOUSE HOLD EXPENSES FROM INCOME GENERATED BY OTHER SOURCES, WHICH WERE NOT DISCLOSED. HE ESTIMATED THE HOUSE HOLD EXPENSES @ RS. 7500/- PER MONTH AND MADE THE ADDITI ON OF RS. 90,000/-. THE ASSESSEE CARRIED THE MATTER TO THE LD .CIT(A) AND SUBMITTED THAT THE AO HAD NOT AFFORDED THE PROPER O PPORTUNITY TO EXPLAIN THE HOUSE HOLD EXPENSES. IT WAS STATED THAT HIS FAMILY CONSISTS OF HIMSELF, HIS WIFE AND MINOR DAUGHTER. I T WAS FURTHER STATED THAT HIS FATHER WAS NOT LIVING WITH HIM AND HE IS INCOME TAX PAYEE FILING HIS INCOME TAX RETURN REGULARLY. IT WA S FURTHER STATED THAT THE PARENTS OF THE ASSESSEE WERE NOT DEPENDENT ON H IM FOR THE LIVELIHOOD AND, THUS, THE CONTENTION OF THE AO THAT THE ASSESSEE WAS BEARING THE EXPENSES OF FIVE FAMILY MEMBERS WAS NOT CORRECT. IT WAS ALSO STATED THAT MEDICAL EXPENSES WERE REIMBURSED B Y LIC AND AS SUCH THERE WERE NO MEDICAL EXPENSES INCURRED BY THE ASSESSEE FROM HIS POCKET. 15. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS DI D NOT FIND MERIT IN THE CONTENTION OF THE ASSESSEE FOR TH E REASONS STATED IN PARA 5.1 OF THE IMPUGNED ORDER AND CONFIRMED THE AD DITION. NOW THE ASSESSEE IS IN APPEAL. -: 8 :- 8 16. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND F URTHER SUBMITTED THAT THE AO AS WELL AS THE LD.CIT(A) WITHOUT APPRE CIATING THE FACTS AND EXPLANATION GIVEN BY THE ASSESSEE MADE THE ADDI TION. IT WAS SUBMITTED THAT THE ASSESSEE WAS HAVING SUFFICIENT F UNDS TO MEET OUT THE HOUSE HOLD EXPENSES. SO, NO ADDITION WAS CALLED FOR. 17. IN HER RIVAL SUBMISSIONS, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 18. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES, IT APPEARS THAT THE AO MADE THE ADDITION CONSIDERING T HAT THE ASSESSEE WAS NOT HAVING ANY WITHDRAWAL TO MEET OUT HOUSE HOL D EXPENSES. ON THE OTHER HAND, THE CONTENTION OF THE ASSESSEE WAS THAT HE WAS HAVING SUFFICIENT FUNDS TO MEET THE FAMILY NEEDS. IN THE PRESENT CASE, IT IS ALSO NOTICED THAT THE AO ESTIMATED THE HOUSE HOLD E XPENSES CONSIDERING THAT THE FAMILY OF THE ASSESSEE WAS HAV ING 5 MEMBERS. ON THE OTHER HAND, THE CLAIM OF THE ASSESSEE WAS TH AT HIS FATHER WAS RETIRED OFFICER AND WAS NOT DEPENDENT UPON HIM, SO HIS FAMILY WAS HAVING THREE MEMBERS. THE LD.CIT(A) CONFIRMED THE A CTION OF THE -: 9 :- 9 AO BY OBSERVING THAT AS PER INDIAN CUSTOM AND TRADI TION, THE SON IS SUPPOSED TO SERVE AND HELP THE FATHER AFTER HIS RET IREMENT INSTEAD OF OTHERWISE. IN OUR OPINION, THAT OBSERVATION MAY BE CORRECT , BUT THE VITAL FACT THAT THE FATHER OF THE ASSESSEE WAS A RE TIRED GOVERNMENT SERVANT AND WAS SEPARATELY ASSESSED TO TAX HAD NOT BEEN CONSIDERED BY THE LD. CIT(A). FURTHERMORE, INSPITE OF THE SPEC IFIC EXPLANATION GIVEN BY THE ASSESSEE THAT HIS PARENT WERE LIVING S EPARATELY AT DEWAS, WHILE THE ASSESSEE WAS LIVING AT INDORE HAD ALSO NOT BEEN CONSIDERED BY THE LD.CIT(A). WE, THEREFORE, CONSIDE RING THE TOTALITY OF THE FACTS DEEM IT PROPER TO SET-ASIDE THIS ISSUE ALSO BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER PROVIDING DU E AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 19. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. THIS ORDER HAS BEEN PRONOUNCED ON 21 ST JULY, 2009. (BHAVNESH SAINI) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21ST JULY, 2009. CPU* 21227