Varinder Kumar, Sangrur V. ACIT, Sangrur

ITA 234/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5469 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 08-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.234 /CHD/2011 (ASSESSMENT YEAR : 2007-08) VARINDER KUMAR VS. THE A.C.I.T., PROP.M/S AHUJA TRADERS CIRCLE SANGRUR SUNAMI GATE, SANGRUR. PAN: AAVPK3022F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH MALHOTRA RESPONDENT BY : SMT.JAISHREE SHARMA, DR O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (A), DATED 27.12.2010 RE LATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED U/ S 143(3) OF THE INCOME-TAX ACT. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER : 1. THE LD. C.I.T. (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS.3,792/- IN RESPECT OF TELEPHONE INSTALLED AT THE RESIDENCE OF THE APPELLANT ALTHOUG H NO SUCH BUSINESS EXPENDITURE HAD BEEN CLAIMED. 2. THE LD. C.I.T. (APPEALS) HAS FURTHER ERRED IN SUSTAINING THE DISALLOWANCE OF BUSINESS EXPENDITURE INCURRED FOR RUNNING OF CAR, FOR USE OF MOBILE-PHON E AND TELEPHONE ETC.. 2 3. THE LD. C.I.T. (APPEALS), ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE, HAS ALSO ERRED IN PARTLY SUSTAINING THE ADDITION OF RS.1,48,800/- OUT OF THA T MADE BY THE A.O. BY ESTIMATING THE HOUSEHOLD EXPENDITURE AT RS.1,99,715/-. 3. THE ASSESSEE HAS MOVED AN APPLICATION FOR CONDON ATION OF DELAY IN FILING THE PRESENT APPEAL BY TWO DAYS. THE CONTENT ION OF THE ASSESSEE IN THIS REGARD IS THAT THE APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF CIT(A) WAS SENT BY POST ON 4.3.20011 BUT RECEIVED B Y THE REGISTRAR OF I.T.A.T., CHANDIGARH ON 8.3.2011. THE SAID APPEAL WAS THUS, FILED AFTER A DELAY OF TWO DAYS BECAUSE OF THE DELAY AT THE END OF THE POSTAL AUTHORITIES. A REQUEST WAS MADE TO CONDONE THE AF ORESAID DELAY IN FILING THE PRESENT APPEAL. IN THE FACTS AND CIRCUM STANCES OF THE CASE WE CONDONE THE DELAY OF TWO DAYS IN FILING THE PRESENT APPEAL. 4. THE ISSUE IN GROUND NO.1 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF RESIDENTIAL TELEPHONE EXPENSES. 5. THE ISSUE IN GROUND NO.2 IS WITH REGARD TO THE D ISALLOWANCE OUT OF RUNNING OF CAR EXPENSES AND OUT OF MOBILE PHONE AND TELEPHONE EXPENSES FOR PERSONAL USE. THE ASSESSING OFFICER HAD DISALL OWED THE RESIDENTIAL TELEPHONE EXPENSES OF RS.3792/- IN ENTIRETY AND FUR THER HAD DISALLOWED 1/4 TH OUT OF CAR RUNNING EXPENSES OF RS.34,259/-, MOBILE PHONE EXPENSES OF RS.71,287/- AND TELEPHONE EXPENSES OF RS.46,469/ -. THE CIT(A) UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFIC ER IN RESPECT OF THE RESIDENTIAL TELEPHONE EXPENSES, BUT RESTRICTED THE DISALLOWANCE FOR PERSONAL USE OF 1/5 TH OUT OF CAR, TELEPHONE AND MOBILE PHONE EXPENSES. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID DIS ALLOWANCE. 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PROP. OF M/S AHUJA TRADERS IS ENGAGED IN THE DISTRI BUTION OF TALKTIME RECHARGE CARDS, NEW MOBILE PHONE CONNECTION TO DEAL ERS OF AIRTEL. THE ASSESSEE HAD CLAIMED THE RESIDENTIAL TELEPHONE EXPE NSES OF RS.3792/- AS BUSINESS EXPENSES IN ADDITION TO THE MOBILE PHONE A ND TELEPHONE EXPENSES CLAIMED AT RS.71,287/- AND RS.46,469/-. T HE ASSESSEE HAD FURTHER CLAIMED CAR RUNNING EXPENSES AT RS.34,259/- . THE PERSONAL USE OUT OF THE AFORESAID EXPENSES CANNOT BE RULED OUT A ND WE ARE CONFORMITY WITH THE ORDERS OF THE AUTHORITIES BELOW THAT THE E XPENSES RELATABLE TO SUCH PERSONAL USE ARE TO BE DISALLOWED IN THE HAND OF THE ASSESSEE. HOWEVER, WE DIRECT THE ASSESSING OFFICER TO RESTRIC T THE DISALLOWANCE ON ACCOUNT OF PERSONAL USE OUT OF THE AFORESAID EXPENS ES INCLUDING THE TELEPHONE EXPENSES TO 1/10 TH . THUS, GROUND NOS.1 AND 2 RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 7. THE NEXT GRIEVANCE OF THE ASSESSEE VIDE GROUND N O.3 IS AGAINST THE ADDITION MADE ON ACCOUNT OF ESTIMATION OF HOUSEHOLD EXPENSES. 8. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE FAMILY OF THE ASSESSEE CONSISTED OF FOUR MEMBERS, THOUGH HE WAS L IVING IN A JOINT FAMILY OF ELEVEN MEMBERS. THE ASSESSEE HAD SHOWN HOUSEHOLD EXPENSES OF RS.1,13,070/-, WHEREAS THE ASSESSING OFFICER NOT ICED THAT THE TOTAL WITHDRAWAL BY THE FOUR MEMBERS COMES TO RS.4,29,070 . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE HOUSEHOLD EXPENSES SHOWN BY THE ASSESSEE WAS ON THE LOWER SIDE TAKING INTO ACCOUNT THE VARIOUS HEADS OF EXPENSES AS INCORPORATED AT PAGES 7 TO 9 OF THE ASS ESSMENT ORDER. ACCORDINGLY, THE SHARE OF THE HOUSEHOLD EXPENSES OF THE FAMILY OF THE ASSESSEE WAS COMPUTED AT RS.3,12,785/-, ADDITION OF RS.1,99,715/- WAS MADE ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. THE CIT (A) WAS OF THE 4 OPINION THAT THE ESTIMATION OF HOUSEHOLD EXPENSES B Y THE ASSESSING OFFICER WAS ON THE HIGHER SIDE. HE RESTRICTED THE SAME TO RS.1,48,400/-. THE ASSESSEE IS IN APPEAL AGAINST THE SAME. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS STAYING IN A JOINT FAMILY AND HAS CLAI MED THAT THE STANDARD OF LIVING OF THE FAMILY COULD BE JUDGED FROM THE FA CT THAT THE ELECTRICITY EXPENDITURE OF THE ENTIRE FAMILY OF ELEVEN PERSONS WAS RS.26,720/- IN THE ENTIRE YEAR. THE ASSESSING OFFICER, ON THE OTHER HAND, HAD OBSERVED THAT THE EDUCATION EXPENSES OF TWO SCHOOL GOING CHI LDREN OF THE ASSESSEE WAS RS.12,840/-. WE FIND NO MERIT IN THE AFORESAID ADDITION MADE IN THE HANDS OF THE ASSESSEE IN THE ABSENCE OF ANY EVIDENC E FOUND TO PROVE THE STAND OF THE ASSESSING OFFICER, ESTABLISHING THE AS SESSEE TO HAVE INCURRED THE EXPENDITURE OF HOUSEHOLD HIGHER THAN THE ONE CL AIMED BY THE ASSESSEE. IN THE ABSENCE OF SUCH EVIDENCE, WE DIRE CT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON ACCOUNT OF E STIMATION OF HOUSEHOLD EXPENSES. THUS, GROUND NO.3 RAISED BY TH E ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF APRIL, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH APRIL , 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5