Sh. Sandeep Jain, Ludhiana V. ITO, Ludhiana

ITA 292/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5419 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: LALIT TAKYAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH SMC, CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.292/CHD/2011 (ASSESSMENT YEAR : 2007-08) SH.SANDEEP JAIN, VS. THE INCOME-TAX OFFICER, C/O B.C.JAIN & CO. V (4), MOONGFALI MANDI, GILL ROAD, LUDHIANA. PAN: AAYPJ5555F & ITA NO.293/CHD/2011 (ASSESSMENT YEAR : 2007-08) SH.SACHIL JAIN, VS. THE INCOME-TAX OFFICER, C/O B.C.JAIN & CO. V (4), MOONGFALI MANDI, GILL ROAD, LUDHIANA. PAN: ABAPJ4261F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI LALIT TAKYAR RESPONDENT BY : SHRI N.K.SAINI, DR O R D E R THE APPEALS OF THE TWO ASSESSEES ARE AGAINST THE C ONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME-TAX (A), DATED 16.12. 2010 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED U/ S 143(3) OF THE INCOME-TAX ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEA L BUT THE EFFECTIVE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE GROUND NOS.2 AND 3 WHICH READ AS UNDER : 2 2. THAT THE AO MADE AN ADDITION OF RS.184785/- ON ACCOUNT OF ESTIMATED HOUSEHOLD EXPENSES. 3. THAT THE CIT ALLOWED AN AD-HOC RELIEF OF RS.1 LA C ON ESTIMATED BASIS AND SUSTAINED THE BALANCE ADDITION OF RS.84785/-. 3. BOTH THESE APPEALS RELATING TO TWO BROTHERS ON T HE SAME ISSUE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. 4. THE ONLY ISSUE RAISED IN THE PRESENT APPEALS IS IN CONNECTION WITH THE ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUISI TIONED THE ASSESSEE TO FURNISH THE DETAILS OF HOUSEHOLD EXPENSES. IN R EPLY THE ASSESSEE VIDE LETTER DATED 6.7.2009 SUBMITTED THAT THE FAMILY CON SISTED OF SHRI BIMAL KUMAR JAIN, FATHER OF THE ASSESSEE, AS HEAD OF THE FAMILY. THE PLEA OF THE ASSESSEE WAS THAT SHRI BIMAL KUMAR JAIN WAS THE INCHARGE OF THE FAMILY AND WAS MAINTAINING THE HOUSEHOLD EXPENSES O F THE FAMILY. AS PER PEDIGREE TABLE OF THE FAMILY AT PAGE-1 IN PARA 2 OF THE ASSESSMENT ORDER, THE FAMILY OF THE ASSESSEE CONSISTED OF SHRI BIMAL KUMAR JAIN, HIS WIFE AND HIS FATHER AND MOTHER AND IN THE NEXT GENE RATION HIS TWO SONS ALONGWITH RESPECTIVE WIVES AND TWO CHILDREN EACH. THE TOTAL FAMILY CONSISTED OF 12 MEMBERS. BOTH THE ASSESSEES S/SHRI SACHIL JAIN AND SANDEEP JAIN BEFORE US ARE THE SONS OF SHRI BIMAL K UMAR JAIN. THE ASSESSING OFFICER NOTED THE FOLLOWING AMOUNTS TO HA VE BEEN WITHDRAWN FOR HOUSEHOLD EXPENSES : SANDEEP JAIN RS.72,000/- (SALARY FROM B.C.JAIN & CO.) SACHIL JAIN RS.72,000/- (SALARY FROM B.C.JAIN & CO.) OUT OF HUF ACCOUNT RS.96,000/- BIMAL KUMAR JAIN RS.56,000/- 3 CASH LYING IN HAND WITH THE RS.1,14,430/- ASSESSEE ON A/C OF SALE OF LAND WHICH WASNOT ACCOUNTED FOR IN THE ABOVE BUT WAS UTILIZED FOR HOUSE HOLD EXPENSES TOTAL RS.4,10,430/- 5. THE ASSESSEE CLAIMED THAT THE ELECTRICITY BILL W AS PAID BY MRS.KAUSHALAYA DEVI WHICH WAS DEBITED TO HER ACCOUN T TOTALING RS.84,160/-. THE ASSESSING OFFICER NOTED THE ASSE SSEE TO BE ENJOYING THE LIFE STYLE OF UPPER MIDDLE CLASS AS THEY WERE L IVING IN POSH COLONY OF KITCHLU NAGAR OF LUDHIANA AND THE CHILDREN WERE STU DYING IN D.A.V. PUBLIC SCHOOL, BHAI RANDHIR SINGH NAGAR, WHICH WAS ONE OF THE TOP SCHOOLS. THE ASSESSEE BEFORE US HAS INDIVIDUALLY C ONTRIBUTED ONLY RS.72,000/- EACH FOR HOUSEHOLD EXPENSES THOUGH THEI R CHILDREN WERE SCHOOL GOING. THE ASSESSING OFFICER IN PARA-5 AT P AGE 2 OF THE ASSESSMENT ORDER ESTIMATED THE HOUSEHOLD EXPENSES A ND WAS OF THE VIEW THAT THE TOTAL ESTIMATED HOUSEHOLD EXPENSES WERE RS .7,80,000/; THE FAMILY OF THE ASSESSEE HAD SHOWN THE TOTAL HOUSEHOL D WITHDRAWAL AT RS.4,10,430/- AND 50% OF THE AFORESAID I.E. RS.3,69 ,570/- AMOUNTING TO RS.1,84,785/- WAS ADDED AS INCOME OF SHRI SANDEEP J AIN AND THE BALANCE IN THE HANDS OF SHRI SACHIL JAIN. THE CIT(A) WAS O F THE VIEW THAT THE ADDITION, IF ANY, MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS SHOULD ALSO BE MADE IN THE HANDS OF SHRI BIMAL KUMAR JAIN WHO IS THE HEAD OF THE FAMILY. ACCORDINGLY, THE CIT(A) RESTRICTED THE DISALLOWANCE TO RS.84,785/- IN THE CASE OF EACH OF THE ASSESSEE ALL OWING RELIEF OF RS.1 LAC EACH TO BOTH OF THEM. 6. THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT THE ADDITION WAS MADE ON PURE ESTIMATE BASIS AND WAS RESTRICTED ONLY IN THE HANDS OF TWO M EMBERS OF THE FAMILY AND NO ADDITION WAS MADE IN THE HANDS OF OTHER MEMB ER OF THE FAMILY. IT 4 WAS FURTHER POINTED OUT THAT DURING THE PRECEDING Y EAR ONLY ADDITION OF RS.30,000/- BEING THE AMOUNT OFFERED BY THE ASSESSE E WAS MADE IN THE HANDS OF SMT.KAUSHALAYA DEVI AND RS.36,000/- EACH W AS MADE IN THE HANDS OF S/SHRI SACHIL JAIN AND SANDEEP JAIN IN ASS ESSMENT YEAR 2006- 07, WHICH WAS REDUCED TO NIL BY THE CIT(A). IN ASS ESSMENT YEAR 2006-07 THE TOTAL WITHDRAWALS WERE RS.2,58,000/-. 7. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORD. THE LIMITED ISSUE ARISING IN THE PRESENT APPEALS FILED BY TWO BROTHERS IS IN RESPECT OF THE TOTAL HOUSEHOLD EXPENSES INCURRED BY THE FAMILY. AS POINTED OUT IN THE PARAS HEREINABOVE, THE FAMILY OF THE ASSESSEE CONSISTED OF 12 MEMBERS AND BOTH THE ASSESSEES ALON GWITH THEIR FATHER SHRI BIMAL KUMAR JAIN HAD SHOWN WITHDRAWAQLS FOR HO USEHOLD EXPENSES AND OUT OF WITHDRAWALS OF HUF ACCOUNT. THE TOTAL W ITHDRAWALS FOR HOUSEHOLD EXPENSES DURING THE YEAR WERE RS.4,10,430 /- OUT OF WHICH BOTH THE ASSESSEES BEFORE US HAD CONTRIBUTED RS.72,000/- EACH. THE FAMILY OF EACH OF THE ASSESSEES CONSISTED OF SELF, HIS WIFE A ND TWO SCHOOL GOING CHILDREN EACH. IN THE ENTIRETY OF THE FACTS AND CI RCUMSTANCES OF THE CASE WE FIND THAT THE TOTAL HOUSEHOLD EXPENSES SHOWN BY THE ASSESSEE AT RS.4,10,430/- FOR THE FAMILY OF 12 MEMBERS, WITH F OUR SCHOOL GOING CHILDREN IS DEFINITELY ON A LOWER SIDE. THOUGH ALL ENDEAVOR SHOULD BE MADE BY THE AUTHORITIES TO DETERMINE THE EXACT NATU RE OF THE EXPENDITURE, HOWEVER, IN CERTAIN CASES, WHERE THE EVIDENCES ARE NOT AVAILABLE, A RESORT IS TO BE MADE TO ESTIMATION OF THE INCOME ON ACCOUN T OF HOUSEHOLD EXPENSES. IN THE CASE OF THE ASSESSEE ITSELF DURI NG THE PRECEDING YEAR AN ADDITION OF RS.30,000/- FOR LOW HOUSEHOLD WITHDRAWA LS WAS CONFIRMED IN THE HANDS OF SMT.KAUSHALAYA DEVI, THE MOTHER OF THE ASSESSEES. THE 5 ASSESSING OFFICER HAD MADE AN ADDITION OF RS.1,84,7 85/- IN THE HANDS OF EACH OF THE ASSESSEES ON ACCOUNT OF HOUSEHOLD WITHD RAWALS, WHICH WAS REDUCED TO RS.84,785/- EACH BY THE CIT(A). I FIND M ERIT IN THE SUBMISSIONS OF THE LEARNED A.R. FOR THE ASSESSEE TH AT ESTIMATION OF ADDITION ON ACCOUNT OF WITHDRAWALS FOR HOUSEHOLD EX PENSES ARE ON A HIGHER SIDE AS COMPARED TO THE TOTAL WITHDRAWALS FO R THE PRECEDING YEAR I.E. 2006-07 AT RS.2,88,000/-. HOWEVER, IN ORDER T O MEET THE ENDS OF JUSTICE, THE ADDITION IS RESTRICTED TO RS.50,000/- EACH IN THE HANDS OF BOTH THE ASSESSEES RESULTING IN DELETION OF ADDITIO N TO THE EXTENT OF RS.44,785/- EACH. THE ASSESSING OFFICER IS ACCORDI NGLY DIRECTED TO RECOMPUTE THE INCOME IN THE HANDS OF BOTH THE ASSES SEES. THE GROUNDS OF APPEALS RAISED BY THE ASSESSEES IN BOTH THE APPEALS ARE PARTLY ALLOWED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF MAY, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 30 TH MAY, 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH