Sanjay Kr. Aarwal, V. ACIT,

ITA 268/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0436 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 14-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAON
• Assessee Lawyers: JAI KISHAN SHARMA
• Keywords: Assessment record
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 268/RAN/2014 (ASST. YEAR : 2007-08) SHRI SANJAY KUMAR AGARWAL, BARA NIMDIH, CHAIBASA, DIST. WEST SINGHBHUM. VS. ACIT, CIRCLE-3, JAMSHEDPUR. PAN NO. ADSPA 4798 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JAI KISHAN SHARMA CA DEPARTMENT BY : SHRI CHOUDHARY ORAON DR DATE OF HEARING : 29/10/2015. DATE OF PRONOUNCEMENT : 29/10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), JAMSHEDPUR DA TED 19/06/2014. 2. IN GROUND NO.1, THE GRIEVANCE OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIF IED IN CONFIRMING THE ADDITION OF RS. 4,05,833/- AS ADDITIONAL INCOME WHICH WAS ALREADY CREDITED IN THE TRADING ACCOUNT. 3 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD EARNED COMMISSI ON INCOME OF RS.4,05,833/- FROM INSTALLATION OF PHONES FROM TATA TELE SERVICES. THE 2 ITA NO. 268/RAN/2014 ASSESSING OFFICER INQUIRED FROM THE ASSESSEE AS TO HOW HE HAD INCURRED LOSSES ON COMMISSION INCOME AND WHAT ARE THE SPECIF IC EXPENSES INVOLVED IN THIS REGARD. THE ASSESSING OFFICER ALS O ASKED THE ASSESSEE TO EXPLAIN THAT IN ABSENCE OF ANY PROPER EXPLANATIO N WHY THE NET PROFIT SHOULD NOT BE TAKEN AS NET PROFIT FROM TRADING BUSI NESS AND COMMISSION INCOME BE NOT TAKEN AS ADDITIONAL INCOME OF THE ASS ESSEE. THE ASSESSING OFFICER HAS OBSERVED THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 17/12/200 9 STATED THAT THE ASSESSEE HAD NO OBJECTION IN TAKING THE COMMISSION INCOME AS ADDITIONAL INCOME OF THE ASSESSEE AND ADDED THE SAM E TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) AL SO CONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THE GROUND TH AT ON PERUSAL OF THE ASSESSMENT RECORD, IT IS SEEN THAT THE ASSESSEE HAD AGREED THAT THE COMMISSION INCOME OF RS. 4,05,833/- MAY BE TAKEN AS ADDITIONAL INCOME. THE AUTHORIZED REPRESENTATIVE OF THE ASSES SEE COULD NOT BRING ANY MATERIAL ON RECORD TO REBUT THE FINDINGS OF THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) THAT THE A SSESSEE HIMSELF BEFORE THE ASSESSING OFFICER ALSO AGREED THAT THE C OMMISSION INCOME OF RS. 4,05,833/- MAY BE TAKEN AS ADDITIONAL INCOME. NO MATERIAL WAS ALSO BROUGHT ON RECORD TO SHOW THAT WHY THE COMMISS ION INCOME OF RS.4,05,833/- SHOULD NOT BE SEPARATELY ASSESSED TO TAX. HENCE, WE FIND NO INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES AND THEREFORE THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 5. IN GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) IS NO T JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 63,725/- TOWARDS DRA WINGS. 6 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT 3 ITA NO. 268/RAN/2014 CASE, THE ASSESSING OFFICER OBSERVED ON PERUSAL OF ACCOUNTS OF THE ASSESSEE THAT THE ASSESSEE HAD SHOWN RS. 64,800/- U NDER THE HEAD DRAWINGS. THE ASSESSEE HAS ALSO CLAIMED RS. 8,52 5/- AS PAYMENT TOWARDS 80C FROM THE TOTAL DRAWINGS. HENCE, THE NE T DRAWINGS SHOWN BY THE ASSESSEE COMES TO RS. 56,275/- I.E. RS. 4,69 0/- P.M. ONLY. ACCORDING TO THE ASSESSING OFFICER, THE AMOUNT BEIN G TOO LOW THE MONTHLY DRAWINGS IS TAKEN AT RS. 10,000/-, TOTALLIN G TO RS. 1,20,000/- FOR THE WHOLE YEAR AND THE DIFFERENCE OF RS. 63,725 /- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 7 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) C ONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT T HE ESTIMATION OF MONTHLY EXPENDITURE BY THE ASSESSING OFFICER AT RS. 10,000/- P.M. IS QUITE REASONABLE. 8 . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITT ED THAT THE ASSESSING OFFICER HAS ESTIMATED THE DRAWINGS OF THE ASSESSEE DURING THE YEAR ON ADHOC BASIS AND MADE AN ADHOC ADDITION OF RS. 63,725/- AND, THEREFORE, THE SAME IS LIABLE TO THE DELETED. 9. ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUPP ORTED THE ORDERS OF THE LOWER AUTHORITIES. 10. WE FIND THAT THE ASSESSEE HAS SHOWN DRAWINGS OF RS. 64,800/- DURING THE YEAR WHICH INCLUDED INSURANCE PREMIUM OF RS. 8,525/-. NO MATERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFF ICER TO SHOW THAT THE ASSESSEE ACTUALLY INCURRED ANY EXPENDITURE MORE THAN RS. 64,800/- DURING THE YEAR. IN ABSENCE OF THE SAME, IN OUR CO NSIDERED VIEW, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADHOC ADDITION OF RS.63,725/- TO THE INCOME OF THE ASSESSEE ON ACCOUN T OF LOW DRAWINGS. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AU THORITIES AND DELETE 4 ITA NO. 268/RAN/2014 THE ADDITION OF RS. 63,725/- AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON THURSDAY, THE 29 TH DAY OF OCTOBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29 TH OCTOBER, 2015. VR/- COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RANCHI 5 ITA NO. 268/RAN/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 29/10/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 30/10/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 30/10/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 30/10/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 30/10/2015 SR.PS 6. DATE OF PRONOUNCEMENT 29/10/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 30/10/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER