ACIT 20(2), MUMBAI V. POOJA ARORA, MUMBAI

ITA 2786/MUM/2009

• Counselvise Citation: 278619914 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-04-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 01-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT KUMAR SINHA
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI, J. SUDHAKAR REDDY, ACCOUNTANT MEMBER A ND SMT. ASHA VIJAYRAGHAVAN, JUDICIAL MEMBER ITA NO.2786, 2787 & 2789/MUM./2009 (A.YS : 2001-02, 2002-03 & 2005-06 ) DATE OF HEARING: 28.4.2011 ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-20(2), PIRAMAL CHAMBERS LALBAUG, MUMBAI 400 012 .. APPELLANT V/S MRS. POOJA ARORA, C/2, RISHIKESH BUILDING, LOKHANDWALA COMPLEX ANDHERI (W), MUMBAI 400 058 PAN ABKPA7933P .... RESPONDENT ITA NO.2794 AND 2795/MUM./2009 (A.YS : 2005-06 AND 2006-07 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-20(2), PIRAMAL CHAMBERS LALBAUG, MUMBAI 400 012 .. APPELLANT V/S MR. PRAVEEN KUMAR ARORA (INDIVIDUAL), C/2, RISHIKESH BUILDING LOKHANDWALA COMPLEX ANDHERI (W) MUMBAI 400 058 ABAPA2027N .... RESPONDENT POOJA ARORA PRAVEEN KUMAR ARORA (IND.) & PRAVEEN KUMAR (HUF) 2 ITA NO.2797, 2799 SNF 2801/MUM./2009 (A.YS : 2000-01, 2003-04 AND 2005-06 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-20(2), PIRAMAL CHAMBERS LALBAUG, MUMBAI 400 012 .. APPELLANT V/S MR. PRAVEEN KUMAR (HUF) C/2, RISHIKESH BUILDING LOKHANDWALA COMPLEX ANDHERI (W) MUMBAI 400 058 ABAPA2027N .... RESPONDENT REVENUE BY : MR. AJIT KUMAR SINHA ASSESSEE BY : MR. VIJAY MEHTA* O R D E R PER BENCH ALL THESE APPEALS ARE FILED BY THE REVENUE, AND ARE DIRECTED AGAINST THE SEPARATE BUT IDENTICAL ORDERS PASSED BY THE COMMISS IONER (APPEALS)-XX, MUMBAI. SINCE ALL THESE APPEALS HAVE A COMMON ISSUE , THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. FACTS IN BRIEF:- THE ASSESSEE MS. POOJA ARORA, IS A N INDIVIDUAL, AND WHEREAS, THE ASSESSEE MR. PRAVEEN KUMAR, IS ASSESSE D BOTH IN THE CAPACITY OF INDIVIDUAL AS WELL AS H.U.F . A SEARCH AND SEIZER OPERATION WAS CONDUCTED UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) IN CITIES OF DELHI, KANPUR, SONAPETH (HARYANA) AN D HARIDWAR, ON ONE MR. DILBAUG RAI ARORA AND GROUP ON 1 ST SEPTEMBER 2005. DURING THE COURSE OF SEARCH OPERATION, THE DEPARTMENT RECOVERED CERTA IN CASH, JEWELLERY AND OTHER MATERIALS. MS. POOJA ARORA, IS THE DAUGHTER-I N-LAW OF MR. DILBAG RAI ARORA, AND MR. PRAVEN KUMAR IS THE SON OF MR. DILBA G RAI ARORA. NOTICES WERE ISSUED UNDER SECTION 153A OF THE ACT. POOJA ARORA PRAVEEN KUMAR ARORA (IND.) & PRAVEEN KUMAR (HUF) 3 3. IN AN ORDER PASSED UNDER SECTION 153A, R/W SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER FOUND THAT THE HOUSEHOLD DRAW INGS OF THE ASSESSEE ARE NOT SUFFICIENT TO EXPLAIN THE EXPENDITURE. FOR VARI OUS REASONS GIVEN AT PAGES- 19 AND 20 OF THE ASSESSMENT ORDER, THE ASSESSING OF FICER CAME TO A CONCLUSION THAT THE DRAWINGS ARE NOT AT ALL SUFFICI ENT TO MEET THE HOUSEHOLD EXPENDITURE CONSIDERING LIFE STYLE OF THE ASSESSEE AND THE PROPERTIES HELD BY THEM. HENCE, HE ESTIMATED THE DRAWINGS AND MADE AN ADDITION ON THAT GROUND. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN THE COMMISSIONER (APPE ALS), CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FOR VARIOUS REASONS RECORDED IN THE ORDER, HELD THAT THE ADDITION IS BAD IN LAW AND THAT THE D RAWINGS OF THE ENTIRE FAMILY PUT TOGETHER IS SUFFICIENT TO MEET HOUSEHOLD EXPENS ES. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIB UNAL. THE SOLE GROUND OF APPEAL IN ALL THESE CASES ARE ADDITION ON ACCOUNT OF LOW HOUSEHOLD DRAWINGS. 6. LEARNED DEPARTMENTAL REPRESENTATIVE, MR.AJIT KUMRA SINHA, SUBMTTED THAT THE ASSESSING OFFICER HAS FOUND CERTAIN BILLS DURING THE COURSE OF SEARCH AND IT IS BROUGHT OUT IN THE ASSESSMENT ORDER THAT, THE DRAWINGS MADE DURING THAT PERIOD WERE NOT SUFFICIENT TO MEET THE EXPENDI TURE IN THE FORM OF EIGHT BILLS SEIZED DURING THE COURSE OF SEARCH. HE SUBMIT TED THAT THE ASSESSEE HAS MANY PROPERTIES AND THE HOUSEHOLD DRAWINGS ARE INSU FFICIENT TO MEET THE HOUSEHOLD EXPENDITURE. HE FILED A CHART SHOWING THA T IN ALL THE EIGHT CASES, THE DRAWINGS ARE INSUFFICIENT AND THE ADDITION MADE BY THE ASSESSING OFFICER BY ESTIMATING DRAWINGS @ ` 25,000 PER MONTH IN THE ASSESSMENT YEAR 2001- 02 AND ` 65,000 PER MONTH IN ASSESSMENT YEAR 2005-06, IS RE ASONABLE AND HAS TO BE RESTORED. HE RELIED ON THE DECISION OF SA NJEEV BATRA V/S ACIT, 69 ITD 23. HE SUBMITTED THAT THE ORDER OF THE ASSESSIN G OFFICER SHOULD BE RESTORED AND THAT OF THE COMMISSIONER (APPEALS) BE REVERSED. POOJA ARORA PRAVEEN KUMAR ARORA (IND.) & PRAVEEN KUMAR (HUF) 4 7. LEARNED COUNSEL, MR.VIJAY MEHTA, FILED PAPER BOOK. ON THE ISSUE OF LOW HOUSEHOLD WITHDRAWALS, LEARNED COUNSEL POINTED OUT TO THE ANALYSIS GIVEN BY THE COMMISSIONER (APPEALS) AT PAGE-21, VIDE PARA-9. 2 OF THE ORDER AND SUBMITTED THAT THE DRAWINGS ARE REASONABLE AND SUFF ICIENT TO MEET THE HOUSEHOLD EXPENSES. HE SUBMITTED THAT THE LEARNED D EPARTMENTAL REPRESENTATIVE HAS NOT POINTED OUT ANY INFIRMITY IN THE FACTS AND FIGURES GIVEN BY THE COMMISSIONER (APPEALS). HE SPECIFICALL Y PLEADED THAT (A) THE ASSESSING OFFICER HAS WRONGLY TAKEN ONLY ONE WITHDR AWAL OF ` 25,000, MADE AND TRIED TO CONNECT THE SAME WITH THE EXPENDITURE OF A WEEK. IT IS HIS CASE THAT THE DRAWING FOR THE ENTIRE YEAR HAS TO BE TAKE N; (B) THE DRAWING OF THE HUSBAND AND WIFE HAVE TO BE CONSIDERED AND IF SO CO NSIDERED, THE DRAWINGS ARE MORE THAN SUFFICIENT TO MEET HOUSEHOLD EXPENDIT URE; (C) THE ASSESSING OFFICER WAS WRONG IN EXTRAPOLATING THE WRONG FINDIN G, BASED ON EIGHT BILLS FOUND DURING THE SEARCH EVIDENCING EXPENDITURE. HE SUBMITTED THAT NO ADDITION CAN BE MADE; (D) THAT HE REASON GIVEN BY T HE ASSESSING OFFICER THAT PROPERTY MAINTENANCE CHARGES HAVE NOT BEEN REFLECTE D BY THE DRAWINGS IS CLEARLY INCORRECT AND IT IS DEMONSTRATED BEFORE THE COMMISSIONER (APPEALS) THAT THE EXPENDITURE ON WATER TAX, HOUSEHOLD TAX, E TC., IS SHOWN IN THE RETURN OF INCOME SEPARATELY. ON THE CASE LAW RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, IT WAS SUBMITTED THAT THE FACTS ARE DIFFERENT AND NOT APPLICABLE TO THE CASE OF THE ASSESSEE. HE PRAYED THAT THE ORDER OF THE COMMISSIONER (APPEALS) BE UPHELD AND THE APPEAL OF THE REVENUE BE DISMISSED. 8. RIVAL CONTENTIONS HEARD. THE COMMISSIONER (APPEALS) , AT PAGE-28, PARAS-9.2 AND 9.2.1 OF HIS ORDER, HAS HELD AS FOLLO WS:- 9.2 I HAVE CAREFULLY CONSIDERED THE ABOVE NOTED SUB MISSIONS AND ARGUMENTS OF THE A.R. AND THE FACTS AND FINDINGS NO TED BY THE A.O. IN THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE CASE LAWS CITED BY THE A.R. AS NOTED ABOVE. AS PER THE FACTS BROUGHT O N RECORD, IT IS NOTED THAT THE APPELLANT FAMILY HAS SHOWN HOUSEHOLD WITHD RAWALS OF ` 55,65,720 FOR THE VARIOUS ASSESSMENT YEARS UNDER AP PEAL. THE PARTICULARS THEREOF IS AS UNDER:- POOJA ARORA PRAVEEN KUMAR ARORA (IND.) & PRAVEEN KUMAR (HUF) 5 ( ALL FIGURES IN ` ) A.Y. DRAWINGS BY PRAVEEN KUMAR ARORA (IND.) DRAWINGS BY THE APPELLANT DRAWINGS BY PRAVEEN KUMAR (HUF) TOTAL 2000-01 2,58,438 2,40,000 - - 4,98,438 2001-02 3,96,817 1,20,000 - - 5,16,817 2002-03 1,98,899 1,70,000 - - 3,68,899 2003-04 7,43,000 4,50,000 - - 11,93,000 2004-05 6,11,250 3,60,878 60,348 10,32,476 2005-06 7,45,750 3,05,640 - - 10,51,390 2006-07 6,04,700 3,00,000 - - 9,04,700 TOTAL 35,58,854 19,46,518 60,348 55,65,720 9.2.1 AS MENTIONED ABOVE, THE APPELLANTS FAMILY CONSIST OF THREE PERSONS FOR THE INITIAL TWO ASSESSMENT YEARS AND TH EREAFTER OF FOUR PERSONS. A SEARCH HAS TAKEN PLACE AND NO SUCH EVIDE NCE IS FOUND THEREIN TO ESTABLISH THAT THE VARIOUS MEMBERS OF AP PELLANT HAVE INCURRED HOUSEHOLD EXPENSES WHICH ARE NOT REFLECTED IN THEIR REGULAR BOOKS OF ACCOUNT. THE ENTIRE ADDITION MADE BY THE A .O. IS FOUND TO BE PURELY ON ESTIMATED BASIS. NO DETAILS, EVIDENCES OR EVEN THE BASIS FOR THE SAME ARE BROUGHT ON RECORD BY THE A.O. MOREOVER , PRIMARILY THE HOUSEHOLD DRAWINGS ARE FOUND TO BE MET OUT OF THE D RAWINGS AND DISCLOSED IN THE HANDS OF HER HUSBAND SHRI PRAVEEN KUMAR ARORA ONLY. ACCORDINGLY, I FIND THAT IN THE ABSENCE OF ANY EVID ENCE, THE AD-HOC ADDITION MADE BY THE A.O. PURELY ON SUSPICION AND G UESS WORK IS NOT WARRANTED. THEREFORE, IN VIEW OF THE ABOVE NOTED SP ECIFIC FACTS AND FINDINGS, I FIND THAT THE A.O. IS NOT JUSTIFIED IN MAKING SUCH AN AD-HOC ADDITION. THE CASE LAWS RELIED ON BY THE A.R. ARE F OUND TO SUPPORT THE SAID ARGUMENTS OF THE A.R. THEREFORE, IN VIEW OF TH E ABOVE, THE ENTIRE ADDITION MADE BY THE A.O. ON THIS ACCOUNT IS DIRECT ED TO BE DELETED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 9. A PERUSAL OF THE CHART GIVEN IN PARA-9.2 OF THE COM MISSIONER (APPEALS)S ORDER, SHOWS THAT WHEN THE DRAWINGS OF THE HUSBAND, WIFE AND HUF, WHEN TAKEN TOGETHER, ARE SUFFICIENT TO MEET TH E HOUSEHOLD EXPENDITURE, AS ESTIMATED BY THE ASSESSING OFFICER. THE FIGURES ESTIMATED BY THE ASSESSING OFFICER HAVE NOT BEEN ALTERED BY THE COMM ISSIONER (APPEALS) BUT THE FACTUAL FINDING IS GIVEN THAT THE DRAWINGS RECO RDED IN THE BOOKS OF ACCOUNT ARE IN EXCESS OF THE WITHDRAWALS ESTIMATED BY THE ASSESSING OFFICER AS WHICH IS REQUIRED FOR MEETING THE HOUSEHOLD EXPE NDITURE. THE FIGURES POOJA ARORA PRAVEEN KUMAR ARORA (IND.) & PRAVEEN KUMAR (HUF) 6 GIVEN BY THE COMMISSIONER (APPEALS) ARE NOT IN DISP UTE. THE CASE LAW RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, IN OUR OPINION, IS NOT OF MUCH HELP, AS THIS IS A FACTUAL MATTER. ON THIS FAC TUAL MATRIX, WE AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL AND UPHOLD TH E FINDINGS OF THE COMMISSIONER (APPEALS). 10. IN THE RESULT, ALL THE REVENUES APPEALS ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL 2011. SD/- ASHA VIJAYRAGHAVAN JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 29.4.2011 COPY TO : (1) THE ASSESSEE (2) THE RESPONDENT (3) THE CIT(A), MUMBAI, CONCERNED (4) THE CIT, MUMBAI CITY CONCERNED (5) THE DR, C BENCH, ITAT, MUMBAI TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI